24th Jan 2017 10:49
LONDON (Alliance News) - Fabrics and wallpaper designer Colefax Group PLC said Tuesday its financial first half profit slumped due to tough trading conditions in the US and currency hedging losses.
Colefax reported a pretax profit of GBP1.9 million for the six months to October 31, down from GBP3.3 million for the same period in 2015. Sales increased to GBP39.5 million from GBP38.0 million.
Colefax increased its interim dividend to 2.30 pence per share from 2.20p the prior year.
The company said the drop in profit was due to poor market conditions in the US, but also hedging against US dollar exposure incurring GBP755,000 losses, as the company did not benefit from the decline in sterling following the Brexit vote.
Colefax said it expects a GBP2.0 million pretax charge for hedging losses in its current financial year and GBP1.4 million next year, although longer term sterling weakness will benefit the company which makes 75% of its sales overseas.
"Results reflect the challenging trading conditions in our core US market, where sales declined by 10% on a constant currency basis. Our decision to hedge our US dollar exposure also incurred losses and will continue to adversely affect results this financial year and next," said David Green, chairman of Colefax.
Shares in Colefax were down 6.5% at 505.00 pence Tuesday morning.
By Adam Clark; [email protected]
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