Housing slowdown and weak dollar to hit Colefax

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The Independent Online

Colefax Group, the upmarket home furnishings and wallpaper manufacturer, yesterday warned that its profits would be hit by a continued slide in the US dollar and a slowdown in the UK housing market.

Shares in the company fell to a three-month low on the concerns, closing down nearly 8 per cent at 79.5p. Pre-tax profits at the group for the six months to the end of October rose 7 per cent to £1.76m thanks to cost-cutting measures, but sales for the group over the period were down 3 per cent.

"We believe that the group has performed reasonably well given current market conditions. Although we are seeing signs of growth in our major market, the US, the rapid decline of the US dollar against sterling and the euro, and its continuing weakness, will continue to impact the group's performance," David Green, the company's chairman and brother of the ousted Carlton chairman Michael Green, said yesterday.

The weak dollar meant that fewer customers in the US employed Colefax's services as an interior decorator, and sales in its decorating division fell 11 per cent over the six months. "The US is a traditionally strong market for this division. We expect trading to remain challenging over the next 12 months," Mr Green said.

Sales of fabrics in the UK were down 2 per cent on a like-for-like basis. Its antiques business has also suffered from a lack of overseas visitors.