Magnet: Kitchen maker bets on premium as huge losses continue
The group behind kitchen maker Magnet is hoping expanding into the premium market will help it return to profit after falling to another huge loss and cutting hundreds of jobs.
Nobia Holdings UK, the company behind the brand, has set about restructuring itself in recent years after not making a pre-tax profit since 2019.
But the transformation plan has come at a cost, with hundreds of jobs made redundant in the process.
Now, delayed accounts for Magnet filed with Companies House have revealed the most up to date picture of the brand’s attempt to return to the black.
According to the results, the business reported a pre-tax loss of £54.5m for 2023, after also losing £68.9m in 2022.
The latest pre-tax loss means Magnet has racked up a pre-tax loss of more than £160m since it last made a pre-tax profit of £18.2m in 2019.
The accounts also show that its turnover decreased from £424.3m to £356.8m over the year and that its headcount reduced from 2,671 to 2,292 employees.
Nobia Holdings UK is a subsidiary of Swedish firm Nobia AB, a company listed on Nasdaq Stockholm which took control of Magnet in 2001 in a deal worth £123m.
Nobia Holdings UK’s results for 2024 are due to be filed with Companies House by the end of September this year.
‘A challenging economic environment’
In a statement included in the accounts, UK executive vice president George Dymond said: “The fiscal year 2023 continued to be a challenging economic environment with inflation, direct materials and energy prices still at relatively high levels.
“This impacted consumer confidence and consequently volumes.
“To ensure stability and improved profitability, the management team took action and in the first half of 2023 the decision was taken to exit some of our lower performing projects business contracts as well as a cost reduction programme which resulted in a number of redundancies across the UK business.
“An announcement was also made regarding the closure of two factories with a net book value of £4.8m in the first half of 2023.
“The cost reduction program cost £3.4m and returned annual savings of £13.4m.
“A sale of the Dewsbury factory was also completed in September 2023 with a profit on disposal of £9.5m generated.
“Further activities have also been undertaken in 2024, including the announcement of the consolidation of manufacturing capability in our Halifax site into Darlington and the closure of 26 loss making stores.”
Magnet eyes premium move to return to growth
Dymond added: “We remain confident in the efficiency of our strategic initiatives, which involve focussing on our core competencies and a targeted expansion via other distribution channels into the mass premium market.
“Our expectation is that this approach will lead to strong returns, profitable growth and ensure a consistent cash flow trajectory from next year and beyond.”
The accounts for Magnet come after Morning Wire reported in October 2024 that profit at rival Wren Kitchens slumped to its lowest level since 2017 as its sales fell back from a record high and it shed 1,000 jobs.
The West Retail Group, which is headquartered in Yorkshire, posted a pre-tax profit of £35.1m for 2023, down from £75.8m.
The last time the group posted a profit lower than its 2023 total was the £17.7m it reported in 2017. At the time, the firm’s turnover stood at £607.1m.
In 2023, the group’s turnover fell from £1.25bn to £991.6m.