Furnishings group posts record results; invests in furniture division

Furnishing fabrics and wallpaper group, Colefax, has reported record sales and profits due to ‘favourable market conditions’ especially in the US and the UK.

According to its preliminary results for the year ended 30 April 2022, total sales increased by 31% to £101.80m from £77.91m 2021, and by 33% on a constant currency basis.

Fabric Division sales increased by 21.5% to £84.51m, up by 23.7% on a constant currency basis, with UK sales up by 33%. Decorating Division sales rose by 152% to £14.63m, partly due to the completion of projects delayed from the prior year.

As for sales of Kingcome furniture, which represent 3% of Product Division sales, total revenues increased by 5% to £2.66 million. Pre-tax profit decreased by 72% to £80,000 from £288,000, reflecting significant increases in the cost of raw materials and energy and some one-off marketing and website costs during the year.

“The order book ended the year close to record levels and up by 116% compared to the start of the year when the showroom had only just reopened from lockdown. Factory production remains challenging due to labour and materials shortages and lead times have increased. We have just started a major investment in our freehold factory in Devon which will increase capacity and improve productivity and energy efficiency,” the group added.

Overall, group pre-tax profit increased by 100% to £10.82m from £5.42m, reflecting ‘operational gearing in the Fabric Division sales’ and an ‘exceptional performance by the Decorating Division’. Year-end cash resulted at £21.8m, up from £19.3m.

David Green, Chief Executive of Colefax Group plc, said: “Over the past year we have benefitted from the very strong housing market conditions which emerged after the first lockdowns in 2020 and this is the main reason for the Group’s record results for the year ended April 30 2022.

“Rising interest rates and high levels of inflation have already started to slow housing market activity and we are therefore cautious about prospects for the coming year especially as we tend to lag changes in the housing market. We are also experiencing high levels of cost inflation especially from our fabric suppliers whose manufacturing operations are being impacted by large increases in energy and raw materials costs.

“Against this backdrop we believe it is unrealistic to expect continued sales growth in the current year especially against such strong prior year comparatives. The fact that the Group operates at the premium end of the market should provide some protection from high levels of inflation.

“In addition we are benefitting from the recent strengthening of the US Dollar as over 60% of our Fabric Division revenues are in the US. The Group has a very strong balance sheet including cash in excess of £21 million and is well placed to deal with more challenging trading conditions.”

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