Colefax Group plc

CFX

26th July 2012

COLEFAX GROUP PLC

 

(“Colefax” or the “Group”)

 

Preliminary Results for the year ended 30th April 2012

 

Colefax is an international designer and distributor of luxury furnishing fabrics & wallpapers and owns a leading interior decorating business. The Group trades under five brand names, which serve different segments of the soft furnishings marketplace; these are Colefax and Fowler, Cowtan and Tout, Jane Churchill, Manuel Canovas and Larsen.

 

Highlights

 

 

 

 

 

 

 

 

 

David Green, Chairman of Colefax, commented,

 

“The principal reason for the decline in our pre-tax profits was a very weak performance from the Decorating Division which made a loss of £87,000 compared to an exceptional profit of £2.01 million last year. Sales in the Product Division were flat reflecting difficult trading conditions in all of our major markets.

The current economic conditions prevailing in our most important markets make it difficult to be optimistic about short term growth prospects.  The Group has a strong balance sheet and is well placed to deal with adverse market conditions. Until we are confident of an improvement we will continue to run the business prudently focussing on cash flow and tight control of working capital.”

 

 

Enquiries:

 

Colefax Group plc

David Green, Chairman

Tel: 020 3178 6378 (today)

 

Robert Barker, Finance Director

 

 

 

 

Biddicks

Katie Tzouliadis

Tel: 020 3178 6378

 

Sophie McNulty

 

 

 

 

Peel Hunt LLP

Dan Webster

Tel: 020 7418 8900

(NOMAD & Broker)

Matthew Armitt

 

 

Richard Brown

 

 


COLEFAX GROUP PLC

CHAIRMAN’S STATEMENT

 

Financial Results

 

The Group’s pre-tax profit for the year to 30th April 2012 decreased by 52% to £3.15 million (2011 - £6.52 million) on sales down 9% at £70.40 million (2011 - £77.72 million).  Earnings per share decreased by 52% to 15.8p (2011 – 33.0p) and the Group ended the year with net cash of £8.52 million (2011 - £6.30 million).

 

During the year, the Group purchased for cancellation 140,000 shares at an average price of £2.44 per share, representing 1.0% of the Group’s issued share capital at the start of the year.

 

The Board has decided to maintain the final dividend at 2.00p per share (2011 – 2.00p), making a total for the year of 3.85p (2011 – 3.85p).  The final dividend will be paid on 9th October 2012 to shareholders on the register at the close of business on 14th September 2012.

 

As stated when we announced our Interim Results the principal reason for the decline in our pre-tax profits was a very weak performance from the Decorating Division which made a loss of £87,000 compared to an exceptional profit of £2.01 million last year. Sales in the Product Division were flat reflecting difficult trading conditions in all of our major markets.

 

Product Division

 

·         Fabric - Portfolio of Five Brands: “Colefax and Fowler”, “Cowtan and Tout”, “Jane Churchill”, “Manuel Canovas” and “Larsen”

 

Sales in the Fabric Division, which represent 87% of Group sales, increased by 1% to £61.27 million on a constant currency basis (2011 - £61.20 million).  Profit from operations decreased by 25% to £3.18 million (2011 - £4.23 million).

 

Sales in the US, which represent 50% of the Fabric Division’s sales, increased by 4% on a constant currency basis.  Trading conditions in all our main territories have been difficult especially New York which is our largest territory. During the year we moved our US operations to new premises in New York and we have continued to invest in our network of showrooms in the firm belief that this market will recover. We recently assumed full responsibility for our agent showroom in Florida which we believe will increase sales in this important territory. 

 

UK sales, which represent 21% of the Fabric Division's sales, decreased by 1% during the year following a 10% increase in the previous year. I am still surprised by the relative strength of this market and therefore remain concerned that it will continue at this level. The UK housing market is still showing no sign of recovery and the UK economy is being affected by the on going problems in the Eurozone.

 

Sales in Continental Europe, which represent 26% of the Fabric Division’s sales, decreased by 3% on a constant currency basis. There was a wide variation in performance between countries. In our top three markets, sales in France were flat, sales in Italy were down 14% and sales in Germany were up 5%. I believe that, with the possible exception of Germany, all these markets will remain very difficult in the near future.  We are about to relocate our showroom in Munich to a far more prominent position which will improve our presence in this important market.

