Colefax Grp. Regulatory News (CFX)

25 Jan 2007 07:01

Colefax Group PLC25 January 2007 CFX.L COLEFAX GROUP PLC ("Colefax" or "the Group") Interim Results for the six months ended 31 October 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 - Sales up 7.5% on constant currency basis to £33.76m (2005:£32.19m) - Favourable conditions across major markets US, UK and Continental Europe - US sales up 3% (2005: 8%) - UK sales up 17% (2005: Nil) reflecting strong housing market - European sales up 15% (2005: -1%), benefiting from improved economic conditions - Pre-tax profit up 26% to £2.54m (2005: £2.10m) - Earnings per share increased by 27% to 10.31p (2004: 8.09p) - Strong operating cash flow - Net cash of £0.56m - net borrowings eliminated - Interim dividend increased 5% to 1.45p per share (2005:1.38p) - Encouraging outlook for full year David Green, Chairman of Colefax, said, "During the period, we have experienced favourable trading conditions in all ourmajor markets and in the UK and Europe in particular. This continues the trendreported in our final results announcement last July. Group sales increased by7.5% on a constant currency basis, which is the fastest rate of growth since theyear 2000. Current growth trends seem likely to continue in at least the shortterm although we do expect a slowdown in the rate of growth in the US. We have continued to invest heavily in our core fabric brands and remainoptimistic about the outlook for the full year." 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 2006 increased by26% to £2.54 million (2005: £2.01 million) on sales up 5% at £33.76 million(2005: £32.19 million). Earnings per share increased by 27% to 10.31p (2005:8.09p). Group net borrowings decreased by £673,000 eliminating the Group'sgearing and giving rise to net cash of £556,000. During the period the Grouppurchased for cancellation 450,000 shares at an average price of £1.99 per shareand representing 2.6% of the Group's issued share capital. The Board has decided to recommend that the interim dividend be increased by 5%to 1.45p per share (2005: 1.38p). The interim dividend will be paid on 12thApril 2007 to shareholders on the register at the close of business on 10thMarch 2007. During the period we have experienced favourable trading conditions in all ourmajor markets and in particular in the UK and Europe. This continues the trendreported in our final results announcement last July. On a constant currencybasis Group sales increased by 7.5%, which is the fastest rate of growth sincethe year 2000. Current growth trends seem likely to continue in at least theshort term although we do expect a slowdown in the rate of growth in the US. 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 3% on a constant currency basis. This compares to growth of 8% inthe equivalent period last year and suggests that rising interest rates arestarting to have an impact on trading conditions. Our autumn fabric collectionshave been well received and in spite of the slower growth rate we believe thatthe high end market will continue to perform well. Sales in the UK, which represent 20% of the Fabric Division's turnover increasedby 17% during the period. This reflects the strength of the high end housingmarket, particularly in London. We expect these favourable trading conditions tocontinue for the remainder of the financial year. Sales in Europe and the rest of the world, which represent 25% of the FabricDivision's turnover increased by 15% on a constant currency basis. This reflectsimproving economic conditions throughout most of Europe. Our European sales havebenefited from the continued growth of our contemporary Larsen brand which wasfirst launched in Europe in 2001. Overall we expect market conditions to remaingenerally favourable. • Furniture - Kingcome Sofas Sales of furniture, which account for 4% of Group sales, increased by 46% duringthe period. We attribute much of this dramatic improvement to the relocation ofthe trade and retail showroom to premises adjacent to our Colefax and Fowlershowroom in London's Fulham Road. The closure of Kingcome's trade showroom inChelsea Harbour has not adversely affected sales. This saving together with thesales increase will result in significantly improved furniture profits for thecurrent year. • Accessories - Manuel Canovas Accessories sales comprise beachwear and candles and represent approximately 2%of the Group total. The majority of sales take place in the second half of theyear. The forward order book is in line with the prior year although accessoriesprofits will be adversely affected by the weak US dollar because almost onethird of sales are invoiced in US dollars. Interior Decorating Division Decorating sales decreased by 1% during the period although this is largely dueto timing differences in the invoicing of contracts. The level of deposits is up18% on the prior year. This reflects good trading conditions in the UK and inparticular the strength of the high end residential property market in London.Antique sales recovered strongly during the period increasing by 36%. Thisfollows several years of difficult trading. Prospects Current trading conditions in all our major markets continue to remainfavourable. We are experiencing a growth slowdown in the US but the trend isgradual rather than dramatic and reflects the general economy. Our main concernis the continued weakness of the US dollar which is having an adverse impact onmargins in the US and if sustained will impact profits next year. In Europe, andespecially in the UK, we expect market conditions to remain favourable. We havecontinued to invest heavily in our core fabric brands and remain optimisticabout the outlook for the full year. David GreenChairman 25th January 2007 COLEFAX GROUP PLC INTERIM GROUP PROFIT AND LOSS ACCOUNT Unaudited Unaudited Audited Six Months