Aga drops dividend to rescue pension fund

Shares in Aga Rangemaster dropped 9 per cent yesterday as it scrapped its dividend in order to bolster its pension fund.

"It's obviously not a positive to drop the dividend," the chief executive, William McGrath, admitted. "But it should be seen in the wider context, which is about achieving some medium-term clarity over the pension scheme."

First-half profits dropped from £2.1m to £1.5m on sales down 1 per cent at £119m.

Mr McGrath said: "While the housing market continues to be flat it is difficult to see the market making any progress for us so we have to look to self-help."