RNS Number : 4734Y
Colefax Group PLC
31 July 2024
 

AIM: CFX

COLEFAX GROUP PLC

("Colefax" or the "Group")

 

Preliminary Results for the year ended 30 April 2024

 

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

 

Key Points

 

·      Sales increased by 2% to £107.16m (2023 - £104.82m) and by 4.8% on a constant currency basis

 

·      Pre-tax profit decreased by 10% to £7.73m (2023 - £8.54m) - mainly due to higher Fabric Division operating costs and a weaker US Dollar exchange rate

 

·      Earnings per share decreased by 1.6% to 88.3p (2023 - 89.7p)

 

·      Share buyback returned £7.2m of surplus capital to shareholders in September 2023

 

·      Cash at 30 April 2024 of £17.8m (2023 - £19.8m) 

 

·      Fabric Division sales decreased by 2.1% to £90.54m (2023 - £92.51m) but increased by 0.6% on a constant currency basis

-     US sales down by 3%, UK sales up by 3% and Europe sales up by 8% (on a constant currency basis)

 

·      Decorating Division delivered a strong performance with sales up by 42% to £13.51m (2023 - £9.52m) and pre-tax profit of £847,000 (2023 - £96,000 loss)

 

·      Board is proposing a final dividend of 2.9p (2023 2.8p) making a total for the year of 5.6p (2023 - 5.4p)

 

David Green, Chief Executive of Colefax Group plc, said:

 

"

 

 

 

Enquiries:

Colefax Group plc

David Green, Chief Executive

Tel: 020 7318 6021


Rob Barker, Finance Director

 


KTZ Communications

Katie Tzouliadis, Robert Morton

 

Tel: 020 3178 6378

Peel Hunt LLP  

(Nominated Advisor and Broker)

Dan Webster, Andrew Clark

Tel: 020 7418 8900

 

 

 

COLEFAX GROUP PLC

 

CHAIRMAN'S STATEMENT

Financial Results

 

Group sales increased by 2% to £107.16 million (2023 - £104.82 million) and by 4.8% on a constant currency basis. Pre-tax profits decreased by 10% to £7.73 million (2023 - £8.54 million). Earnings per share decreased by 1.6% to 88.3p (2023 - 89.7p) reflecting the benefit of share buybacks during the year. The Group ended the year with net cash of £17.8 million (2023 - £19.8 million).

 

Sales in the Group's core Fabric Division increased by 0.6% on a constant currency basis reflecting relatively challenging trading conditions in the Group's major markets. The sales increase was not sufficient to offset the impact of higher operating costs during the year and as a result Fabric Division profit declined by 23% to £6.47 million (2023 - £8.40 million). This decline was partly offset by a strong performance by the Decorating Division which made a profit of £848,000 compared to a loss of £96,000 last year. 

 

In September 2023 the Group returned £7.2 million of surplus cash to shareholders by way of a share buyback in the form of a tender offer. The Group purchased and cancelled 1,013,254 shares representing 14.0% of the issued ordinary share capital at a price of £7.00 per share.

 

The Board is proposing to pay a final dividend of 2.9p (2023 - 2.8p) making a total for the year of 5.6p (2023 - 5.4p). This will be paid on 11 October 2024 to shareholders on the register at the close of business on 13 September 2024.

 

Product Division

•                          Fabric Division - Portfolio of Five Brands: "Colefax and Fowler", "Cowtan and Tout", "Jane Churchill", "Manuel Canovas" and "Larsen"

 

£92.51 million) but increased by 0.6% on a constant currency basis. Pre-tax profit decreased by 23% to £6.47 million (2023 - £8.40 million) due to higher operating costs and a weaker US Dollar which averaged $1.26 compared to $1.20 for the prior year. The US Dollar exchange rate has a significant impact on profitability.

 

Sales in the Rest of the World, which represent just 3% of the Fabric Division's turnover, increased by 25% during the year. The increase was mainly due to a strong performance by the Middle East which is the largest region followed by Australia, China and Japan. For cost and efficiency reasons we mainly sell via distributors in the Rest of the World and as a result we expect the Rest of the World to remain a small proportion of overall Fabric Division sales.

 

•                          Furniture - Kingcome Sofas

 

 

Interior Decorating Division

 

Decorating sales, which represent 13% of Group turnover, increased by 42% to £13.51 million (2023 - £9.52 million) resulting in a pre-tax profit of £847,000 (2023 - £96,000 loss). This was a strong performance boosted by an increase in overseas projects which reduced to almost zero during the Covid pandemic. Decorating Division profitability partly reflects the timing of project completions because profit on individual projects is recognised on invoicing and this can sometimes cause material fluctuations in Group profits. The Decorating Division has started the new financial year with a healthy level of deposits although they are down by 18% compared to a strong prior year comparative.

