Foam shortages held back performance at furnishings group

Furnishings manufacturer, The Belfield Group, which includes the brands of Westbridge, Tetrad, Belfield Home & Leisure and Clinchplain, has reported a slight growth in turnover as EBITDA fell.

According to its latest filed accounts for the year ended 31 December 2022, total sales rose 0.9% to £130.7m from £129.6m in 2021. EBITDA resulted at £1m, down from £2.6m recorded the previous year. Pre-tax losses widened from £1.6m to £8.8m.

Stated within its report, the company said: “2022 started well for the group, with encouraging progress through the year as sales grew steadily. As 2022 progressed and in common with most of the industry, the Ukraine driven supply chain shortages and price increases including huge energy and raw material cost inflation held back performance.

“In the second half of the year, an industry-wide chronic shortage of foam drove production disruption and inefficiency, which is estimated to have supressed revenue by c£5.7m and EBITDA by c£2.3m.

“The increase in sales recorded in the leisure and caravan market (through its Belfield Leisure business) more than offset the decrease in sales in the retail market. The 2022 result was significantly impacted by the industry-wide foam shortage.

“The group absorbed £1.5m of cash in 2022. This shows a significant improvement from the prior year when £7.1m of cash was absorbed. The disruptive impact of supply shortages has forced the group’s stock position to be higher than expected, but the adverse effect on cash has been partially mitigated through strong credit control.

“During the year, the gross profit increased from 22.5% to 22.8%, whilst total wage costs decreased from 36.9% to 35.4% of net sales, reflecting improved labour utilisation.

“The directors have implemented a new strategy which will continue to put the customer first, but with an unfaltering focus on operational improvements and cost management. As such, the directors are confident that the business profitability will improve in 2023.

“Since the year end, Westbrigde Furniture has consolidated its operations from three facilities to two, to increase production efficiency and improve operational effectiveness. This change was completed in June 2023,” the group added.

As for the brands, Westbridge reported a decline in sales by 11.2% to £67.9m from £76.5m year-on-year. EBITDA resulted at a loss of £1.2m, while pre-tax losses amounted to £6.1m. The business said that revenue going into 2023 has been “ahead of forecast”.

Tetrad saw revenues increase 12.7% to £17.1m from £15.1m, while pre-tax losses stood at £431,000, adding that it ended the period with a “satisfactory order book” and expects further growth moving forward.

Finally, Belfield Leisure reported a growth in sales of 20.7% to £38.9m from £32.2m. Pre-tax profit resulted at £1m, down from £5.3m. The company said that it had a “healthy order book” at the year end and also expects future growth within this division of the group.

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