Colefax Grp. Regulatory News (CFX)

20 Jul 2006 07:01

Colefax Group PLC20 July 2006 Colefax Group plcCFX.L20 July 2006 COLEFAX GROUP PLC ("Colefax" or "the Group") Preliminary Results for the year ended 30 April 2006 Colefax is an international designer and distributor of furnishing fabrics &wallpapers and owns a leading interior decorating business. The Group tradesunder five brand names, which serve different segments of the soft furnishingsmarketplace; these are Colefax and Fowler, Cowtan & Tout, Jane Churchill, ManuelCanovas and Larsen. Highlights • Pre-tax profit increased by 30% to £4.09m (2005 - £3.15m) • Sales up 6% to £68.36m (2005 - £64.46m) • Earnings per share rose by 33% to 17.4p (2005 - 13.1p) • Strong cash generation of £3.7m • Group borrowings reduced to just £0.3 million, representing gearing of 2% to net tangible assets (2005 - 34%) • Proposed final dividend of 2.37p (2005 - 2.16p), giving total dividend of 3.75p, an increase of 7% on last year • Favourable market conditions across the Group's major markets - US market strong - Pick up in demand across European markets, especially Germany - UK boosted by buoyant high end property market • Board confident of continued growth David Green, Chairman of Colefax, commented, "Our improved results this year were due to favourable trading conditions in allour major markets, particularly the US, which does not yet seem to have beenaffected by steadily rising interest rates. Trading has recovered in ContinentalEurope, especially in Germany which is our third largest European market. We will continue to focus on our principal objectives of improving operatingprofits and margins and using our free cash flow to enhance shareholder valueand in addition, we will continue to ensure that our creative quality andcapability remain strong. Trading conditions in all our major markets continueto remain favourable and whilst the recent weakness of the US dollar willnegatively impact our ability to improve margins, I am optimistic of anotheryear of continued growth." Enquiries: Colefax Group plc David B. Green, Chairman Tel: 020 7448 1000 (today)Biddicks Katie Tzouliadis Tel: 020 7448 1000 COLEFAX GROUP PLCCHAIRMAN'S STATEMENT Financial ResultsThe Group's pre-tax profit for the year to 30th April 2006 increased by 30% to£4.09 million (2005 - £3.15 million) on sales up 6% at £68.36 million (2005 -£64.46 million). Earnings per share increased by 33% to 17.4p (2005 - 13.1p).Group net borrowings at the year-end were £0.30 million (2005 - £4.05 million),which represents gearing of 2% to net assets (2005 - 34%). The Board has decided to recommend that the final dividend is increased by 10%to 2.37p (2005 - 2.16p), making a total for the year of 3.75p (2005 - 3.50p), anincrease of 7%. The final dividend will be paid on 12th October 2006 toshareholders on the register at the close of business on 15th September 2006. Our improved results this year were due to favourable trading conditions in allour major markets particularly the US which does not yet seem to have beenaffected by steadily rising interest rates. Trading has recovered in ContinentalEurope especially Germany which is our third largest European market. Product Division Fabric - Portfolio of Brands: "Colefax and Fowler", "Cowtan & Tout", "Jane Churchill", "Manuel Canovas", and "Larsen". Sales in the Fabric Division, which represents 82% of Group sales, increased by7% to £56.01 million (2005 - £52.24 million) Sales in the US, which represents 57% of the Fabric Division's sales, increasedby 6% on a constant currency basis. This market remained strong throughout theyear with most territories performing well. UK sales, which represent 18% of the Fabric Division's turnover, increased by 4%on a like for like basis. A strong high end housing market is behind theimprovement in market conditions and this has continued into the current year. Sales in Continental Europe, which represents 23% of the Fabric Division'sturnover, increased by 2% on a constant currency basis. Particularly encouragingwas the fact that two of our most important markets, France and Germany, showeda return to growth and we believe there are good opportunities to increase salesin these markets. Sales in the rest of the world, which represents just 2% of the FabricDivision's sales, increased by 8% during the year mainly due to a strongrecovery in Australia which is our largest territory in this market. • Furniture - Kingcome Sofas Sales of Kingcome furniture, which account for 3% of Group sales, increased by15% to £2.09 million (2005 - £1.81 million) with all of the increase takingplace in the second half of the year. The main factor behind the improvement hasbeen the relocation of Kingcome's showroom to new premises next to our Colefaxand Fowler showroom in the London's Fulham Road. In January, we closed our tradeshowroom in the Chelsea Harbour Design Centre realising significant costsavings. Kingcome has a very strong forward order book and we are confident of agood result for the