Oven and traditional range maker Aga is considering selling its food service operations to focus on the consumer market.
Aga said yesterday it was working on a plan to separate the food service operations, which supplies commercial catering equipment, from the consumer arm, as it believes this can unlock more value for shareholders. The shares jumped 27p to 412½p.
Plans to merge with rival Enodis last year fell through. William McGrath, chief executive, said: “We were enthusiastic for a deal with Enodis but it wasn’t to be.”
He said he believed consolidation in the sector would continue, and that Aga had “built up a really good business and we’d expect there to be considerable interest”.
The company has appointed Dresdner Kleinwort and Citi to explore a possible sale of the unit, which is expected to record sales of about £270m this year.
Mr McGrath added: “Our consumer business has exceedingly high quality brands led by the iconic Aga, a track record of strong growth and excellent routes to market.
“We can grow it more aggressively both organically and through acquisition, and shareholders can benefit from having an attractive business with a single market focus.”
The company said it expects pre-tax profits to reach £22m in the first half, compared to £20m in the previous half-year. Aga said it has seen a good performance from its European consumer operations, underpinned by the main Aga and Rangemaster brands.