OKA earnings fall to £1.7m in FY25

Home furnishings retailer OKA Direct Limited has seen adjusted EBITDA fall to £1.7m in its full-year results, down from £6.7m in the prior period, representing a margin of 4.7% compared with 12.1% in 2024. 

Gross margin declined to 64.9% from 68.9%, which the company attributed to fluctuating freight costs and foreign exchange rates

There was an improvement in its balance sheet, however, with net liabilities reduced from £64.4m to £7.2m for the year ended 28 June. 

The figure includes £7.5m in long-term shareholder loans. OKA’s directors said they remain confident in the business’s ability to continue operating for the foreseeable future, having prepared detailed trading and cash flow projections that include downside scenarios.

In the latest filing at Companies House, OKA’s directors said a “reasonable expectation” existed that the retail group had adequate resources to continue trading, and confirmed the financial statements had been prepared on a going concern basis.

The company’s base case model assumes performance below budget, though directors noted there were “a number of levers that could be pulled” to protect cash without breaching covenant levels.

Meanwhile, sales were said to be broadly in line with the previous year on a pro-rata basis, despite the impact of higher inflation and interest rates during the early part of the period. The company noted that both indicators began to ease toward the year end, offering a more positive outlook for the next financial year.

However, during the period OKA continued to balance “tight cost controls” with selective investment for long-term benefit. It also maintains a rolling 13-week cash flow forecast updated weekly, alongside a three-year financial model to assess long-term needs. 

Acknowledging wider economic uncertainty, directors said the business’ multi-channel model – spanning retail stores, online sales and interior design services – offered partial protection if any single channel in the UK were disrupted.

OKA’s employee numbers had fallen year-on-year as part of a continued focus on operational efficiency. The business said it benefits from a management team that includes one of its original founders, with each department operating under group guidance.