Aga cooks up a profit after a shaky recession

The cooker company's return to profit bodes well in terms of consumer spending...

Last Updated: 01 Sep 2015
Aga, that mainstay of the upper-middle classes, has staged a surprising recovery in its second quarter. After demand plummeted in the recession, it now seems to be simmering nicely: revenues rose by nearly 5% in the first six months of the year, to £123.4m. This isn't just a turn-up for Aga’s books – the fact that people are once again choosing to splash out five grand on a posh cooker suggests all is not lost for the housing market. Or maybe the home improvement market...
Aga, which owns cooker brand Rangemaster, cooker/boiler combos Rayburn and Stanley, and tile company Fired Earth, made a pre-tax profit of £16.4m in the first six months of the year – a substantial upturn on its £2.4m loss a year ago. Presumably the cold weather over the winter was one of the contributing factors; nothing says ‘cosy’ quite like an Aga. Although they do guzzle fuel at a rate that puts the most red-blooded of Chelsea tractors to shame – and at a time when people seem to be cutting back on expensive, impractical, unnecessary luxury purchases, we can’t help being a little surprised by how well it’s done.
The company said its impressive turnaround is, in part, down to the swift action it took during the recession. It made sweeping changes to its management structures in the UK and US markets, while targeting the US market with ‘punchily priced’ products. As a result of its push abroad, it sold more than a quarter of its products overseas – with France overtaking Ireland as its main export market. Tres bien.
But since no self-respecting British country pile (/Notting Hill townhouse) is complete without its obligatory Aga, these figures are a positive sign for the UK too. Aga considers its fortunes to be closely tied to the housing market – the level of mortgage approvals tends to be a key indicator. And, although lending isn't exactly on the rise, it's not falling either – leading Aga to believe that it can maintain this momentum for the rest of the year.
Although we shouldn't get too excited about the prospects for the housing market: maybe some of its customers have just been priced out of moving and decided to squander their insufficient deposit on a new Rangemaster instead...

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