Nobia saw weakened UK sales in the fourth quarter of 2017 due to the phasing out of its Homebase business.
During this phase out, Interior Solutions, which supplied Homebase, has now been discontinued, resulting in a cost of SKr15 million (£1.3m) during Q4.
UK net sales for the Group, which owns Gower, Magnet, Rixonway Kitchens and Commodore Kitchens, fell from SKr1.4 billion (£125m) in Q4 2016 to SKr1.2bn in 2017.
Organic growth fell by 8%, with currency losses of SKr16m impacting net sales for the quarter.
Gross profit amounted to SKr496m and the gross margin at 38.6%.
Operating profit fell from SKr93m in 2016 to SKr67m in Q4 2017, with the operating margin at 5.2%.
Currency effects saw a negative SKr10m impacting on transaction effects.
As well as the Homebase affecting Nobia results in the UK, it also saw a lower number of project deliveries year-on-year, as well as a slight decrease in Magnet sales.
However, the Group claimed it had repositioned the Magnet brand in December, which would see a simplified purchasing process and a clearer offering. It has also launched a new Magnet website and launched the ‘Magnet – Part of the family’ campaign.
The group admitted that it had seen a weakened UK kitchen market, which has been driven by macroeconomic uncertainty. However, it claimed that the market for new construction is continuing to be favoured by low interest rates and state-sponsored incentives.
For the group as a whole, net sales for the fourth quarter reached SKr3.11 billion, down slightly on the SKr3.15bn seen in Q4 2016.
Operating profit amounted to SKr282m, which saw an operating margin of 9.1%.
Currency effects on operating profit saw a loss of SKr25m in transaction effects.
Profit after tax reached SKr232m, while operating cash flow amounted to SKr196m.
For the whole of 2017, the Group saw an increase in net sales, up from SKr12.6bn in 2016 to SKr12.7bn.
It also saw organic growth of 2%, with operating profit totalling SKr1.28bn, corresponding to an operating margin of 10.1%.
Operating profit saw a loss of SKr95m in currency impacts, and profit after tax reached SKr1bn.
Nobia president and chief executive Morten Falkenberg (pictured) said: “Nobia has had a good year. Despite currency headwind and a challenging UK market, we deliver an EBIT margin that reaches our financial target of 10%. Given the company’s satisfactory net profit and strong balance sheet, the Board proposes a dividend totalling SKr7 per share. Our strong financial position will also enable continued investments in growth, both organic and via acquisitions.
“In the fourth quarter sales continued to grow in the Nordics, while sales in the UK were down, primarily because we have exited the Homebase business. I am pleased that the Group’s underlying earnings, adjusted for currency and the ceasing of Homebase, were better than the same quarter last year.”