U.S. News

Aga Full-Year Profit Up 8%


Upmarket British oven maker Aga Foodservice Group posted a 7.7% rise in its underlying annual profit on Friday and said strong finances meant it could pay a special dividend of 43 pence.

Aga said in a statement the return of capital left it "flexibility as we consider further acquisitions and a share buy-back programme". Last year Aga failed in a bid to buy British kitchen equipment company Enodis.

Aga, which makes cookers and refrigerators for the domestic, commercial and bakery markets, said the start of 2007 has seen a continuation of the trends seen in the second half of 2006. "Lead indicators and order books are positive," said the maker of Aga and Rangemaster cookers and Marvel fridges.

The company, which is to sell its loss-making U.S. home-furnishing stores Domain, said its continuing businesses made a pretax profit of 46.0 million pounds ($89 million) in 2006 on revenue up 15% at 529 million pounds.

Domain made an operating loss of 2.9 million pounds and Aga took a charge of 3 million pounds to write down Domain's assets. The results met forecasts following a trading update on Jan. 15.

Aga shares were up 2.2% at a five-day high of 418 pence, valuing the business at 540 million pounds and making it one of the biggest FTSE 350 index gainers.

Numis Securities, which rates Aga stock an "add" with a 470 pence target, said in a broker note: "Aga has delivered a good set of numbers, highlighting the strength of its consumer and foodservice business". Numis said it was set to raise its 2007 forecasts.

Aga helped fit out two major British sporting venues that have been rebuilt -- Wembley stadium and Ascot racecourse. Spectators buying a prawn sandwich at Wembley or champagne at Royal Ascot will likely be served from an Aga fridge.

The final dividend was set at 7 pence, making the total ordinary dividend 14% higher at 10.5 pence.

Aga shares have underperformed the household goods sector by 5 percent over the past 12 months.