Colefax fights back into the black

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COLEFAX and Fowler, the upmarket interior decorator, reported a return to profitability yesterday, writes Robert Cole.

Colefax made pre-tax profits of pounds 331,000 for the year to 30 April against losses of pounds 396,000 last time.

The underlying improvement was even stronger, with operating profits of pounds 800,000 to compare with a loss of pounds 427,000. Last year's figure was depressed by losses incurred on the sale of a warehouse in the US, while the previous year's were inflated by a pounds 400,000 gain on currency translation.

Domestic decorating services led the recovery with a 75 per cent increase in turnover. However, the performance from Colefax's retail operations worsened, with sales falling by 10 per cent.

As well as undertaking redecorating work for the wealthy and running a chain of shops, Colefax designs and manufactures wallpaper and furnishing fabrics.

The company has three brands - Colefax and Fowler, Cowtan & Tout and Jane Churchill. Sales in the UK increased by 15 per cent and in Europe by 25 per cent. US sales also improved by 8 per cent.

David Green, chief executive, said that, in addition to receiving help from the wider economy, all three brands reaped the benefits of revamped product ranges. He said the company was making additional product investment this year.

Mr Green said the positive trend was continuing. 'Current trading conditions worldwide for the product division are showing signs of improvement, and in particular we are experiencing sales growth in the UK and Europe.'

Earnings per share increased to 0.8p against losses per share last time of 1.05p. Colefax has maintained the final dividend at 0.5p, making an unchanged total payout of 1p. Gearing at the end of April was 33 per cent, down from 40 per cent. The shares were unchanged at 79p. Five years ago, they traded at 180p. However, the price has doubled in the past year.