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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 805.00 | 770.00 | 840.00 | 805.00 | 805.00 | 805.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Fabricated Textile Pds, Nec | 104.82M | 6.69M | 0.9239 | 8.71 | 58.26M |
From Apr 2019 to Apr 2024
TIDMCFX
RNS Number : 8947U
Colefax Group PLC
24 January 2017
AIM: CFX
24 January 2017
COLEFAX GROUP PLC
("Colefax" or the "Group")
Half Year Results
for the six months ended 31 October 2016
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.
Key Points
-- Group sales of GBP39.53m (2015: GBP37.98m) -- Group pre-tax profit of GBP1.90m (2015: GBP3.27m) affected by:
o challenging conditions in core US market
o hedging losses following decline in Sterling
-- Earnings per share of 12.50p (2015: 21.60p) -- Net cash increased to GBP8.0m (2015: GBP7.8m) -- Interim dividend increased to 2.30p per share (2015: 2.20p)
-- Core Fabric Division sales up 4.7% to GBP34.87m but down by 7.3% on constant currency basis, reflecting difficult trading conditions in US
-- New showroom opened in Boston in October, with showroom in Atlanta to open in February -- Decorating Division opening new Pimlico Road showroom in February
David Green, Chairman, said:
"Results reflect the challenging trading conditions in our core US market, where sales declined by 10% on a constant currency basis. Our decision to hedge our US Dollar exposure also incurred losses and will continue to adversely affect results this financial year and next.
We have continued to invest in our business with significant one-off capital expenditure this year and expect to see a positive benefit from our new US showrooms and new Decorating Division premises in London.
The Group has a strong balance sheet and we will continue to invest with confidence in our diverse portfolio of brands"
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations.
Enquiries:
Hot Features
Premium
Colefax Group David Green, Chief Tel: 020 7318
plc Executive 6021
Rob Barker, Finance
Director
KTZ Communications Katie Tzouliadis, Tel: 020 3178
Emma Pearson 6378
Peel Hunt LLP Dan Webster, Adrian Tel: 020 7418
(Nominated Advisor Trimmings, George 8900
And Broker) Sellar
CHAIRMAN'S STATEMENT
Financial Results
Group sales for the six months to 31 October 2016 increased by 4% to GBP39.53 million (2015: GBP37.98 million) but decreased by 6.5% on a constant currency basis. Pre-tax profits decreased to GBP1.90 million (2015: GBP3.27 million). Earnings per share decreased to 12.5p (2015: 21.6p). The Group ended the half year with net cash of GBP8.0 million (2015: GBP7.8 million).
The main reason for the decline in profits in the first six months was challenging trading conditions in our core US market where sales declined by 10% on a constant currency basis. In addition, our decision to hedge our US Dollar exposure meant that we did not benefit from the significant decline in Sterling after the Brexit vote and incurred hedging losses of GBP755,000. Excluding hedging losses, operating profits declined by 19% to GBP2.66 million. Trading conditions in the UK were relatively stable after the Brexit vote and sales increased by 1% during the period. In Europe trading conditions remained challenging and sales declined by 6% on a constant currency basis
During the period the Group purchased and cancelled 537,000 shares at a cost of GBP2.57 million and representing 5% of the Group's issued share capital.
In line with our progressive dividend policy the Board has decided to increase the interim dividend by 5% to 2.30p per share (2015: 2.20p). The interim dividend will be paid on 10 April 2017 to shareholders on the register at the close of business on 3 March 2017.
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 88% of the Group's sales, increased by 4.7% to GBP34.87 million (2015: GBP33.33 million) but decreased by 7.3% on a constant currency basis. Excluding hedging losses of GBP755,000 operating profits decreased by 18.5% to GBP2.73 million (2015: GBP3.35 million) reflecting difficult trading conditions in our core US market.
Sales in the US, which represent 59% of the Fabric Division's turnover, increased by 6% in reported terms but decreased by 10% on a constant currency basis. This reflects uncertain trading conditions in the run up to the US election. We have continued to invest in the US market and opened our new showroom in Boston in October and will open a new showroom in Atlanta in February. Previously we have sold through agents in these two major territories.
Sales in the UK, which represent 19% of the Fabric Division's turnover, were up by 1% compared to last year and so far sales do not seem to have been adversely impacted by the Brexit vote. We are concerned by the slowdown in high end housing transactions as a result of the increase in stamp duty that was introduced in December 2014 because trading tends to lag changes in the high end housing market.
