Colefax Grp. Regulatory News (CFX)

25 Jan 2006 07:00

Colefax Group PLC25 January 2006 COLEFAX GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2005 Colefax Group designs and distributes furnishing fabrics & wallpapers and owns a leading interior decorating business. The Group's five major fabric brands are Colefax and Fowler, Cowtan & Tout, Jane Churchill, Manuel Canovas and Larsen. Key Points • Pre-tax profits increased by 11% to £2.012 million (2004: £1.816 million) • Earnings per share rose by 18% to 8.09p (2004: 6.87p) • Sales up by 2% to £32.194 million (2004: £31.701 million) • Proposed interim dividend of 1.38p, a rise of 3% David Green, Chairman and Chief Executive, commenting on prospects, said, " Current trading conditions in our major market, the US, are not as strong asthey were at the start of the financial year and therefore we are cautious aboutfuture growth prospects. Although we have seen a modest strengthening of the USdollar against sterling, there is considerable uncertainty over future exchangerates, which have a major impact on our gross profit margin. We continue toinvest in our core fabric brands and believe we are well placed to takeadvantage of any improvement in market conditions." Enquiries: Colefax Group plc David B. Green, Chairman Tel: 020 7448 1000 (today) Biddicks Katie Tzouliadis Tel: 020 7448 1000 CHAIRMAN'S STATEMENT Financial Results The Group's pre-tax profit for the six months to 31st October 2005 increased by11% to £2.012 million (2004: £1.816 million) on sales up 2% at £32.194 million(2004: £31.701 million). Earnings per share increased by 18% to 8.09p (2004:6.87p) partly due to the effect of share buybacks in the prior period. Group netborrowings decreased by £1.063 million to £2.988 million, which representsgearing of 22% to net tangible assets. The Board has decided to recommend that the interim dividend be increased by 3%to 1.38p per share (2004: 1.34p). The interim dividend will be paid on 12thApril 2006 to shareholders on the register at the close of business on 10thMarch 2006. During the period, trading conditions in the US remained strong and are the primary reason for the improvement in profitability. The US dollar strengthenedslightly during the period although there is considerable uncertainty about itsfuture direction. Trading conditions in most of our other major markets werechallenging, particularly in France. 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 59% of the fabric division's turnover,increased by 8% on a constant currency basis. Sales throughout the US werestrong and with a significant new product launch planned for this year, we wouldnormally be optimistic. However, the rate of growth has slowed in the lastquarter of the calendar year, and we therefore expect future growth to be at aslower pace.Sales in the UK, which represent 18% of the fabric division's turnover, remainedflat and currently there are no signs of any improvement. We do not expect theUK market to show any significant growth until there is a pickup in the high endhousing market. Sales in Europe and the rest of the world, which represent 23% of the fabricdivision's turnover, decreased by 1% on a constant currency basis. The decreasewas mainly due to difficult trading in France, where sales were down by 14%,although we have seen an improvement in sales in the last quarter of thecalendar year. Certain European markets are more encouraging, particularlyGermany which is growing again after several difficult years. • Furniture - Kingcome Sofas Sales of furniture, which account for 3% of Group sales, decreased by 1% duringthe period. After a difficult start to the year, we opened our new Fulham Roadshowroom in July and this is proving to be popular with both our retail andtrade customers. As a result, our current order book is significantly ahead oflast year. We have decided to close our trade showroom in Chelsea Harbour, whichwill lead to cost savings next year. • Accessories - Manuel Canovas The majority of accessories sales, which represent approximately 2% of the Grouptotal, take place in the second half of the year. Currently forward orders areslightly up on last year. Over one third of accessories sales are invoiced in USdollars so recent strengthening of the dollar against the Euro will benefitmargins in the second half of the year. Interior Decorating Division Interior decorating sales for the first six months decreased by 14%, althoughthis is mainly due to the timing of contract completions and the order book iscurrently healthy. Sales of antiques are still difficult and we expect tradingconditions to remain challenging. Prospects Current trading conditions in our major market, the US, are not as strong asthey were at the start of the financial year and therefore we are cautious aboutfuture growth prospects. Although we have seen a modest strengthening of the USdollar against sterling, there is considerable uncertainty over future exchangerates, which have a major impact on our gross profit margin. We continue toinvest in our core fabric brands and believe we are well placed to takeadvantage of any improvement in market conditions. David GreenChairman 25th January 2006 INTERIM GROUP PROFIT AND LOSS ACCOUNT Six Months Six Months Year to 31st Oct to 31st Oct to 30th April 2005 2004 2005 £'000 £'000 £'000 (Restated) (Restated) Turnover 32,194 31,701 64,455 Operating profit 2,103 1,984 3,439Interest (91) (168) (292)---------------- ------------- ------------ ------------- Profit before taxation 2,012 1,816 3,147Taxation (702) (627) (938)---------------- ------------- ------------ ------------- Profit after taxation 1,310 1,189 2,209Dividends (350) (354) (571)---------------- ------------- ------------ ------------- Retained profit for the period 960 835 1,638================ ============= ============ ============= Earnings per share 8.09p 6.87p 13.1pDiluted earnings per share 8.00p 6.80p 13.0p INTERIM GROUP BALANCE SHEET At 31st Oct At 31st Oct At 30th April 2005 2004 2005 £'000 £'000 £'000 (Restated) (Restated) Fixed assets 5,881 5,978 5,792 Current assets:Stocks and contracts in progress 12,314 13,117 12,167Debtors 9,477 8,266 9,559Cash at bank and in hand 3,870 2,944 1,736-------------------------- -------- -------- -------- 25,661 24,327 23,462-------------------------- -------- -------- -------- Creditors: amounts falling duewithin one year 17,436 16,594 16,264 Net current assets 8,225 7,733 7,198-------------------------- -------- -------- --------Total assets less currentliabilities 14,106 13,711 12,990-------------------------- -------- -------- -------- Creditors: amounts falling dueafter one year 250 750 500Provision for liabilities andcharges 64 106 64-------------------------- -------- -------- -------- 13,792 12,855 12,426========================== ======== ======== ======== Capital and reserves:Called up share capital 1,709 1,809 1,709Share premium account 11,087 11,087 11,087Capital redemption reserve 1,157 1,057 1,157ESOP share reserve (499) (466) (499)Profit and loss account 338 (632) (1,028)-------------------------- -------- -------- -------- 13,792 12,855 12,426========================== ======== ======== ======== INTERIM GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Six Months Six Months Year to 31st Oct to 31st Oct to 30th April 2005 2004 2005 £'000 £'000 £'000 Profit for the period 1,310 1,189 2,209 Currency translation differenceson foreign currency netinvestments 61 53 (62) Currency translation differenceson foreign currency loans 583 (290) (546) Deferred tax on long-term loanforeign currency movements (238) 121 230 --------- --------- ---------Total recognised gains and lossesrelating to the period 1,716 1,073 1,831 ========= ========= ========= INTERIM GROUP CASH FLOW STATEMENT Six months Six months Year to 31st Oct to 31st Oct to 30th April 2005 2004 2005 £'000 £'000 £'000 Net cash inflow from operatingactivities 2,921 1,778 4,786 Returns on investments and servicingof finance Interest received 26 8 20Interest paid (135) (170) (311) ---------- --------- ---------- (109) (162) (291) TaxationUK corporation tax paid (536) (593) (1,074)Overseas tax (paid)/refunded (77) 13 - ---------- --------- ---------- (613) (580) (1,074)Capital expenditure and financialinvestmentPayments to acquire tangible fixedassets (889) (1,057) (2,179)Receipts from sales of tangiblefixed assets 16 4 32 ---------- --------- ---------- (873) (1,053) (2,147) Equity dividends paid (350) (354) (571) ---------- --------- ---------- Cash inflow/(outflow) beforefinancing 976 (371) 703 FinancingPurchase of own shares - (930) (1,900)Repayment of long-term loan (250) (250) (500) ---------- --------- ----------Net cash outflow from financing (250) (1,180) (2,400) ---------- --------- ---------- ---------- --------- ----------Increase/(decrease) in cash in theperiod 726 (1,551) (1,697) ========== ========= ========== NOTES1. Cash flow statement Six months Six months Year to 31st Oct to 31st Oct to 30th April 2005 2004 2005 £'000 £'000 £'000Reconciliation of operating profitto net cash inflow from operatingactivities Operating profit before interestand tax 2,103 1,984 3,439Depreciation charges 1,018 1,095 2,271Profit on sale of tangible fixedassets (16) (2) (12)Decrease/(increase) in stocks 95 (1,564) (918)Decrease/(increase) in debtors 264 392 (547)(Decrease)/increase in creditors (543) (127) 553 ---------- --------- ---------Net cash inflow from operatingactivities 2,921 1,778 4,786 ---------- --------- --------- 2. Adoption of new accounting requirementThe Company has adopted FRS 21 'Events after the balance sheet date' at 1st May2005, which removes the requirement to report dividends proposed after thebalance sheet date in the profit and loss account and instead requiresdisclosures in the notes to the financial statements. Therefore, dividendsdeclared after the balance sheet date are not being recognised in the interimfinancial information at 31st October 2005 and the comparative figures have beenrestated accordingly. This has had the effect of increasing shareholders' fundsby £350,000 at 30th April 2005 and £127,000 at 31st October 2004. 3. The proposed interim dividend of 1.38p (2004: 1.34p) per share is payable on12th April 2006 to qualifying shareholders on the register at the close ofbusiness on 10th March 2006. 4. Earnings per share have been calculated on the basis of earnings of£1,310,000 (2004: £1,189,000) and on 16,197,578 (2004: 17,311,708) ordinaryshares being the weighted average number of ordinary shares in issue during theperiod. 5. Diluted earnings per share have been calculated on the basis of earnings of£1,310,000 (2004: £1,189,000) and on 16,386,128 (2004: 17,490,129) ordinaryshares being the weighted average number of ordinary shares in the periodadjusted to assume conversion of all dilutive potential ordinary shares 188,550(2004: 178,421). 6. The interim accounts are unaudited. The above financial information does notcomprise full accounts within the meaning of Section 240 of the Companies Act1985 (as amended). 7. Copies of the interim report are being sent to shareholders and will also bemade available on request to members of the public at the Company's registeredoffice at 39 Brook Street, London W1K 4JE. This information is provided by RNS The company news service from the London Stock Exchange