TIDMCPR
RNS Number : 1073E
Carpetright PLC
15 December 2009
Carpetright plc
Interim Results Announcement for the 26 weeks ended 31 October 2009
Strong First Half Recovery Drives Revenue, Earnings and Dividend Growth
Carpetright plc, Europe's leading specialist carpet and floor coverings
retailer, today announces its interim results for the 26 week trading period
from 3 May 2009 to 31 October 2009.
Highlights
Group
* Total Group revenue of GBP258.0m up 9.0% (2008: GBP236.8m)
* Underlying4 profit before tax of GBP13.9m up 58.0% (2008: GBP8.8m)
* Exceptional charges of GBP2.9m primarily relating to exit from Polish market
* Profit before tax of GBP11.0m up 15.8% (2008: GBP9.5m)
* Underlying4 earnings per share of 15.5p up 64.9% (2008: 9.4p)
* Basic earnings per share of 11.6p up 14.9% (2008: 10.1p)
* Interim dividend of 8.0p up 100.0% (2008: 4.0p), underlining the Board's
confidence in future prospects
* Net debt reduced by GBP23.7m to GBP73.4m, during the first half
UK and Republic of Ireland
* Total sales increased by 9.6%, with LFL sales3 up 3.9%
* Underlying4 operating profit increased 67.9% to GBP14.1m (2008: GBP8.4m)
* Store base increased to 590 stores2
Rest of Europe
* Total sales increased by 5.9% with like for like sales down by 3.8% in constant
currency
* Underlying4 operating profit increased by 6.5% to GBP3.3m (2008: GBP3.1m)
* Store base decreased to 126
* Withdrawal from loss making Polish operation included as a non-recurring cost of
GBP2.5m
1. All sales figures are quoted after deducting VAT.
2. Excludes Sleepright within Carpetright locations.
3. Like-for-like sales represent sales from stores which have been trading for 52
weeks at the start of the financial year. It includes the sales of beds, where
these have been introduced into the like-for-like store base since the
acquisition of Sleepright in December 2008.
4. 'Underlying' excludes profits on property disposals and non-recurring items and
for EPS together with associated tax
Commenting on the results, Lord Harris of Peckham, Chairman and Chief Executive,
said:
"We are pleased with this significantly improved first half performance, which
clearly demonstrates the strength of the Group. The improved profit and
reduction in net debt provide a firm base for the continued growth of our
business.
"In the UK, discussions with housebuilders and insurers have progressed well and
we are starting to generate new business. These initiatives ensure we remain
well placed to trade resiliently and drive further growth.
"Our business in The Netherlands and Belgium continues to make progress and grow
market share although, as previously stated, sales have declined as a
consequence of a weaker economy. However, we have a good position to capitalise
on any improvement in trading conditions. The planned withdrawal from our loss
making operation in Poland will improve Group profitability.
"While we remain cautious about the retail market in the balance of the
financial year and through 2010, we have made a good start to the second half,
with the added potential of more insurance and housebuilder business to come.
Consequently, the Board has confidence that the Group is well positioned to make
further progress."
Analyst Presentation
There will be a presentation to analysts today at 9.00am at Deutsche Bank,
Winchester House, 1 Great Winchester Street, London, EC2N 2DB. A copy of this
interim statement can be found on our website www.carpetright.plc.uk from 7.00am
today.
Enquiries:
Carpetright plc
Lord Harris of Peckham, Chairman and Chief Executive
Neil Page, Group Finance Director
Telephone 020 7638 9571 (until 2pm), 01708 802000 (thereafter)
Citigate Dewe Rogerson
Kevin Smith / Angharad Couch / Lindsay Noton
Telephone 020 7638 9571
Forthcoming News flow
Carpetright will be releasing its Interim Management Statement for the third
quarter on
3 February 2010.
Certain statements in this report are forward looking. Although the Group
believes that the expectations reflected in these forward looking statements are
reasonable, we can give no assurance that these expectations will prove to have
been correct. Because these statements contain risks and uncertainties, actual
results may differ materially from those expressed or implied by these forward
looking statements. We undertake no obligation to update any forward looking
statements whether as a result of new information, future events or otherwise.
Chief Executive's Review
I am pleased to report that the first half has seen Carpetright make good
progress, as the Group returned to like for like sales growth and increased
profits significantly. This performance has been achieved against an ongoing
backdrop of a challenging economic and consumer environment.
Total sales increased by 9.0% to GBP258.0m. During the first half, the Group
opened 39 stores and closed 18 which gave a net increase of 21 stores and a
total store base of 716. Total space grew by 2.2% to just under 6.3m square
feet.
The return to sales growth in the UK & RoI was the key driver in underlying
operating profit increasing to GBP17.4m, a growth of 51.3%. Net finance charges
increased to GBP3.5m. These factors combined to produce an increase in
underlying profit before tax of 58.0% to GBP13.9m, with a consequent increase in
underlying earnings per share to 15.5p.
Non-recurring items accounted for a net loss of GBP2.9m (2008: profit of
GBP0.7m). This is principally a combination of the costs of exiting the Polish
market, which is discussed in more detail below, and non-cash store impairment
charges.
As a result, profit before tax increased by 15.8% to GBP11.0m. Basic earnings
per share increased by 14.9% to 11.6p, reflecting the increase in post tax
earnings.
As a consequence of the higher profits, the reduced capital expenditure and
effective management of working capital, net debt has reduced by GBP23.7m since
the year end to GBP73.4m.
Summary of Group Results
A summary of the reported financial results for the 26 weeks ended 31 October
2009 is set out below:
+--------------------------------------------+------------+------------+-------------+
| | 2009 | 2008 | Change |
| | GBPm | GBPm | |
+--------------------------------------------+------------+------------+-------------+
| Revenue | 258.0 | 236.8 | 9.0% |
+--------------------------------------------+------------+------------+-------------+
| Underlying* operating profit | 17.4 | 11.5 | 51.3% |
+--------------------------------------------+------------+------------+-------------+
| Net finance charges | (3.5) | (2.7) | (29.6)% |
+--------------------------------------------+------------+------------+-------------+
| Underlying* profit before tax | 13.9 | 8.8 | 58.0% |
+--------------------------------------------+------------+------------+-------------+
| Profit/(loss) on property disposals and | (2.9) | 0.7 | |
| non-recurring items | | | |
+--------------------------------------------+------------+------------+-------------+
| Profit before tax | 11.0 | 9.5 | 15.8% |
+--------------------------------------------+------------+------------+-------------+
| Earnings per share (pence) | | | |
+--------------------------------------------+------------+------------+-------------+
| - underlying* | 15.5 | 9.4 | 64.9% |
+--------------------------------------------+------------+------------+-------------+
| - basic | 11.6 | 10.1 | 14.9% |
+--------------------------------------------+------------+------------+-------------+
| Interim Dividend (pence) | 8.0 | 4.0 | 100.0% |
+--------------------------------------------+------------+------------+-------------+
| Net debt | (73.4) | (87.8) | |
+--------------------------------------------+------------+------------+-------------+
* Where this review makes reference to "Underlying" these relate to profits /
earnings before profits / losses on property disposals and other non-recurring
items.
UK and Republic of Ireland - Operational Review
UK & RoI - Key financial results
+-----------------------------------+--------------+--------------+--------------+--+
| | 2009 | 2008 | Change | |
| | GBPm | GBPm | | |
+-----------------------------------+--------------+--------------+--------------+--+
| Revenue | 213.3 | 194.6 | 9.6% | |
+-----------------------------------+--------------+--------------+--------------+--+
| Like-for-like sales | 3.9% | (13.0%) | | |
+-----------------------------------+--------------+--------------+--------------+--+
| Gross profit | 131.6 | 121.5 | 8.3% | |
+-----------------------------------+--------------+--------------+--------------+--+
| Gross profit % | 61.7% | 62.4% | (0.7)pp | |
+-----------------------------------+--------------+--------------+--------------+--+
| Underlying operating profit | 14.1 | 8.4 | 67.9% | |
+-----------------------------------+--------------+--------------+--------------+--+
| Underlying operating margin % | 6.6% | 4.3% | | |
+-----------------------------------+--------------+--------------+--------------+--+
Sales and space
Total revenue increased by 9.6% to GBP213.3m. The acquisition of Sleepright
contributed 3.6% of this increase. We have opened 38 new stores adding 209,000
sq ft of selling space in the first half. Including the impact of 15 closures,
this translated into net space growth of 151,000 sq ft, an increase of 3.3%
since the start of the year.
