26th Jul 2016 09:11
LONDON (Alliance News) - Luxury furnishing designer and distributor Colefax Group PLC said Tuesday profit and revenue for its financial year ended April 30 was flat on the year previously, due to low consumer confidence in both the US and Europe.
Colefax's pretax profit was flat on its previous financial year at GBP5.0 million. This was due to broadly unchanged sales, with full-year revenue of GBP76.9 million compared to USD76.8 million the previous year. The company lifted its dividend 4.5% to 4.60 pence from 4.40p a year before.
Colefax said the flat sales reflected a year which became "progressively more challenging" for all its major markets.
The uncertainty over the forthcoming presidential election in the US contributed to weak sales, with the region accounting for 58% of Colefax's fabric division, the company said. Ahead of the election in November, the company said consumer purchasing in the luxury end of the furnishing market are more cautious. This was shown by a slowdown in sales in the fabric division, down 1% in the first half of its financial year and down by 5% in the second half, Colefax said.
Higher stamp duty in the UK contributed to weak sales, with an increase in stamp duty on high-end housing reducing the number of people buying new homes. Colefax said its customers tend to spend more with it when moving house than when refurbishing, so it was hit by this increase in stamp duty.
Continental Europe sales, which make up 20% of the fabric division, were "very mixed" with "no overall sign of a strong recovery". Sales were down in France and Germany, the company's two largest markets in Europe, which Colefax said was due to weak consumer confidence in Europe.
Colefax said it is too early to judge what the impact of Brexit will be on its sales, though it is "clearly not good for trading prospects". However, 75% of the company's sales are made outside the UK, so the impact should be limited.
"Despite the ongoing uncertainty, we will continue to invest in our business with confidence and have a significant capital expenditure programme planned, with new US showrooms and a new Decorating Division showroom in the UK," Colefax Chairman David Green said.
Shares in Colefax were down 1.6% at 455.00p on Tuesday.
By Lucy Heming; [email protected]
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