RNS Number:7972N
Colefax Group PLC
22 July 2003
22 July 2003 For immediate release
COLEFAX GROUP PLC
FINAL RESULTS FOR THE YEAR TO 30 APRIL 2003
Colefax Group designs and distributes furnishing fabrics & wallpaper and owns a
leading interior decorating subsidiary.
The Group's five major fabric brands are Colefax and Fowler, Cowtan & Tout, Jane
Churchill, Manuel Canovas and Larsen.
Key Points
*Pre-tax profits of #2.8 million
*Earnings per share of 8.9p
*Sales of #64.4 million
*Proposed final dividend of 2.06p, making a total of 3.40p for the year
David Green, chairman and chief executive, commented,
"This year's results have been achieved in a very challenging trading
environment. Considering these difficult market conditions and the sudden
weakness of the US dollar, I believe we produced a creditable performance
reflecting the considerable strength of our brands."
Enquiries:
Colefax Group plc David Green, chairman Tel: 020 7448 1000
Biddicks Zoe Biddick/Katie Tzouliadis Tel: 020 7448 1000
CHAIRMAN'S STATEMENT
FINANCIAL RESULTS
The Group generated a pre-tax profit for the year to 30th April 2003 of #2.8
million (2002 - #3.9 million) on sales down 4% at #64.4 million (2002 - #67.3
million). Earnings per share decreased by 20% to 8.9p (2002 - 11.1p). Group net
borrowings at the year end were #5.0 million (2002 - #4.8 million), which
represents gearing of 38% to net assets.
The Board has decided to recommend that the final dividend is maintained at
2.06p (2002 - 2.06p) making a total for the year of 3.40p (2002 - 3.40p). The
final dividend will be paid on 10th October 2003 to shareholders on the register
at the close of business on 12th September 2003.
This year's results have been achieved in a very challenging trading
environment. Our prime market, the US, has been in decline throughout the year.
The UK market remained flat and Continental Europe weakened significantly in the
second half of the year. Considering these difficult market conditions and the
sudden weakness of the US dollar, I believe we produced a creditable performance
reflecting the considerable strength of our brands and the loyal support of our
customers.
PRODUCT DIVISION
Fabric - Portfolio of Brands: Colefax and Fowler, Cowtan & Tout, Jane Churchill,
Manuel Canovas and Larsen.
Sales in the US, which represent 55% of the Fabric Division's sales, decreased
by 3% on a constant currency basis. This market has remained difficult
throughout the year. We have consolidated our distribution centre into one
location at 111 Eighth Avenue in New York and extended our lease so we will not
need to relocate in the near future.
UK sales, which represent 20% of the Fabric Division's turnover, decreased by 2%
during the year and the market is showing signs of getting tougher. This
reflects the weak state of the high end housing market.
Sales in Continental Europe, which represent 22% of the Fabric Division's
turnover, decreased by 5% during the year on a constant currency basis. Our
principal market, France, deteriorated sharply towards the end of the year and
currently market conditions in our three main markets of France, Italy and
Germany are very challenging.
Sales in the Rest of the World, which represent 3% of the Fabric Division sales,
increased by 12% during the year. We exhibited for the first time at the INDEX
show in Dubai and we have seen an increase in orders from the Middle East, a
market in which we were traditionally very weak. We will continue to try and
grow in this market and are currently seeing some growth in the Far East.
Furniture - Kingcome Sofas
Sales of furniture decreased by 9% during the year in a particularly difficult
market. We have reduced costs in our manufacturing facility and refocused our
sales effort with the introduction of an exclusive Kingcome range of fabrics.
The early signs are that this is proving successful and I am confident of an
improvement this year.
Accessories - Manuel Canovas
Manuel Canovas accessories had a good year during which sales grew by 41% and
now represent 5% of total Group sales. We are currently investing in this
activity so the design, origination and marketing costs are significant. I
believe there is a good future for this type of product which will ultimately
make a meaningful contribution to the Group's profits.
DECORATING DIVISION
Interior Decorating sales were down by just 2% during the year and antique sales
remained flat. Activity is currently reasonable for this area of the Group and
we have started a number of significant new projects which will keep our
decorating teams busy in the current year.
PROSPECTS
Currently there are no real signs of improvement in any of our major markets.
The current exchange rate of the dollar to the pound will have a negative effect
on our results if these rates persist. There is little in the short term that
will improve our results but we are well placed to take advantage of the upturn
when it comes.
David B. Green
Chairman
GROUP PROFIT AND LOSS ACCOUNT
For the year ended 30th April 2003
Notes 2003 2002
#'000 #'000
Turnover 64,422 67,307
Cost of sales 28,088 29,235
---------- ----------
Gross profit 36,334 38,072
Operating expenses 33,297 33,847
---------- ----------
Operating profit 3,037 4,225
Interest (236) (366)
---------- ----------
Profit on ordinary activities before 2,801 3,859
taxation
Tax on profit on ordinary activities
UK (445) (608)
Overseas (562) (716)
---------- ----------
(1,007) (1,324)
---------- ----------
Profit on ordinary activities after 1,794 2,535
taxation
Dividends on equity shares (594) (741)
---------- ----------
Retained profit for the year 1,200 1,794
---------- ----------
Basic earnings per share 1 8.9p 11.1p
Diluted earnings per share 1 8.8p 10.9p
Dividends per share 3.40p 3.40p
All activity has arisen from continuing operations.
