A sharp fall in demand for its cast-iron cookers means profits at Aga Rangemaster will be "appreciably" lower in the second half of the year than in the first six months.

Orders for the company's upmarket kitchen goods, which include fridges as well as stoves, have fallen more than 15 per cent in recent weeks, following a 5 per cent decline over the summer.

William McGrath, chief executive, said the global financial storm and consequent decline in consumer confidence could not have arrived at a worse time for Aga because autumn is its main sales period.

The shares fell 18¾p, or 18 per cent, to 85¼p, extending their decline this year to 76 per cent.

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Consumers have been holding off buying "big ticket" items such as Aga cookers, which typically cost £7,500 to supply and install, not just because of financial worries but because the housing market has ground to a near standstill. Sales of kitchen goods are closely linked to activity in the housing market, with people spending most money on their kitchens when they move house.

He said sales of wood-burning cookers and stoves were "performing strongly" as consumers became concerned about fuel prices and the environment.

Aga said it would continue to cut costs on top of the £6m in savings it made by closing a US factory in October and moving its head office to Leamington Spa, the site of its Rangemaster distribution centre. The company has cut staff numbers by a 10th in the past year.

Panmure Gordon expects Aga to cut its 2009 dividend by 75 per cent to 1.7p. The broker said: "We predict further deterioration from here as it is clear that the trends in property transactions, credit availability and discretionary consumer spending remain in decline. Consumers require pricing deals but Aga has limited flexibility in this area due to its thin margins."