AIM: CFX

COLEFAX GROUP PLC

("Colefax" or the "Group")

Half Year Results

for the six months ended 31 October 2025

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

Highlights

David Green, Chairman, said:

"The Group has delivered another good performance in the first six months primarily due to a strong Fabric Division performance in the US and despite the additional cost and ongoing uncertainty caused by very significant increases in US import tariffs. We believe that US trading is benefitting from the very strong US stock market. Sales in November, December and January have continued to perform well and unless there is a significant stock market correction, we expect this trend to continue through to the end of the financial year. As a result, the Group's profits for the year ended 30 April 2026 are expected to be ahead of current market forecasts. This is despite a weaker US dollar exchange rate and an expected breakeven performance from our Decorating Division. Next year, Fabric Division sales growth will be more challenging due to strong prior year comparatives and the Group's performance will partly depend on the stability of market conditions.

"The Group has a strong balance sheet with cash of £22.2 million. We will continue to focus on investing in our US distribution network and our portfolio of Fabric Division brands to take advantage of growth opportunities in our major markets."

Enquiries:

Colefax Group plc                     David Green, Chief Executive                Tel 020 7318 6021

                                                  Rob Barker, Finance Director

KTZ Communications               Katie Tzouliadis, Robert Morton             Tel 020 3178 6378

Peel Hunt LLP                          Dan Webster, Andrew Clark                   Tel 020 7418 8900

CHAIRMAN'S STATEMENT

Financial Results

Group sales for the six months to 31 October 2025 increased by 11.7% to £58.96 million (2024: £52.79 million) and by 13.6% on a constant currency basis. Pre-tax profits increased by 21.3% to £5.29 million (2024: £4.36 million).  Earnings per share increased by 25.0% to 66.5p (2024: 53.2p). The Group ended the half year with cash of £22.16 million (30 April 2025: £22.31 million).

In October 2025 the Group returned £6.1 million of surplus capital to shareholders by way of a share buyback. The Group purchased and cancelled 691,680 shares, representing 11.7% of the issued ordinary share capital, at a price of £8.80 per share. The share buyback will benefit earnings per share in the current and future financial years.

Sales in our core Fabric Division increased by 13.6% on a constant currency basis compared to a 4.5% constant currency increase in the first half of the prior year. This increase was mainly due to a strong performance in the US where sales increased by 18.3% on a constant currency basis. The percentage increase includes surcharges to cover significant increases in US import tariffs and excluding these, US sales increased by 12.9% on a constant currency basis. This was still a strong performance which we attribute to the ongoing stock market boom in the US. The profit benefit of the US sales increase was partly offset by a weaker US dollar exchange rate which averaged $1.34 compared to $1.29 for the prior year. Fabric Division sales in the UK increased by 10.5% but against a weak prior year comparative and sales in Europe increased by 2.9% on a constant currency basis.

The Group's first half results include an improved performance from our Decorating Division which made a pre-tax profit of £351,000 compared to a loss of £63,000 in the prior year.

In line with the Group's progressive dividend policy the Board has increased the interim dividend by 7% to 3.0p (2024: 2.8p). This will be paid on 15 April 2026 to shareholders on the register at 13 March 2026.

Product Division

·      Fabric Division - Portfolio of five brands: "Colefax and Fowler", "Cowtan and Tout", "Jane Churchill", "Manuel Canovas" and "Larsen".

Sales in the Fabric Division, which represent 88% of the Group's sales, increased by 11.4% to £51.97 million (2024: £46.70 million) and increased by 13.6% on a constant currency basis. Excluding US tariff surcharges, Fabric Division sales increased by 10.3% on a constant currency basis. Profits increased by 13.2% to £4.76 million (2024: £4.21 million). The profit benefit of the sales increase was partly offset by a weaker US Dollar exchange rate and budgeted increases in operating costs, notably staff and premises.

Sales in the US, which represent 64% of the Fabric Division's turnover, increased by 13.8% in reported terms and 18.3% on a constant currency basis.  The increase is distorted by tariff surcharges to cover   substantial increases in US import duty costs which have increased from an average of 5% to over 20% of the value of US imports. Excluding tariff surcharges sales increased by 12.9% on a constant currency basis. Considering the magnitude and on-off-on nature of the US tariff increases the sales performance in the US was very strong and we attribute this to the stock market boom which has particularly benefitted the luxury market in which we operate. The higher tariffs do affect most of our competitors as the majority of luxury fabrics sold are manufactured outside of the US.