The UK & RoI portfolio is now as follows:
+------------------------+----------+----------+----------+-+-+-+-------+--------+----------+
| | Store numbers | Sq ft ('000) |
+------------------------+----------------------------------------------+-------------------+
| UK & RoI store base | 2 May | Openings | Closures | | 31 Oct | 2 May | 31 Oct |
| | 2009 | | | | 2009 | 2009 | 2009 |
+------------------------+----------+----------+----------+---+---------+--------+----------+
| Standalone - | 508 | 28 | (4) | | 532 | 4,503 | 4,650 |
| floorcovering | | | | | | | |
+------------------------+----------+----------+----------+---+---------+--------+----------+
| Concessions - | 57 | 10 | (10) | | 57 | 116 | 130 |
| floorcovering | | | | | | | |
+------------------------+----------+----------+----------+---+---------+--------+----------+
| Standalone - | 2 | | (1) | | 1 | 13 | 3 |
| Sleepright | | | | | | | |
+------------------------+----------+----------+----------+---+---------+--------+----------+
| | 567 | 38 | (15) | | 590 | 4,632 | 4,783 |
+------------------------+----------+----------+----------+---+---------+--------+----------+
| |
+-------------------------------------------------------------------------------------------+
| Included in standalone stores : | | | | | |
+----------------------------------------------+------------+---+-------+--------+----------+
| Sleepright | 109 | 17 | (2) | | 124 | 135 | 167 |
+------------------------+----------+----------+----------+-+-+-+-------+--------+----------+
The like for like growth of 3.9% was the strongest half year performance since
2004. This reflects an underlying recovery which correlates closely, on a lagged
basis, with the improved mortgage approval figures. It has also been assisted by
the contraction of the Allied Carpets business in the period since July 2009.
The growth of the insurance replacement business continued during the period and
this contributed 0.6% to the like for like growth.
The growth in sales has been predominately from within the carpet categories.
The proportion of cut length business has increased relative to 'pay and take'
roll stock. The vinyl business has grown, whilst the laminate / wood categories
have continued to decline. We believe this is a reflection of a growing customer
appreciation of the benefits of vinyl and the trend back to carpet as previously
laid laminate is replaced.
Our promotional stance remains consistent with offering our customers the best
prices. This has been supported by a 24% increase in advertising expenditure
which has been focused on a strong price theme, and which also emphasised our
product quality and service credentials.
We have continued to develop the Sleepright proposition, focusing on the
product, promotional offers and reducing delivery lead times. We also launched a
transactional website in October, offering a wider range than in our stores.
Initial sales have been in line with expectations.
Underlying operating profit
Underlying operating profit increased by 67.9% to GBP14.1m, reflecting the
stronger sales performance.
Gross profit increased by 8.3% to GBP131.6m, representing 61.7% of sales. This
is a 0.7 percentage point decline on the previous year. The Sleepright
acquisition accounted for 0.8 percentage points of this decline, as this part of
the business operates on a lower gross margin than floor coverings. This was
offset by an improvement in the underlying floorcovering margin, achieved
through a combination of management of promotions, negotiation with suppliers
and increased productivity in the Purfleet cutting facility.
The total UK cost base increased by 3.9% compared to last year, to GBP117.5m.
This included the impact of the Sleepright acquisition, which accounted for
3.4% of the growth. Store payroll numbers continue to be managed closely to the
volume of sales. Average store headcount continued to decline with Full time
Equivalents (excluding Sleepright) in the first half decreasing by 8% to 2,284.
Store occupancy costs increased year on year, through a mixture of underlying
rent and rates inflation plus new space.
Rest of Europe - Operational Review
Rest of Europe - Key financial results
+-------------------------------+---+----+---------+---------+------------+-----------+
| | 2009 | 2008 | Change | Change |
| | GBPm | GBPm | (Reported) | (Constant |
| | | | | Currency) |
+----------------------------------------+---------+---------+------------+-----------+
| Revenue | | | | | | |
+-------------------------------+---+----+---------+---------+------------+-----------+
| - The Netherlands and Belgium | | | 43.4 | 40.7 | 6.6% | (3.9)% |
+-------------------------------+---+----+---------+---------+------------+-----------+
| - Poland | | | 1.3 | 1.5 | (13.3)% | 0.4% |
+-------------------------------+---+----+---------+---------+------------+-----------+
| - Rest of Europe | | | 44.7 | 42.2 | 5.9% | |
+-------------------------------+---+----+---------+---------+------------+-----------+
| Underlying operating profit | | | | | | |
+-------------------------------+---+----+---------+---------+------------+-----------+
| - The Netherlands and Belgium | | | 4.1 | 3.7 | 10.8% | (1.2)% |
+-------------------------------+---+----+---------+---------+------------+-----------+
| - Poland | | | (0.8) | (0.6) | (33.3)% | (77.8)% |
+-------------------------------+---+----+---------+---------+------------+-----------+
| Rest of Europe | | | 3.3 | 3.1 | 6.5% | |
+-------------------------------+---+----+---------+---------+------------+-----------+
| Underlying operating margin % | | | | | | |
+-------------------------------+---+----+---------+---------+------------+-----------+
| - The Netherlands and Belgium | | | 9.4% | 9.1% | 0.3pp | |
+-------------------------------+---+----+---------+---------+------------+-----------+
| - Poland | | | - | - | | |
+-------------------------------+---+----+---------+---------+------------+-----------+
| Rest of Europe | | | 7.4% | 7.3% | 0.1pp | |
+-------------------------------+---+----+---------+---------+------------+-----------+
Sales and space
In local currency terms, sales in The Netherlands and Belgium declined by 3.9%.
This performance was in a market which it is estimated has declined by around
15% and consequently we have continued to increase our market share. After
allowing for the movement in exchange rates, this translates to a total sales
growth of 6.6% in reported revenue.
In local currency terms, sales in Poland increased by 0.4%. After allowing for
the movement in exchange rates, this translates to a total sales decline of
13.3% in reported revenue.
The European portfolio is now as follows:
+----------------------+----------+----------+----------+--+---------+--------+---------+
| | Store Numbers | Sq ft ('000) |
+----------------------+---------------------------------------------+------------------+
| Rest of Europe | 2 May | Openings | Closures | | 31 Oct | 2 May | 31 Oct |
| store base | 2009 | | | | 2009 | 2009 | 2009 |
+----------------------+----------+----------+----------+--+---------+--------+---------+
| The Netherlands | 88 | 1 | (1) | | 88 | 1,065 | 1,059 |
+----------------------+----------+----------+----------+--+---------+--------+---------+
| Belgium | 28 | - | - | | 28 | 335 | 335 |
+----------------------+----------+----------+----------+--+---------+--------+---------+
| Poland | 12 | - | (2) | | 10 | 123 | 113 |
+----------------------+----------+----------+----------+--+---------+--------+---------+
| | 128 | 1 | (3) | | 126 | 1,523 | 1,507 |
+----------------------+----------+----------+----------+--+---------+--------+---------+
Underlying operating profit
The Netherlands and Belgium gross profit declined by 0.7% in local currency
terms on the reduced level of sales. There was an improvement in the gross
margin of 1.8 percentage points - a combination of cost price improvements and
managing the product mix.
Total costs increased by 0.9% in local currency terms. The year on year increase
was principally from rent indexation and the addition of new stores offset by
store headcount reductions reflecting the lower level of sales.
The underlying reported operating profit in The Netherlands and Belgium
increased by 10.8% to GBP4.1m with an operating margin of 9.4%. In local
currency terms the underlying operating profit decreased by 1.2%.
The reported loss in Poland was GBP0.8m, an increase of GBP0.2m on the previous
year.
Following a review of the Polish business by the Board, a decision has been
taken to withdraw from trading in this market. In the period since its launch
four years ago, the business has failed to establish sufficient trading momentum
and critical mass, and the resulting performance has been disappointing. Good
progress has been made in closing stores either by returning leases to landlords
or assignment to other retailers. To date, two stores have been closed in the
first half and a further two stores have closed since the end of October, with
the remainder scheduled for completion by early 2010. This has resulted in a
non-recurring cost of GBP2.5m, which is a combination of a non-cash write down
of the fixed assets to their realisable value (GBP2.0m) and other costs incurred
specifically for the closure (GBP0.5m). This is reported within non-recurring
items.
Group Financial Review
Property disposals and non-recurring items
The Group recorded a net charge of GBP2.9m (2008: profit of GBP0.7m) in the
first half:
+----------------------------------------------------+-------------+-------------+
| | (Charge) / Gain |
+----------------------------------------------------+---------------------------+
| | 2009 | 2008 |
| | GBPm | GBPm |
+----------------------------------------------------+-------------+-------------+
| Profit/(loss) on disposal of properties | (0.2) | 1.2 |
+----------------------------------------------------+-------------+-------------+
| UK & RoI Store Impairment charge | (1.2) | - |
+----------------------------------------------------+-------------+-------------+
| Poland : Store impairment charge | (2.0) | - |
+----------------------------------------------------+-------------+-------------+
| Closure costs | (0.5) | - |
+----------------------------------------------------+-------------+-------------+
| Over-provision from pre-opening costs of Purfleet | 1.0 | - |
+----------------------------------------------------+-------------+-------------+
| Re-organisation costs of acquired businesses | - | (0.5) |
+----------------------------------------------------+-------------+-------------+
| | (2.9) | 0.7 |
+----------------------------------------------------+-------------+-------------+
We continued to trade our property portfolio, although market conditions have
made this more challenging. A loss of GBP0.2m was incurred (2008: gain of
GBP1.2m).
