Annual Financial Report
24 March 2012 - 4:17AM
UK Regulatory
TIDMAGA
23rd March 2012
AGA Rangemaster Group plc - 2011 Annual Report & Accounts
AGA Rangemaster Group plc (the "Company") has today posted to shareholders and,
in accordance with Listing Rule 9.6.1R has submitted to the National Storage
Mechanism copies of the following documents:
* Annual Report & Accounts for the year ended 31st December 2011 (`2011
Annual Report & Accounts');
* Notice of Annual General Meeting (`AGM Notice');
* Form of Proxy.
The documents will shortly be available for inspection on the National Storage
Mechanism www.hemscott.com/nsm.do. Copies of the above documents may be
obtained directly from the Company Secretary at the Company's registered
office: AGA Rangemaster Group plc, Juno Drive, Leamington Spa, Warwickshire
CV31 3RG.
As required by Disclosure and Transparency Rule 6.3.5R, the Company confirms
that the 2011 Annual Report & Accounts and the AGM Notice are now available to
view or download in pdf format on the Company's website at http://
www.agarangemaster.com/979 or under the `Investor Relations' section.
On 9th March 2012, the Company issued its 2011 Full Year Results for the year
ended 31st December 2011. The results included a management report which
contained an indication of the important events which had occurred during the
year and their impact on the financial results. That information, together with
the information set out below, which is extracted from the 2011 Annual Report &
Accounts, constitute the material required by DTR 6.3.5R to be communicated to
the media in unedited full text through a Regulatory Information Service. This
material is not a substitute for reading the full 2011 Annual Report &
Accounts. Page numbers and cross-references in the extracted information below
refer to page numbers and cross-references in the 2011 Annual Report &
Accounts.
Key Risks and Uncertainties
The key risks and uncertainties are set out on pages 14 and 15 of the 2011
Annual Report & Accounts. The unedited full text relating to these disclosures
is set out below:
Key risks and uncertainties facing the Group
The board regularly reviews the risks faced by the Group, including business
and wider social, environmental and ethical issues. Risk is an inherent part of
doing business and the intention of AGA Rangemaster's risk management process
is not to avoid all risk, but to identify, manage and, where appropriate,
mitigate risks through the balance of risk versus reward. Details of our
systems of internal control and risk management are set out on pages 28 and 29
of the report and this section describes the processes through which risks are
assessed, managed and mitigated. The directors consider the principal risks and
corresponding mitigation set out below represent the principal uncertainties
that may impact on the Group's ability to effectively deliver our strategy in
the future. The board recognises the profile of the risks changes constantly
and additional risks not presently known, or that are currently deemed
immaterial, may also impact on delivery of the Group's strategy.
Risks to the Group
Pension scheme
Risk - The Group is the sponsor of a large pension scheme and can be called on
to meet funding deficits. The required periodic revaluations of the pension
scheme may highlight a worsening deficit that may require the Company to
provide additional cash contributions or guarantees to meet future funding
needs. This could severely constrain the finances of the Group.
Mitigation - The Group works closely with the trustee of the main pension
scheme and has in place a long-term funding strategy to manage closely assets
and liabilities in relation to each other. The defined benefit scheme is closed
to new entrants and pensionable salaries were frozen in 2009/10.
Funding
Risk - The Group has bank facilities requiring renewal over the next two years.
Changes in the banking market since the facilities were put in place in 2008
may affect renewal.
Mitigation - The Group maintains an ongoing dialogue with its bankers and keeps
them informed of the Group's progress against its business plans and financial
covenants.
General economic conditions
Risk - The Group's operations are sensitive to global economic conditions and
levels of consumer confidence particularly since the housing market slowed in
2007. This could impact on the Group's revenues and if the downturn persists or
worsens may impact on currently planned production levels and profitability. A
global economic recovery would bring benefits given the operational gearing of
the Group, but could also result in an increase in raw material prices or
restrict the availability
and quality of components.
Mitigation - The Group reviews financial forecasts and monitors economic
conditions (in particular housing market trends in the UK and the US) to assess
the impact on its budget and strategic plans. The Group seeks to increase
international sales and to reduce individual market dependency. Internal
processes are in place to continually monitor progress and the availability of
raw materials and components.
Financial instruments
Risk - The Group is exposed to foreign exchange and interest rate risks as it
sells its products and sources components world-wide. Significant movements
could impact on future profitability and cashflow. For further details see note
19 to the accounts.
Mitigation - The Group's treasury policy sets the framework for hedging foreign
exchange and interest rate risks. The Group offsets currency flows internally
where possible and puts in place foreign exchange contracts, where appropriate.
