Furniture Village profits plunge 21%

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Furniture Village

Furniture Village has recorded a 21 per cent slump in profits in its full year report, after it invested money to shield itself from a weakened economy.

For the year to April 2, the furniture retailer said EBITDA plunged to £6.6 million, which it attributed to additional costs, the opening of seven stores and an upgrade of its ecommerce platform.

Furniture Village said these investments will “facilitate much improved efficiencies and profitability in the years ahead”.

However, order intakes increased 10 per cent to almost £300 million, boosted by like-for-like increases in store volumes and online, along with like-for-like increases from new stores.

Furniture Village insisted that its underlying business model remained “highly cash generative”, with a closing cash position of £16.7 million.

Chief executive Peter Harrison warned how a challenging trading environment meant the situation could “without doubt” worsen.

“The muted GDP growth prospects for the UK, as outlined in the recent autumn Budget, were a stark reminder of the combined impact of inflationary pressures and an allied reduction in real wage growth on both disposable incomes and business and consumer confidence, these factors hardly contributing to a buoyant retail market,” he said.

“Without doubt, the trading environment is set to become more challenging and, as ever, we must leverage the significant investments made in recent years in stores, online and in our systems to increase productivity and efficiencies, and continue to grow underlying profitability and cash, whilst remaining true to our ethos of ‘doing it properly’.”

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