TIDMCPR
RNS Number : 4343W
Carpetright PLC
31 January 2012
Embargoed until 7am, 31 January 2012
31 January 2012
Carpetright plc
Interim Management Statement
Carpetright plc, Europe's leading specialist carpet and floor
coverings retailer, today announces its trading update for the 12
weeks ended 21 January 2012.
Highlights
-- Group sales(1) declined by 3.8%.
-- Sales in the UK declined by 4.8%, with like-for-like sales(2) down 0.5%.
-- In local currency terms, total sales in Rest of Europe (The
Netherlands, Belgium and the Republic of Ireland) decreased by 0.1%
with like-for-like sales up 0.3%. After allowing for the movement
in exchange rates, this translates to a total sales increase in
Rest of Europe of 1.1%.
-- Whilst self-help initiatives are improving the Group's
performance, based on the current pace of sales and margin
improvement, full year underlying pre-tax profit is expected to be
slightly below the lower end of current market expectations.
-- Year end net debt expected to be around GBP43m (2011: GBP65.7m).
12 weeks to 38 weeks to
21 January 2012 21 January 2012
-----------------
Group Sales (3.8%) (4.1%)
UK
- Total (4.8%) (5.3%)
- Like-for-like (0.5%) (1.7%)
Rest of Europe
- Total (in GBP) 1.1% 1.7%
- Total (in local currency) (0.1%) (1.8%)
- Like-for-like (in local
currency) 0.3% (1.3%)
----------------------------- ----------------- -----------------
Lord Harris of Peckham, Chairman and Chief Executive, said:
"Tough trading conditions in the UK persisted in the third
quarter of our financial year with fragile consumer confidence
producing a difficult floor coverings market. We have said in the
past that the like-for-like sales performance has been volatile,
and this continues to be the case, with volumes remaining sensitive
to levels of promotional discounting. Excluding sales from our
insurance replacement business, which has been disappointing, our
core retail business would have reported like-for-like growth of
1.0%.
"Against this tough backdrop we have continued to focus on a
range of self-help initiatives and have made progress in each of
these areas. The response to the re-launch of our bed proposition
in January was encouraging and we have completed the refurbishment
of 27 stores, which are delivering good growth. The gross profit
margin decline seen the in first half was 430 basis points. This is
expected to moderate to around 300 basis points in the second half,
slightly down on our previous expectation, reflecting the continued
need to drive value for the consumer to maintain sales momentum. We
have continued to take a determined approach to reducing the cost
base and expect this to be down by approximately GBP5m year on
year, in line with our previous expectations.
"We are delighted that the actions taken in our Rest of Europe
operations are now delivering growth in like-for-like sales and an
improvement in profitability. We are particularly pleased with the
success of the recovery plan in the Republic of Ireland.
"In this current environment, predicting the final outcome for
the year with any accuracy is difficult. The result for the year
will depend on our performance in the final quarter when we see
some weak comparatives but, with sales volatility continuing to
impact on the pace of margin improvement, we expect underlying
pre-tax profits for the full year will be slightly below the lower
end of the current range of market expectations. We expect the year
end net debt to be significantly down on the previous year, at
around GBP43m.
"Looking forward, I see no respite from the challenging
environment over the next 12 months but remain confident the Group
will emerge in a strong position to deliver future growth once
consumer demand improves."
The Group will report its usual year end pre-close trading
update on Tuesday 24 April 2012 in advance of its year end on 28
April 2012.
Analyst conference call
Lord Harris will host a conference call for analysts at 8.00am
GMT today.
The dial in number is +44 (0)20 3003 2666 with the passcode 374
6482
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 Group's
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.
Appendix 1: Store portfolio
Store portfolio 21 Jan 2012 29 Oct 2011 30 April 2011
------------------- ------------------- -------------------
Sites Sq Ft '000 Sites Sq Ft '000 Sites Sq Ft '000
-------------------------- ------ ----------- ------ ----------- ------ -----------
UK
Standalone 479 4,273 480 4,275 497 4,416
Concessions 22 44 23 46 42 98
Total 501 4,317 503 4,321 539 4,514
-------------------------- ------ ----------- ------ ----------- ------ -----------
Rest of Europe
Republic of Ireland 20 147 20 147 20 145
The Netherlands 93 1,088 92 1,078 92 1,078
Belgium 28 329 28 329 28 335
Total 141 1,564 140 1,554 140 1,558
-------------------------- ------ ----------- ------ ----------- ------ -----------
Total Group 642 5,881 643 5,875 679 6,072
-------------------------- ------ ----------- ------ ----------- ------ -----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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