As a result of the challenging retail environment we have reviewed the carrying
value of the store assets in our balance sheet. The models used to value these
assets include a number of assumptions relating to market growth and
inflationary expectations. The tests have led to an impairment of GBP1.2m in
relation to 12 loss making stores, principally located in the Republic of
Ireland.
As disclosed earlier, the estimated costs of withdrawing from Poland total
GBP2.5m.
The non-recurring pre-opening costs of the cutting and distribution centre
recognised in 2007/08 were over-provided by GBP1.0m.
Taxation
The taxation charge is based on an estimated full year effective tax rate of
29.8% (2008: 29.8%).
Net debt and cashflow
The Group's net debt at 31 October 2009 was GBP73.4m, a reduction of GBP23.7m
from the year end position of GBP97.1m. This decrease was primarily driven from
an improvement in operational profit performance and a decrease in working
capital. The latter reflects the working capital cycle of the business.
The average net debt figure in the first half was GBP97.5m (2008: GBP80.9m) and
the Group's average cost of funding was 6.8% (2008: 6.3%).
Summary cashflow
+--------------------------------------+---------------+---------------+------------+
| | 2009 | 2008 | 52 wks to |
| | GBPm | GBPm | 2 May 2009 |
| | | | GBPm |
+--------------------------------------+---------------+---------------+------------+
| Underlying Operating Profit | 17.4 | 11.5 | 22.8 |
+--------------------------------------+---------------+---------------+------------+
| Depreciation and other non-cash | 9.9 | 10.0 | 20.5 |
| items | | | |
+--------------------------------------+---------------+---------------+------------+
| Non-recurring items | 0.5 | - | (1.2) |
+--------------------------------------+---------------+---------------+------------+
| (Increase)/Decrease in stock | (0.2) | 5.0 | 2.7 |
+--------------------------------------+---------------+---------------+------------+
| (Increase)/Decrease in working | 11.2 | (15.4) | (18.6) |
| capital | | | |
+--------------------------------------+---------------+---------------+------------+
| Cash generated by operations | 38.8 | 11.1 | 26.2 |
+--------------------------------------+---------------+---------------+------------+
| Net Interest paid | (3.8) | (2.5) | (5.5) |
+--------------------------------------+---------------+---------------+------------+
| Corporation Tax paid | (3.0) | (8.2) | (12.2) |
+--------------------------------------+---------------+---------------+------------+
| Dividends paid | (2.7) | (20.2) | (22.8) |
+--------------------------------------+---------------+---------------+------------+
| Net Capital Expenditure | (5.6) | (11.0) | (20.6) |
+--------------------------------------+---------------+---------------+------------+
| Other | - | 0.5 | (4.7) |
+--------------------------------------+---------------+---------------+------------+
| Movement in net debt | 23.7 | (30.3) | (39.6) |
+--------------------------------------+---------------+---------------+------------+
| Opening net debt | (97.1) | (57.5) | (57.5) |
+--------------------------------------+---------------+---------------+------------+
| Closing net debt | (73.4) | (87.8) | (97.1) |
+--------------------------------------+---------------+---------------+------------+
Net capital expenditure was GBP5.6m (2008: GBP11.0m). This can be broken down
into the following principal categories.
+------------------------------------------------+---------------+----------------+
| | 2009 | 2008 |
| | GBPm | GBPm |
+------------------------------------------------+---------------+----------------+
| Core capital expenditure | 5.8 | 5.4 |
+------------------------------------------------+---------------+----------------+
| Freehold properties | - | 1.6 |
+------------------------------------------------+---------------+----------------+
| Acquisition of new businesses | - | 6.3 |
+------------------------------------------------+---------------+----------------+
| Proceeds from property disposals | (0.2) | (2.3) |
+------------------------------------------------+---------------+----------------+
| | 5.6 | 11.0 |
+------------------------------------------------+---------------+----------------+
Gross bank borrowings at the balance sheet date were GBP76.5m (2008: GBP107.3m)
of which GBP72.0m is term based with the balance of GBP4.5m being drawn down
from overdraft facilities. The Group had further undrawn, committed facilities
of GBP42.1m at the balance sheet date. The term of the majority of these
facilities is to July 2012 and they are accompanied by a number of covenants,
against which the Group monitors actual and prospective compliance. At 31
October 2009, the Group was compliant with all covenants.
During October 2009 the Group paid down existing loans with one lender utilising
existing resources. This reflects the confidence of the Board in the future cash
generation of the business.
Pensions
At 31 October 2009 the IAS net retirement benefit deficit was GBP5.7m (2 May
2009: GBP2.4m). The change is predominately due to a decrease in the discount
rate used to calculate the liability at the half year. The half year discount
rate was 5.5% (year end 6.8%), reflecting prevailing corporate bond rates and
together with an increase in the inflation rate used of 3.4% (year end 2.9%),
has led to an increase of GBP5.3m in the IAS 19 calculation of the pension
liability for accounting purposes at 31 October 2009. The increase in the
deficit has been offset in part by an increase of GBP2.0m in the market value of
the assets arising from a combination of higher equity prices and a tightening
of corporate bond yields.
The company agreed a recovery plan with the Trustees in 2009 and this will be
reviewed following the next triennial valuation, which will be performed at 5
April 2011.
Dividend
The Board has declared a 100.0% increase in the interim dividend to 8.0p. In
taking this decision, the Board has considered the improvement in profitability
achieved and the future prospects of the Group, weighed against the desire to
reduce the level of debt.
The dividend will be paid on 19 February 2010 to shareholders on the register on
5 February 2010.
Outlook
The first half has provided a firm foundation to continue to rebuild Group
profitability. In the UK and RoI, the economic environment has made trading
tough. However, the business has capitalised on opportunities and continues to
grow. The significant contraction of Allied Carpets, the focus on securing new
insurance and housebuilder contracts and launch of a transactional website have
added to the strength of the business.
The performance of The Netherlands and Belgium has been very good in trading
conditions which have become significantly tougher. By applying learning from
the UK operation, we are confident we have the strength of offer to continue to
grow.
Despite the continued uncertainty about economic recovery, we believe we are
growing more quickly than the market in all our territories, reflecting the
appeal of our value for money proposition. While we remain cautious about the
retail market in the balance of the financial year and into 2010, we have made a
good start to the second half and have the added potential to secure further new
business from the insurers and housebuilders. Consequently the Board has
confidence that the Group is well positioned to make further progress.
