Furnishing fabrics, wallpapers and furniture supplier Colefax Group PLC has reported a growth in half year sales while profit reduced.
According to its half year results for the six months ended 31 October 2023, total group sales slightly rose 0.4% to £51.84m from £51.66m in 2022. On a constant currency basis, sales increased 3.4%.
Colefax Group, which trades under five brand names including Colefax and Fowler, Cowtan & Tout, Jane Churchill, Manuel Canovas and Larsen, as well as through its furniture division Kingcome Sofas, said that fabric sales were down 3% £45.8m from £47.17m.
Sales in the UK, which represent 18% of the Fabric Division’s turnover, increased by 4% during the period and compare to an increase of 4% in the first half of the prior year. This performance was slightly ahead of expectations at the start of the year and partly reflects the success of recent new product launches. “We are also benefitting from the expansion of our trade showroom in the Chelsea Harbour Design Centre which took place in October 2022m,” the group said.
As for Kingcome Sofas, total sales for the period increased by 10% to £1.50m, up from £1.36m, with the company making an operating profit of £126,000.
“Furniture sales are recognised on delivery of orders and the 10% increase in sales during the period was due to improvements in factory productivity which reduced the existing order book and hence the lead time for new orders, to a more acceptable level,” the group said.
“The improvement in productivity follows a significant investment in the factory in the prior year. Most furniture sales are made to order and relate to UK customers. Trading conditions during the period were challenging and the order intake was down by 22% compared to a strong prior year comparative.
“The reduced level of orders reflects high UK interest rates and a subdued housing market and trading is expected to remain challenging for at least the remainder of the year.”
Meanwhile its decorating division saw sales rise 45% from £3.13m to £4.55m. Group pre-tax profit resulted at £4.38m, down 16% from £5.2m.
David Green, Chairman, commented: “The Group has delivered a good performance in the first six months which is broadly in line with expectations and follows record interim profits in the prior year. Trading in all our major markets is starting to reflect the impact of high interest rates and lower levels of housing market activity.
“We are therefore expecting conditions to become more difficult especially as customer spending on our products tends to lag changes in housing market activity and we believe trading conditions are likely to remain challenging for much of the next financial year. Our Decorating Division is expected to deliver an exceptional performance this year due to the timing of projects but as a result decorating turnover will be significantly lower next year.
“The Group has a strong balance sheet and we will continue to focus on investing in our distribution network and our portfolio of brands. This will ensure that we are well placed to benefit from any improvement in market conditions.”
