Luxury kitchen maker Omega has slipped into the red following a year marred by challenges “outside the company’s control”, according to newly-filed documents.
The group, whose brands include Novus, Sheraton and Mackintosh, made a pre-tax loss of £1.3m in 2023, down from a pre-tax profit of £4.3m in the year before.
The loss came as the company’s revenue dripped to £54m from £60m in 2022.
Omega said its ailing performance was “solely attributable” to macro-economic factors including inflation and low consumer demand for big ticket items.
The company’s contract division also struggled, with the downturn in new housing dealing a blow to its order book.
The kitchen maker added that although it expected things to start to turn around in the second half of its current financial year, the first six months of 2024 had been “challenging” due to ongoing economic uncertainty.
Omega: ‘Extraordinary challenges’ drive loss
In a statement published to Companies House, Omega said: “Despite the extraordinary challenges, the company continued to take proactive action where possible, focussing on quality and service, and expanded its customer base in all routes to market, with the resulting benefit expected as the market recovers.
“Due to the impact of the national and global economy on business performance, sales reduced from £60.2m in 2022 to £54m.
“Despite improvements in efficiency and cost control this resulted in an operating loss of £400,000 (2022: profit of £5.2m) and an EBITDA in the year of £3.3m (2022: £8.9m).
“The focus on working capital management continued throughout 2023, resulting in an excellent cash generation for the year of £4.6m (2022: £1.6m). The balance sheet remained robust, with net assets of £76m (2022: £77.1m).
“These results are solely attributable to macro-economic factors outside the company’s control, with the single biggest factor being continued inflationary pressure during the year, resulting in lower consumer demand for traditional bigger ticket items.
“In addition, the downturn in new housing developments had a significant impact on the contracts sector.
“[2024] is expected to be yet another challenging year due to the continued economic conditions and world issues.
“Uncertainty, as to the timing of any interest rate movements, is linked to the Bank of England’s targeted inflation reductions, which means that a further period of downturn in both the retail sector and new housing is envisaged.
“Any upturn in not forecast until later in the year, however the business is perfectly positioned to take advantage of market improvements in 2025 and beyond.”
Omega was not the only kitchen maker to struggle last year.
Industry-wide struggles
Luxury kitchen maker Harvey Jones made headlines earlier this year when it had to be sold out of administration in a pre-pack deal.
Interpath Advisory said in February that during late FY22 and early FY23 the company’s management noted that the order book was “unreliable due to the high level of cancellations and delays significantly impacting the liquidity and cashflow of the group”.
In the same month fellow kitchen maker Magnet revealed it had made a pre-tax loss of almost £70m in 2022, compared to a loss of £9.9m in 2021.
It blamed the results on “unprecedented” inflation, “elevated” energy prices and “notably subdued markets” due to the cost-of-living crisis.
In May the home improvement specialist Wickes announced a 4.2 per cent fall in sales for the 16 weeks to 20 April 2024, driven by an 18.2 per cent fall in installations.
The group said retail sales were driven by increased transactions rather than inflationary prices.