Pre-tax profits at a Co Tyrone kitchen unit designer and manufacturing business have fallen by 28% to £1.6m, its most recent accounts have shown.
BA Kitchen Components, set up by twin brothers Kieran and Brian McCracken, grew turnover by over £1m to £43m over the year to the end of March 2024.
However, rising costs of sales and distribution bit into margins, as the company continues to deal with supply chain problems connected to geopolitical instability.
In the strategic report attached to the accounts, the Cookstown-based company describes their principal business as “the design, manufacture and distribution of kitchen and bedroom unit doors, components and complete kitchens.”
Revenues at BA Kitchen Components went up by 3%, from a 2023 figure of £41.9m to £43.2m.
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Costs continued to rise during the period, however, with cost of sales up 5% to £33.4m and distribution costs going up by a quarter to £2.1m. Administrative expenses also increased slightly, from £5.2m to £5.7m.
Collectively, these cost increases cut the company’s profit before tax by 28%, falling to £1.6m from £2.2m.
The amount the company owes to creditors due within one year went up by 25% to £10.4m, while the amount owed by debtors increased to £7.3m. Both of these changes are largely attributable to movements of debt within group companies.
Staff numbers at the company increased slightly from 305 to 309, with its pay bill rising from £10.1m to £11m.
In the review of the company’s business in the strategic report, the directors say they “consider the results of the financial year and the position of the company at year end to be satisfactory.”
It adds that they are confident their market share will increase in the coming year.
They added that “2024 saw continued successful implementation of the strategy with substantial progress made in new product development, investment in machinery and people, and the move into complete kitchens”.
The directors added: “The company continues to closely monitor its operations, liquidity and capital resources and is actively working to minimise the current and future impacts of the current difficult trading conditions caused by Brexit, conflicts in Ukraine and the Middle East and other geopolitical tensions.
“As expected, this situation is presenting several challenges to the business, particularly to its supply chain in the form of raw material costs, finance costs due to high interest rates, energy costs and labour availability and cost.
The report adds that “it expects conditions within the sector to remain challenging in the short and medium term as the cost-of-living crisis and the subdued housing market continues to be very prevalent in the UK”.