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Share Name Share Symbol Market Type Share ISIN Share Description
Colefax Group Plc LSE:CFX London Ordinary Share GB0002090453 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 535.00p 525.00p 545.00p 535.00p 535.00p 535.00p 0 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Household Goods & Home Construction 86.1 4.7 38.1 14.0 74.42

Colefax Group PLC Half Year Results

29/01/2019 7:00am

UK Regulatory (RNS & others)


Colefax (LSE:CFX)
Historical Stock Chart

6 Months : From Dec 2018 to Jun 2019

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TIDMCFX

RNS Number : 3325O

Colefax Group PLC

29 January 2019

AIM: CFX

29 January 2019

COLEFAX GROUP PLC

("Colefax" or the "Group")

Half Year Results

for the six months ended 31 October 2018

Colefax is an international designer and distributor of furnishing fabrics & wallpapers and owns a leading interior decorating business. The Group trades under five brand names, serving different segments of the soft furnishings marketplace; these are Colefax and Fowler, Cowtan & Tout, Jane Churchill, Manuel Canovas and Larsen.

Highlights

 
 --   Group sales up 7.8% to GBP45.38m (2017: GBP42.08m); 
       up by 7.7% on a constant currency basis 
 --   Group pre-tax profit up 41% to GBP3.62m (2017: GBP2.56m) 
      -   strong first half performance from Decorating Division 
           due to timing of contracts - profits of GBP738,000 
           (2017: GBP213,000) 
      -   reduced hedging losses of GBP73,000 compared to GBP595,000 
           in prior year 
 --   Core Fabric Division sales up 1.0% to GBP36.89m (2017: 
       GBP36.47m) 
      -   US up by 2%, UK flat, Europe down by 1% 
 --   Earnings per share increased by 55% to 27.9p (2017: 
       18.0p) 
 --   Net cash increased by GBP1.6m to GBP11.1m (2017: GBP9.5m) 
 --   Interim dividend up by 4% to 2.50p per share (2017: 
       2.40p) 
 

David Green, Chairman, said:

"The Group has delivered a positive first half performance against a weakening trading environment in most of our major markets. In our core US market we continue to benefit from the strength of the US Dollar but the confidence that we saw at the start of the year has slowed recently and we are therefore more cautious about growth. In the UK trading remains challenging but could improve quickly if there is a satisfactory resolution to the current high level of Brexit uncertainty

"The Group has a strong balance sheet with net cash of GBP11.1 million and we are well-placed to take advantage of any improvements in market conditions. We will continue to invest with confidence in our portfolio of luxury brands and our worldwide distribution network."

Enquiries:

 
 Colefax Group plc    David Green, Chief         Tel: 020 7318 6021 
                       Executive 
                      Rob Barker, Finance 
                       Director 
 KTZ Communications   Katie Tzouliadis, Dan      Tel: 020 3178 6378 
                       Mahoney 
 Peel Hunt LLP        Adrian Trimmings, George   Tel: 020 7418 8900 
                       Sellar 
 

CHAIRMAN'S STATEMENT

Financial Results

Group sales for the six months to 31 October 2018 increased by 7.8% to GBP45.38 million (2017: GBP42.08 million) and increased by 7.7% on a constant currency basis. Pre-tax profits increased by 41% to GBP3.62 million (2017: GBP2.56 million). Earnings per share increased by 55% to 27.9p (2017: 18.0p). The Group ended the first half of the year with net cash of GBP11.1 million (2017: GBP9.5 million).

The main reason for the increase in profits in the first six months was a strong first half performance from our Decorating Division which made profits of GBP738,000 compared to GBP213,000 last year. In addition US Dollar hedging losses reduced by GBP522,000 due to the absence of contracts put in place prior to the Brexit referendum. In our core US market Fabric Division sales increased by 2.1% on a constant currency basis. In the UK sales were flat and in Europe sales decreased by 0.8% on a constant currency basis reflecting challenging trading conditions in both these markets.

In line with our progressive dividend policy the Board has decided to increase the interim dividend by 4% to 2.50p per share (2017: 2.40p). The interim dividend will be paid on 10 April 2019 to shareholders on the register at the close of business on 15 March 2019.

Product Division

-- Fabric Division - Portfolio of five brands: "Colefax and Fowler", "Cowtan and Tout", "Jane Churchill", "Manuel Canovas" and "Larsen".

Sales in the Fabric Division, which represent 81% of the Group's sales, increased by 1.2% to GBP36.89 million (2017: GBP36.47 million) and by 1.1% on a constant currency basis. Excluding hedging losses of GBP73,000 (2017: GBP595,000) operating profits decreased by 2% to GBP2.86 million (2017: GBP2.92 million) reflecting relatively challenging market conditions especially in the UK and Europe.

