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john-cotton-beddingBedding and fillings group John Cotton increased sales for an eighth year in a row in 2013–14 but one-off costs and customer price pressures stymied earnings growth.


An 8.5 per cent leap in sales to £137.7m in the year to 2nd March meant the Mirfield headquartered supplier has grown group sales every year since 2005–06, when its top line was sub-£80m.


Its revenue uplift was enough to help pre-tax profits rise 1.6 per cent to £7.1m, though the group said maintenance of gross margin was a major concern as a result of customer selling price pressures and the inflationary impact of key raw materials.


Group gross margin declined 150 basis points to 14.9 per cent in the reported period, while earnings were also hindered by a £1.6m loss on termination of forward exchange contracts and a £344k exchange difference arising on a loan to a foreign subsidiary.


Management said demand for the group’s products had increased mainly as a result of higher sales in Poland following the successful tenders for contracts with two major retailers. Sales to Europe — excluding the UK — climbed 43 per cent to £18.4m, though UK sales were still up 4.2 per cent to £118.8m.


John Cotton group and its subsidiaries are major suppliers of fillings for the bedding and upholstery manufacturing sectors as well as suppliers of filled bedding — such as quilts and pillows — to major retailers.


The group generated a net £5.3m cash from operations (2013: £9.3m) though overall net cash declined to £16.2m (2013: £17m) after tax, capex and dividends. Group shareholder funds climbed £1m to £42m at the balance sheet date.



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