Colefax Grp. Regulatory News (CFX)

26 Jan 2005 07:00

Colefax Group PLC26 January 2005 COLEFAX GROUP INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2004 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 to £1.82m (2003: £1.76m) • Earnings per share increased by 11.7% to 6.87p (2003: 6.15p) • Sales of £31.70m (2003: £31.25m) • Maintained interim dividend of 1.34p per share (2003: 1.34p) David Green, chairman and chief executive, commenting on prospects, said, "I believe that the trading environment in the US, our most important market,will remain favourable for the remainder of the year. In contrast, trading inEurope and the UK could become more difficult. The most significant factoraffecting the Group's results is the continuing weakness of the US dollar andits impact on our ability to make improvements to profitability." Enquiries: Colefax Group plc David Green, Chairman Tel: 020 7448 1000Biddicks Katie Tzouliadis Tel: 020 7448 1000 CHAIRMAN'S STATEMENT Financial Results The Group's pre-tax profit for the six months to 31st October 2004 increased by3% to £1.82 million (2003: £1.76 million) on sales up 1% at £31.70 million(2003: £31.25 million). On a constant currency basis, Group sales increased by7%. Earnings per share increased by 11.7% to 6.87p (2003: 6.15p) partly due tothe effect of share buybacks in the current and prior periods. The Board has decided to maintain the interim dividend at 1.34p per share (2003:1.34p). This reflects continuing uncertainty over the current weakness of the USdollar. The interim dividend will be paid on 13th April 2005 to shareholders onthe register at the close of business on 11th March 2005. During the period, the Group purchased and cancelled one million shares at acost of £930,000 and representing 5.24% of the Group's issued share capital.Mainly due to the share buyback, Group net borrowings increased by £1.3 millionto £4.1 million, which represents gearing of 32% to net tangible assets. Our results for the six months reflect a continuing improvement in tradingconditions in the US, which, as we stated in our year-end results announcementin July, markedly improved at the beginning of 2004. The benefit of the salesincrease, however, has been offset by the continued weakness of the US dollar. 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 55% of the fabric division's turnover,increased by 12% on a constant currency basis. This market has performed wellthroughout the whole of 2004. We have recently opened our own showroom inWashington DC, which represents an important market for us, and this will helpto grow sales. Sales in the UK, which represent 21% of the fabric division's turnover,increased by 5% during the period. However, we expect the slowing of activity inthe high-end property sector will have an adverse impact on sales. Sales in Europe and the rest of the world, which represent 24% of the fabricdivision's turnover increased by 7% on a constant currency basis. Our principalmarkets, France, Germany and Italy remain difficult whilst certain of the lessermarkets are seeing more significant growth. • Furniture - Kingcome Sofas Sales of furniture, which account for 3% of Group sales, decreased by 5% duringthe period. This reflected the challenging conditions in the UK furnituremarket. We have recently signed a new lease on a showroom next to our Colefaxand Fowler showroom on the Fulham Road and expect to relocate Kingcome Sofas tothis new site in the early part of 2005. The improved location should have abeneficial impact on sales. • Accessories - Manuel Canovas The majority of accessories sales, which represent approximately 3% of the Grouptotal, take place in the second half of the year. We anticipate that sales willshow a small increase on a like-for-like basis. However, as the US is a majormarket for this activity, the continued weakness of the dollar will have anadverse effect on sales growth. Interior Decorating Division Interior decorating sales for the first six months increased by 14%, althoughtrading conditions have weakened slightly in the second half of the year.Antique sales have remained difficult, primarily due to a shortage of overseascustomers. The current level of decorating deposits remains healthy and weanticipate a satisfactory performance for the year. Prospects I believe that the trading environment in the US, our most important market,will remain favourable for the remainder of the year. In contrast, trading inEurope and the UK could become more difficult. The most significant factoraffecting the Group's results is the continuing weakness of the US dollar andits impact on our ability to make improvements to profitability. David GreenChairman PROFIT AND LOSS ACCOUNTFor the six months ended 31 October 2004 Six months to Six months to Year to 31 Oct 31 Oct 30 April 2004 2003 2004 £'000 £'000 £'000 Turnover 31,701 31,254 63,381 ---------- ---------- --------- Operating profit 1,984 1,878 3,187Interest (168) (116) (277) ---------- ---------- --------- Profit before taxation 1,816 1,762 2,910Taxation (627) (599) (977) ---------- ---------- --------- Profit after taxation 1,189 1,163 1,933Dividends (217) (248) (596) ---------- ---------- --------- Retained profit for the period 972 915 1,337 ---------- ---------- --------- Earnings per share 6.87p 6.15p 10.40pDiluted earnings per