Lord Harris of Peckham
14 December 2009
+------+--------------------------------+--+----+--------------+--------------+------------+
| Carpetright plc | | | | |
| | | | | |
+------------------------------------------+----+--------------+--------------+------------+
| Condensed consolidated income statement for 26 weeks ended 31 October 2009 |
+------------------------------------------------------------------------------------------+
| | | Notes | 26 weeks | 26 weeks | 52 weeks |
| | | | ended | ended | ended |
| | | | 31 October | 1 November | 2 May 2009 |
| | | | 2009 | 2008 | audited |
| | | | unaudited | unaudited | GBPm |
| | | | GBPm | GBPm | |
+------+--------------------------------+-------+--------------+--------------+------------+
| Revenue | 4 | 258.0 | 236.8 | 482.8 |
+---------------------------------------+-------+--------------+--------------+------------+
| Cost of sales | | (100.5) | (91.5) | (187.0) |
+---------------------------------------+-------+--------------+--------------+------------+
| Gross profit | 4 | 157.5 | 145.3 | 295.8 |
+---------------------------------------+-------+--------------+--------------+------------+
| Other operating income | | 0.6 | 2.4 | 1.8 |
+---------------------------------------+-------+--------------+--------------+------------+
| Administrative expenses | | (143.6) | (135.5) | (275.3) |
+---------------------------------------+-------+--------------+--------------+------------+
| Operating profit | 4 | 14.5 | 12.2 | 22.3 |
+---------------------------------------+-------+--------------+--------------+------------+
| Operating profit before profit/(loss) | 4 | 17.4 | 11.5 | 22.8 |
| on property disposals and | | | | |
| non-recurring items | | | | |
+---------------------------------------+-------+--------------+--------------+------------+
| Profit/(loss) on property disposals | 5 | (2.9) | 0.7 | (0.5) |
| and non-recurring items | | | | |
+---------------------------------------+-------+--------------+--------------+------------+
| Finance costs payable | | (4.1) | (2.9) | (7.2) |
+---------------------------------------+-------+--------------+--------------+------------+
| Finance income receivable | | 0.6 | 0.2 | 1.6 |
+---------------------------------------+-------+--------------+--------------+------------+
| Profit before tax | | 11.0 | 9.5 | 16.7 |
+---------------------------------------+-------+--------------+--------------+------------+
| Tax | | 6 | (3.2) | (2.7) | (4.9) |
+------+--------------------------------+-------+--------------+--------------+------------+
| Profit for the financial period attributable | 7.8 | 6.8 | 11.8 |
| to | | | |
| equity holders of the Company | | | |
+-----------------------------------------------+--------------+--------------+------------+
| | | | | | |
+------+--------------------------------+-------+--------------+--------------+------------+
| Basic earnings per share | 8 | 11.6 | 10.1 | 17.6 |
+---------------------------------------+-------+--------------+--------------+------------+
| Diluted earnings per share | 8 | 11.5 | 10.1 | 17.6 |
+---------------------------------------+-------+--------------+--------------+------------+
| All items in the income statement arise from continuing | | |
| operations. | | |
+--------------------------------------------------------------+--------------+------------+
| | | | | | |
+------+-----------------------------------+----+--------------+--------------+------------+
| | | | | | |
+------+-----------------------------------+----+--------------+--------------+------------+
| Condensed consolidated statement of comprehensive income for 26 weeks ended 31 October |
| 2009 |
+------------------------------------------------------------------------------------------+
| | | Notes | 26 weeks | 26 weeks | 52 weeks |
| | | | ended | ended | ended |
| | | | 31 October | 1 November | 2 May 2009 |
| | | | 2009 | 2008 | audited |
| | | | unaudited | unaudited | GBPm |
| | | | GBPm | GBPm | |
+------+--------------------------------+-------+--------------+--------------+------------+
| Profit for the financial period | | 7.8 | 6.8 | 11.8 |
+---------------------------------------+-------+--------------+--------------+------------+
| Actuarial gain/(loss) on defined | 11 | (3.3) | - | (1.1) |
| benefit pension scheme | | | | |
+---------------------------------------+-------+--------------+--------------+------------+
| Fair value gain/(loss) in respect of | | (0.1) | 0.5 | (2.3) |
| cash flow hedges | | | | |
+---------------------------------------+-------+--------------+--------------+------------+
| Exchange gain/(loss) in respect of hedged | 0.3 | (1.7) | 7.2 |
| equity investments | | | |
+-----------------------------------------------+--------------+--------------+------------+
| Tax on components of other | | - | (0.1) | 0.3 |
| comprehensive income | | | | |
+---------------------------------------+-------+--------------+--------------+------------+
| Total other comprehensive income | | (3.1) | (1.3) | 4.1 |
+---------------------------------------+-------+--------------+--------------+------------+
| | | | | | |
+------+--------------------------------+-------+--------------+--------------+------------+
| Total comprehensive income for the financial | 4.7 | 5.5 | 15.9 |
| period, attributable to equity shareholders | | | |
| of the Company | | | |
+-----------------------------------------------+--------------+--------------+------------+
| The notes on pages 13 to 18 form an integral part of this consolidated interim financial |
| information. |
+------+--------------------------------+--+----+--------------+--------------+------------+
+----------+------------+---------+---------+----------+--------+---+---------+---+-----+---+------+---+--------+
| Carpetright plc | | | | | | | | |
| | | | | | | | | |
+-----------------------+---------+---------+----------+--------+-------------+---------+----------+------------+
| Condensed consolidated statement of changes in equity for 26 weeks ended 31 October 2009 |
+---------------------------------------------------------------------------------------------------------------+
| | | Share | Share | Treasury | Capital | Translation | Hedging | Retained | Total |
| | | Capital | Premium | Shares | Redemption | Reserve | Reserve | Earnings | GBPm |
| | | GBPm | GBPm | GBPm | Reserve | GBPm | GBPm | GBPm | |
| | | | | | GBPm | | | | |
+----------+------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| At 3 May 2009 | 0.7 | 15.4 | (0.1) | 0.1 | 11.9 | (2.3) | 41.5 | 67.2 |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| | | | | | | | | | |
+----------+------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| Total comprehensive | - | - | - | - | 0.3 | (0.1) | 4.5 | 4.7 |
| income for the | | | | | | | | |
| financial period | | | | | | | | |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| Purchase of own | - | - | (0.1) | - | - | - | - | (0.1) |
| shares by Employee | | | | | | | | |
| Share Trust | | | | | | | | |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| Share based payments | - | - | - | - | - | - | 0.2 | 0.2 |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| Dividends paid to | - | - | - | - | - | - | (2.7) | (2.7) |
| Group shareholders | | | | | | | | |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| At 31 October 2009 | 0.7 | 15.4 | (0.2) | 0.1 | 12.2 | (2.4) | 43.5 | 69.3 |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| | | | | | | | | | |
+----------+------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| | | Share | Share | Treasury | Capital | Translation | Hedging | Retained | Total |
| | | Capital | Premium | Shares | redemption | Reserve | Reserve | Earnings | GBPm |
| | | GBPm | GBPm | GBPm | reserve | GBPm | GBPm | GBPm | |
| | | | | | GBPm | | | | |
+----------+------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| At 4 May 2008 | 0.7 | 15.4 | (0.2) | 0.1 | 4.7 | - | 53.6 | 74.3 |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| | | | | | | | | | |
+----------+------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| Total comprehensive | - | - | - | - | (1.7) | 0.5 | 6.7 | 5.5 |
| income for the | | | | | | | | |
| financial period | | | | | | | | |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| Share based payments | - | - | - | - | - | - | 0.1 | 0.1 |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| Dividends paid to | - | - | - | - | - | - | (20.2) | (20.2) |
| Group shareholders | | | | | | | | |
+-----------------------+---------+---------+----------+------------+-------------+---------+----------+--------+
| At 1 November 2008 | 0.7 | 15.4 | (0.2) | 0.1 | 3.0 | 0.5 | 40.2 | 59.7 |
+----------+------------+---------+---------+----------+--------+---+---------+---+-----+---+------+---+--------+
The notes on pages 13 to 18 form an integral part of this consolidated interim
financial information.
