Preliminary Results

CFX

COLEFAX GROUP PLC

("Colefax" or the "Group")

Preliminary Results for the year ended 30th April 2012

Colefax is an international designer and distributor of luxury furnishing fabrics & wallpapers and owns a leading interior decorating business. The Group trades under five brand names, which serve different segments of the soft furnishings marketplace; these are Colefax and Fowler, Cowtan and Tout, Jane Churchill, Manuel Canovas and Larsen.

Highlights

·; Sales of £70.40m (2011: £77.72m)

·; Pre-tax profit of £3.15m (2011: £6.52m)

·; Earnings per share of 15.8p (2011: 33.0p)

·; Net cash of £8.52m (2011: £6.30m)

·; Final dividend maintained at 2.00p per share (2011: 2.00p per share), taking total dividend for the year to 3.85p (2011: 3.85p)

·; Results impacted by very weak performance from the Decorating Division

·; Strong financial position but outlook remains cautious

David Green, Chairman of Colefax, commented,

"The principal reason for the decline in our pre-tax profits was a very weak performance from the Decorating Division which made a loss of £87,000 compared to an exceptional profit of £2.01 million last year. Sales in the Product Division were flat reflecting difficult trading conditions in all of our major markets.

The current economic conditions prevailing in our most important markets make it difficult to be optimistic about short term growth prospects. The Group has a strong balance sheet and is well placed to deal with adverse market conditions. Until we are confident of an improvement we will continue to run the business prudently focussing on cash flow and tight control of working capital."

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COLEFAX GROUP PLC

CHAIRMAN'S STATEMENT

Financial Results

The Group's pre-tax profit for the year to 30th April 2012 decreased by 52% to £3.15 million (2011 - £6.52 million) on sales down 9% at £70.40 million (2011 - £77.72 million). Earnings per share decreased by 52% to 15.8p (2011 - 33.0p) and the Group ended the year with net cash of £8.52 million (2011 - £6.30 million).

During the year, the Group purchased for cancellation 140,000 shares at an average price of £2.44 per share, representing 1.0% of the Group's issued share capital at the start of the year.

The Board has decided to maintain the final dividend at 2.00p per share (2011 - 2.00p), making a total for the year of 3.85p (2011 - 3.85p). The final dividend will be paid on 9th October 2012 to shareholders on the register at the close of business on 14th September 2012.

As stated when we announced our Interim Results the principal reason for the decline in our pre-tax profits was a very weak performance from the Decorating Division which made a loss of £87,000 compared to an exceptional profit of £2.01 million last year. Sales in the Product Division were flat reflecting difficult trading conditions in all of our major markets.

Product Division

·; Fabric - Portfolio of Five Brands: "Colefax and Fowler", "Cowtan and Tout", "Jane Churchill", "Manuel Canovas" and "Larsen"

Sales in the Fabric Division, which represent 87% of Group sales, increased by 1% to £61.27 million on a constant currency basis (2011 - £61.20 million). Profit from operations decreased by 25% to £3.18 million (2011 - £4.23 million).

Sales in the US, which represent 50% of the Fabric Division's sales, increased by 4% on a constant currency basis. Trading conditions in all our main territories have been difficult especially New York which is our largest territory. During the year we moved our US operations to new premises in New York and we have continued to invest in our network of showrooms in the firm belief that this market will recover. We recently assumed full responsibility for our agent showroom in Florida which we believe will increase sales in this important territory.

UK sales, which represent 21% of the Fabric Division's sales, decreased by 1% during the year following a 10% increase in the previous year. I am still surprised by the relative strength of this market and therefore remain concerned that it will continue at this level. The UK housing market is still showing no sign of recovery and the UK economy is being affected by the on going problems in the Eurozone.

Sales in Continental Europe, which represent 26% of the Fabric Division's sales, decreased by 3% on a constant currency basis. There was a wide variation in performance between countries. In our top three markets, sales in France were flat, sales in Italy were down 14% and sales in Germany were up 5%. I believe that, with the possible exception of Germany, all these markets will remain very difficult in the near future. We are about to relocate our showroom in Munich to a far more prominent position which will improve our presence in this important market.

Sales in the rest of the world, which represent 3% of the Fabric Division's sales, were down by 2% in the year. There are opportunities to grow in certain markets and we are targeting the Middle East and Russia as the two principal markets for growth in the coming year.

·; Furniture - Kingcome Sofas

Sales of Kingcome furniture, which account for 3% of Group sales, decreased by 7% to £2.28 million (2011 - £2.44 million). Operating profit was £63,000 (2011 - £211,000) and whilst this result was disappointing, it reflects very challenging market conditions. The majority of furniture sales are made in the UK and we are currently exploring opportunities to increase export sales in selected markets.

Interior Decorating Division

Interior decorating sales, which account for 10% of Group sales, decreased by 51% to £6.85 million (2011 - £14.08 million). This resulted in a loss for the year of £87,000 compared to a profit of £2.01 million last year. The weak performance this year follows an exceptional performance last year and is not unusual after the completion of a number of major projects.

Prospects

Trading in all our major markets remains difficult. However, over the last two months, we have seen a small improvement in our largest market, the US. The current economic conditions prevailing in our most important markets make it difficult to be optimistic about short term growth prospects. The Group has a strong balance sheet and is well placed to deal with adverse market conditions. Until we are confident of an improvement we will continue to run the business prudently focussing on cash flow and tight control of working capital.

David Green

Chairman

COLEFAX GROUP PLC

GROUP INCOME STATEMENT

For the year ended 30th April 2012

COLEFAX GROUP PLC

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30th April 2012

COLEFAX GROUP PLC

GROUP STATEMENT OF FINANCIAL POSITION

At 30th April 2012

The financial statements were approved by the board of directors and authorised for issue on 25th July 2012.

D. B. Green Director

R. M. Barker Director

COLEFAX GROUP PLC

GROUP STATEMENT OF CASH FLOWS

For the year ended 30th April 2012

COLEFAX GROUP PLC

GROUP STATEMENT OF CHANGES IN EQUITY

For the year ended 30th April 2012

COLEFAX GROUP PLC

NOTES TO THE FINANCIAL INFORMATION

At 30th April 2012

1. Earnings per share

2. Cash and cash equivalents

For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise the following:

Cash at bank earns interest at floating rates based on daily bank deposit rates. The fair value of cash and cash equivalents are considered to be their book value.

3. The above financial information, which has been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union, does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006.

The financial information for the year ended 30th April 2012 has been extracted from the statutory accounts which will be delivered to the Registrar of Companies following the company's annual general meeting. The comparative financial information is based on the statutory accounts for the financial year ended 30th April 2011 which have been delivered to the Registrar of Companies. The Independent Auditors' Report on both of those financial statements was unqualified and did not contain a statement under Section 498(2) and Section 498(3) of the Companies Act 2006.

4. Annual general meeting

The Annual General Meeting of Colefax Group plc will be held at 19-23 Grosvenor Hill, London W1K 3QD on 11th September 2012 at 11.00 a.m.