 

Sales in the rest of the world, which represent 3% of the Fabric Division’s sales, were down by 2% in the year.  There are opportunities to grow in certain markets and we are targeting the Middle East and Russia as the two principal markets for growth in the coming year. 

 

 

 

·         Furniture – Kingcome Sofas

 

Sales of Kingcome furniture, which account for 3% of Group sales, decreased by 7% to £2.28 million (2011 - £2.44 million).  Operating profit was £63,000 (2011 - £211,000) and whilst this result was disappointing, it reflects very challenging market conditions. The majority of furniture sales are made in the UK and we are currently exploring opportunities to increase export sales in selected markets.

 

Interior Decorating Division

 

Interior decorating sales, which account for 10% of Group sales, decreased by 51% to £6.85 million (2011 - £14.08 million). This resulted in a loss for the year of £87,000 compared to a profit of £2.01 million last year.  The weak performance this year follows an exceptional performance last year and is not unusual after the completion of a number of major projects.

 

 

Prospects

 

Trading in all our major markets remains difficult.  However, over the last two months, we have seen a small improvement in our largest market, the US. The current economic conditions prevailing in our most important markets make it difficult to be optimistic about short term growth prospects.  The Group has a strong balance sheet and is well placed to deal with adverse market conditions. Until we are confident of an improvement we will continue to run the business prudently focussing on cash flow and tight control of working capital.

 

 

David Green

Chairman

25th July 2012

 

 

 


COLEFAX GROUP PLC

GROUP INCOME STATEMENT

For the year ended 30th April 2012

 

 

 

2012

 

2011

 

 

 

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

     70,399

 

     77,722

 

 

 

Cost of sales

       31,595

 

       34,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

       38,804

 

       42,793

 

 

 

Operating expenses

      35,653

 

      36,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit from operations

         3,151

 

         6,448

 

 

 

 

 

 

 

 

 

 

Finance income

              -

 

              74

 

 

 

Finance expense

(3)

 

(1)

 

 

 

 

             (3)

 

              73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before taxation

         3,148

 

         6,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

 

 

 

 

 

-UK

(691)

 

(1,329)

 

 

 

-Overseas

(262)

 

(436)

 

 

 

 

(953)

 

(1,765)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit from continuing operations

         2,195

 

         4,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading loss on discontinued operations, net of tax

-

 

(111)

 

 

 

 

 

 

 

 

 

 

Loss on disposal, net of tax

-

 

(72)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on discontinued operations, net of tax

-

 

(183)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the year attributable to equity holders of the parent

         2,195

 

         4,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

           15.8

p

           31.8

p

 

 

 

 

 

 

 

 

 

Diluted earnings per share

           15.8

p

           31.5

p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations:

 

 

 

 

 

 

Basic earnings per share

           15.8

p

           33.0

p

 

 

 

 

 

 

 

 

 

Diluted earnings per share

           15.8

p

           32.8

p

 

 

 

 

 

 

 

 

 


COLEFAX GROUP PLC

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30th April 2012

 

 

 

 

2012

 

2011

 

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

   2,195

 

   4,573

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (expense) / income:

 

 

 

 

 

 

 

 

 

Currency translation differences on foreign currency net investments

(62)

 

(610)

 

 

 

 

 

 

Cash flow hedges:

 

 

 

 

(Losses) / gains recognised directly in equity

     (120)

 

      1,012

 

Transferred to profit and loss for the year

(400)

 

(235)

 

 

 

 

 

 

Tax on components of other comprehensive income

57

 

50

 

 

 

 

 

 

 

 

 

 

 

Total other comprehensive (expense) / income

     (525)     

 

    217

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the year attributable to equity holders of the parent

       1,670

 

       4,790

 

 

 

 

 

 

 

 

 

 

 

 


COLEFAX GROUP PLC

GROUP STATEMENT OF FINANCIAL POSITION

At 30th April 2012

 

 

2012

2011

 

£'000

£'000

 

 

 

 

 

 

Non-current assets:

 

 

