Pre-tax losses have narrowed at Lancashire bed and mattress maker Silentnight following a further restructuring exercise. However, sales at the Barnoldswick-based company, which was bought in a rescue deal by private equity firm HIG Europe three years ago, rose by 11% to break the £100m barrier, and MD Steve Freeman says the group is expecting "further strengthening" in its performance in the current year.
Silentnight Holdings Ltd posted a pre-tax loss, after exceptional items, of £3.2m for the year to 1st February 2014. This is compared with a loss of £4.5m for the 53 weeks to 2nd February 2013. Operating profit, before exceptional items, rose from £931,000 in 2013 to £2.8m.
As well as improving profitability, the group posted a rise in turnover from £98.9m in 2013 to £109.3m.
Silentnight reports that a "significant strengthening" of the UK bed market "in line with the improvement in the UK economy as a whole", as well as investment in new products and improving relationships with its customers, were the reasons for the sales rise.
Steve Freeman says: "Over the past 18 months we have invested significantly in driving greater quality into our brands and becoming industry leading in our service proposition through all customer channels. This has driven an extremely strong trading performance, with our growth outstripping that of the total market which has shown a modest recovery of around 2%. This trend has continued into our current trading year, with both our Silentnight and Sealy Posturepedic brands showing double-digit year-on-year growth as our new product innovation through our Geltex models, Sealy Posturepedic Hybrid and Silentnight Geltex Collection, prove a clear winner with the UK consumer. If we couple this with our development plans for our Rest Assured brand, then 2014/15 will see even further strengthening in our trading performance."
In the directors' report accompanying the accounts, the business added: "The directors aim to continue the management policies which have resulted in the group reporting an increased operating profit during the period. They consider that the UK bed market will remain challenging during 2014, but the restructuring which has taken place, and the ongoing investment in products and marketing, will drive improved sales and operating profits from continuing operations."
Silentnight was acquired by HIG Europe, the European arm of PE firm HIG Capital, from administration in May 2011 in a deal which safeguarded the jobs of its staff. In April 2012, it closed a production site in Batley, West Yorkshire, and relocated all jobs to Barnoldswick. As a result of "ongoing cost reduction actions" across the group, the number of staff fell by 1% during the period, to 945. Silentnight traces its history back to 1946 when it was founded as Clarke's Mattresses in Skipton, North Yorkshire. It relocated to Barnoldswick three years later and moved to its current premises in 1961.