Six Months Year to 31 Oct to 31 Oct to 30 April 2006 2005 2006 £'000 £'000 £'000 Turnover 33,764 32,194 68,361 Operating profit 2,493 2,088 4,419Profit/(loss) on disposal of fixedassets 19 15 (177)---------------------- --------- -------- -------- Profit on ordinary activitiesbefore interest and taxation 2,512 2,103 4,242Interest received/(paid) 24 (91) (148)---------------------- --------- -------- -------- Profit on ordinary activitiesbefore taxation 2,536 2,012 4,094Taxation (875) (702) (1,270)---------------------- --------- -------- -------- Profit for the period 1,661 1,310 2,824==================== ========= ======== ======== Earnings per share 10.31p 8.09p 17.4pDiluted earnings per share 9.95p 8.00p 16.8pDividend per share 2.37p 2.16p 3.75p COLEFAX GROUP PLC INTERIM GROUP BALANCE SHEET Unaudited Unaudited Audited At 31 Oct At 31 Oct At 30 April 2006 2005 2006 £'000 £'000 £'000 Fixed assets 5,402 5,881 5,403 Current assets:Stocks and contracts in progress 11,878 12,314 10,942Debtors 10,288 9,477 11,498Cash at bank and in hand 4,366 3,870 2,347 -------- -------- --------- 26,532 25,661 24,787 -------- -------- --------- Creditors: amountsfalling due within one year 16,263 17,324 14,493 Net current assets 10,269 8,337 10,294 -------- -------- ---------Total assets less currentliabilities 15,671 14,218 15,697 -------- -------- --------- Creditors: amountsfalling due after one year - 250 -Provision for liabilitiesand charges 33 64 57 -------- -------- --------- Net assets excludingpension liability 15,638 13,904 15,640 Pensions liability 134 112 134 -------- -------- --------- 15,504 13,792 15,506 ======== ======== ========= Capital and reserves:Called up share capital 1,664 1,709 1,709Share premium account 11,087 11,087 11,087Capital redemptionreserve 1,202 1,157 1,157ESOP share reserve (287) (499) (287)ESOP capital reserve 228 - 228Profit and loss account 1,610 338 1,612 -------- -------- --------- 15,504 13,792 15,506 ======== ======== ========= COLEFAX GROUP PLC INTERIM GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Unaudited Audited Six Months Six Months Year to 31st Oct to 31st Oct to 30th April 2006 2005 2006 £'000 £'000 £'000 Profit for the period 1,661 1,310 2,824 Currency translation differences on foreign currencynet investments (163) 61 127 Currency translation differences onforeign currency intercompany loans (378) 583 453 Deferred tax on long-term intercompany loanforeign currency movements 157 (238) (189) --------- --------- ---------Total recognised gains and lossesrelating to the period 1,277 1,716 3,215 ========= ========= ========= COLEFAX GROUP PLC INTERIM GROUP CASH FLOW STATEMENT Unaudited Unaudited Audited Six months Six months Year to 31st Oct to 31st Oct to 30th April 2006 2005 2006 £'000 £'000 £'000 Net cash inflow from operatingactivities 4,037 2,921 7,556 Returns on investments and servicing of finance Interest received 54 26 80Interest paid (53) (135) (247) ---------- --------- --------- 1 (109) (167) TaxationUK corporation tax paid (649) (536) (988)Overseas tax paid (256) (77) (411) ---------- --------- --------- (905) (613) (1,399)Capital expenditure and financial investmentPayments to acquire tangible fixed assets (966) (889) (1,781)Receipts from sales of tangible fixed assets 35 16 64 ---------- --------- --------- (931) (873) (1,717) Equity dividends paid (382) (350) (574) ---------- --------- ---------Cash inflow before financing 1,820 976 3,699 FinancingPurchase of own shares (897) - -Repayment of long-term loan (250) (250) (500) ---------- --------- ---------Net cash outflow from financing (1,147) (250) (500) ---------- --------- --------- ---------- --------- ---------Increase in cash in the period 673 726 3,199 ========== ========= ========= COLEFAX GROUP PLC NOTES 1. Cash flow statement Unaudited Unaudited Audited Six months Six months Year to 31st Oct to 31st Oct to 30th April 2006 2005 2006 £'000 £'000 £'000Reconciliation of operating profit to net cash inflow from operating activities Operating profit before interest and tax 2,493 2,088 4,419Depreciation charges 807 1,018 2,116(Increase)/decrease in stocks (1,058) 95 1,442Decrease/(increase) in debtors 1,009 264 (1,615)Increase/(decrease) in creditors 786 (544) 1,194 --------- --------- --------Net cash inflow from operating activities 4,037 2,921 7,556 --------- --------- -------- 2. The interim results have been prepared in accordance with applicableAccounting Standards and on the basis of the accounting policies set out in theannual report and accounts for the year ended 30th April 2006, which haveremained unchanged. 3. During the financial period ended 31 October 2006, the Company paid a finaldividend for the year ended 30 April 2006 of 2.37p per ordinary share giving atotal dividend of £382,232. The proposed interim dividend of 1.45p (2005: 1.38p) per share is payable on12th April 2007 to qualifying shareholders on the register at the close ofbusiness on 10th March 2007. 4. Earnings per share have been calculated on the basis of earnings of£1,661,000 (2005: £1,310,000) and on 16,111,464 (2005: 16,197,578) 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£1,661,000 (2005: £1,310,000) and on 16,698,371 (2005: 16,386,128) ordinaryshares being the weighted average number of ordinary shares in the period adjusted to assume conversion of all dilutive potential ordinary shares 586,907(2005: 188,550). 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). The comparatives for the full year ended 30th April 2006 are not the Company'sfull statutory accounts for that year. A copy of the statutory accounts for thatyear has been delivered to the Registrar of Companies. The auditor's report onthose accounts was unqualified and did not contain a statement under section 237(2)-(3) of the Companies Act 1985 (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