Interim Results

Colefax Group PLC
25 January 2006


                                        
                                COLEFAX GROUP PLC

            INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2005

Colefax Group designs and distributes furnishing fabrics & wallpapers and owns a
                     leading interior decorating business.

  The Group's five major fabric brands are Colefax and Fowler, Cowtan & Tout,
                   Jane Churchill, Manuel Canovas and Larsen.

                                   Key Points

   • Pre-tax profits increased by 11% to £2.012 million (2004: £1.816
    million)


   • Earnings per share rose by 18% to 8.09p (2004: 6.87p)


   • Sales up by 2% to £32.194 million (2004: £31.701 million)


   • Proposed interim dividend of 1.38p, a rise of 3%


David Green, Chairman and Chief Executive, commenting on prospects, said,

' Current trading conditions in our major market, the US, are not as strong as
they were at the start of the financial year and therefore we are cautious about
future growth prospects. Although we have seen a modest strengthening of the US
dollar against sterling, there is considerable uncertainty over future exchange
rates, which have a major impact on our gross profit margin. We continue to
invest in our core fabric brands and believe we are well placed to take
advantage of any improvement in market conditions.'



Enquiries:

Colefax Group plc     David B. Green, Chairman   Tel: [phone] (today)

Biddicks              Katie Tzouliadis           Tel: [phone]



CHAIRMAN'S STATEMENT

Financial Results

The Group's pre-tax profit for the six months to 31st October 2005 increased by
11% to £2.012 million (2004: £1.816 million) on sales up 2% at £32.194 million
(2004: £31.701 million). Earnings per share increased by 18% to 8.09p (2004:
6.87p) partly due to the effect of share buybacks in the prior period. Group net
borrowings decreased by £1.063 million to £2.988 million, which represents
gearing of 22% to net tangible assets.

The Board has decided to recommend that the interim dividend be increased by 3%
to 1.38p per share (2004: 1.34p). The interim dividend will be paid on 12th
April 2006 to shareholders on the register at the close of business on 10th
March 2006.

During the period, trading conditions in the US remained strong and are the p
rimary reason for the improvement in profitability. The US dollar strengthened
slightly during the period although there is considerable uncertainty about its
future direction. Trading conditions in most of our other major markets were
challenging, particularly in France.

Product Division

   • Fabric - Portfolio of Five Brands: 'Colefax and Fowler', 'Cowtan and
    Tout', 'Jane Churchill', 'Manuel Canovas' and 'Larsen'

Sales in the US, which represent 59% of the fabric division's turnover,
increased by 8% on a constant currency basis. Sales throughout the US were
strong and with a significant new product launch planned for this year, we would
normally be optimistic. However, the rate of growth has slowed in the last
quarter of the calendar year, and we therefore expect future growth to be at a
slower pace.
Sales in the UK, which represent 18% of the fabric division's turnover, remained
flat and currently there are no signs of any improvement. We do not expect the
UK market to show any significant growth until there is a pickup in the high end
housing market.

Sales in Europe and the rest of the world, which represent 23% of the fabric
division's turnover, decreased by 1% on a constant currency basis. The decrease
was mainly due to difficult trading in France, where sales were down by 14%,
although we have seen an improvement in sales in the last quarter of the
calendar year. Certain European markets are more encouraging, particularly
Germany which is growing again after several difficult years.

   • Furniture - Kingcome Sofas

Sales of furniture, which account for 3% of Group sales, decreased by 1% during
the period. After a difficult start to the year, we opened our new Fulham Road
showroom in July and this is proving to be popular with both our retail and
trade customers. As a result, our current order book is significantly ahead of
last year. We have decided to close our trade showroom in Chelsea Harbour, which
will lead to cost savings next year.

   • Accessories - Manuel Canovas

The majority of accessories sales, which represent approximately 2% of the Group
total, take place in the second half of the year. Currently forward orders are
slightly up on last year. Over one third of accessories sales are invoiced in US
dollars so recent strengthening of the dollar against the Euro will benefit
margins in the second half of the year.

Interior Decorating Division

Interior decorating sales for the first six months decreased by 14%, although
this is mainly due to the timing of contract completions and the order book is
currently healthy. Sales of antiques are still difficult and we expect trading
conditions to remain challenging.

Prospects

Current trading conditions in our major market, the US, are not as strong as
they were at the start of the financial year and therefore we are cautious about
future growth prospects. Although we have seen a modest strengthening of the US
dollar against sterling, there is considerable uncertainty over future exchange
rates, which have a major impact on our gross profit margin. We continue to
invest in our core fabric brands and believe we are well placed to take
advantage of any improvement in market conditions.



David Green
Chairman

25th January 2006





INTERIM GROUP PROFIT AND LOSS ACCOUNT
                                Six Months       Six Months               Year
                               to 31st Oct      to 31st Oct      to 30th April
                                      2005             2004               2005
                                     £'000            £'000              £'000
                                                 (Restated)         (Restated)

Turnover                            32,194           31,701             64,455

Operating profit                     2,103            1,984              3,439
Interest                               (91)            (168)              (292)
----------------               -------------     ------------      -------------

Profit before taxation               2,012            1,816              3,147
Taxation                              (702)            (627)              (938)
----------------               -------------     ------------      -------------

Profit after taxation                1,310            1,189              2,209
Dividends                             (350)            (354)              (571)
----------------               -------------     ------------      -------------

Retained profit for the period         960              835              1,638
================               =============     ============      =============

Earnings per share                    8.09p            6.87p              13.1p
Diluted earnings per share            8.00p            6.80p              13.0p





INTERIM GROUP BALANCE SHEET
                                   At 31st Oct     At 31st Oct   At 30th April
                                          2005            2004            2005
                                         £'000           £'000           £'000
                                                    (Restated)      (Restated)