+---------------------------------+----+--+----+------+------+----+--------------+------------+
| Carpetright plc |
| |
+---------------------------------------------------------------------------------------------+
| Condensed consolidated balance sheet as at 31 October 2009 |
+---------------------------------------------------------------------------------------------+
| | Notes | At 31 | At 1 November | At 2 May |
| | | October | 2008 | 2009 |
| | | 2009 | Unaudited | Audited |
| | | Unaudited | GBPm | GBPm |
| | | GBPm | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Assets | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Non-current assets | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Intangible assets | | 69.1 | 66.4 | 71.2 |
+---------------------------------+------------+-------------+-------------------+------------+
| Property, plant and equipment | | 156.7 | 164.8 | 164.7 |
+---------------------------------+------------+-------------+-------------------+------------+
| Investment property | | 25.5 | 21.2 | 25.3 |
+---------------------------------+------------+-------------+-------------------+------------+
| Investment in joint ventures | | - | 0.2 | - |
+---------------------------------+------------+-------------+-------------------+------------+
| Deferred tax assets | | 3.2 | 3.2 | 3.3 |
+---------------------------------+------------+-------------+-------------------+------------+
| Derivative financial | | - | 0.5 | - |
| instruments | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Trade and other receivables | | 1.4 | 1.3 | 1.3 |
+---------------------------------+------------+-------------+-------------------+------------+
| Total non-current assets | | 255.9 | 257.6 | 265.8 |
+---------------------------------+------------+-------------+-------------------+------------+
| Current assets | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Inventories | | 43.4 | 37.9 | 43.2 |
+---------------------------------+------------+-------------+-------------------+------------+
| Assets held for sale | 13 | 0.6 | - | - |
+---------------------------------+------------+-------------+-------------------+------------+
| Trade and other receivables | | 37.3 | 32.1 | 34.4 |
+---------------------------------+------------+-------------+-------------------+------------+
| Cash and cash equivalents | 10 | 8.7 | 23.3 | 17.4 |
+---------------------------------+------------+-------------+-------------------+------------+
| Total current assets | | 90.0 | 93.3 | 95.0 |
+---------------------------------+------------+-------------+-------------------+------------+
| Total assets | | 345.9 | 350.9 | 360.8 |
+---------------------------------+------------+-------------+-------------------+------------+
| Liabilities | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Current liabilities | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Trade and other payables | | (120.1) | (111.9) | (110.8) |
+---------------------------------+------------+-------------+-------------------+------------+
| Obligations under finance | 10 | (0.5) | (0.8) | (0.9) |
| leases | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Borrowings and overdrafts | 10 | (12.0) | (59.9) | (17.1) |
+---------------------------------+------------+-------------+-------------------+------------+
| Current tax liabilities | | (5.6) | (6.0) | (5.7) |
+---------------------------------+------------+-------------+-------------------+------------+
| Total current liabilities | | (138.2) | (178.6) | (134.5) |
+---------------------------------+------------+-------------+-------------------+------------+
| Non-current liabilities | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Trade and other payables | | (33.9) | (30.1) | (31.5) |
+---------------------------------+------------+-------------+-------------------+------------+
| Obligations under finance | 10 | (3.0) | (3.5) | (3.0) |
| leases | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Borrowings | 10 | (64.5) | (47.4) | (91.2) |
+---------------------------------+------------+-------------+-------------------+------------+
| Derivative financial | | (2.1) | - | (2.3) |
| instruments | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Provisions for liabilities and | | (1.1) | (1.2) | (0.8) |
| charges | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Deferred tax liabilities | | (28.1) | (29.1) | (27.9) |
+---------------------------------+------------+-------------+-------------------+------------+
| Retirement benefit obligations | 11 | (5.7) | (1.3) | (2.4) |
+---------------------------------+------------+-------------+-------------------+------------+
| Total non-current liabilities | | (138.4) | (112.6) | (159.1) |
+---------------------------------+------------+-------------+-------------------+------------+
| Total liabilities | | (276.6) | (291.2) | (293.6) |
+---------------------------------+------------+-------------+-------------------+------------+
| Net assets | | 69.3 | 59.7 | 67.2 |
+---------------------------------+------------+-------------+-------------------+------------+
| Equity | | | | |
+---------------------------------+------------+-------------+-------------------+------------+
| Share capital | | 0.7 | 0.7 | 0.7 |
+---------------------------------+------------+-------------+-------------------+------------+
| Share premium | | 15.4 | 15.4 | 15.4 |
+---------------------------------+------------+-------------+-------------------+------------+
| Treasury shares | | (0.2) | (0.2) | (0.1) |
+---------------------------------+------------+-------------+-------------------+------------+
| Other reserves | | 53.4 | 43.8 | 51.2 |
+---------------------------------+------------+-------------+-------------------+------------+
| Total equity attributable to equity holders | 69.3 | 59.7 | 67.2 |
| of the Company | | | |
+----------------------------------------------+-------------+-------------------+------------+
| The notes on pages 13 to 18 form an integral part of this consolidated interim |
| financial information. |
+---------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------+
| Carpetright plc |
| Condensed consolidated statement of cash flows for 26 weeks ended 31 October 2009 |
+---------------------------------------------------------------------------------------------+
| | | Notes | 26 | 26 weeks | 52 weeks |
| | | | weeks | ended | ended |
| | | | ended | 1 November | 2 May 2009 |
| | | | 31 | 2008 | audited |
| | | | October | unaudited | GBPm |
| | | | 2009 | GBPm | |
| | | | unaudited | | |
| | | | GBPm | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Cash flows from operating activities | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Profit before tax | | | 11.0 | 9.5 | 16.7 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Adjusted for: | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Depreciation and amortisation | | | 9.7 | 9.9 | 20.4 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Non-recurring non-cash items | | | 3.2 | 0.5 | 1.1 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Other non-cash items | | | 0.2 | 0.1 | 0.1 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| (Profit)/loss on property disposals | | 5 | 0.2 | (1.2) | (1.8) |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Net finance costs | | | 3.5 | 2.7 | 5.6 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Operating cash flows before movements | 27.8 | 21.5 | 42.1 |
| in working capital | | | |
+-----------------------------------------------------+-----------+--------------+------------+
| (Increase)/decrease in inventories | | | (0.2) | 5.0 | 2.7 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Increase in trade and other | | | (3.0) | (2.0) | (0.9) |
| receivables | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Increase/(decrease) in trade and other | | 14.2 | (13.4) | (17.7) |
| payables | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| Cash generated by operations | | | 38.8 | 11.1 | 26.2 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Interest paid | | | (3.9) | (2.7) | (6.2) |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Corporation taxes paid | | | (3.0) | (8.2) | (12.2) |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Net cash generated from operating | | 31.9 | 0.2 | 7.8 |
| activities | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| Cash flows from investing activities | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Proceeds on disposal of property, plant | 9 | 0.2 | 2.3 | 3.0 |
| | | | | |
| and equipment and investment property | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| Purchases of intangible assets | | 9 | (0.6) | (0.7) | (2.0) |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Purchases of property, plant and | 9 | (5.2) | (6.3) | (14.3) |
| equipment and investment property | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| Acquisition of businesses net of cash | | - | (6.3) | (7.3) |
| acquired | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| Interest received | | | 0.1 | 0.2 | 0.7 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Net cash used in investing | | | (5.5) | (10.8) | (19.9) |
| activities | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Cash flows from financing activities | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Purchase of treasury shares by Employee | (0.1) | - | (0.2) |
| Share Trust | | | |
+-----------------------------------------------------+-----------+--------------+------------+
| Repayment of borrowings | | 10 | (34.6) | (4.6) | (20.5) |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| New loans advanced | | 10 | 2.7 | 58.0 | 72.0 |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Repayment of obligations under finance | 10 | (0.4) | (0.4) | (0.8) |
| leases | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| Dividends paid to Company | | 7 | (2.7) | (20.2) | (22.8) |
| shareholders | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Net cash used in financing | | | (35.1) | 32.8 | 27.7 |
| activities | | | | | |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Net increase/(decrease) in cash and | 10 | (8.7) | 22.2 | 15.6 |
| cash equivalents in the period | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| Cash and cash equivalents at the beginning | 13.0 | (2.2) | (2.2) |
| of the period | | | |
+-----------------------------------------------------+-----------+--------------+------------+
| Exchange differences | | | (0.1) | 0.3 | (0.4) |
+--------------------------------------+--+-----------+-----------+--------------+------------+
| Cash and cash equivalents at the end of | 10 | 4.2 | 20.3 | 13.0 |
| | | | | |
| the period | | | | |
+-----------------------------------------+-----------+-----------+--------------+------------+
| For the purposes of the cash flow statement, cash and cash equivalents are reported net |
| of overdrafts repayable on demand. Overdrafts are excluded from the definition of cash |
| and cash equivalents disclosed in the balance sheet. |
+---------------------------------------------------------------------------------------------+
| The notes on pages 13 to 18 form an integral part of this consolidated interim |
| financial information. |
+---------------------------------+----+--+----+------+------+----+--------------+------------+
1. General information
The Company is a public limited liability company incorporated and domiciled in
the UK. The address of its registered office is Harris House, Purfleet Bypass,
Purfleet, Essex, RM19 1TT. The Company is listed on the London Stock Exchange.
This condensed consolidated half-yearly financial information was approved for
issue on 14 December 2009.
This interim report does not comprise statutory accounts within the meaning of
Section 434(3) of the Companies Act 2006. It has been reviewed but not audited
by the Group's auditors. The statutory accounts for the year ended 2 May 2009
were approved by the Board of Directors on 29 June 2009 and delivered to the
Registrar of Companies. The report of the auditors on those accounts was
unqualified, did not contain an emphasis of matter paragraph and did not contain
any statement made under section 498 of the Companies Act 2006.
2. Basis of preparation
These condensed consolidated half-yearly financial statements for the 26 weeks
ended 31 October 2009 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim
financial reporting' as adopted by the European Union. The half-yearly condensed
consolidated financial report should be read in conjunction with the annual
financial statements for the 52 weeks ended 2 May 2009, which have been prepared
in accordance with IFRSs as adopted by the European Union.
3. Accounting policies
Except as described below the accounting policies adopted are consistent with
those of the annual financial statements for the 52 weeks ended 2 May 2009, as
described in those annual financial statements.
Taxes on income for interim periods are accrued using the tax rate that would be
applicable to expected total annual earnings.
