Omega upbeat despite feeling the squeeze

KITCHEN manufacturer Omega reported a rise in profits but said that the credit crunch was beginning to take its toll as order books slowed as homeowners and housebuilders tighten their belts.

Announcing its interim results for the six months to June 27, the group said turnover had increased 10% to £17.9m, whilst pre-tax profits had increased by 4% to £4m.

Omega, based in Thorne, near Doncaster, also said it had purchased an additional 3.42 acres of land adjacent to its existing factory – providing future expansion potential of up to 95,000 sq ft.

The credit squeeze and the downturn in the economy have led to a slowdown in activity both in the new build housing sector and on the high street.

However the group said it expected to see an uplift from home improvements – where home owners are choosing to improve their properties rather than move.

Omega sources most of its raw materials from Europe and said that the continued strength of the Euro was continuing to affect its costs.

Chairman Bob Murray said the strength of the Euro had affected profitability in the first six months compared with the same period in 2007 by £500,000.

Commenting on the results Mr Murray said that while the economic environment is “undoubtedly challenging” the group was continuing to launch new products and strengthening its competitive position.

Mr Murray said: “I am delighted to report a positive set of results for the first six months of the year. We have a robust business model, the balance sheet is strong and we continue to take market share. The board remains confident in its strategy for growth and in the prospects for the group going forward. ”

Omega designs, manufactures and market branded kitchen furniture through three main brands: Sheraton, Omega and Chippendale.

These three brands are sold mainly through independent kitchen specialist outlets throughout the UK.

The board announced a dividend of 0.94p – up 4% from last year.