Derby, UK - Thursday, 6th November 2008 - Heating Finance plc has reported a strong set of Q3 figures for its parent Baxi Group, despite difficult market conditions. Consolidated sales were up 8%* with year-to-date sales up 2%* compared to 2007. Profits before exceptional items, impairment charges and goodwill amortisation were up 58% from £11.7 million in Q3 2007 to £18.5 million in Q3 2008. Year-to-date profits are up 54% from £30.4 million in 2007 to £46.8 million to end of September 2008.1
The Group is realising the benefits of a UK cost saving programme and a major French restructuring instigated in 2007. Elsewhere the Group saw the German boiler market recover with new technologies such as solar collectors growing strongly, leading to a significant increase in profitability. In Italy the Group maintained market share in tough conditions, while demand continues to grow in Russia, Eastern and Central European markets. In Spain profitability was maintained in the quarter, notwithstanding difficult boiler and radiator markets.
Group Chief Executive Martyn Coffey commented; "These results continue the first half recovery story. The Group continues to see the benefits of the restructuring it has undertaken over the past 18 months, with a strong showing in a number of markets including the UK, Germany and international markets - despite tough economic conditions. In the UK we have been pleased that we are continuing to take market share from our competitors, and, in Germany, our investment in mCHP technologies and solar means we will reap the benefits of new government environmental incentives. We also believe we will see continued good growth in international markets, particularly Russia.
We have now started to see evidence of raw material and component costs falling, to our advantage. However all our markets remain tough and we will continue to focus on cost reduction and savings.
The preferred supplier agreement also announced today, under which British Gas will distribute the Baxi Ecogen micro combined heat and power (m-CHP) unit in the UK, could generate revenue for the Group of up to £40m per annum and will strengthen Baxi's position in the heating products markets. The agreement will result in the units being made exclusively available to British Gas customers from quarter two of 2009."
* % change at constant currency.
1 The impact on 2008 profitability of changes in the €/£ exchange rate was to reduce Q3 profits by £0.5 million and year-to-date profits by £3 million.
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For further information contact Chris Genasi or Magdalen Bush, Eloqui - 0207 534 0620 / 07980 393920
Baxi Group is one of Europe's biggest manufacturers and distributors of domestic and commercial water and space heating systems, operating in a market worth over £5.5 billion a year.
It employs more than 5,000 people across Europe with a turnover exceeding €1.2 billion. The Group has significant market shares across all major Continental territories and in the UK. It is also expanding into new markets such as Romania and Argentina and already has a direct presence in Russia, China and the Czech Republic, and joint venture partnerships in developing locations such as Turkey.
Baxi Group owns and sells some of the leading brands in the European market for heating products. These include the Baxi brand in the UK, Italy, Turkey, Russia and a number of East European markets, Potterton in the UK, Chappée and Ideal Standard in France, Roca in Spain and Broetje in Germany.
In addition to manufacturing high efficiency condensing boilers, Baxi Group is committed to new heating technologies that will play a role in tackling climate change. It already sells the world's leading mini combined heat and power (CHP) unit and has a well developed range of domestic biomass and solid fuel boilers, solar and heat pump products and is developing micro-CHP boilers for domestic installations. New technology and innovation is so important to the Group that it is also investing in a micro-CHP unit, powered by a fuel cell, which will be small enough for domestic use.