current year. • Accessories - Manuel Canovas Manuel Canovas accessories are based in Paris and comprise sales of beachwearand scented candles which account for 4% of Group sales. During the year, salesdecreased by 2% to £2.80 million (2005 - £2.86 million) due mainly to a customerstore closure in France. Sales outside of France showed good growth particularlyin the newer markets. We have launched our new collections for 2006 and theinitial reaction has been encouraging. Decorating Division Interior decorating and antique sales which together account for 11% of Groupsales, decreased by 2% to £7.40 million (2005 - £7.52 million) during the year.The decrease reflects very difficult antiques trading offset by a strongperformance from our decorating teams. The level of decorating deposits remainshealthy and as a result we anticipate a good performance for the current year. Prospects We will continue to focus on our principal objectives of improving operatingprofits and margins and using our free cash flow to enhance shareholder valueand in addition we will continue to ensure that our creative quality andcapability remain strong. Trading conditions in all our major markets continueto remain favourable and whilst the recent weakness of the US dollar willnegatively impact our ability to improve margins, I am optimistic of anotheryear of continued growth. David B. GreenChairman20th July 2006 COLEFAX GROUP PLC GROUP PROFIT AND LOSS ACCOUNTFor the year ended 30th April 2006 As restated Notes 2006 2005 £'000 £'000 --------- ---------Turnover 68,361 64,455Cost of sales 30,575 29,335 --------- ---------Gross profit 37,786 35,120Operating expenses 33,367 31,693 --------- ---------Operating profit 3 4,419 3,427(Loss)/profit on disposal of fixed assets (177) 12 --------- ---------Profit on ordinary activities before interest 4,242 3,439and taxationInterest (148) (292) --------- ---------Profit on ordinary activities before taxation 4,094 3,147 --------- ---------Tax on profit on ordinary activities - UK (933) (924)- Overseas (337) (14) --------- --------- (1,270) (938) --------- ---------Profit for the financial year 2,824 2,209 --------- ---------Basic earnings per share 2 17.4p 13.1pDiluted earnings per share 2 16.8p 13.0p --------- --------- All activity has arisen from continuing operations. COLEFAX GROUP PLC GROUP BALANCE SHEETAt 30th April 2006 As restated 2006 2005 --------- --------- £'000 £'000Fixed assets:Tangible assets 5,403 5,792 --------- ---------Current assets:Stocks and contracts in progress 10,942 12,167Debtors 11,498 9,559Cash at bank and in hand 2,347 1,736 --------- --------- 24,787 23,462 --------- ---------Creditors: amounts falling due within one year 14,493 16,152 --------- ---------Net current assets 10,294 7,310 --------- ---------Total assets less current liabilities 15,697 13,102Creditors: amounts falling due after more than one year - 500Provision for liabilities and charges:Deferred taxation 57 64 --------- ---------Net assets excluding pensions liability 15,640 12,538Pensions liability 134 112 --------- ---------Net assets including pensions liability 15,506 12,426 --------- ---------Capital and reserves:Called up share capital 1,709 1,709Share premium account 11,087 11,087Capital redemption reserve 1,157 1,157ESOP share reserve (287) (499)ESOP capital reserve 228 -Profit and loss account 1,612 (1,028) --------- ---------Equity shareholders' funds 15,506 12,426 --------- --------- The financial statements were approved by the board of directors and authorisedfor issue on 20th July 2006.D. B. Green DirectorR. M. Barker Director COLEFAX GROUP PLC GROUP CASHFLOW STATEMENTFor the year ended 30th April 2006 Notes 2006 2005 £'000 £'000 --------- ---------Net cash inflow from operating activities 3 7,556 4,786Returns on investments and servicing of finance:Interest received 80 20Interest paid (247) (311) --------- --------- (167) (291) --------- ---------Taxation:UK Corporation tax paid (988) (1,074)Overseas tax paid (411) - --------- --------- (1,399) (1,074) --------- ---------Capital expenditure and financial investment:Payments to acquire tangible fixed assets (1,781) (2,179)Receipts from sales of tangible fixed assets 64 32 --------- --------- (1,717) (2,147)Equity dividends paid (574) (571) --------- ---------Cash inflow before financing 3,699 703 --------- ---------Financing:Purchase of own shares - (1,900)Repayment of long-term loans (500) (500) --------- ---------Net cash outflow from financing (500) (2,400) --------- ---------Increase/(decrease) in cash in the period 4 3,199 (1,697) --------- --------- GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the year ended 30th April 2006 2006 2005 £'000 £'000 --------- ---------Profit for the financial year 2,824 2,209Currency translation differences on foreign currency net 127 (62)investmentsCurrency translation differences on foreign currency loans 453 (546)Deferred tax on long-term loan foreign currency movements (189) 230 --------- ---------Total recognised gains and losses