Sales in Continental Europe, which represent 19% of the Fabric Division's turnover, increased by 9% on a reported basis but were down by 6% on a constant currency basis. Trading conditions overall have remained challenging, but there are some significant variations between countries. In France, which is our largest market, constant currency sales increased by 4% which was better than expected partly due to a significant contract order in the period. In Germany which is our second largest market sales declined by 1.6% and in Italy which is our third largest market sales declined by just 0.2%.
Sales in the rest of the world, which represent just 3% of the Fabric Division's turnover, decreased by 14% on a constant currency basis. The major territories in the rest of the world are China, Russia and the Middle East, although they represent a small part of overall sales.
-- Furniture - Kingcome Sofas
Sales for the six months to October 2016 decreased by 9% to GBP1.15 million (2015: GBP1.26 million) with all of the decrease attributable to a contract order in the prior year. Operating profit was just GBP9,000 compared to GBP74,000 in 2015. The order book was down 6% at the period end, but is currently ahead of last year despite very competitive market conditions for high end furniture.
Interior Decorating Division
Decorating sales, which account for 9% of Group turnover, increased by 3% during the period and the Division made a reduced first half loss of GBP84,000 compared to a loss of GBP148,000 for the prior year
The Decorating Division had a demanding six months due to preparations for the move out of 39 Brook Street, where it had been based for over 80 years, to new premises at 89-91 Pimlico Road. The office move was successfully completed in December and the new showroom will open in early February. The business will continue to sell high quality decorative antiques but on a smaller scale than in Brook Street with significantly lower inventory. We are optimistic about trading prospects at the new location which is synonymous with high end decorating in London.
Customer deposits increased throughout the period and remain at a healthy level. The significant devaluation of Sterling following the Brexit vote has increased the attractiveness of the business to overseas customers both for projects in the UK and overseas.
Prospects
The major issue for the Group over the last six months has been the decline in Fabric Division sales in our core US market and this will weigh on our results this year. We did not foresee the Brexit result and our decision to hedge our US Dollar exposure for this year and part of next year will result in an expected pre-tax charge of approximately GBP2 million for the current financial year and GBP1.4 million next year. Longer term, if Sterling weakness persists the Group will be a major beneficiary due to the fact that over 75% of Group sales are made in overseas markets and mostly invoiced in local currency.
We have continued to invest in our business with significant one-off capital expenditure this year and we expect to see a positive benefit from our new US showrooms in Boston and Atlanta and our new Decorating Division premises in London.
The Group has a strong balance sheet with cash of GBP8.0 million and we will continue to invest with confidence in our diverse portfolio of brands.
David Green
Chairman
24 January 2017
COLEFAX GROUP PLC
INTERIM GROUP INCOME STATEMENT
Unaudited Unaudited Audited
Six
months Year
Six months to 31 to 30
to 31 Oct April
Oct 2016 2015 2016
GBP'000 GBP'000 GBP'000
Revenue 39,529 37,985 76,879
Profit from operations 1,903 3,273 5,013
Finance income - 3 3
Finance expense - - -
- 3 3
Profit before taxation 1,903 3,276 5016
Tax expense (628) (949) (1,555)
Profit for the period attributable to equity holders of the parent 1,275 2,327 3,461 Basic earnings per share 12.5p 21.6p 32.2p Diluted earnings per share 12.5p 21.6p 32.2p
COLEFAX GROUP PLC
INTERIM GROUP STATEMENT OF COMPREHENSIVE
INCOME
Unaudited Unaudited Audited
Six
months Year
Six months to 31 to 30
to 31 Oct April
Oct 2016 2015 2016
GBP'000 GBP'000 GBP'000
Profit for the year 1,275 2,327 3,461
Other comprehensive income /
(expense):
Items that will not be reclassified
to profit and loss:
Exchange differences on translation
of foreign operations 2,543 (61) 642
Remeasurement of defined benefit
pension scheme - - (100)
Tax relating to items that will
not be reclassified to profit
and loss (617) (15) (106)
----------- ---------- -----------
1,926 (76) 436
Items that will or may be reclassified
to profit and loss:
Cash flow hedges:
(Losses) / gains recognised
directly in equity (3,309) 78 (805)
Transferred to profit and loss
for the year 755 (120) 144
Tax relating to items that will
or may be reclassified to profit
and loss 511 8 132
----------- ---------- -----------
(2,043) (34) (529)
Total other comprehensive income
