RNS Number:3556U
Colefax Group PLC
19 January 2004
COLEFAX GROUP
INTERIM RESULTS
FOR THE SIX MONTHS TO 31 OCTOBER 2003
Colefax Group designs and distributes furnishing fabrics and wallpaper and
owns a leading interior decorating subsidiary.
Portfolio of five major fabric brands:
"Colefax and Fowler", "Cowtan & Tout",
"Jane Churchill", "Manuel Canovas" and "Larsen"
Key points
*Pre-tax profit increased by 7% to #1.76m (2002: #1.65m)
*Earnings per share increased by 20% to 6.15p (2002: 5.11p)
*Sales of #31.25m, down by 3% (2002: #32.19m)
*Maintained interim dividend of 1.34p per share (2002: 1.34p)
David Green, chairman and chief executive, commented,
"We believe that the Group has performed reasonably well given current market
conditions, and we are benefiting from prior year cost savings, particularly in
France. Although we are seeing signs of growth in our major market, the US, the
rapid decline of the US dollar against Sterling and the Euro, and its continuing
weakness, will continue to impact the Group's performance."
Enquiries:
Colefax Group plc David Green, Chairman Tel: 020 7448 1000
Biddicks Katie Tzouliadis / Kathryn van der Kroft Tel: 020 7448 1000
CHAIRMAN'S STATEMENT
Financial results
The Group's pre-tax profit for the six months to 31st October 2003 increased by
7% to #1.76 million (2002: #1.65 million) on sales down 3% at #31.25 million
(2002: #32.19 million). Earnings per share increased by 20% to 6.15p (2002:
5.11p) with 11% of this increase due to the effect of share buybacks in the
current and prior periods.
The Board has decided to recommend a flat interim dividend of 1.34p per share
(2002: 1.34p). This reflects uncertainties relating to the current weakness of
the US dollar. The interim dividend will be paid on 8th April 2004 to
shareholders on the register at the close of business on 5th March 2004.
Group net borrowings increased by #0.4 million to #5.4 million, which represents
gearing of 40% to net tangible assets. The Group's operating cash inflow during
the period was #1.9 million compared to #4.4 million in the prior year. This is
mainly due to differences in the timing of creditor payments and deposit
receipts. During the period, the Group purchased and cancelled 382,000 shares at
a cost of #278,000 and representing 1.9% of the Group's issued share capital.
Product Division
Fabric - Portfolio of Five Brands: "Colefax and Fowler", "Cowtan and Tout",
"Jane Churchill", "Manuel Canovas" and "Larsen"
Sales in the US, which represent 56% of the fabric division's turnover, were 1%
down on a like-for-like basis. Since the end of October 2003, there is some
evidence of an increase in activity in this market and we are cautiously
optimistic about sales prospects for the remainder of the year
Sales in the UK, which represent 20% of the fabric division's turnover, were
down 2% on a like-for-like basis. The high end housing market in the UK is still
difficult and coupled with a lack of contract activity, we do not expect any
significant short-term improvement in this market.
Sales in Continental Europe, which represent 21% of the fabric division's sales
decreased by 7% on a like-for-like basis. This area has seen the largest decline
in all our markets during the first six months and although market conditions
have improved slightly, we expect trading conditions to remain generally
difficult.
Sales in the rest of the world, which represent 3% of the fabric division's
sales, were flat during the period. We continue to look for growth opportunities
in the Far East and the Middle East, although this market will remain relatively
insignificant in overall Group terms.
Furniture - Kingcome Sofas
Sales in the first six months of the year were up 34% mainly due to the
introduction of new models and Kingcome's own fabric range. Both retail and
trade sales reported good increases compared to a difficult trading period last
year. The improved sales, together with the cost savings made last year, mean
that this division will return to profitability in the current year.
Accessories - Manuel Canovas
This division of the Group, based in Paris, has been adversely affected by the
strength of the Euro. This has reduced gross profit margins in certain export
markets, particularly the US. We have reduced costs to mitigate the currency
situation and continue to explore options for improving margins.
Interior Decorating Division
Interior decorating sales for the first six months decreased by 11% to #3.4
million. Antique sales have continued to suffer from a lack of overseas
visitors, especially from the US. The weak dollar will make it increasingly
difficult for us to obtain work in the US, which is traditionally a strong
market for this division. As a result, we expect trading to remain challenging
over the next twelve months.
Prospects
We believe that the Group has performed reasonably well given current market
conditions, and we are benefiting from prior year cost savings, particularly in
France. Although we are seeing signs of growth in our major market, the US, the
rapid decline of the US dollar against Sterling and the Euro, and its continuing
weakness, will continue to impact the Group's performance.
