Furnishing fabrics, wallpapers and furniture supplier Colefax Group PLC has reported a growth in half year sales.
According to its latest trading update for the six months ended 31 October 2024, total sales rose 1.8% to £52.79m from £51.84m in 2023.
Pre-tax profit resulted at £4.36m, down 0.5% compared to £4.38m against the same period last year.
Fabric Division sales were up 2% to £46.7m, with the US and EU up by 7% and 12% respectively. UK sales were down by 8%.
“Sales in the UK, which represent 16% of the Fabric Division’s turnover, decreased by 8% during the period compared to an increase of 4% in the first half of the prior year,” the group said. “Market conditions in the UK were challenging and reflect the impact of high interest rates on housing market activity and consumer spending.
“We believe that sales were also impacted by uncertainty in the run up to the General Election on 4 July 2024 and then the first post election budget on 30 October 2024. The proposed increase in UK employers national insurance will add approximately £270,000 to the Group’s UK employment costs from April 2025.”
Meanwhile, for Kingcome Sofas, sales for the period decreased by 1% to £1.48m, while operating profit resulted at £216,000, up from £126,000. “The improvement in profit reflects on-going efficiency improvements at our factory in Devon following a significant investment in 2023,” the group added.
“Over 90% of furniture sales are to UK customers and market conditions have remained difficult. The order book at the end of October 2024 was down by 10% compared to October 2023. The business has a relatively high fixed cost base due to its skilled labour force. This means that profitability is highly operationally geared and the business is well placed to benefit from any pick up in sales.”
Decorating Division sales rose by 2% to £4.65m with project completions weighted to the second half of the financial year.
David Green, Chairman, said: “The Group has delivered a good performance in the first six months due to a strong Fabric Division performance in the US. Market conditions in the UK and Europe are currently challenging and we expect these conditions to continue through the second half of the year.
“Following the US election in November the US Dollar exchange rate has strengthened significantly and if sustained this will be beneficial for Fabric Division profits going forward. Although trading prospects in the US look favourable there is currently significant uncertainty around the possibility of higher US import tariffs and how they might impact our US business.
“The Group has a strong balance sheet with cash of £18.6 million. We will continue to focus on investing in our US distribution network and our portfolio of Fabric Division brands and we are well placed to benefit from any improvement in market conditions.”
