Colefax Group Preliminary Results: US Fabric Sales Drive 18.3% Profit Growth

Colefax Group has delivered a stronger-than-expected full-year performance, with its core fabric operation benefiting from buoyant demand in the US luxury market.

For the year ended 30 April 2026, Group sales rose by 5.4% to £115.92 million, or 7.3% at constant currency. Pre-tax profit increased by 18.3% to £10.53 million, while earnings per share advanced by 29.8% to 140.7p.

The headline numbers are encouraging, but there is a clear split within the business. The Fabric Division performed exceptionally well, particularly in the US, while the UK-focused Decorating Division moved into a loss.

Investors can read the original company announcement or visit the dedicated Colefax Group PLC share page for further company coverage.

Colefax Group's key results

Metric	2026	2025	Change
Group sales	£115.92 million	£109.99 million	5.4%
Pre-tax profit	£10.53 million	£8.90 million	18.3%
Earnings per share	140.7p	108.4p	29.8%
Fabric Division sales	£103.99 million	£95.92 million	8.4%
Cash at year-end	£23.5 million	£22.3 million	5.5%
Total dividend per share	6.3p	5.9p	7.0%

Profit grew considerably faster than revenue. Management attributed this mainly to the Fabric Division, where higher sales translated into a disproportionately large increase in profit.

This is known as operational gearing. It means that once a business has covered much of its fixed cost base, additional sales can generate profit at a faster rate than revenue.

The US was the main growth engine

The Fabric Division accounts for 90% of Group turnover and remains the central part of the investment case.

Its sales increased by 8.4% to £103.99 million and by 10.7% at constant currency. Pre-tax profit climbed by 33.4% to £10.62 million.

The US, representing 63% of Fabric Division turnover, was responsible for much of that improvement. US sales rose by 15.9% at constant currency. Excluding income from tariff surcharges, growth was still a healthy 10.2%.

Colefax operates at the luxury end of the furnishing fabrics and wallpapers market. Management believes demand is closely linked to the strength of the US stock market, which supports confidence and spending among wealthier customers.

That exposure has worked in Colefax's favour during the past year. It also creates concentration risk. A significant US stock market correction is identified by the company as the main external risk to its US sales.

The Group has continued investing in its US showroom network. Territories served by showrooms now account for 84% of US sales. Colefax moved to new premises in Florida during December and plans to relocate its San Francisco showroom in September 2026.

UK trading remains difficult

UK Fabric Division sales increased by 4.4%, reversing the previous year's 4.7% decline. However, management continues to describe conditions as challenging, particularly at the top end of the market.

Colefax highlighted high stamp duty, relatively high interest rates and uncertainty around potential tax increases as factors affecting expensive residential property transactions. Historically, the company's UK sales have been closely connected to high-end housing activity, usually with a time lag.

The UK now represents only 15% of Fabric Division turnover, limiting its impact on the division's overall performance.

Continental European sales rose by 2.4% at constant currency. The Group incurred £1.26 million of import duty on EU sales, illustrating the continuing cost and complexity of operating in Europe following Brexit.

Decorating Division falls into loss

The weakest part of the results was the Interior Decorating Division.

Sales declined by 21.1% to £8.86 million, producing a pre-tax loss of £339,000. This compares with a £582,000 profit in the previous year.

The division operates at the very top of the market and was affected by the abolition of UK non-domiciled tax status in April 2025 and a sharp reduction in high-end property transactions.

Project timing also played a role. The installation of a Middle East project was delayed by the US-Iran conflict. Management expects the division to return to profitability next year, although UK market conditions remain challenging.

The smaller Kingcome furniture operation increased sales by 8.0% to £3.08 million, but pre-tax profit fell by 30.6% to £249,000. Higher salary and premises costs, including those associated with a new showroom concession in Witney, reduced profitability.

More concerningly, furniture order intake was down by 4%, while the year-end order book was 27% lower than at the start of the year.

Cash generation supports shareholder returns

Colefax generated a net operating cash inflow of £15.14 million, compared with £14.14 million in the previous year. It finished April with cash of £23.55 million, even after returning significant capital to shareholders.

In October 2025, the company spent £6.1 million buying back and cancelling 691,680 shares at £8.80 each. This represented 11.7% of its issued ordinary share capital.

The lower share count contributed to the 29.8% increase in earnings per share. The weighted average number of shares fell from 6.01 million to 5.51 million, so the per-share improvement was partly driven by buybacks as well as higher profit.

The Board has proposed a final dividend of 3.3p per share, taking the full-year payment to 6.3p, up 7.0%. Subject to approval, the final dividend will be paid on 9 October 2026 to shareholders on the register on 11 September 2026.

What investors should watch next

Trading in the US has remained strong since the year-end, and management is cautiously optimistic that this will continue for at least the first half of the new financial year.

That gives Colefax some near-term momentum, backed by a strong cash position and further investment in its international showroom network.

The main positive is the performance of the core Fabric Division, where strong US demand generated substantial profit growth. The balance sheet and cash generation also provide flexibility to invest and return surplus capital.

The key risk is that recent growth is heavily dependent on affluent US customers and the resilience of the US stock market. UK weakness is also visible in decorating, furniture orders and management's cautious commentary.

Colefax has therefore produced an impressive set of preliminary results, but investors will need to monitor whether US momentum can continue strongly enough to offset persistent pressure in its UK-facing operations.