GROUP BALANCE SHEET
At 30th April 2003
Notes 2003 2002
#'000 #'000
Fixed assets
Tangible assets 7,068 7,759
Investments 687 687
----------- -----------
7,755 8,446
----------- -----------
Current assets:
Stocks and contracts in progress 13,039 13,489
Debtors 9,211 8,397
Cash at bank and in hand 3 1,639 1,911
----------- -----------
23,889 23,797
----------- -----------
----------- -----------
Creditors: amounts falling due within
one year
16,683 16,522
----------- -----------
Net current assets 7,206 7,275
----------- -----------
Total assets less current 14,961 15,721
liabilities ----------- -----------
Creditors: amounts falling due after
more than one year 1,500 1,029
Provision for liabilities and
charges:
Deferred taxation 130 52
----------- -----------
13,331 14,640
----------- -----------
Capital and reserves:
Called up share capital 2,009 2,332
Share premium account 11,087 11,055
Capital redemption account 857 521
Profit and loss account (622) 732
----------- -----------
Equity shareholders' funds 13,331 14,640
----------- -----------
GROUP CASH FLOW STATEMENT
For the year ended 30th April 2003
Notes 2003 2002
#'000 #'000
Net cash inflow from operating 2 6,191 6,909
activities --------- --------
Returns on investments and servicing of
finance:
Interest received 40 54
Interest paid (262) (468)
--------- --------
(222) (414)
--------- --------
Taxation:
UK Corporation tax paid (572) (562)
Overseas tax paid (668) (1,039)
--------- --------
(1,240) (1,601)
--------- --------
Capital expenditure and financial
investment:
Payments to acquire tangible fixed (2,106) (2,194)
assets
Receipts from sales of tangible fixed 93 235
assets --------- --------
(2,013) (1,959)
--------- --------
Equity dividends paid (661) (756)
--------- --------
Cash inflow before financing 2,055 2,179
--------- --------
Financing:
Purchase of own shares (2,414) (928)
New long-term loan 2,000 -
Repayment of long-term loan (957) (1,045)
--------- --------
Net cash outflow from financing (1,371) (1,973)
--------- --------
Increase in cash in the period 3 684 206
--------- --------
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 30th April 2003
2003 2002
#'000 #'000
Profit for the period 1,794 2,535
Currency translation differences on foreign
currency net investments
258 (57)
Currency translation differences on foreign (674) (196)
currency loans
Deferred tax on long-term loan foreign currency 276 57
movements --------- --------
Total recognised gains and losses relating to the 1,654 2,339
period --------- --------
NOTES TO THE ACCOUNTS
At 30th April 2003
1. Earnings per share
Basic earnings per share have been calculated on the basis of earnings of
#1,794,000 (2002 - #2,535,000) and on 20,176,029 (2002 - 22,844,735) 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 have been calculated on the basis of earnings of
#1,794,000 (2002 - #2,535,000) and on 20,476,029 (2002 - 23,166,795) being the
weighted average number of shares in issue during the year, calculated as follows:
2003 2002
Basic weighted average number of shares 20,176,029 22,844,735
----------- -----------
Dilutive potential ordinary shares, including
shares under option owned by the Colefax Group
Plc ESOP Trust
300,000 322,060
----------- -----------
20,476,029 23,166,795
----------- -----------
2. Operating profit
Cash flow statement
Reconciliation of operating profit to net cash inflow from operating activities:
2003 2002
#'000 #'000
Operating profit 3,037 4,225
Depreciation charges 2,454 2,646
Profit on sale of tangible fixed assets (22) (144)
Decrease in stocks 171 1,333
(Increase)/decrease in debtors (200) 282
Increase/(decrease) in creditors 751 (1,433)
----------- -----------
Net cash inflow from operating activities 6,191 6,909
----------- -----------
3. Reconciliation of net cash flow to movement in net debt
2003 2002
#000 #000
Increase in cash 684 206
New bank loan (2,000) -
Repayment of bank loan 957 1,045
----------- -----------
Movement in net debt resulting from cash flows (359) 1,251
Translation differences 78 17
----------- -----------
Movement in net debt in the period (281) 1,268
Net debt at 1st May (4,761) (6,029)
----------- -----------
Net debt at 30th April (5,042) (4,761)
----------- -----------
At 1st May 2002 Cash flow Other Exchange At 30th April
differences 2003
#'000 #'000 #'000 #'000 #'000
Analysis of
net debt
Cash at bank 1,911 (188) - (84) 1,639
and in
hand
Overdrafts (4,614) 872 - - (3,742)
--------- -------- ------- -------- ---------
(2,703) 684 - (84) (2,103)
--------- -------- ------- -------- ---------
Debt due (1,029) 957 (1,457) 90 (1,439)
within one --------- -------- ------- -------- ---------
year
Debt due (1,029) (2,000) 1,457 72 (1,500)
after one --------- -------- ------- -------- ---------
year
Net debt (4,761) (359) - 78 (5,042)
--------- -------- ------- -------- ---------
4. The above financial information, which has been prepared on the same basis as set
out in the 2002 annual accounts, does not constitute statutory accounts as defined
in Section 240 of the Companies Act 1985. The financial information for the year
ended 30th April 2003 has been extracted from the statutory accounts on which an
unqualified audit opinion has been issued.
Statutory accounts for the year ended 30th April 2003 will be delivered to the
Registrar in due course. The comparative financial information is based on the
statutory accounts for the financial year ended 30th April 2002. Those accounts,
upon which the auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies.
5. The Annual General Meeting of Colefax Group plc will be held at 39 Brook Street,
London W1K 4JE on 18th September 2003 at 11.00 a.m.
This information is provided by RNS
The company news service from the London Stock Exchange
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