TIDMCPR
RNS Number : 7501Q
Carpetright PLC
25 October 2011
Embargoed until 7am, 25 October 2011
25 October 2011
Carpetright plc
Pre-close Trading Update
Carpetright plc, Europe's leading specialist carpet and floor
coverings retailer, today announces a trading update for the 12
weeks ended 22 October 2011.
Highlights
-- Group sales(1) declined by 5.2%.
-- The Group's store base has decreased by 11 to 643 stores.
-- Sales in the UK declined by 6.8%, with like-for-like sales(2) down 3.0%.
-- In local currency terms, total sales in Rest of Europe (The
Netherlands, Belgium and the Republic of Ireland) decreased by 1.8%
with like-for-like sales down 1.7%. After allowing for the movement
in exchange rates, this translates to a total sales increase of
2.9%.
-- Full year underlying pre-tax profits expected to be at the
lower end of current expectations(5) .
12 weeks to 25 weeks to
22 October 2011 22 October 2011
--------------------- ----------------- -----------------
Group Sales (5.2%) (3.9%)
UK
- Total (6.8%) (5.4%)
- Like-for-like (3.0%) (2.2%)
Rest of Europe
- Total (in GBP) 2.9% 2.6%
- Total (in local
currency) (1.8%) (1.8%)
- Like-for-like (in
local currency) (1.7%) (1.4%)
--------------------- ----------------- -----------------
Lord Harris of Peckham, Chairman and Chief Executive, said:
"As I have said previously, like many other retailers we expect
the challenging trading environment across Europe will continue for
the rest of our financial year. This view is reflected in the
update announced today.
"In the UK, like-for-like sales performance has been volatile,
with sales volumes closely linked to periods when there has been a
higher level of promotional discount. This factor, alongside an
increasing proportion of beds in the sales mix, will dilute the
gross margin by around 400 basis points in the first half compared
to the prior year, with a corresponding impact on first half
profitability. To partially offset this, we continue to take a
determined approach to reducing our cost base and expect this to be
down by approximately GBP4m.
In this fragile market, we remain focused on self-help measures.
We have continued to rationalise the UK store base and have been
successful in transferring sales to nearby stores as part of this
activity. Based on our experience in the first half, we are
adapting our ranges and promotional activity to continue to offer
the best prices to our customers whilst simultaneously working with
our suppliers to reduce the level of margin investment. Following
the appointment of a new senior management team in July 2011, we
have further developed and expanded our beds business, which now
represents approximately 6.0% of revenue. The new team will launch
a significantly improved beds range in the third quarter of our
current financial year and accelerated growth from the beds
business will be an important area in the delivery of our sales and
margin targets for the second half. The roll-out of our new
laminate offering is progressing and we continue to develop our
website to help drive store footfall. These factors are expected to
combine to limit the impact on gross margin to around 300 basis
points for the full year.
"The actions we have taken in our Rest of Europe operations are
delivering an improvement in profitability despite a decline in
sales.
"As a consequence of all of these factors, we expect underlying
pre-tax profits for the full year to be towards the lower end of
the current range of expectations.
"Looking forward, I see no respite from the challenging
environment over the next year but remain confident the Group will
emerge in a strong position to deliver future growth once consumer
demand improves."
The Group will report its interim results for the first half of
its financial year on 13 December 2011.
Analyst conference call
Lord Harris will host a conference call for analysts at 8.30am
BST today.
The dial in number is 020 8817 9301 with the passcode
5849357
Thereafter, for further enquiries please contact:
Carpetright plc
Lord Harris of Peckham, Chairman and Chief Executive
Neil Page, Group Finance Director
Tel: 01708 802000
Citigate Dewe Rogerson
Kevin Smith / Lindsay Noton
Tel: 020 7638 9571
A copy of this trading statement will be available on our
website www.carpetright.plc.uk today from 7.00am.
Notes
1. All sales figures are quoted after deducting VAT.
2. Like-for-like sales calculated as this year's net sales
divided by last year's net sales for all stores that are at least
12 months old at the beginning of our financial year. Stores closed
during the year are excluded from both years. No account is taken
of changes to store size or introduction of third party
concessions. Sales from insurance and house building contracts are
supplied through the stores and included in their figures.
3. There have been no significant changes to the Groups
financial position during the period.
4. 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.
5. The current range of analysts' estimates for adjusted pre-tax
profits for the 52 week period ending 28 April 2012 is GBP11.8m to
GBP16.9m.
Appendix 1: Store portfolio
Store portfolio 22 Oct 2011 23 July 2011 30 April 2011
--------------- --------------- ----------------
Sites Sq Ft Sites Sq Ft Sites Sq Ft
'000 '000 '000
---------------------- ------- ------ ------- ------ ------- -------
UK
Standalone 480 4,275 489 4,342 497 4,416
Concessions 23 46 25 49 42 98
Total 503 4,321 514 4,391 539 4,514
---------------------- ------- ------ ------- ------ ------- -------
Rest of Europe
Republic of
Ireland 20 147 20 147 20 145
The Netherlands 92 1,078 92 1,078 92 1,078
Belgium 28 329 28 329 28 335
Total 140 1,554 140 1,554 140 1,558
---------------------- ------- ------ ------- ------ ------- -------
Total Group 643 5,875 654 5,945 679 6,072
---------------------- ------- ------ ------- ------ ------- -------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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