The following new standards and amendments to standards, which are mandatory for
the first time in the financial year beginning 3 May 2009, are relevant for the
group:
+-------------+------------------+-------------------------------------------------+
| IAS 1 | Presentation of | Requires non-owner changes in equity to be |
| (revised) | financial | shown in either one performance statement (the |
| | statements | statement of comprehensive income) or two |
| | | statements (the income statement and the |
| | | statement of comprehensive income). The Group |
| | | has elected to present two statements. Owner |
| | | changes in equity are required to be shown in a |
| | | statement of changes in equity. |
| | | |
+-------------+------------------+-------------------------------------------------+
| IFRS 2 | Share based | Clarifies that vesting conditions are service |
| (amendment) | payments | conditions and performance conditions only. |
| | - vesting | Other features that are not vesting |
| | conditions and | conditions are required to be included in the |
| | cancellations | grant date fair value. This has had no impact |
| | | on the results presented. |
| | | |
+-------------+------------------+-------------------------------------------------+
| IFRS 8 | Operating | IFRS 8 replaces IAS 14 'Segment reporting'. It |
| | segments | requires a 'management approach' under which |
| | | segment information is |
| | | presented on the same basis as that used for |
| | | internal reporting |
| | | purposes. The Chief operating decision maker, |
| | | who is responsible for resource allocation and |
| | | assessing performance of the operating segments |
| | | has been identified as the Board of Directors. |
| | | As a result of IFRS 8 The Netherlands is being |
| | | shown as a separate operating segment with the |
| | | remainder of what was previously reported as |
| | | 'Rest of Europe' being included under 'all |
| | | other operating segments'. |
| | | |
+-------------+------------------+-------------------------------------------------+
The following new standards and amendments to standards, which are mandatory for
the first time in the financial year beginning 3 May 2009, are relevant but were
already applied by the group:
IAS 23, 'Borrowing costs (revised)'
The following new standards and amendments to standards, which are mandatory for
the first time in the financial year beginning 3 May 2009, are either not
currently relevant or material for the group:
IAS 39 (amendment), 'Financial instruments: Recognition and measurement';
IAS 39 and IFRS 7 (amendment), 'Reclassification of financial assets';
IFRIC 13, 'Customer loyalty programmes'; and
IFRIC 16, 'Hedges of net investment in a foreign operation'
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| 4. Segmental analysis |
+---------------------------------------------------------------------------------------------------------------------+
| The operating segments have been determined based on reports reviewed by the Board that are used to |
| make strategic decisions. The Board considers the business on a geographic basis as the company |
| operates only a retail business. Performance is considered for UK and Republic of Ireland (UK & |
| RoI), The Netherlands, Belgium and Poland. Neither Belgium or Poland are significant enough to meet |
| the quantitative thresholds to require separate reporting. They have, therefore, been included |
| under "All other segments". |
| |
+---------------------------------------------------------------------------------------------------------------------+
| The reportable operating segments derive their revenue primarily from the retail of floor coverings |
| and beds. Central costs are incurred principally in the UK and are immaterial. As such these costs |
| are included within the UK & RoI segment. Sales between segments are carried out at arm's length. |
+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | |
+-------------------------------------+-------------+----------+---------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| The segment information provided to the Board for the reportable segments for the 26 weeks ended 31 |
| October 2009 is as follows: |
+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| | 26 weeks to 31 October 2009 | 26 weeks to 1 November 2008 |
+---------------------------+--------------------------------------------+--------------------------------------------+
| | UK & | The | All | Group | UK & | The | All | Group |
| | RoI | Netherlands | other | | RoI | Netherlands | other | |
| | | | segments | | | | segments | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Gross Revenue | 215.1 | 31.7 | 13.0 | 259.8 | 196.1 | 30.2 | 12.0 | 238.3 |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Inter-segment revenue | (1.8) | - | - | (1.8) | (1.5) | - | - | (1.5) |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Revenues from external | 213.3 | 31.7 | 13.0 | 258.0 | 194.6 | 30.2 | 12.0 | 236.8 |
| customers | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Gross profit | 131.6 | 18.4 | 7.5 | 157.5 | 121.5 | 17.1 | 6.7 | 145.3 |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Underlying operating | 14.1 | 3.1 | 0.2 | 17.4 | 8.4 | 3.3 | (0.2) | 11.5 |
| profit | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Profits/(loss) on | (0.5) | - | (2.4) | (2.9) | 1.0 | (0.3) | - | 0.7 |
| property disposals and | | | | | | | | |
| non- recurring items | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Operating profit | 13.6 | 3.1 | (2.2) | 14.5 | 9.4 | 3.0 | (0.2) | 12.2 |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Interest revenue | 0.6 | - | - | 0.6 | 0.2 | - | - | 0.2 |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Interest expense | (3.9) | (0.1) | (0.1) | (4.1) | (2.4) | (0.3) | (0.2) | (2.9) |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Profit before tax | 10.3 | 3.0 | (2.3) | 11.0 | 7.2 | 2.7 | (0.4) | 9.5 |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Tax | (2.3) | (0.7) | (0.2) | (3.2) | (2.0) | (0.7) | - | (2.7) |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Profit for the financial | 8.0 | 2.3 | (2.5) | 7.8 | 5.2 | 2.0 | (0.4) | 6.8 |
| period | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Segment Assets: | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Segment assets | 248.1 | 83.5 | 33.6 | 365.2 | 256.7 | 77.1 | 26.4 | 360.2 |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Inter-segment balances | (11.4) | (0.1) | (7.8) | (19.3) | (8.7) | - | (0.6) | (9.3) |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Balance sheet total | 236.7 | 83.4 | 25.8 | 345.9 | 248.0 | 77.1 | 25.8 | 350.9 |
| assets | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Segment Liabilities: | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Segment liabilities | (238.7) | (30.4) | (26.8) | (295.9) | (249.1) | (34.5) | (16.9) | (300.5) |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Inter-segment balances | - | 11.1 | 8.2 | 19.3 | - | 3.1 | 6.2 | 9.3 |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Balance sheet total | (238.7) | (19.3) | (18.6) | (276.6) | (249.1) | (31.4) | (10.7) | (291.2) |
| liabilities | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Other segmental items: | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Depreciation and | 7.8 | 1.3 | 0.6 | 9.7 | 8.1 | 1.1 | 0.7 | 9.9 |
| amortisation | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Additions to non-current | 3.4 | 0.4 | - | 3.8 | 8.7 | 4.2 | - | 12.9 |
| assets | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Carpetright plc is domiciled in the UK. The Group's revenue from external customers in the UK is |
| GBP208.6m (2008 : GBP188.3m) and the total revenue from external customers from other countries is |
| GBP49.4m (2008 : GBP48.5m). The total of non-current assets (other than financial instruments, |
| deferred tax assets and employment benefit assets) located in the UK is GBP233.5m (2008 : |
| GBP219.8m) and the total of those located in other countries is GBP38.5m (2008 : GBP43.4m). |
+---------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
| Carpetright's trade has historically shown no distinct pattern of seasonality with trade cycles |
| more closely following economic indicators such as consumer confidence and mortgage approvals. |
+---------------------------+---------+-------------+----------+---------+---------+-------------+----------+---------+
+------------------------------------------+--------------+---------------+---------------+
| 5. Profit/(loss) on property disposals and | | |
| non-recurring items | | |
+---------------------------------------------------------+---------------+---------------+
| | 26 weeks | 26 weeks | 52 weeks |
| | ended | ended | ended |
| | 31 October | 1 November | 2 May 2009 |
| | 2009 | 2008 | GBPm |
| | GBPm | GBPm | |
+------------------------------------------+--------------+---------------+---------------+
| Disclosed in the income statement: | | | |
+------------------------------------------+--------------+---------------+---------------+
| Profit/(loss) on property disposals | (0.2) | 1.2 | 1.8 |
+------------------------------------------+--------------+---------------+---------------+
| UK & RoI impairment of property, plant | (1.2) | - | (0.9) |
| and equipment | | | |
+------------------------------------------+--------------+---------------+---------------+
| Impairment of investment in joint | - | - | (0.2) |
| venture | | | |
+------------------------------------------+--------------+---------------+---------------+
| Over provision for pre-opening costs of | 1.0 | - | - |
| Purfleet | | | |
+------------------------------------------+--------------+---------------+---------------+
| Post acquisition reorganisation of new | - | (0.5) | (1.2) |
| businesses | | | |
+------------------------------------------+--------------+---------------+---------------+
| Poland: | | | |
+------------------------------------------+--------------+---------------+---------------+
| Impairment of property, plant and | (2.0) | - | - |
| equipment | | | |
+------------------------------------------+--------------+---------------+---------------+
| Closure costs | (0.5) | - | - |
+------------------------------------------+--------------+---------------+---------------+
| Total | (2.9) | 0.7 | (0.5) |
+------------------------------------------+--------------+---------------+---------------+
| | | | |
| | | | |
+------------------------------------------+--------------+---------------+---------------+
| 6. Tax | | | |
+------------------------------------------+--------------+---------------+---------------+
| | 26 weeks | 26 weeks | 52 weeks |
| | ended | ended | ended |
| | 31 October | 1 November | 2 May 2009 |
