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CFX sailed through the last 2 years
and continue to rapidly reduce their share count.
Dreadful.
What happens when the next recession hits?.
Challenging market conditions for this one right now
Down around 12% since my last post.
Only creates value if profitability can be maintained longer term.
Where is the strategy to grow the business...? To grow in emerging markets etc...
I'm not making a case for acquisitions, however the company appears perhaps pedestrian,
is there a solid longer term future ....?.
Would appreciate any view on the above, thanks. As always all IMV ONLY, please DYOR.
RNS just out shows what a solid company CFX is. I have got to know the FD quite well over the years from my mostly solo attendance at the AGMs (Must recommend coffee and biscuits!!!). They are very careful with their expenditure and that is as always reflected in their cash generation. Share buy backs over many years has mopped up huge amounts of shares so there is tremendous value in the remaining shares. At one time WGB looking like they might make a take-over bid, but they have had a sudden fall from grace (just showing how more stable CFX is!). The CE must surely be thinking about spending more time with his family so there is an outside chance of a bid??
So although the frugal dividend of 5p a share is not a big attraction - one must remember that share buy backs are huge and any resultant increase in share value is a capital gain and not subject to the dividend tax.
The Buzz
mentioned by Richard Beddard in iii as stable and profitable business
http://www.privatepunter.co.uk/Companies/covering-cfx-22-september-2014
http://www.stockopedia.com/content/colefax-cfx-doing-the-right-things-78501/
Profits in the core fabric division increased 4% compared to the prior year and the decline in the interim profits was due to a weak performance by the Decorating Division and expenses of £130,000 relating to the tender offer in September last year. Sales in the Fabric Division, which represent 89% of group sales, fell by 2% to £30.21m. Chairman David Green said: "Current trading conditions are still extremely challenging but we are cautiously optimistic about growth in our major market, the US. Our other principal markets remain weak and I think this situation will continue for at least another year." Earnings per share slipped to 8.8p from 9.9p previously. Net cash increased to £5.59m from £5.30m before.
Upmarket furnishing, fabrics and wallpapers designer Colefax said persistently weak market conditions in its key markets hurt half year results but it remains cautiously optimistic about growth in the US. Pre-tax profit fell to £1.79m for the six months ended October 31 2012 from £1.98m the same time a year earlier. Sales for the period slipped to £34.04m from £35.14m. Underlining its confidence in future trading, Colefax increased the dividend to 1.90p per share from 1.85p previously. The group, which trades under Colefax and Fowler, Cowtan & Tout, Jane Churchill, Manuel Canovas and Larsen, said the results, which were in line with company expectations, reflect challenging market conditions in most of its major markets, especially the UK and Europe.
Upmarket furnishing, fabrics and wallpapers designer Colefax said trading since its July update has remained generally difficult but broadly in line with expectations. The group, whose brands include Colefax, Fowler and Jane Churchill, said as a result it is cautious about its key autumn selling period especially in the UK and Europe. The Mayfair-based decorating company said overall sales in its core Fabric Division fell 1% in the four months ended 31st August on a constant currency basis. Sales in the US, the group's biggest market, climbed 6%, sales in the UK fell 8% while European sales dropped 7%.
AGM STATEMENT Colefax will be holding its Annual General Meeting today and Alan Smith, Non Executive Director, will make the following comment on current trading, "Since we announced our final results in July, trading conditions have remained generally difficult but broadly in line with expectations. In our core Fabric Division, overall sales for the four months to 31st August 2012 are down 1% on a constant currency basis. Sales in the US, which is our largest market, were up 6%, sales in the UK were down 8% and European sales were down 7%. As the Group enters its important autumn selling season we remain cautious about the trading outlook especially in the UK and Europe."
http://www.investegate.co.uk/Article.aspx?id=201209110700039249L
Prospects Trading in all our major markets remains difficult. However, over the last two months, we have seen a small improvement in our largest market, the US. The current economic conditions prevailing in our most important markets make it difficult to be optimistic about short term growth prospects. The Group has a strong balance sheet and is well placed to deal with adverse market conditions. Until we are confident of an improvement we will continue to run the business prudently focussing on cash flow and tight control of working capital.
David Green, Chairman of Colefax, commented, "The principal reason for the decline in our pre-tax profits was a very weak performance from the Decorating Division which made a loss of £87,000 compared to an exceptional profit of £2.01 million last year. Sales in the Product Division were flat reflecting difficult trading conditions in all of our major markets. The current economic conditions prevailing in our most important markets make it difficult to be optimistic about short term growth prospects. The Group has a strong balance sheet and is well placed to deal with adverse market conditions. Until we are confident of an improvement we will continue to run the business prudently focussing on cash flow and tight control of working capital."
Highlights · Sales of £70.40m (2011: £77.72m) · Pre-tax profit of £3.15m (2011: £6.52m) · Earnings per share of 15.8p (2011: 33.0p) · Net cash of £8.52m (2011: £6.30m) · Final dividend maintained at 2.00p per share (2011: 2.00p per share), taking total dividend for the year to 3.85p (2011: 3.85p) · Results impacted by very weak performance from the Decorating Division · Strong financial position but outlook remains cautious
http://www.investegate.co.uk/Article.aspx?id=201207260700095284I
Market wont like this
David Green, Chairman, said "The principal reason for the decline in our pre-tax profit for the six months to 31 October 2011 was a weak performance from the Decorating Division which made a loss of £248,000 for the first half compared to an exceptional profit of £625,000 in the same period last year. In addition, sales in the Product Division's principal markets were weaker than we expected. Since the half year end trading conditions in the UK and Europe have deteriorated and we expect trading to become more difficult. In the US, which is our major market, we expect the recovery to continue but at a slower pace than we previously anticipated. There are still three important sales months left in this financial year but, as a result of current trading conditions, the Board now believes that this year's pre-tax profits will be significantly below current market expectations. The Group has a strong balance sheet and we continue to invest in our portfolio of brands but until we have evidence of a return to growth our focus will remain on managing cash flow and controlling costs."
Half Year Results for the six months ended 31 October 2011 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 · Sales of £35.14m (2010: £36.69m) · Pre-tax profit of £1.98m (2010: £2.98m) · Earnings per share of 9.9p (2010: 12.4p) · Net cash of £5.30m (2010: £7.26m) · Interim dividend held at 1.85p per share (2010: 1.85p per share) · Weak performance from the Decorating Division · Recovery in core US market slower than expected
http://www.investegate.co.uk/Article.aspx?id=201201250700131183W
COLEFAX Colefax may be the archetypal safety-first investment: profitable, unburdened by debt and operating in a prosaic business - upmarket fabric and wallpaper. It owes its stability to chairman and chief executive David Green, who has been in charge since 1986 and owns almost a third of the shares. Green is downbeat about the company's immediate prospects, even though 2011 seemed to herald a return to pre-credit crunch levels of profitability when profits were enhanced by the completion of major decorating projects. Economic uncertainty and high cotton, linen and silk prices mean a full and sustained recovery could be years away. Meanwhile Colefax continues to buy back shares, and since Green has a lot to lose if the company turns out to have paid inflated prices, he must be confident that the shares are cheap. Source moneywise