Fabrics group Colefax has reported report full-year income fuelled by the adorning growth through the pandemic, though it warned that inflation might hinder gross sales progress.
The Aim-listed firm posted a pre-tax revenue of £10.82mn within the 12 months to the tip of April, up from £5.42mn the earlier 12 months. Sales jumped by nearly a 3rd to £102mn over the interval.
David Green, chair and chief government, mentioned the “exceptional” efficiency over the interval “reflects extremely favourable market conditions in the US and the UK”.
“One of the consequences of the pandemic was a surge in housing transactions and home-related spending and this has been the main driver of our business over the last financial year,” he mentioned.
The group, a global designer and cloth distributor, sells most of its wallpaper and materials for between £75 and £100 a metre, though some rolls value as a lot as £450 in accordance with the corporate’s web site. Shares rose 3 per cent on Wednesday to £8.08p following the revenue announcement.
However, the corporate warned that the impact of surging materials prices and a slowdown within the housing market might decelerate future gross sales progress.
“Rising interest rates and high levels of inflation have already started to slow housing market activity and we are therefore cautious about prospects for the coming year especially as we tend to lag changes in the housing market,” Green mentioned.
“We are also experiencing high levels of cost inflation especially from our fabric suppliers whose manufacturing operations are being impacted by large increases in energy and raw materials costs,” he added.
As a outcome, Green mentioned it was “unrealistic to expect continued sales growth in the current year”, though he famous that the “premium end” was barely extra sheltered from inflation than the remainder of the market.
Colefax’s cloth portfolio, which constitutes nearly all of the group’s turnover, had a powerful 12 months. Pre-tax revenue within the division jumped 60 per cent to £9.29mn, whereas gross sales elevated greater than a fifth.
The group mentioned it had additionally benefited from the strengthening of the greenback, noting that it generates greater than 60 per cent of the material division’s revenues within the US.
Its adorning division shifted to a pre-tax revenue of £1.48mn after a £680,000 loss final 12 months, after gross sales elevated 153 per cent, partly because of the completion of delayed tasks.
The Kingcome furnishings division reported a 72 per cent drop in revenue, nonetheless, because of vital will increase in the price of uncooked supplies and power.