| | 2009 | 2008 | GBPm |
| | GBPm | GBPm | |
+------------------------------------------+--------------+---------------+---------------+
| Current | 2.9 | 2.0 | 5.7 |
+------------------------------------------+--------------+---------------+---------------+
| Deferred | 0.3 | 0.7 | (0.8) |
+------------------------------------------+--------------+---------------+---------------+
| | 3.2 | 2.7 | 4.9 |
+------------------------------------------+--------------+---------------+---------------+
| The estimated tax rates on the profits of the Group are | | |
| as follows: | | |
+---------------------------------------------------------+---------------+---------------+
| | | 52 weeks | 52 weeks |
| | | ended | ended |
| | | 1 May 2010 | 2 May 2009 |
| | | % | % |
+------------------------------------------+--------------+---------------+---------------+
| Weighted average annual underlying tax | | 28.7 | 28.9 |
| rate | | | |
+------------------------------------------+--------------+---------------+---------------+
| Weighted average annual effective tax | | 29.8 | 29.8 |
| rate | | | |
+------------------------------------------+--------------+---------------+---------------+
| The effective tax rate is defined as the tax charged or credited as a percentage of the |
| accounting profit before tax. The underlying tax rate is defined as the effective tax |
| rate after adjusting for, when relevant, profit/(loss) on property disposals and |
| non-recurring items and tax adjustments in respect of such items. |
+------------------------------------------+--------------+---------------+---------------+
+--------------------------------+---+-------+--+----------+--+--------+--+--------------+
| 7. Dividends | | | | | | |
+--------------------------------+---+-------+-------------+--+--------+-----------------+
| | 26 weeks ended 31 | 26 weeks ended 1 November |
| | October 2009 | 2008 |
+--------------------------------+-------------------------+-----------------------------+
| | Pence/share | GBPm | Pence/share | GBPm |
+--------------------------------+--------------+----------+--------------+--------------+
| | | | | | | |
+--------------------------------+---+----------+----------+--+-----------+--------------+
| Final prior year dividend paid | | 4.0 | 2.7 | | 30.0 | 20.2 |
+--------------------------------+---+----------+----------+--+-----------+--------------+
| Proposed current year interim | | 8.0 | 5.4 | | 4.0 | 2.7 |
| dividend | | | | | | |
+--------------------------------+---+----------+----------+--+-----------+--------------+
| The proposed interim dividend of 8.0p per share was approved by the Board of Directors |
| on 14 December 2009 but has not been included as a liability in these financial |
| statements. The proposed dividend will be paid on 19 February 2010 to shareholders who |
| are on the register of members on 5 February 2010. |
+--------------------------------+---+-------+--+----------+--+--------+--+--------------+
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| 8. Earnings per share |
+-------------------------------------------------------------------------------------------------------------------+
| | 26 weeks ended 31 October | 26 weeks ended 1 | 52 weeks ended 2 May |
| | 2009 | November 2008 | 2009 |
+----------------+--------------------------------+--------------------------------+--------------------------------+
| | Earnings | Weighted | Earnings | Earnings | Weighted | Earnings | Earnings | Weighted | Earnings |
| | GBPm | average | per | GBPm | average | per | GBPm | average | per |
| | | number | share | | number | share | | number | share |
| | | of | Pence | | of | Pence | | of | Pence |
| | | shares | | | shares | | | shares | |
| | | Millions | | | Millions | | | Millions | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Basic earnings | 7.8 | 67.2 | 11.6 | 6.8 | 67.2 | 10.1 | 11.8 | 67.2 | 17.6 |
| per share | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Effect of | - | 0.4 | (0.1) | - | - | - | 0.1 | 0.4 | - |
| dilutive share | | | | | | | | | |
| options | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Diluted | 7.8 | 67.6 | 11.5 | 6.8 | 67.2 | 10.1 | 11.9 | 67.6 | 17.6 |
| earnings per | | | | | | | | | |
| share | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
+-------------------------------------------------------+----------+----------+---------+
| The Directors have presented an additional measure of earnings per share based on |
| underlying earnings as they believe this provides a more comparable measure on an |
| ongoing basis. Underlying earnings is defined as profit after adjusting for post tax |
| profits/(losses) on property disposals and non-recurring items. |
| |
+---------------------------------------------------------------------------------------+
| | 26 weeks | 26 weeks | 52 |
| | ended | ended | weeks |
| | 31 | 1 | ended |
| | October | November | 2 May |
| | 2009 | 2008 | 2009 |
| | Pence | Pence | Pence |
+-------------------------------------------------------+----------+----------+---------+
| Basic earnings per share | 11.6 | 10.1 | 17.6 |
+-------------------------------------------------------+----------+----------+---------+
| Adjusted for the effect of profit/loss on property disposals and | | |
| | | |
| non-recurring items: | | |
+------------------------------------------------------------------+----------+---------+
| (Profit)/loss on property disposals | 0.3 | (1.8) | (2.7) |
+-------------------------------------------------------+----------+----------+---------+
| Non-recurring items | 4.0 | 0.7 | 3.4 |
+-------------------------------------------------------+----------+----------+---------+
| Tax thereon | (0.4) | 0.4 | (0.1) |
+-------------------------------------------------------+----------+----------+---------+
| Underlying earnings per share | 15.5 | 9.4 | 18.2 |
+-------------------------------------------------------+----------+----------+---------+
+------------------------------------------------------------------------------------+
| 9. Capital expenditure |
| During the period, the Group spent approximately GBP0.6m (2008 : GBP0.7m) on |
| intangible assets principally in respect of the |
| e-commerce project; GBP4.9m (2008 : GBP4.9m) on the acquisition and fit out of |
| stores and GBP0.3m (2008 : GBP1.4m) on fitting out the new warehouse and transport |
| depot. Net proceeds from vacating properties during the period were GBP0.2m (2008 |
| : GBP2.3m). |
| Capital commitments of GBP2.4m at 31 October 2009 for which no provision has been |
| made in the accounts relate to the acquisition of tangible and intangible assets |
| (2008 : GBP5.3m). |
+------------------------------------------------------------------------------------+
+--------------------------------------+---------+---------+----------+-------------+----------+
| 10. Borrowings |
+----------------------------------------------------------------------------------------------+
| | 2 May | | | 31 |
| | 2009 | | | October |
| | | | | 2009 |
+--------------------------------------+-------------------+----------+-------------+----------+
| | GBPm | Cash | Exchange | Revaluation | GBPm |
| | | flow | | | |
| | | GBPm | movement | GBPm | |
| | | | | | |
| | | | GBPm | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Cash and cash equivalents per the | 17.4 | (8.7) | - | - | 8.7 |
| balance sheet | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Bank overdrafts | (4.4) | - | (0.1) | - | (4.5) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Cash and cash equivalents per the | 13.0 | (8.7) | (0.1) | - | 4.2 |
| cash flow statement | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Borrowings: | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Current borrowings | (12.7) | | | | (7.5) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Non-current borrowings | (91.2) | | | | (64.5) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| | (103.9) | 31.9 | - | - | (72.0) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Obligations under finance leases: | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Current obligations under finance | (0.9) | | | | (0.5) |
| leases | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Non-current obligations under | (3.0) | | | | (3.0) |
| finance leases | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| | (3.9) | 0.4 | - | - | (3.5) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Derivative financial instruments | (2.3) | - | - | 0.2 | (2.1) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Net debt | (97.1) | 23.6 | (0.1) | 0.2 | (73.4) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| | 3 May | | | 1 |
| | 2008 | | | November |
| | | | | 2008 |
+--------------------------------------+-------------------+----------+-------------+----------+
| | GBPm | Cash | Exchange | Revaluation | GBPm |
| | | flow | | | |
| | | GBPm | movement | GBPm | |
| | | | | | |
| | | | GBPm | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Cash and cash equivalents per the | 8.9 | 14.4 | - | - | 23.3 |
| balance sheet | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Bank overdrafts | (11.1) | 7.8 | 0.3 | - | (3.0) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Cash and cash equivalents per the | (2.2) | 22.2 | 0.3 | - | 20.3 |
| cash flow statement | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Borrowings: | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Current borrowings | (11.3) | | | | (56.9) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Non-current borrowings | (39.3) | | | | (47.4) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| | (50.6) | (53.4) | (0.3) | - | (104.3) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Obligations under finance leases: | | | |
+----------------------------------------------------------+----------+-------------+----------+
| Current obligations under finance | (0.8) | | | | (0.8) |
| leases | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Non-current obligations under | (3.9) | | | | (3.5) |
| finance leases | | | | | |
+--------------------------------------+---------+---------+----------+-------------+----------+
| | (4.7) | 0.4 | - | - | (4.3) |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Derivative financial instruments | - | - | - | 0.5 | 0.5 |
+--------------------------------------+---------+---------+----------+-------------+----------+
| Net debt | (57.5) | (30.8) | - | 0.5 | (87.8) |
+--------------------------------------+---------+---------+----------+-------------+----------+
+--------------------------------------------------+------------+------------+----------+
| 11. Retirement benefit obligation | |
+----------------------------------------------------------------------------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
| | ended | ended | ended |