We have continued to invest in our US showroom network and in December we moved to new showroom premises in Florida in an improved location. We are also planning to move to a new showroom in San Francisco and have signed a lease which will commence in September 2026.

Sales in the UK, which represent 16% of the Fabric Division's turnover, increased by 10.5% during the period compared to a decrease of 8.3% in the first half of the prior year. The increase largely reflects weak trading in the prior year caused by uncertainty around the General Election and the first post-election Budget. Market conditions remain relatively challenging in the UK due to subdued high-end housing market conditions. High rates of stamp duty are a particular drag on housing market activity and all the economic benefits that would flow from higher transaction levels. However, lower inflation and lower interest rates should help market conditions going forward.  

Sales in Continental Europe, which represent 18% of the Fabric Division's turnover, increased by 4.7% on a reported basis and 2.9% on a constant currency basis. This follows an 11.5% constant currency increase in sales in the first half of the prior year when we benefitted from some significant one-off contract orders. Market conditions have been fairly stable in Europe which we attribute to the steady reduction in interest rates from 4.50% to 2.15% in the year to June 2025.

Sales in the Rest of the World, which represent just 2% of the Fabric Division's turnover, increased by 7.7% on a constant currency basis. This compares to a 15.5% decrease in the prior year. Our largest market in the Rest of the World is the Middle East and sales can fluctuate significantly due to the number and timing of contract orders.

Furniture - Kingcome Sofas

Sales for the six months to October 2025 increased by 6.0% to £1.57 million (2024: £1.48 million) and the Company made an operating profit of £176,000 (2024: £216,000). Furniture is the Group's only manufacturing activity. The reduction in profit was due to increased operating expenses but is considered a good performance in challenging UK market conditions for high-end furniture.  Sales reflect orders delivered during the period and the actual order intake was down by 3% compared to an increase of 19% in the prior year. Overall, the forward order book remains healthy and the business should benefit from post Budget certainty and any further reductions in interest rates.

Interior Decorating Division

Decorating sales, which account for just over 9% of Group turnover, increased by 16.7% in the period to £5.42 million (2024: £4.65 million) and the business made a profit of £351,000 compared to a loss of £63,000 for the same period last year. This strong performance has boosted the Group's first half profits but is mainly due to timing differences with project completions weighted to the first half of the financial year. This contrasts with the prior year and is reflected in the level of decorating work in progress which ended the half year at £1.4 million compared to £3.6 million one year ago. Overall, we expect the Decorating Division to achieve only a breakeven performance this year, primarily due to a difficult high-end housing market in the UK.

Prospects

The Group has delivered another good performance in the first six months primarily due to a strong Fabric Division performance in the US and despite the additional cost and ongoing uncertainty caused by very significant increases in US import tariffs. We believe that US trading is benefitting from the very strong US stock market. Sales in November, December and January have continued to perform well and unless there is a significant stock market correction, we expect this trend to continue through to the end of the financial year. As a result, the Group's profits for the year ended 30 April 2026 are expected to be ahead of current market forecasts. This is despite a weaker US dollar exchange rate and an expected breakeven performance from our Decorating Division. Next year, Fabric Division sales growth will be more challenging due to strong prior year comparatives and the Group's performance will partly depend on the stability of market conditions.    

The Group has a strong balance sheet with cash of £22.2 million. We will continue to focus on investing in our US distribution network and our portfolio of Fabric Division brands to take advantage of growth opportunities in our major markets.

David Green

Chairman

28 January 2026              

COLEFAX GROUP PLC

INTERIM GROUP INCOME STATEMENT

INTERIM GROUP STATEMENT OF COMPREHENSIVE INCOME

COLEFAX GROUP PLC

INTERIM GROUP STATEMENT OF FINANCIAL POSITION

COLEFAX GROUP PLC

INTERIM GROUP STATEMENT OF CASH FLOWS

COLEFAX GROUP PLC