Property, plant and equipment

        7,319

        5,909

Deferred tax asset

        1,062

        1,372

 

        8,381

        7,281

 

 

 

Current assets:

 

 

Inventories and work in progress

      12,215

      12,283

Trade and other receivables

      8,894

      12,640

Cash and cash equivalents

        8,519

        7,132

 

      29,628

      32,055

 

 

 

Current liabilities:

 

 

Trade and other payables

11,064

13,042

Current corporation tax

            438

            388

Provisions

       -

       205

 

      11,502

      13,635

 

 

 

 

 

 

Net current assets

       18,126

       18,420

 

 

 

Total assets less current liabilities

       26,507

       25,701

 

 

 

Non-current liabilities:

 

 

Pension liability

           253

           241

 

 

 

Net assets

       26,254

       25,460

 

 

 

Capital and reserves attributable to equity holders of the Company:

 

 

Called up share capital

        1,391

        1,405

Share premium account

       11,148

       11,148

Capital redemption reserve

         1,483

         1,469

ESOP share reserve

(96)

(96)

Share based payment reserve

            19

            94

Foreign exchange reserve

         1,238

         1,383

Cash flow hedge reserve

            203

            583

Retained earnings

       10,868

         9,474

Total equity

       26,254

       25,460

 

 

 

The financial statements were approved by the board of directors and authorised for issue on 25th July 2012.

 

D. B. Green Director

R. M. Barker Director


COLEFAX GROUP PLC

GROUP STATEMENT OF CASH FLOWS

For the year ended 30th April 2012

 

 

2012

2011

 

£'000

£'000

 

 

 

 

 

 

Operating activites

 

 

Profit before taxation - continuing operations

        3,148

        6,521

Loss before taxation - discontinued operations

-

(278)

Finance income

-

(74)

Finance expense

              3

              1

Depreciation

         1,991

         2,044

 

 

 

Cash flows from operations before changes in working capital

         5,142

         8,214

 

 

 

Decrease / (increase) in inventories and work in progress

     115

     (566)

Decrease in trade and other receivables

3,213

316

Decrease in trade and other payables

(1,355)

(205)

 

 

 

Cash generated from operations

         7,115

         7,759

 

 

 

 

 

 

Taxation paid

 

 

UK corporation tax paid

(919)

(1,280)

Overseas tax received / (paid)

383

(279)

 

(536)

(1,559)

 

 

 

Net cash inflow from operating activities

         6,579

         6,200

 

 

 

 

 

 

Investing activities

 

 

Payments to acquire property, plant and equipment

(3,460)

(2,885)

Receipts from sales of property, plant and equipment

            20

            29

Interest received

              -

              74

Purchase of ESOP shares

-

(95)

Net cash outflow from investing

(3,440)

(2,877)

 

 

 

 

 

 

Financing activities

 

 

Purchase of own shares

(342)

(1,840)

Interest paid

(3)

(1)

Equity dividends paid

(534)

(486)

 

 

 

Net cash outflow from financing

(879)

(2,327)

 

 

 

 

 

 

Net increase in cash and cash equivalents

         2,260

         996

Cash and cash equivalents at beginning of year

       6,298

       5,472

Exchange losses on cash and cash equivalents

(39)

(170)

 

 

 

Cash and cash equivalents at end of year

        8,519

        6,298

 

 


 

COLEFAX GROUP PLC

GROUP STATEMENT OF CHANGES IN EQUITY

For the year ended 30th April 2012

 

Share capital

Share premium account

Capital redemption reserve

ESOP share reserve

Share based payment reserve

Foreign exchange reserve

Cash flow hedge reserve

Retained earnings

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 May 2011

1,405

 11,148

  1,469

(96)

     94

1,383

583

 9,474

25,460

Profit for the year

-

-

-

-

-

-

-

2,195

2,195

Foreign exchange

-

-

-

-

-

(62)

-

-

(62)

 

Cash flow hedges:

 

 

 

 

 

 

 

 

 

Losses

-

-

-

-

-

-

(120)

-

(120)

Transfers

-

-

-

-

-

-

(400)

-

(400)

 

Tax on other comprehensive income

-

-

-

-

-

(83)

