Despite net sales being down and the company still making an overall loss, Nobia – the parent group behind national retailer Magnet – has continued to see notable year-on-year profit improvements this quarter.
Compared with Q2 of last year, when Nobia’s UK business saw operating profits of SEK -211m (roughly -£16.2m), the company says it closed this quarter with operating profits totalling SEK -21m ( roughly -£1.61m). Although this is still a negative profit figure, it is a significant financial improvement of around SEK 190 (£14.6m).
This also follows the trend seen in Nobia’s Q1 results earlier this year, in which the company enjoyed an 86% year-on-year increase to its operating profits.
However, this improvement is set against a roughly 10% year-on-year reduction in Q2 net sales in the UK. At the close of this quarter last year, Nobia’s UK net sales were around SEK 1.319bn (approximately £101.5m). However, at the close of Q2 this year, net sales in the UK had decreased to SEK 1.181bn (around £90.9m).
According to Nobia, this decrease was “partly due to an effect of store closures”. The company confirmed that its number of kitchen studios was 168 at the close of the quarter, down from 185 a year ago.
Taking a look at Nobia’s Nordic business, operating profits were actually down by around 31% in the region this quarter, from SEK 79m this time last year to SEK 54m at the close of Q2 2025.
In the company’s Nordic home region, Q2 net sales were also down by a slight 6%, from SEK 1.614 (roughly £124.3m) in 2024 to SEK 1.514 (roughly £116.6m) this year.
Discussing the results, Nobia president and CEO Kristoffer Ljungfelt commented: “We continue to strengthen our profitability, despite a continued soft market. Although volumes in the project market are at a historically low level, our efforts to pool resources into the consumer market are generating solid returns, and our cost out activities and factory consolidations are delivering savings above plan.
Discussing the UK market in particular, Ljungfelt explained: “On a like-for-like store basis, sales in the UK were unchanged. Store visits and kitchen design appointments continue to increase double digit and contribute to the good consumer segment development. However, the low level of residential property developments continue to burden demand in the project segment, especially in the UK.
“Net sales declined due to the ongoing challenges in the project market and the closure of 17 unprofitable stores, reducing the total to 168 stores. However, Magnet consumer sales continued to grow on the back of successful product launches in the higher price segments, contributing to improved product mix and margin development.”
Offering his forecast for the year ahead, Ljungfelt said: “We estimate the consumer market to continue its gradual recovery, while the project market is likely to remain subdued for at least the rest of the year. We are also making progress in the transition of our UK operations to an asset-light model in order to improve the UK profitability, although the underlying market and inflation remains challenging.”
kbbreview recently spoke with George Dymond, Nobia’s executive vice president and head of region for the UK, where he explained how Nobia’s strategy to close so-called “unprofitable” stores was a major factor in the company’s financial turnaround.