| | 31 October | 1 November | 2 May |
| | 2009 | 2008 | 2009 |
| | GBPm | GBPm | GBPm |
+--------------------------------------------------+------------+------------+----------+
| | | | |
+--------------------------------------------------+------------+------------+----------+
| Opening retirement benefit obligations | (2.4) | (1.3) | (1.3) |
+--------------------------------------------------+------------+------------+----------+
| Current service cost | (0.1) | (0.2) | (0.5) |
+--------------------------------------------------+------------+------------+----------+
| Interest cost | (0.5) | (0.5) | (1.0) |
+--------------------------------------------------+------------+------------+----------+
| Expected return on scheme assets | 0.5 | 0.5 | 1.0 |
+--------------------------------------------------+------------+------------+----------+
| Employer contributions | 0.1 | 0.2 | 0.5 |
+--------------------------------------------------+------------+------------+----------+
| Actuarial gains/(losses) | (3.3) | - | (1.1) |
+--------------------------------------------------+------------+------------+----------+
| Closing retirement benefit obligations | (5.7) | (1.3) | (2.4) |
+--------------------------------------------------+------------+------------+----------+
| | | | |
+--------------------------------------------------+------------+------------+----------+
| Fair value of pension scheme assets | 14.9 | 12.0 | 12.3 |
+--------------------------------------------------+------------+------------+----------+
| Present value of pension scheme obligations | (20.6) | (13.3) | (14.7) |
+--------------------------------------------------+------------+------------+----------+
| Retirement benefit obligations | (5.7) | (1.3) | (2.4) |
+--------------------------------------------------+------------+------------+----------+
+------------------------------------------------------------------------------------+
| The main financial assumptions used to assess the liabilities of the scheme have |
| been updated by independent qualified actuaries to assess the liabilities of the |
| scheme. The most significant of these are the discount rate and the inflation rate |
| which are 5.5% (last full year 6.8%) and 3.4% (last full year 2.9%) respectively. |
| The amount of the deficit varies if the main financial assumptions change, |
| particularly the discount rate. If the discount rate increased/decreased by 0.1% |
| the IAS 19 deficit would decrease/increase by approximately GBP0.4m. |
| 12. Related party transactions |
| Details of transactions during the period with Companies of which Lord Harris |
| and/or M J Harris is a director and/or in which Lord Harris holds a material |
| interest are set out below. |
+------------------------------------------------------------------------------------+
+---------------------------------------+----------+------------+------------+----------+
| | Lease and concession | Supply of |
| | agreement payments | goods/services |
| | made | payments made |
+---------------------------------------+-----------------------+-----------------------+
| | 26 weeks | 26 weeks | 26 weeks | 26 weeks |
| | ended | ended | ended | ended |
| | 31 | 1 November | 31 October | 1 |
| | October | 2008 | 2009 | November |
| | 2009 | | | 2008 |
+---------------------------------------+----------+------------+------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------+----------+------------+------------+----------+
| Clacton Property Investments Ltd | 117 | 40 | - | - |
+---------------------------------------+----------+------------+------------+----------+
| Edinburgh Retail LLP | 228 | 228 | - | - |
+---------------------------------------+----------+------------+------------+----------+
| Glenrothes Retail LLP | 94 | 94 | - | - |
+---------------------------------------+----------+------------+------------+----------+
| Greenock Retail Ltd | 113 | 113 | - | - |
+---------------------------------------+----------+------------+------------+----------+
| Harris Ventures Ltd | 130 | 102 | 49 | 30 |
+---------------------------------------+----------+------------+------------+----------+
| Hull Unit Trust | 177 | 177 | - | - |
+---------------------------------------+----------+------------+------------+----------+
| Islandview Properties Ltd | 136 | 136 | - | - |
+---------------------------------------+----------+------------+------------+----------+
| Neath Retail LLP | 75 | 75 | - | - |
+---------------------------------------+----------+------------+------------+----------+
| Wick Retail LLP | 27 | 27 | - | - |
+---------------------------------------+----------+------------+------------+----------+
+----------------------------------------------------------------------------------+
| As at 31 October 2009 the Group owed related parties GBP53,000 (2008 - |
| GBP26,000). |
| 13. Closure of Polish stores |
| At 31 October 2009 the Board had approved a plan to exit from Poland by the |
| closure of the stores and the assignment or surrender of the leases. The |
| freehold site will be retained and classified as an investment property when the |
| store has closed. Exits from the sites are being actively sought. The |
| non-current assets, except the freehold property have been reclassified as |
| assets held for sale at 31 October 2009. The estimated costs for closing and |
| disposing of the sites and the impairment charges relating to the non-current |
| assets have been included in non-recurring items. |
+----------------------------------------------------------------------------------+
+--------------------------------------------------+----------+------------+----------+
| 14. Foreign exchange | | | |
| The principal exchange rates used were as | | | |
| follows: | | | |
+--------------------------------------------------+----------+------------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
| | ended | ended | ended |
| | 31 | 1 November | 2 May |
| | October | 2008 | 2009 |
| | 2009 | | |
+--------------------------------------------------+----------+------------+----------+
| Euro | | | |
+--------------------------------------------------+----------+------------+----------+
| Average | 1.14 | 1.26 | 1.19 |
+--------------------------------------------------+----------+------------+----------+
| Closing | 1.12 | 1.26 | 1.12 |
+--------------------------------------------------+----------+------------+----------+
| Zloty | | | |
+--------------------------------------------------+----------+------------+----------+
| Average | 4.87 | 4.27 | 4.53 |
+--------------------------------------------------+----------+------------+----------+
| Closing | 4.72 | 4.61 | 4.89 |
+--------------------------------------------------+----------+------------+----------+
+--------------------------------------------------------------------------------+
| Risks and uncertainties |
| The Board has considered the principal risks and uncertainties for the |
| remaining six months of the financial year and determined that the risks |
| presented in the 2009 Annual Report, described below, remain for the rest of |
| the financial year: |
| ? economic and market conditions |
| ? business strategy development and implementation |
| ? employee risk - management and customer service |
| ? entering new markets |
| ? cost inflation |
| ? supply chain and business continuity |
| ? IT systems |
| These are detailed on page 13 of the 2009 Annual Report, a copy of which is |
| available on the Group's website www.carpetright.plc.uk |
| Forward looking statements |
| Certain statements in this half year report are forward looking. Although the |
| Group believes that the expectations reflected in these forward looking |
| statements are reasonable, we can give no assurance that these expectations |
| will prove to have been correct. Because these statements contain risks and |
| uncertainties, actual results may differ materially from those expressed or |
| implied by these forward looking statements. We undertake no obligation to |
| update any forward looking statements whether as a result of new information, |
| future events or otherwise. |
| Statement of Directors' responsibilities |
| The condensed financial statements have been prepared in accordance with IAS |
| 34, as adopted by the European Union, and the interim management report herein |
| includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 |
| namely: |
| ? an indication of important events that have occurred during the period and |
| their impact on the interim financial |
| statements, and a description of the principal risks and uncertainties for |
| the remainder of the financial year. |
| ? material related party transactions in the period and any material changes |
| in the related party transactions |
| described in the last Annual Report. |
| The Directors of Carpetright plc are listed on page 14 of the Group's 2009 |
| Annual Report. Since the date of the Annual Report there have been no changes |
| to the composition of the Board. |
| By order of the Board |
| Neil Page |
| Group Finance Director |
| 14 December 2009 |
+--------------------------------------------------------------------------------+
Interim review opinion
Independent review report to Carpetright plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the 26 weeks ended 31 October
2009, which comprises the condensed consolidated income statement, condensed
consolidated statement of comprehensive income, condensed consolidated statement
of changes in equity, condensed consolidated statement of financial position,
condensed consolidated statement of cash flows, comparative figures and related
notes. We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of the Disclosure and Transparency Rules of the
Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the 26 weeks ended 31 October 2009 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
14 December 2009
London
Notes:
+-----+----------------------------------------------------------------------------+
| a) | The maintenance and integrity of the Carpetright plc website is the |
| | responsibility of the directors; the work carried out by the auditors does |
| | not involve consideration of these matters and, accordingly, the auditors |
| | accept no responsibility for any changes that may have occurred to the |
| | financial statements since they were initially presented on the website. |
| | |
+-----+----------------------------------------------------------------------------+
| b) | Legislation in the United Kingdom governing the preparation and |
| | dissemination of financial statements may differ from legislation in other |
| | jurisdictions. |
| | |
+-----+----------------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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