Full year profit warning from Colefax

Upmarket furnishing, fabrics and wallpapers designer Colefax warned this year's pre-tax profit will be significantly below current market expectations after a weak performance from its decorating division and a slower than expected recovery in its core US market.

Chairman David Green said, "Since the half year end trading conditions in the UK and Europe have deteriorated and we expect trading to become more difficult. In the US, which is our major market, we expect the recovery to continue but at a slower pace than we previously anticipated."

For the six months ended 31 October 2011 pre-tax profit fell to £1.98m from £2.98m in 2010. Sales for the period eased to £35.14m from £36.69m.

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Earnings per share fell to 9.9p from 12.4p in 2010 while net cash dropped to £5.30m from £7.26m the previous year.

"There are still three important sales months left in this financial year but, as a result of current trading conditions, the board now believes that this year's pre-tax profits will be significantly below current market expectations," he said.

The interim dividend has been held at 1.85p per share.