Colefax (CFX) H2 2024 earnings summary

Executive summary

• FY ended 30 Apr 2024 revenue rose 2% to £107.16m, or 4.8% at constant currency; profit before tax fell 10% to £7.73m.

• Profit attributable to shareholders was £5.79m, down 13%; EPS declined 1.6% to 88.3p, while operating cash flow less lease cash flows rose 12% to £10.15m.

• Net cash ended the year at £17.76m after £7.2m of share buybacks and £353k of dividend payments.

Financial highlights

• Revenue £107.16m vs £104.82m; reported growth 2% and constant-currency growth 4.8%.

• Operating profit £8.48m vs £9.52m; profit before tax £7.73m vs £8.54m; net profit £5.79m vs £6.69m.

• Gross profit was £60.03m vs £59.73m; gross margin declined to 56.0% from 57.0%.

• Basic and diluted EPS was 88.3p vs 89.7p; weighted-average shares fell 12% following the September 2023 tender offer and buyback.

Outlook and guidance

• Difficult market conditions are expected in the year ahead; higher interest rates have reduced housing activity, and any benefit from lower rates may take time to reach home spending.

• Investment in the brand portfolio and distribution network is set to continue; FY2025 capex is expected to be slightly higher than depreciation.

• Decorating deposits ended at a historically healthy level but were 18% below the strong prior-year comparative.

• Lease renewals at the Garratt Lane operations centre are expected to increase right-of-use assets and lease liabilities in FY2025.