LONDON (Alliance News) - Luxury interior furnishings company Walker Greenback PLC Wednesday reported higher profit and revenue for the first half of the year, prompting a 25% increase in its dividend, and gave a confident outlook for the remainder of the year despite warning about the strength of sterling.
The company, which designs, manufactures and markets wallpapers and fabrics, and owns brands Sanderson, Morris & Co., Harlequin, Zoffany, Scion and Anthology, reported a pretax profit of GBP2.3 million for the six months to July 31, up from a GBP2.0 million a year earlier, as revenue rose 5.4% to GBP41.1 million, from GBP39.1 million.
Overall revenue growth was driven by 10% growth in brand sales in the UK, its largest market, and overseas sales growth of 7.4% at constant currency rates. It said manufacturing sales were up 8.4% in the first half, driven by a strong increase in digital fabric printing sales.
However, it warned that the current strength of sterling is hitting its overseas sales growth performance on a reported basis.
The company raised its interim dividend by 25% to 0.35 pence per share, and said it remains confident of meeting market expectations for the full year, as trading so far in the second half has continued to build on the growth momentum.
"Total brand sales in the first eight weeks of the second half are up an encouraging 5.4% in reportable currency, and 7.0% in constant currency compared with the same period last year. This is a robust performance ahead of our key autumn selling period and reflects strong trading in the UK, where brand sales are up 8.6%, and in overseas markets, where brand sales are on an improving trend up 4.7% in constant currency. Manufacturing also continues to perform strongly," said Chairman Terry Stannard in a statement.
Walker Greenback said the steady improvement in the UK economy and consumer confidence is helping to drive sales growth in the region, while its Western Europe arm is also seeing good signs of growth.
"Although the Eurozone appears to be recovering more slowly, and despite the impact of currency, Western Europe, our second biggest market, has performed strongly with brand sales up 6.9%, 12.2% in constant currency... driven by Southern Ireland, Benelux, and Spain," the company said.
However, the group said that sales in the US, its third largest market, are being hit by sterling strength, and were down 6.9% on a reported basis, but up 3% at constant currencies, in the first half.
Walker Greenback shares were trading 1.2% lower at 204.00 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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