Sales in the US, which represent 61% of the Fabric Division's turnover, increased by 2.4% in reported terms and by 2.1% on a constant currency basis. Trading became more difficult towards the end of the period with sales up by 4.4% in the first three months and down by 0.3% in the second three months despite relatively strong general economic conditions. We believe that confidence in our sector has recently been impacted by a number of factors including rising interest rates and stock market volatility.

We are about to start the refurbishment of our Los Angeles showroom and expect this project to be completed by July 2019. Currently we lease and operate eight company owned showrooms in the US covering our most important territories and these now account for over 75% of total US sales.

Sales in the UK, which represent 17% of the Fabric Division's turnover, were flat during the period. The high end housing market remains very weak and historically this has been an important driver of our business. We believe that market conditions in the UK will remain difficult until the uncertainty and potential adverse impact of Brexit is resolved. In August we completed the refurbishment of our showroom in the Chelsea Harbour Design Centre and we are pleased with the positive reaction from our customers.

Sales in Continental Europe, which represent 19% of the Fabric Division's turnover, decreased by 1.1% on a reported basis and by 0.8% on a constant currency basis. Trading in most of our major European markets has been weak despite significant monetary stimulus by the European Central Bank over the past four years which is now coming to an end. In France, which is our largest European market, sales were flat during the period but helped by a significant contract order. In Germany sales were down by 8%. In Italy sales were down by 15% reflecting very challenging economic conditions. We do not anticipate any short term improvement in trading conditions in most of our major European markets. Europe encompasses a wide range of tastes and we will continue focus our sales efforts on the markets best suited to our brands and with the most growth potential.

Sales in the Rest of the World, which represent approximately 3% of the Fabric Division's turnover, decreased by 2% on a constant currency basis. Our major markets comprise the Middle East, Russia, China and Australia. In Russia we have changed our method of distribution from a distributor to an agent and are optimistic about growth prospects in this market. Overall we expect the Rest of the World to remain a relatively small proportion of Fabric Division sales

   --      Furniture - Kingcome Sofas 

Sales for the six months to October 2018 increased by 14% to GBP1.36 million (2017: GBP1.19 million) and the Company made an operating profit of GBP102,000 compared to GBP22,000 in 2017. The increase in sales reflected a strong order book at the start of the year. The majority of sales are made in the UK, especially London and so this was a good performance in difficult market conditions. Currently the order book is in line with last year.

Interior Decorating Division

Decorating sales, which account for just over 16% of Group turnover, increased by 61% in the period to GBP7.1 million (2017: GBP4.4 million). This was a strong performance reflecting the completion of a number of major projects during the period. As a result the Decorating Division made a first half profit of GBP738,000 compared to a profit of GBP213,000 for the same period last year.

Decorating Division sales can vary significantly between periods according to the timing of contract completions. For the current financial year sales will be weighted to the first half of the year and we expect sales for the full year to be below the exceptional performance last year. Customer deposits remain at a healthy level and we remain optimistic about trading from our new Pimlico Road showroom which is performing well in its second full year of operation.

Prospects

The Group has delivered a positive first half performance against a weakening trading environment in most of our major markets. In our core US market we continue to benefit from the strength of the US Dollar but the confidence that we saw at the start of the year has slowed recently and we are therefore more cautious about growth prospects. In the UK trading remains challenging but could improve quickly if there is a satisfactory resolution to the current high level of Brexit uncertainty. In Europe we expect trading to remain difficult but there are opportunities for growth and we will focus our efforts on countries with the most potential.

The Group has a strong balance sheet with net cash of GBP11.1 million and we are well-placed to take advantage of any improvements in market conditions. We will continue to invest with confidence in our portfolio of luxury brands and our worldwide distribution network.

David Green

Chairman

COLEFAX GROUP PLC

 
 INTERIM GROUP INCOME STATEMENT 
 
                                               Unaudited        Unaudited          Audited 
                                              Six months       Six months          Year to 
                                                   to 31            to 31         30 April 
                                                Oct 2018         Oct 2017             2018 
                                                 GBP'000          GBP'000          GBP'000 
 
 
 Revenue                                          45,384           42,083           86,052 
 
 
 Profit from operations                            3,623            2,559            4,721 
 Finance income                                        3                -                1 
 Finance expense                                     (1)              (2)              (3) 
                                                       2              (2)              (2) 
 
 
 Profit before taxation                            3,625            2,557            4,719 
 Tax expense                                       (906)            (729)            (887) 
 
