UK boosts Colefax's profits

27th Jan 2011 16:36

A recovery in the UK fabrics market helped furnishings supplier Colefax substantially increase its profits in the six months to October 2010. The figures have prompted house broker Peel Hunt to raise its profit forecast for the year to April 2011 from £4m to £6.2m. However, it has kept its 2011-12 figure unchanged at £5.1m. The US market remains weak but exchange rate movements have helped to boost its contribution. European sales rose 12% on a constant currency basis but the market is starting to weaken again. Furniture sales were flat. The interior decorating division is expected to do particularly well this year thanks to a couple of large contracts but AIM-quoted Colefax says that it will be an exceptional contribution and is unlikely to be repeated. Revenues from continuing operations improved from £30.8m to £35.7m, while pre-tax profit jumped from £1.83m to £2.98m. That does not include a £240,000 post-tax loss on the discontinued Manuel Canovas beachwear business, down from £454,000 net loss in the previous year. This business was sold to management. Cash generation was good and net cash increased from £4.43m to £7.26m. The interim dividend has increased from 1.55p a share to 1.85p a share.