David Green
Chairman
GROUP PROFIT AND LOSS ACCOUNT
For the six months ended 31 October 2003
Six months to Six months to
31 Oct 31 Oct
2003 2002
#'000 #'000
Turnover 31,254 32,188
Operating profit 1,878 1,772
Interest payable (116) (119)
------------- -------------
Profit before taxation 1,762 1,653
Taxation (599) (579)
------------- -------------
Profit after taxation 1,163 1,074
Dividends (248) (211)
------------- -------------
Retained profit for the year 915 863
------------- -------------
Earnings per share 6.15p 5.11p
Diluted earnings per share 6.05p 5.02p
Dividend per share 1.34p 1.34p
GROUP BALANCE SHEET
At 31 October 2003
At 31 Oct At 31 Oct At 30 April
2003 2002 2003
#'000 #'000 #'000
Fixed assets 7,450 8,222 7,755
Current assets:
Stocks and contracts in 12,882 13,387 13,039
progress
Debtors 8,872 8,165 9,211
Cash at bank and in hand 1,989 1,677 1,639
--------- --------- ---------
23,743 23,229 23,889
--------- --------- ---------
Creditors: amounts falling due
within 16,234 17,637 16,683
one year
Net current assets 7,509 5,592 7,206
--------- --------- ---------
Total assets less current 14,959 13,814 14,961
liabilities --------- --------- ---------
Creditors: amounts falling due
after one 1,250 482 1,500
year
Provision for liabilities and 130 54 130
charges --------- --------- ---------
13,579 13,278 13,331
--------- --------- ---------
Capital and reserves:
Called up share capital 1,971 2,076 2,009
Share premium account 11,087 11,055 11,087
Capital redemption reserve 895 777 857
Profit and loss account (374) (630) (622)
--------- --------- ---------
13,579 13,278 13,331
--------- --------- ---------
GROUP CASH FLOW STATEMENT
For the six months ended 31 October 2003
Six months to Six months to
31 Oct 31 Oct
2003 2002
#'000 #'000
Net cash inflow from operating 1,851 4,438
activities =========== ===========
Returns on investments and servicing
of finance
Interest received 3 10
Interest paid (118) (142)
----------- -----------
(115) (132)
Taxation
UK corporation tax paid (211) (178)
Overseas tax paid (123) (427)
----------- -----------
(334) (605)
Capital expenditure and financial
investment
Payments to acquire tangible fixed (1,057) (1,247)
assets
Receipts from sales of tangible fixed 20 54
assets ----------- -----------
(1,037) (1,193)
Equity dividends paid (392) (406)
----------- -----------
Cash (outflow)/inflow before financing (27) 2,102
----------- -----------
Financing
Purchase of own shares (278) (1,870)
Repayment of long-term loan (1,164) (487)
----------- -----------
Net cash outflow from financing (1,442) (2,357)
----------- -----------
(Decrease) in cash in the period (1,469) (255)
----------- -----------
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the six months ended 31 October 2003
Six months to Six months to
31 Oct 31 Oct
2003 2002
#000 #000
Profit for the period 1,163 1,074
Currency translation differences on
foreign (128) (65)
currency
net investments
Currency translation differences on
foreign (442) (492)
currency loans
Deferred tax on long-term loan foreign
currency movements 181 202
=========== ==========
Total recognised gains and losses
relating to 774 719
the period =========== ==========
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1.Cash flow statement
Six months Six months
to 31 Oct to 31 Oct
2003 2002
#'000 #'000
Reconciliation of operating profit to net
cash inflow from operating activities
Operating profit before interest and tax 1,878 1,772
Depreciation charges 1,153 1,212
(Profit) on sale of tangible fixed assets (12) (35)
(Increase) in stocks (72) (147)
Decrease in debtors 196 340
(Decrease)/increase in creditors (1,292) 1,296
----------- -----------
Net cash inflow from operating activities 1,851 4,438
----------- -----------
2. The interim dividend is payable on 8th April 2004 to qualifying
shareholders on the register at the close of business on 5th March 2004.
3. Earnings per share have been calculated on the basis of earning of
#1,163,400 (2002: #1,074,000) and on 18,929,635 (2002: 21,018,289) 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 #1,163,400
(2002: #1,074,000) and on 19,220,712 (2002: 21,396,762) ordinary shares
being the weighted average number of ordinary shares in the period adjusted
to assume conversion of all dilutive potential ordinary shares 291,077
(2002: 378,473).
5. The interim accounts are unaudited. The above financial information does
not comprise full accounts within the meaning of Section 240 of the
Companies Act 1985 (as amended).
6. Copies of the interim report are being sent to shareholders and will also
be made available on request to members of the public at the Company's
registered office at 39 Brook Street, London W1K 4JE.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QKAKQOBKDPDD