140

-

57

Share buybacks

(14)

          -

         14

          -

             -

              -

             -

(342)

(342)

Share options exercised

             -

             -

                -

             -

(75)

              -

             -

         75

             -

Dividends paid

           -

           -

              -

           -

              -

              -

             -

(534)

(534)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30 April 2012

      1,391

    11,148

         1,483

(96)

         19

    1,238

         203

   10,868

26,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 1 May 2010

1,470

 11,148

  1,404

(18)

     196

1,741

8

 7,106

23,055

Profit for the year

-

-

-

-

-

-

-

4,573

4,573

Foreign exchange

-

-

-

-

-

(610)

-

-

(610)

 

Cash flow hedges:

 

 

 

 

 

 

 

 

 

Gains

-

-

-

-

-

-

1,012

-

1,012

Transfers

-

-

-

-

-

-

(235)

-

(235)

 

Tax on other comprehensive income

-

-

-

-

-

252

(202)

-

50

Share buybacks

(65)

          -

         65

          -

             -

              -

             -

(1,840)

(1,840)

ESOP shares granted

             -

             -

                -

          17

              19

              -

             -

             -

          36

Share options exercised

             -

             -

                -

             -

(121)

              -

             -

         121

             -

Dividends paid

           -

           -

              -

           -

              -

              -

             -

(486)

(486)

Purchase of ESOP shares

           -

           -

              -

(95)

              -

            -

           -

          -

          (95)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30 April 2011

      1,405

    11,148

         1,469

(96)

         94

    1,383

         583

   9,474

25,460

 

 

 

 

 

 

 

 

 

 


 

COLEFAX GROUP PLC

NOTES TO THE FINANCIAL INFORMATION

At 30th April 2012

 

 

1. Earnings per share

Basic earnings / (loss) per share has been calculated using the following data:

 

2012

2011

 

£'000

£'000

 

 

 

 

 

 

Profit after tax from continuing operations

         2,195

4,756

Loss after tax on discontinued operations

-

(183)

 

 

 

Total

         2,195

         4,573

 

 

 

 

 

 

 

No.

No.

 

 

 

Weighted average number of ordinary shares in issue

 13,918,662

 14,396,731

 

 

 

 

 

 

Shares owned by the Colefax Group plc Employees' Share Ownership Plan (ESOP) Trust are excluded

from the basic earnings per share calculation.

 

 

 

 

 

Diluted earnings / (loss) per share has been calculated using the following data:

 

2012

2011

 

£'000

£'000

 

 

 

 

 

 

Profit after tax from continuing operations

         2,195

         4,756

Loss after tax on discontinued operations

-

(183)

 

 

 

Total

         2,195

         4,573

 

 

 

 

 

 

 

No.

No.

 

 

 

Weighted average number of ordinary shares in issue

13,918,662

14,396,731

Dilutive effect of shares under option

     15,000

  115,000

 

 

 

 

 

 

 

13,933,662

14,511,731

 

 

 

 

 

 

2. Cash and cash equivalents

For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise the following:

 

2012

2011

 

£’000

£’000

 

 

 

Cash at bank and in hand

8,519

7,132

Bank overdrafts

-

(834)

 

 

 

 

 

 

 

8,519

6,298

 

 

Cash at bank earns interest at floating rates based on daily bank deposit rates.  The fair value of cash and cash equivalents are considered to be their book value.

 

 

 

COLEFAX GROUP PLC

NOTES TO THE FINANCIAL INFORMATION

At 30th April 2012

 

 

3.  The above financial information, which has been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union, does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006.

 

The financial information for the year ended 30th April 2012 has been extracted from the statutory accounts which will be delivered to the Registrar of Companies following the company’s annual general meeting. The comparative financial information is based on the statutory accounts for the financial year ended 30th April 2011 which have been delivered to the Registrar of Companies. The Independent Auditors’ Report on both of those financial statements was unqualified and did not contain a statement under Section 498(2) and Section 498(3) of the Companies Act 2006.

 

 

4. Annual general meeting

The Annual General Meeting of Colefax Group plc will be held at 19-23 Grosvenor Hill, London W1K 3QD on 11th September 2012 at 11.00 a.m.

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