relating to the year 3,215 1,831 --------- --------- COLEFAX GROUP PLCNOTES TO THE ACCOUNTSAt 30th April 2006 1. Adoption of New Accounting RequirementsThe Group has adopted FRS 21 'Events after balance sheet date'. Previously,equity dividends declared after the balance sheet date were recognised asliabilities at the year end, as required by company law and SSAP 17 'Accountingfor post balance sheet events'. In accordance with FRS 21 and recent changes tothe law, if a final equity dividend is declared after the balance sheet date butbefore the financial statements are authorised for issue, the dividend is notrecognised as a liability at the balance sheet date. The adoption of FRS 21 has resulted in an increase in shareholders funds of£350,000 at 1st May 2005 (2004 - £354,000) due to the write back of the dividendproposed at 30th April 2005. The Group has also adopted FRS 17 'Retirement benefits', FRS 22 'Earnings pershare', relevant parts of FRS 25 'Financial instruments: disclosure andpresentation' and FRS 28 'Corresponding amounts'. The Group has also voluntarilyadopted FRS 20 'Share based payments'. There have been no impacts from theseaccounting policy changes on the comparatives. 2. Earnings Per ShareBasic earnings per share have been calculated on the basis of profit on ordinaryactivities after tax of £2,824,000 (2005 - £2,209,000) and on 16,227,578 (2005 -16,846,893) ordinary shares, being the weighted average number of ordinaryshares in issue during the year. Shares owned by the Colefax Group PlcEmployees' Share Ownership Plan (ESOP) Trust are excluded from the basicearnings per share calculation. Diluted earnings per share have been calculated on the basis of profit onordinary activities after tax of £2,824,000 (2005 - £2,209,000) and on16,728,940 (2005 - 17,031,297) being the weighted average number of shares inissue during the year, calculated as follows: 2006 2005Basic weighted average number of shares 16,227,578 16,846,893Dilutive potential ordinary shares, including sharesunder option owned by the Colefax Group Plc ESOPTrust 501,362 184,404 --------- --------- 16,728,940 17,031,297 --------- --------- 3. Operating Profit Cash flow statementReconciliation of operating profit to net cash inflow from operating activities: 2006 2005 £'000 £'000 ------------ ------------Operating profit 4,419 3,427Depreciation charges 2,116 2,271Decrease/(increase) in stocks 1,442 (918)(Increase) in debtors (1,615) (547)Increase in creditors 1,194 553 ------------ ------------Net cash inflow from operating activities 7,556 4,786 ------------ ------------ NOTES TO THE ACCOUNTS (CONT.)At 30th April 2006 4. Cash and FinancingReconciliation of Net Cash Flow to Movement in Net Debt 2006 2005 £'000 £'000 ------------ ------------Increase/(decrease) in cash 3,199 (1,697)Repayment of bank loan 500 500 ------------ ------------Movement in net debt resulting from cash flows 3,699 (1,197)Translation differences 52 (81) ------------ ------------Movement in net debt in the period 3,751 (1,278)Net debt at 1st May (4,051) (2,773) ------------ ------------Net debt at 30th April (300) (4,051) ------------ ------------ At At 1st May Exchange 30th April 2005 Cash flow Other differences 2006 £'000 £'000 £'000 £'000 £'000 ------- -------- ------- --------- --------Analysis of Net DebtCash at bank and in 1,736 559 - 52 2,347handOverdrafts (4,787) 2,640 - - (2,147) ------- -------- ------- --------- -------- (3,051) 3,199 - 52 200 ------- -------- ------- --------- --------Debt due within one (500) 500 (500) - (500)year ------- -------- ------- --------- --------Debt due after one year (500) - 500 - 0 ------- -------- ------- --------- --------Net debt (4,051) 3,699 - 52 (300) ------- -------- ------- --------- -------- 'Other' relates to changes in the maturity of debt. 5. The above financial information, which has been prepared on the same basis asset out in the 2005 annual accounts, except for the adoption of the accountingstandards described in note 1, does not constitute statutory accounts as definedin Section 240 of the Companies Act 1985. The financial information for the yearended 30th April 2006 has been extracted from the statutory accounts on which anunqualified audit opinion has been issued. Statutory accounts for the year ended 30th April 2006 will be delivered to theRegistrar in due course. The comparative financial information is based on thestatutory accounts for the financial year ended 30th April 2005. Those accounts,upon which the auditors issued an unqualified opinion, have been delivered tothe Registrar of Companies. The annual accounts for the year ended 30 April 2006 are expected to be postedto shareholders on 24th July 2006 and will be available from the Company'swebsite on www.colefaxgroupplc.com. 6. Annual General MeetingThe Annual General Meeting of Colefax Group plc will be held at 19-23 GrosvenorHill, London W1K 3QD on 12th September 2006 at 11.00 a.m. This information is provided by RNS The company news service from the London Stock Exchange