/ (expense) (117) (110) (93)
Total comprehensive income for
the period attributable to equity
holders of the parent 1,158 2,217 3,368
------------------------------------------ ----------- ---------- -----------
COLEFAX GROUP PLC
INTERIM GROUP STATEMENT OF FINANCIAL
POSITION
Unaudited Unaudited Audited
At 31 At 30
At 31 Oct April
Oct 2016 2015 2016
GBP'000 GBP'000 GBP'000
Non-current assets:
Property, plant and equipment 9,135 7,264 7,551
Deferred tax asset - 307 35
9,135 7,571 7,586
Current assets:
Inventories and work in progress 13,825 13,333 12,518
Trade and other receivables 12,604 9,630 9,179
Cash and cash equivalents 8,024 7,777 10,085
34,453 30,740 31,782
--------------------------------------- ---------- ---------- --------
Current liabilities:
Trade and other payables 16,617 10,631 11,258
Current corporation tax 27 424 163
16,644 11,055 11,421
---------- ---------- --------
Net current assets 17,809 19,685 20,361
---------- ---------- --------
Total assets less current liabilities 26,944 27,256 27,947
--------------------------------------- ---------- ---------- --------
Non-current liabilities:
Deferred rent 2,003 1,426 1,459
Pension liability 177 104 170
Deferred tax liability 115 - -
---------- ---------- --------
Net assets 24,649 25,726 26,318
======================================= ========== ========== ========
Capital and reserves attributable
to equity holders of the Company:
Called up share capital 1,022 1,083 1,076
Share premium account 11,148 11,148 11,148
Capital redemption reserve 1,852 1,791 1,798
ESOP share reserve (113) (113) (113)
Foreign exchange reserve 3,485 987 1,559
Cash flow hedge reserve (2,526) 12 (483)
Retained earnings 9,781 10,818 11,333
Total equity 24,649 25,726 26,318
======================================= ========== ========== ========
COLEFAX GROUP PLC
INTERIM GROUP STATEMENT OF
CASH FLOWS
Unaudited Unaudited Audited
Year
Six months Six months to 30
to 31 to 31 April
Oct 2016 Oct 2015 2016
GBP'000 GBP'000 GBP'000
Operating activities
Profit before taxation 1,903 3,276 5,016
Finance income - (3) (3)
Finance expense - - -
Depreciation 1,279 1,040 2,187
----------- ----------- --------
Cash flows from operations
before changes in working capital 3,182 4,313 7,200
Increase in inventories and
work in progress (862) (1,047) (127)
(Increase) / decrease in trade
and other receivables (2,672) (21) 704
Increase / (decrease) in trade
and other payables 2,547 (191) (582)
Cash generated from operations 2,195 3,054 7,195
----------- ----------- --------
Taxation paid
UK corporation tax paid (132) (232) (556)
Overseas tax paid (623) (525) (781)
-----------
(755) (757) (1,337)
----------- ----------- --------
Net cash inflow from operating
activities 1,440 2,297 5,858
----------- ----------- --------
Investing activities
Payments to acquire property,
plant and equipment (1,705) (1,090) (2,278)
Receipts from sales of property,
plant and equipment 27 23 24
Interest received - 3 2
Net cash outflow from investing (1,678) (1,064) (2,252)
----------- ----------- --------
Financing activities
Purchase of own shares (2,583) - (324)
Interest paid - - (1)
Equity dividends paid (244) (248) (483)
Net cash outflow from financing (2,827) (248) (808)
----------- ----------- --------
Net (decrease) / increase in
cash and cash equivalents (3,065) 985 2,798
Cash and cash equivalents at
beginning of period 10,085 6,861 6,861
Exchange gains / (losses) on
cash and cash equivalents 1,004 (69) 426
Cash and cash equivalents at
end of period 8,024 7,777 10,085
------------------------------------ ----------- ----------- --------
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 2017.
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 2016,
the Company paid a final dividend for the year
ended 30 April 2016 of 2.40p per ordinary share
amounting to GBP244,000.
The proposed interim dividend of 2.30p (2015:
2.20p) per share is payable on 10 April 2017 to
qualifying shareholders on the register at the
close of business on 3 March 2017.
3. Basic earnings per share have been calculated
on the basis of earnings of GBP1,275,000 (2015:
GBP2,327,000) and on 10,207,315 (2015: 10,767,500)
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 GBP1,275,000 (2015:
GBP2,327,000) and on 10,207,315 (2015: 10,767,500)
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 (2015: nil).
5. The financial information for the year ended 30
April 2016 does not constitute the full statutory
accounts for that period. The Annual Report and
Financial Statements for the year ended 30 April
2016 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 2016 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 Company'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 company news service from the London Stock Exchange
END
IR LLFSDLEIVFID
(END) Dow Jones Newswires
January 24, 2017 02:00 ET (07:00 GMT)
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