The rising price of stainless steel has set back cooker-maker Aga Rangemaster by £1 million in the past year.
Leamington-based Aga has seen its outlay on stainless steel increase from £13 million to £14 million in the past year as metals prices have soared across the globe.
The group, which revealed a slight dip in first-half revenues last week, still managed to increase operating profits despite the increase in raw materials prices.
Chief executive William McGrath said the company was benefiting from a well-timed agreement on utility bills.
He said: “Stainless steel is our largest single spend item and it has gone up by about £1 million this year, from about £13 million to £14 million. It is quite a lot of dosh.
“On the energy side we did a deal a couple of years ago which proved to be a good move which basically means it has saved us £400,000 this year.”
Aga saw revenue for the six months to June 30 dip to £121.4 million, compared to £123.4 million in the first half of last year.
While the company reported an increase in operating profits, from £800,000 in the first half of last year to £2.9 million, pre-tax profits fell from £16.4 million to £4.2 million.
Mr McGrath said the performance was strong considering conditions. He added: “We feel it is a good performance in the first half. We think the business is in as good shape as it has been in a few years.
“A lot of streamlining work has been done and it is starting to pay off and there has been a better performance in some of the businesses – Grange and Fired Earth – and that helps the overall performance.
Mr McGrath said he was confident that discretionary spending would take place in spite of tough conditions, but felt it was important to market products to encourage customers.
He said: “In these tough conditions we are encouraged by the performance of our market leading products.
“While recent events suggest an even tougher autumn ahead, the second half should see the impact of newly launched products gather pace.
“Most significantly the Aga Total Control will be a factor in driving UK sales performance and its European launch is scheduled for this autumn.
‘‘The group is confident it is well positioned to be a major beneficiary of any upturn in consumer confidence because of the investment in product and the operational gearing of the business.”
The firm’s net cash at June 30 stood at £25.2 million, compared to £22.4 million at the same point last year.