 
 Profit for the period attributable to 
  equity holders of the parent                     2,719            1,828            3,832 
 
 
 Basic earnings per share                          27.9p            18.0p            38.1p 
 Diluted earnings per share                        27.9p            18.0p            38.1p 
 
 
 

COLEFAX GROUP PLC

 
 INTERIM GROUP STATEMENT OF COMPREHENSIVE 
  INCOME 
 
                                                  Unaudited    Unaudited     Audited 
                                                 Six months   Six months     Year to 
                                                      to 31        to 31    30 April 
                                                   Oct 2018     Oct 2017        2018 
                                                    GBP'000      GBP'000     GBP'000 
 
 
 Profit for the year                                  2,719        1,828       3,832 
 
 
 Other comprehensive income / (expense): 
 
 Items that will not be reclassified to 
  profit and loss: 
 
 Exchange differences on translation of 
  foreign operations                                    838          335       (743) 
 Remeasurement of defined benefit pension 
  scheme                                                  -            -          31 
 Tax relating to items that will not be 
  reclassified to profit and loss                     (139)        (411)          76 
                                                -----------  -----------  ---------- 
                                                        699         (76)       (636) 
 Items that will or may be reclassified 
  to profit and loss: 
 
 Cash flow hedges: 
 (Losses) / Gains recognised directly in 
  equity                                              (145)          108         210 
 Transferred to profit and loss for the 
  year                                                   73          595         959 
 Tax relating to items that will or may 
  be reclassified to profit and loss                     14        (133)       (222) 
                                                -----------  -----------  ---------- 
                                                       (58)          570         947 
 
 Total other comprehensive income / (expense)           641          494         311 
 
 Total comprehensive income for the period 
  attributable to equity holders of the 
  parent                                              3,360        2,322       4,143 
----------------------------------------------  -----------  -----------  ---------- 
 

COLEFAX GROUP PLC

 
 INTERIM GROUP STATEMENT OF FINANCIAL POSITION 
 
                                          Unaudited   Unaudited       Audited 
                                          At 31 Oct       At 31   At 30 April 
                                               2018    Oct 2017          2018 
                                            GBP'000     GBP'000       GBP'000 
 
 
 Non-current assets: 
 Property, plant and equipment                8,980       9,771         8,692 
 Deferred tax asset                             188         257           173 
 Pension asset                                   37           -            34 
                                              9,205      10,028         8,899 
 
 Current assets: 
 Inventories and work in progress            14,663      14,203        14,086 
 Trade and other receivables                 11,692      12,056        11,130 
 Cash and cash equivalents                   11,078       9,499         9,177 
                                             37,433      35,758        34,393 
---------------------------------------  ----------  ----------  ------------ 
 
 Current liabilities: 
 Trade and other payables                    13,276      15,054        13,678 
 Current corporation tax                        708         184           306 
                                             13,984      15,238        13,984 
                                         ----------  ----------  ------------ 
 
 Net current assets                          23,449      20,520        20,409 
                                         ----------  ----------  ------------ 
 
 Total assets less current liabilities       32,654      30,548        29,308 
---------------------------------------  ----------  ----------  ------------ 
 
 Non-current liabilities: 
 Deferred rent                                1,977       1,905         1,878 
 Pension liability                                -           3             - 
 Deferred tax liability                         151         636            11 
                                         ----------  ----------  ------------ 
 
 Net assets                                  30,526      28,004        27,419 
=======================================  ==========  ==========  ============ 
 
 Capital and reserves attributable to 
  equity holders of the Company: 
 Called up share capital                        981       1,022           981 
 Share premium account                       11,148      11,148        11,148 
 Capital redemption reserve                   1,893       1,852         1,893 
 ESOP share reserve                           (113)       (113)         (113) 
 Foreign exchange reserve                     2,857       2,703         2,158 
 Cash flow hedge reserve                       (90)       (409)          (32) 
 Retained earnings                           13,850      11,801        11,384 
 
 Total equity                                30,526      28,004        27,419 
=======================================  ==========  ==========  ============ 
 

COLEFAX GROUP PLC

 
 INTERIM GROUP STATEMENT OF CASH FLOWS 
                                               Unaudited    Unaudited     Audited 
                                              Six months   Six months     Year to 
                                               to 31 Oct    to 31 Oct    30 April 
                                                    2018         2017        2018 
                                                 GBP'000      GBP'000     GBP'000 
 
