Collins & Hayes demerger pays off
Article Date: May 01 2002Since its demerger from housewares group Aquarius last July, Aim-listed furniture manufacturer Collins & Hayes has come into its own, producing a £1.8 million pre-tax profit for the 32 weeks to January, writes Elliott Davis.
Despite boasting a history of sofa and chair production for over 130 years, these were Collins & Hayes' (CIY) maiden full-year figures as a separate Aim company. They revealed £16.1 million of sales and earnings of 4.51p a share.
Pro forma results for the full 52 weeks were also impressive. They showed a 7.4 per cent increase in profits to £2.7 million, from £23.6 million (£19.1 million) of revenue.
Chief executive Clive Gilham points out that these profits were achieved against 'a background of modest market growth'. He attributes this to strong demand at 'the upper end of the market', citing, in particular, 'tremendous growth in interest for leather furniture'.
To capitalise on this, Collins & Hayes has launched a Maxim range of contemporary leather products, invested £300,000 in a state-of-the-art cutting machine (the only one in the country, according to Gilham) and opened a showroom in St Leonards-on-Sea, East Sussex. However, in terms of sales, the main onus will be on supplying specialist furniture retailers and major department stores including Harrods, House of Fraser and Selfridges.
Despite the strong figures, its shares slipped 6 per cent to 40p in early trading. With its management announcing a 3p dividend this morning, Collins & Hayes sits on an attractive yield of 7.5 per cent. Analysts argue this looks like good value.
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