Luxury kitchen maker Omega has slid into the red after a year plagued by challenges “outside the company's control,” according to newly filed documents.
The group, whose brands include Novus, Sheraton and Mackintosh, forecast a pre-tax loss of £1.3 million for 2023, down from a pre-tax profit of £4.3 million the previous year.
The loss comes as the company saw its revenue fall to £54 million from £60 million in 2022.
Omega said its poor performance was “entirely attributable” to macroeconomic factors such as inflation and declining consumer demand for luxury items.
The company's contracting division has also struggled, with a decline in new home construction hitting orders.
The kitchen maker expects things to start improving in the second half of the current financial year, but added that the first six months of 2024 have been “challenging” due to ongoing economic uncertainty.
OMEGA: 'Extraordinary difficulties' cause losses
In a statement filed with the Companies House, Omega said: “Despite the extraordinary challenges, we have continued to act proactively where possible, focusing on quality and service and growing our customer base across all routes to market, as a result of which we expect to benefit as markets recover.”
“Turnover has decreased from £60.2m to £54.0m in 2022 due to the impact of the domestic and global economies on our performance.
“Despite improvements in efficiency and cost management, the operating loss was £0.4m (2022: profit of £5.2m) and EBITDA was £3.3m for the year (2022: £8.9m).”
“The focus on working capital management continued throughout 2023, leading to excellent cash generation for the year of £4.6 million (2022: £1.6 million). The balance sheet remained strong with net assets of £76.0 million (2022: £77.1 million).”
“These results are attributable solely to macroeconomic factors outside of our control, primarily due to continued inflationary pressures throughout the year and reduced consumer demand for traditionally high-value items.”
“Furthermore, the slowdown in new housing developments has had a significant impact on the contracting sector.
“[2024] With the ongoing economic and global situation, this year is expected to be another challenging one.
“Uncertainty over the timing of interest rate movements linked to the Bank of England's subdued inflation target means we can expect a further period of weakness in both the retail sector and new housing.”
“While an economic recovery is not expected until later this year, we are well positioned to take advantage of market improvements in 2025 and beyond.”
An industry-wide struggle
Harvey Jones, the luxury kitchen manufacturer, made headlines earlier this year when it collapsed into bankruptcy and was sold off before bankruptcy proceedings could begin.
Interpath Advisory said in February that the company's management had noted that its “order backlog is not reliable due to a high number of cancellations and delays, which have had a material impact on the group's liquidity and cash flows” in the second half of fiscal 2022 and early fiscal 2023.
The same month, fellow kitchen maker Magnet revealed it would make a pre-tax loss of around £70 million in 2022, compared with a loss of £9.9 million in 2021.
The company blamed the results on “unprecedented” inflation due to the cost of living crisis, “high” energy prices and a “significantly weak market.”
Home improvement specialist Wickes said in May that sales fell 4.2% in the 16 weeks to 20 April 2024, driven by an 18.2% drop in installations.
However, retail sales increased by 0.6% during the period, making it a year of positive retail sales growth for Wickes.
The group said retail sales were driven by increased trade rather than inflationary prices.