Operational Risks
Competition/margin erosion
Risk - Competitors may introduce upgraded products and increase their marketing
expenditure, which may impact on market share. There could be downward pressure
on pricing if the sector accepts lower margins. Reduced demand for our products
or being less price competitive could impact the Group's ability to deliver its
strategy and business plans.
Mitigation - We actively invest in new product development and design
capabilities. New products are extensively researched and market tested. We
constantly monitor our market position and competitor strategies. Value
engineering programmes assist with the maintenance and enhancement of margin
and pricing strategies.
Intellectual property
Risk - The Group owns several well known brands and other intellectual
property. Failure to protect our rights in our existing and in potential new
markets could lead to a reduction in their value.
Mitigation - We actively monitor the market to identify and address breaches of
our rights. We register trade marks, patents and designs in existing and new
markets and take legal action as appropriate.
Over reliance on any individual customer or supplier
Risk - The Group's profitability could be impacted if any single customer
became business critical or an individual supplier dominated our manufacturing
process. Changing approaches to distribution emanating from increased consumer
use of the
internet could alter dealer and distributor structures and the industry.
Mitigation - The Group sells its products through a wide range of channels and
markets which helps to minimise single customer reliance. We avoid over
reliance on any single supplier and monitor our supply chain accordingly.
People
Risk - Loss of key personnel or the failure to plan adequately for succession
or to develop new talent could damage the future prospects of the Group.
Competition for quality personnel is intense and the Group may not be
successful in attracting or retaining suitably qualified personnel, such as
skilled engineering staff. Loss of key employees and delays in recruiting new
personnel could harm the Group's business and in time our competitive advantage
may erode.
Mitigation - The Group has succession and development plans in place for key
personnel and these are reviewed and updated at least annually. The Group HR
director oversees talent management and recruitment of key personnel.
Remuneration packages including fixed, variable and long-term elements and
compensation arrangements are regularly benchmarked to ensure the Group's
remuneration policy remains in line with market practice.
Regulatory Risks
Legal, regulatory and litigation
Risk - The Group's operations or its products may fail to comply with laws and
regulations in the markets in which it operates. We may take legal action
against third parties to enforce our rights or face litigation from third
parties. This may result in reputational damage and financial cost.
Mitigation - We are committed to the highest standards and conduct regular
audits covering business processes and behaviours to ensure compliance with the
relevant laws and regulations.
Health, safety and environmental
Risk - A health and safety incident could result in serious injury to the
Group's employees, visitors to our premises or customers. An environmental
incident could impact on the community in which we operate. The environmental
performance and reputation of our products may affect customer demand.
Mitigation - We are committed to the highest standards and conduct regular
audits to ensure compliance with relevant laws and regulations. Accreditation
to ISO 9001:2008, ISO 14001:2004 and BS OHSAS 18001:2007 ensures a framework is
in place with clear policies and procedures and these are regularly reviewed at
operational and board level. Our product development and value engineering
programmes help ensure product performance and benefits are continuously
improved, taking advantage of new and emerging technologies.
Related Party Transactions
The related party transactions are set out in note 28 to the Group accounts on
page 70 of the 2011 Annual Report & Accounts. The unedited full text relating
to these disclosures is set out below:
The Group recharges the Group pension scheme with part of the cost of
administration. The total amount recharged in the year to 31st December 2011
was GBP0.1m (2010: GBP0.1m). The amount outstanding at the year end was GBPnil (2010:
GBPnil).
Key management's compensation
The compensation of the key management team, including the executive and
non-executive directors, at the balance sheet date is set out below:
2011 2010
GBPm GBPm
Salaries and short-term benefits 1.7 2.2
Post employment benefits 0.1 0.1
Share based payments - 0.1
________________________________________________________________
Total emoluments to key management 1.8 2.4
________________________________________________________________
Responsibility Statement
The 2011 Annual Report & Accounts contain a responsibility statement in
compliance with DTR 4.1.12 signed by order of the board by W B McGrath, Chief
Executive and S M Smith, Finance Director. The directors' responsibility
statement is set out on page 24 of the 2011 Annual Report & Accounts for the
Group. This statement is set out in unedited full text below. This states that
on 9th March 2012, the date of approval of the 2011 Annual Report & Accounts,
the directors confirm that to the best of their knowledge:
* the Group financial statements, prepared in accordance with IFRS as adopted
by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit of the Company and the
undertakings included in the consolidation taken as a whole; and
* the business and finance review, which is incorporated into the directors'
report, includes a fair review of the development and performance of the
business and the position of the Company and the undertakings included in
the consolidation as a whole, together with a description of the principal
risks and uncertainties they face.
For further information contact:
P M Sissons
Company Secretary
AGA Rangemaster Group plc
Telephone Number +44 (0)1926 455755
END
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