 

Prospects

 

The Group has delivered a good performance in relatively challenging market conditions and with a weaker US Dollar exchange rate. Over the last year higher interest rates have reduced housing market activity and we are expecting difficult market conditions in the year ahead and this is reflected in our existing market forecast. The Group is well placed to benefit from falling interest rates as this should boost housing market activity but it will take time for this benefit to feed through to home spending. The Group has a strong balance sheet with cash of £17.8 million and we will continue to invest with confidence in our brand portfolio and distribution network.

 

The Group's performance over the last year is due to the loyalty, talent and commitment of all our staff and I would like to thank them for their hard work and support.

 

 

 

David Green

Chairman

30 July 2024

 

 

 

 

GROUP INCOME STATEMENT

 



For the year ended 30 April 2024

 



 

 




2024

 

2023


£'000

 

£'000


 

 



 

 

 

Revenue

107,162

 

104,818

Cost of sales

(47,134)

 

(45,085)


 

 

 


 

 


Gross profit

60,028


59,733

Operating expenses

(51,552)

 

(50,214)


 

 



 

 


Profit from operations

            8,476

 

            9,519


 

 


Finance income

173

 

26

Finance expense

(917)

 

(1,001)


 

 



 

 

 

Profit before taxation

            7,732

 

            8,544

 

 

 

 

 

 

 


Tax expense

(1,938)


(1,857)


 

 

 


 

 


Profit for the year attributable to equity holders of the parent

            5,794

 

            6,687

 

 

 

 


 

 


Basic and diluted earnings per share

 88.3p

 

 89.7p


 

 


 

 

 

 

GROUP STATEMENT OF COMPREHENSIVE INCOME

 



For the year ended 30 April 2024

 



 

 



 

2024


2023

 

£'000

 

£'000

 

 



 

 


 

Profit for the year

            5,794


            6,687

 

 


 

 

 



Other comprehensive (expense):

 



 

 



Items that will or may be reclassified to profit and loss:

 



 

 



Exchange differences on translation of foreign operations

(429)


(93)


 




 




 



Total other comprehensive (expense)

(429)


(93)


 




 


 

Total comprehensive income for the year attributable to

            5,365


            6,594

equity holders of the parent

 



 

 

 

GROUP STATEMENT OF FINANCIAL POSITION

 

 


At 30 April 2024

 

 



Notes

2024

2023


 

£'000

£'000


 

 



 

 

 

Non-current assets:

 

 


Property, plant and equipment

 

           8,557

           8,231

Right of use asset

 

       20,612

        23,464

Deferred tax asset

 

                24

                23


 

          29,193

          31,718

Current assets:

 

 


Inventories and work in progress

2

          18,241

          19,487

Trade and other receivables

3

8,774           

9,153           

Cash and cash equivalents

4

          17,763

        19,746

Current corporation tax

 

              -

              144


 

          44,778

          48,530


 

 


Current liabilities:

 

 


Trade and other payables

 

5

          18,623

          20,003

Lease liabilities

 

           4,038

           3,085

Current corporation tax

 

31

-


 

     22,692

         23,088

Net current assets

 

          22,086

          25,442


 

 


Total assets less current liabilities

 

          51,279

          57,160


 

 


Non-current liabilities:

 

 


Lease liabilities

 

          19,380

          22,977

Deferred tax liability

 

              154

              223


 

 


Net assets

 

          31,745

          33,960


 

 


Capital and reserves attributable to equity holders of the

 

 


Company:

 

 


Called up share capital

 

              623

              724

Share premium account

 

       11,148

        11,148

Capital redemption reserve

 

           2,251

           2,150

ESOP share reserve

 

(113)

(113)

Foreign exchange reserve

 

           1,190

           1,619

Retained earnings

 

          16,646

         18,432

Total equity

 

          31,745

          33,960

 

 

 

GROUP STATEMENT OF CASH FLOWS

 


 

For the year ended 30 April 2024

 


 


2024

2023

 


£'000

£'000

 


 

 

 

Operating activities

 


 

Profit before taxation

             7,732

             8,544

 

Finance income

(173)

(26)

 

Finance expense

             917

             1,001

 

Loss/(Profit) on disposal of property, plant and equipment

38

47

 

Depreciation on right of use assets

             4,350

             4,952

 

Depreciation

             2,625

             2,748

 

Cash flows from operations before changes in working capital

           15,489

           17,266

 


 


 

Decrease / (Increase) in inventories and work in progress

1,244

(2,462)

 

Decrease / (Increase) in trade and other receivables

322

(2,099)

 

(Decrease)/ Increase in trade and other payables

(1,837)             

2,239             

 

Cash generated from operations

           15,218

           14,944

 