share 6.80p 6.05p 10.20pDividend per share 1.34p 1.34p 3.40p GROUP BALANCE SHEETAt 31 October 2004 At 31 Oct At 31 Oct At 30 April 2004 2003 2004 £'000 £'000 £'000 (Restated) (Restated) Fixed assets 5,978 6,763 6,113 --------- --------- --------- Current assets:Stocks and contracts in progress 13,117 12,882 11,470Debtors 8,266 8,872 8,697Cash at bank and in hand 2,944 1,989 1,769 --------- --------- --------- 24,327 23,743 21,936 --------- --------- --------- Creditors: amounts falling due withinone year 16,811 16,061 14,198 Net current assets 7,516 7,682 7,738 --------- --------- --------- Total assets less current liabilities 13,494 14,445 13,851 --------- --------- --------- Creditors: amounts falling due after oneyear 750 1,250 1,000Provision for liabilities and charges 106 130 106 --------- --------- --------- 12,638 13,065 12,745 --------- --------- --------- Capital and reserves:Called up share capital 1,809 1,971 1,909Share premium account 11,087 11,087 11,087Capital redemption reserve 1,057 895 957Profit and loss account (1,315) (888) (1,208) --------- --------- --------- 12,638 13,065 12,745 --------- --------- --------- STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the six months ended 31 October 2004 Six months to Six months to Year to 31 Oct 31 Oct 30 April 2004 2003 2004 £000 £000 £000 Profit for the period 1,189 1,163 1,933 Currency translationdifferences on foreigncurrency net investments 53 (128) (238) Currency translationdifferences on foreigncurrency loans (290) (442) (756) Deferred tax on long-termloan foreign currencymovements 121 181 319 ----------- ---------- ---------- Total recognised gains andlosses relating to the period 1,073 774 1,258 ----------- ---------- ---------- CASH FLOW STATEMENTFor the six months ended 31 October 2004 Six months to Six months to Year to 31 Oct 31 Oct 30 April 2004 2003 2004 £'000 £'000 £'000 Net cash inflow from operatingactivities 1,778 1,851 6,499 ---------- ---------- ---------- Returns on investments and servicingof financeInterest received 8 3 9Interest paid (170) (118) (273) ---------- ---------- ---------- (162) (115) (264) ---------- ---------- ---------- TaxationUK corporation tax paid (593) (211) (679)Overseas tax refunded/ (paid) 13 (123) (141) ---------- ---------- ---------- (580) (334) (820) ---------- ---------- ---------- Capital expenditure and financialinvestmentPayments to acquire tangible fixedassets (1,057) (1,057) (1,771)Receipts from sales of tangiblefixed assets 4 20 96 ---------- ---------- ---------- (1,053) (1,037) (1,675) ---------- ---------- ---------- Equity dividends paid (354) (392) (634) ---------- ---------- ---------- Cash (outflow)/inflow beforefinancing (371) (27) 3,106 ---------- ---------- ---------- FinancingPurchase of own shares (930) (278) (782)Repayment of long-term loan (250) (1,164) (1,371) ---------- ---------- ----------Net cash outflow from financing (1,180) (1,442) (2,153) ---------- ---------- ---------- (Decrease)/increase in cash in theperiod (1,551) (1,469) 953 ---------- ---------- ---------- NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Cash flow statement Six months to Six months to Year to 31 31 Oct 2004 31 Oct 2003 April 2004 £'000 £'000 £'000Reconciliation of operating profit tonet cash inflow from operating activities Operating profit before interest and tax 1,984 1,878 3,187 Depreciation charges 1,095 1,153 2,315 (Profit) on sale of tangible fixedassets (2) (12) (24) (Increase)/decrease in stocks (1,564) (72) 1,206 Decrease in debtors 392 196 646 (Decrease) in creditors (127) (1,292) (831) ----------- ---------- --------- Net cash inflow from operatingactivities 1,778 1,851 6,499 ----------- ---------- --------- 2. Adoption of new accounting requirementThe Company has adopted UITF 38 'Accounting for ESOP trusts' at 1 May 2004,which requires an entity's own shares held in an employee share trust to bededucted in arriving at shareholders' funds rather than being disclosed as anasset. The adoption of the new accounting requirement represents a change inaccounting policy, requiring previously reported figures to be restated in thisyear's interim financial information. This has had the effect of reducingshareholders' funds by £498,000 at 31 October 2004, £466,000 at 30 April 2004and £514,000 at 31 October 2003. 3. The interim dividend is payable on 13 April 2005 to qualifyingshareholders on the register at the close of business on 11 March 2005. 4. Earnings per share have been calculated on the basis of earnings of£1,189,000 (2003: £1,163,400) and on 17,311,708 (2003: 18,929,635) 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£1,189,000 (2003: £1,163,400) and on 17,490,129 (2003: 19,220,712) ordinaryshares being the weighted average number of ordinary shares in the periodadjusted to assume conversion of all dilutive potential ordinary shares 178,421(2003: 291,077). 6. The interim accounts are unaudited. The above financial informationdoes not comprise full accounts within the meaning of Section 240 of theCompanies Act 1985 (as amended). 7. Copies of the interim report are being sent to shareholders and willalso be made available on request to members of the public at the Company'sregistered office at 39 Brook Street, London W1K 4JE. This information is provided by RNS The company news service from the London Stock Exchange