Fixed assets                             5,881           5,978           5,792

Current assets:
Stocks and contracts in progress        12,314          13,117          12,167
Debtors                                  9,477           8,266           9,559
Cash at bank and in hand                 3,870           2,944           1,736
--------------------------             --------        --------        --------
                                        25,661          24,327          23,462
--------------------------             --------        --------        --------

Creditors: amounts falling due
within one year                         17,436          16,594          16,264

Net current assets                       8,225           7,733           7,198
--------------------------             --------        --------        --------
Total assets less current
liabilities                             14,106          13,711          12,990
--------------------------             --------        --------        --------

Creditors: amounts falling due
after one year                             250             750             500
Provision for liabilities and
charges                                     64             106              64
--------------------------             --------        --------        --------
                                        13,792          12,855          12,426
==========================             ========        ========        ========

Capital and reserves:
Called up share capital                  1,709           1,809           1,709
Share premium account                   11,087          11,087          11,087
Capital redemption reserve               1,157           1,057           1,157
ESOP share reserve                        (499)           (466)           (499)
Profit and loss account                    338            (632)         (1,028)
--------------------------             --------        --------        --------
                                        13,792          12,855          12,426
==========================             ========        ========        ========





INTERIM GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
                                    Six Months    Six Months             Year
                                   to 31st Oct   to 31st Oct    to 30th April
                                          2005          2004             2005
                                         £'000         £'000            £'000

Profit for the period                    1,310         1,189            2,209

Currency translation differences
on foreign currency net
investments                                 61            53              (62)

Currency translation differences
on foreign currency loans                  583          (290)            (546)

Deferred tax on long-term loan
foreign currency movements                (238)          121              230
                                       ---------     ---------        ---------
Total recognised gains and losses
relating to the period                   1,716         1,073            1,831
                                       =========     =========        =========





INTERIM GROUP CASH FLOW STATEMENT
                                      Six months    Six months            Year
                                     to 31st Oct   to 31st Oct   to 30th April
                                            2005          2004            2005
                                           £'000         £'000           £'000

Net cash inflow from operating
activities                                 2,921         1,778           4,786

Returns on investments and servicing
of finance

Interest received                             26             8              20
Interest paid                               (135)         (170)           (311)
                                        ----------     ---------      ----------
                                            (109)         (162)           (291)

Taxation
UK corporation tax paid                     (536)         (593)         (1,074)
Overseas tax (paid)/refunded                 (77)           13               -
                                        ----------     ---------      ----------
                                            (613)         (580)         (1,074)
Capital expenditure and financial
investment
Payments to acquire tangible fixed
assets                                      (889)       (1,057)         (2,179)
Receipts from sales of tangible
fixed assets                                  16             4              32
                                        ----------     ---------      ----------
                                            (873)       (1,053)         (2,147)

Equity dividends paid                       (350)         (354)           (571)
                                        ----------     ---------      ----------

Cash inflow/(outflow) before
financing                                    976          (371)            703

Financing
Purchase of own shares                         -          (930)         (1,900)
Repayment of long-term loan                 (250)         (250)           (500)
                                        ----------     ---------      ----------
Net cash outflow from financing             (250)       (1,180)         (2,400)
                                        ----------     ---------      ----------
                                        ----------     ---------      ----------
Increase/(decrease) in cash in the
period                                       726        (1,551)         (1,697)
                                        ==========     =========      ==========





NOTES
1. Cash flow statement
                                      Six months    Six months            Year
                                     to 31st Oct   to 31st Oct   to 30th April
                                            2005          2004            2005
                                           £'000         £'000           £'000
Reconciliation of operating profit
to net cash inflow from operating
activities

Operating profit before interest
and tax                                    2,103         1,984           3,439
Depreciation charges                       1,018         1,095           2,271
Profit on sale of tangible fixed
assets                                       (16)           (2)            (12)
Decrease/(increase) in stocks                 95        (1,564)           (918)
Decrease/(increase) in debtors               264           392            (547)
(Decrease)/increase in creditors            (543)         (127)            553
                                        ----------     ---------       ---------
Net cash inflow from operating
activities                                 2,921         1,778           4,786
                                        ----------     ---------       ---------

2. Adoption of new accounting requirement
The Company has adopted FRS 21 'Events after the balance sheet date' at 1st May
2005, which removes the requirement to report dividends proposed after the
balance sheet date in the profit and loss account and instead requires
disclosures in the notes to the financial statements. Therefore, dividends
declared after the balance sheet date are not being recognised in the interim
financial information at 31st October 2005 and the comparative figures have been
restated accordingly. This has had the effect of increasing shareholders' funds
by £350,000 at 30th April 2005 and £127,000 at 31st October 2004.

3. The proposed interim dividend of 1.38p (2004: 1.34p) per share is payable on
12th April 2006 to qualifying shareholders on the register at the close of
business on 10th March 2006.

4. Earnings per share have been calculated on the basis of earnings of
£1,310,000 (2004: £1,189,000) and on 16,197,578 (2004: 17,311,708) ordinary
shares being the weighted average number of ordinary shares in issue during the
period.

5. Diluted earnings per share have been calculated on the basis of earnings of
£1,310,000 (2004: £1,189,000) and on 16,386,128 (2004: 17,490,129) ordinary
shares being the weighted average number of ordinary shares in the period
adjusted to assume conversion of all dilutive potential ordinary shares 188,550
(2004: 178,421).

6. The interim accounts are unaudited. The above financial information does not
comprise full accounts within the meaning of Section 240 of the Companies Act
1985 (as amended).

7. Copies of the interim report are being sent to shareholders and will also be
made available on request to members of the public at the Company's registered
office at 39 Brook Street, London W1K 4JE.




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