 

 

 

 

Taxation paid

 


 

UK corporation tax paid

(1,021)

(699)

 

Overseas tax paid

(730)

(1,103)

 


(1,751)

(1,802)

 


 


 

Net cash inflow from operating activities

           13,467

           13,142

 

 

 

 

 

Investing activities

 


 

Payments to acquire property, plant and equipment

(2,991)

(3,580)

 

Interest received

                173

                  -

 

Net cash outflow from investing

(2,818)

(3,580)

 

 

 

 

 

Financing activities

 


 

Purchase of own shares

                    (7,227)

                    (5,382)

 

Principal paid on lease liabilities

(4,151)

(4,846)

 

Interest paid on lease liabilities

(916)

(999)

 

Interest paid

(1)

-

 

Equity dividends paid

 (353)

 (399)

 

Net cash outflow from financing

(12,648)

(11,626)

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

             (1,999)

             (2,064)

 

Cash and cash equivalents at beginning of year

           19,746

           21,785

 

Exchange gains/(losses) on cash and cash equivalents

16

25

 

Cash and cash equivalents at end of year

           17,763

           19,746

 

 

 

 

GROUP STATEMENT OF CHANGES IN EQUITY





For the year ended 30 April 2024








Share capital

Share premium account

Capital redemption reserve

ESOP share reserve

Foreign exchange reserve

Retained earnings

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000









At 30 April 2023

724

11,148

2,150

(113)

1,619

18,432

33,960

Profit for the year

              -

              -

                -

              -

              -

       5,794

5,794

Foreign exchange

              -

              -

                -

              -

(429)

              -

(429)









 

Total comprehensive income for the year

 

 

              -

              -

                -

              -

           (429)

5,794

5,365

Share buybacks

            (101)

              -

101

              -

              -

(7,227)

(7,227)

Dividends paid

              -

              -

                -

              -

              -

(353)

(353)









At 30 April 2024

          623

     11,148

2,251

(113)

1,190

16,646

31,745

 

 

 

 

 

 

 

 

















At 30 April 2022

          794

     11,148

         2,080

(113)

       1,712

     17,526

     33,147

Profit for the year

              -

              -

                -

              -

              -

       6,687

       6,687

Foreign exchange

              -

              -

                -

              -

(93)

              -

(93)

Total comprehensive income for the year

              -

              -

                -

              -

           (93)

       6,687

       6,594

Share buybacks

(70)

-

70

-

-

(5,382)

(5,382)

Dividends paid

-

-

-

-

-

(399)

(399)









At 30 April 2023

724

11,148

2,150

(113)

1,619

18,432

33,960









 

 

 

COLEFAX GROUP PLC

 

NOTES TO THE FINANCIAL INFORMATION

 

1.   Earnings per share

Basic earnings per share have been calculated on the basis of profit on ordinary activities after tax of £5,794,000 (2023 - £6,687,000) and on 6,564,031 (2023 - 7,457,535) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Shares owned by the Colefax Group Plc Employees' Share Ownership Plan (ESOP) Trust are excluded from the basic earnings per share calculation.

 

Diluted earnings per share are the same as basic earnings per share as there are no outstanding share options in force at 30 April 2024.

 

2.   Inventories and work in progress

 


2024

£'000

2023

£'000

Finished goods for resale

15,487

16,508

Work in progress

2,754

2,979


18,241

19,487

 

 

3.   Trade and other receivables

 


2024

£'000

2023

£'000

Trade receivables

4,857

6.129

Less: provision for impairment of trade receivables

(592)

(516)

Other receivables

2,802

1,403

Prepayments and accrued income

1,707

2,137


8,774

9,153

 

 

4.   Cash and cash equivalents

 


2024

£'000

2023

£'000

Cash at bank and in hand

17,763

19,746

 

            The fair value of cash and cash equivalents are considered to be their book value.

 

5.   Trade and other payables

 


2024

£'000

2023

£'000

Trade payables

4,648

5,525

Accruals

8,146

7,167

Payments received on account

4,031

5,272

Other taxes and social security costs

643

609

Other payables

1,155

1,430


18,623

20,003

 

6.   Financial Information

 

The above financial information, which has been prepared in accordance with international accounting standards in conformity with the Companies Act 2006, does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006.

 

The financial information for the year ended 30 April 2024 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 30 April 2023 which have been delivered to the Registrar of Companies. The Independent Auditors' Report on both of those financial statements was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498(2) and Section 498(3) of the Companies Act 2006.

 

7.   Copies of the Annual Report and full Financial Statements will be available from the Group's website on www.colefaxgroupplc.com.  Copies will also be made available on request to members of the public at the Company's registered office at 19-23 Grosvenor Hill, London W1K 3QD.

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