 
 Operating activities 
 Profit before taxation                            3,625        2,557       4,719 
 Finance income                                      (3)            -         (1) 
 Finance expense                                       1            2           3 
 (Profit) / loss on disposal of property, 
  plant and equipment                                (7)            -         235 
 Depreciation                                      1,406        1,382       2,735 
                                             -----------  -----------  ---------- 
 Cash flows from operations before changes 
  in working capital                               5,022        3,941       7,691 
 Increase in inventories and work in 
  progress                                         (387)        (330)       (301) 
 (Increase) / decrease in trade and other 
  receivables                                      (280)        (322)         463 
 (Decrease) / increase in trade and other 
  payables                                         (765)        1,880       1,056 
 
 Cash generated from operations                    3,590        5,169       8,909 
                                             -----------  -----------  ---------- 
 
 
 Taxation paid 
 UK corporation tax paid                            (20)         (14)       (350) 
 Overseas tax paid                                 (503)        (358)       (679) 
                                             ----------- 
                                                   (523)        (372)     (1,029) 
                                             -----------  -----------  ---------- 
 
 Net cash inflow from operating activities         3,067        4,797       7,880 
                                             -----------  -----------  ---------- 
 
 
 Investing activities 
 Payments to acquire property, plant 
  and equipment                                  (1,271)      (1,614)     (2,382) 
 Receipts from sales of property, plant 
  and equipment                                        7            -          49 
 Interest received                                     3            -           - 
 Net cash outflow from investing                 (1,261)      (1,614)     (2,333) 
                                             -----------  -----------  ---------- 
 
 
 Financing activities 
 Purchase of own shares                                -            -     (2,172) 
 Interest paid                                       (1)          (2)         (3) 
 Equity dividends paid                             (253)        (254)       (488) 
 Net cash outflow from financing                   (254)        (256)     (2,663) 
                                             -----------  -----------  ---------- 
 
 
 Net increase in cash and cash equivalents         1,552        2,927       2,884 
 Cash and cash equivalents at beginning 
  of period                                        9,177        6,710       6,710 
 Exchange gains / (losses) on cash and 
  cash equivalents                                   349        (138)       (417) 
 
 Cash and cash equivalents at end of 
  period                                          11,078        9,499       9,177 
-------------------------------------------  -----------  -----------  ---------- 
 

COLEFAX GROUP PLC

 
 NOTES 
 
 1.   The Group prepares its annual financial statements in accordance 
       with International Financial Reporting Standards (IFRS). These 
       interim results have been prepared in accordance with the accounting 
       policies expected to be applied in the next annual financial 
       statements for the year ending 30 April 2019. 
 
      These standards and interpretations are subject to ongoing review 
       and endorsement by the EU or possible amendment by interpretive 
       guidance from the International Financial Reporting Interpretations 
       Committee ('IFRIC') and are therefore still subject to change. 
 
 2.   During the financial period ended 31 October 2018, the Company 
       paid a final dividend for the year ended 30 April 2018 of 2.60p 
       per ordinary share amounting to GBP253,000. 
 
      The proposed interim dividend of 2.50p (2017: 2.40p) per share 
       is payable on 10 April 2019 to qualifying shareholders on the 
       register at the close of business on 15 March 2019. 
 
 3.   Basic earnings per share have been calculated on the basis of 
       earnings of GBP2,719,000 (2017: GBP1,828,000) and on 9,747,000 
       (2017: 10,160,000) ordinary shares being the weighted average 
       number of ordinary shares in issue during the period. 
 
 4.   Diluted earnings per share have been calculated on the basis 
       of earnings of GBP2,719,000 (2017: GBP1,828,000) and on 9,747,000 
       (2017: 10,160,000) ordinary shares being the weighted average 
       number of ordinary shares in the period adjusted to assume conversion 
       of all dilutive potential ordinary shares of nil (2016: nil). 
 
 5.   The financial information for the year ended 30 April 2018 does 
       not constitute the full statutory accounts for that period. The 
       Annual Report and Financial Statements for the year ended 30 
       April 2018 have been filed with the Registrar of Companies. The 
       Independent Auditors' Report on the Annual Report and Financial 
       Statements for the year ended 30 April 2018 was unqualified, 
       did not draw attention to any matters by way of emphasis, and 
       did not contain a statement under 498(2) or 498(3) of the Companies 
       Act 2006. 
 
 6.   Copies of the interim report are being sent to shareholders and 
       will be available from the Group's website on www.colefaxgroupplc.com. 
       Copies will also be made available on request to members of the 
       public at the Company's registered office at 19-23 Grosvenor 
       Hill, London W1K 3QD. 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR LLFSTLEITFIA

(END) Dow Jones Newswires

January 29, 2019 02:00 ET (07:00 GMT)

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