Colefax Group H1 2025: profit up 21.3% and outlook raised
Colefax Group has posted a robust set of half-year numbers to 31 October 2025, driven by strong demand in its core Fabric Division, particularly in the US. Group sales rose 11.7% to £58.96 million, profit before tax climbed 21.3% to £5.29 million, and earnings per share jumped 25.0% to 66.5p.
The Board has nudged expectations higher for the full year to 30 April 2026, guiding profits to be ahead of current market forecasts. That confidence comes despite two clear headwinds – a weaker US dollar and tariff-related disruption – which makes the performance all the more noteworthy.
Key numbers at a glance
| Metric | H1 2025 | H1 2024 |
|---|---|---|
| Revenue | £58.96 million | £52.79 million |
| Profit before tax | £5.29 million | £4.36 million |
| Basic EPS | 66.5p | 53.2p |
| Fabric Division sales | £51.97 million | £46.70 million |
| Decorating Division sales | £5.42 million | £4.65 million |
| Decorating Division profit | £351,000 | £(63,000) |
| Cash at period end | £22.16 million | £18.60 million |
| Interim dividend | 3.0p | 2.8p |
| Share buyback | £6.1 million, 691,680 shares at £8.80 | £2.4 million |
US-led growth in the Fabric Division despite tariff pressure
The Fabric Division, which represents 88% of Group sales, did the heavy lifting. Sales rose 11.4% to £51.97 million, and by 13.6% on a constant currency basis. Constant currency strips out exchange rate moves to show underlying trading. Divisional profit increased 13.2% to £4.76 million, though some of that was offset by a weaker US dollar – the average rate moved to $1.34 versus $1.29 last year.
The standout was the US. On a constant currency basis, US fabric sales were up 18.3%, or 12.9% excluding tariff surcharges. Those surcharges are pass-through charges to cover sharp increases in US import duties, which have jumped from around 5% to over 20% of the value of US imports. Management links the robust demand to the ongoing US stock market boom, which is lifting the luxury segment where Colefax plays.
UK edged up, Europe steady, Rest of World small but improved
- UK fabric sales rose 10.5%, helped by weak comparatives after last year’s election-related lull. Management still describes the UK backdrop as challenging, citing subdued high-end housing activity and stamp duty as a drag. Lower inflation and interest rates should help from here.
- Continental Europe increased 4.7% reported, or 2.9% constant currency, lapping a strong prior period with one-off contracts. Conditions are described as fairly stable alongside falling interest rates.
- Rest of the World, a small slice at 2% of Fabric turnover, grew 7.7% constant currency, with Middle East orders remaining lumpy by nature.
Decorating Division: swing to profit looks timing-related
The Decorating Division delivered sales of £5.42 million and a £351,000 profit, a marked improvement on last year’s £63,000 loss. The catch: management says this strength reflects timing, with project completions weighted to the first half. Work in progress stood at £1.4 million versus £3.6 million a year ago, underscoring that skew.
Guidance for the full year is only breakeven for Decorating, primarily due to a slower high-end UK housing market. That is sensible and reins in the temptation to extrapolate H1’s profit run rate.
Cash, buyback and dividend: returns firmly on the agenda
Colefax ended the period with £22.16 million of cash and cash equivalents. Cash generation was £6.2 million excluding share buybacks and dividends, up from £3.6 million in the prior period. The company returned £6.1 million via a buyback in October, purchasing and cancelling 691,680 shares – 11.7% of the issued share capital – at £8.80 per share. Fewer shares in issue helped EPS jump 25.0% to 66.5p.
The interim dividend is increased 7% to 3.0p, payable on 15 April 2026 to shareholders on the register at 13 March 2026. That sits alongside ongoing investment in the US showroom network – a new Florida site opened in December and a San Francisco lease starts in September 2026.
Outlook upgraded, but watch FX, tariffs and the US wealth effect
Management expects full-year profits to 30 April 2026 to be ahead of current market forecasts, aided by continued strong trading in November, December and January. The tone is upbeat but grounded. They explicitly flag two offsets: a weaker US dollar and an expected breakeven from Decorating.
There are also three watch-outs:
- Tariffs: US import duties have leapt from roughly 5% to over 20% of the value of US imports, causing uncertainty and necessitating tariff surcharges. The good news is most luxury fabric competitors are exposed to the same issue.
- Currency: a stronger pound against the dollar reduces translated profits. The average rate moved from $1.29 to $1.34 year-on-year.
- Market sensitivity: management links US demand to a strong US stock market. If there is a significant correction, luxury discretionary spend could wobble.
Looking into next year, they guide that Fabric Division growth will be more challenging due to tough comparatives, and Group performance will depend on stable market conditions. That is a fair and needed recalibration after a strong run.
My take for investors
This is a high-quality update. Colefax has executed well in its biggest profit pool – US luxury interiors – while managing through a messy tariff environment and FX headwinds. The buyback was meaningful at 11.7% of the share base and has clearly enhanced EPS. The balance sheet is strong with £22.16 million of cash, giving room to keep investing and returning capital.
On the flip side, the Decorating Division’s H1 profit looks largely timing-related, and the UK remains sluggish. Tariffs and currency are not going away, and management is transparent that next year’s growth will be harder.
Net-net, the upgrade to full-year expectations is the headline. If US demand stays buoyant and the dollar does not weaken further, there is a decent setup into year-end. Beyond that, I will be watching tariff developments, FX, and the pace of showroom-led expansion in the US to judge the durability of growth.
