2 Aug 2011 07:00
2 August 2011
Carpetright plc
Interim Management Statement
Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces its Interim Management Statement for the period from 1 May 2011 to 30 July 2011, incorporating a trading update for the 12 weeks ended 23 July 2011.
Highlights for the 12 weeks ended 23 July 2011
·; Group sales declined by 1.5%.
·; The Group's store base decreased by 25 to 654 stores at the period end.
·; Sales in the UK declined by 2.3%, with like-for-like sales2 down 0.2%.
·; In local currency terms, total sales in Rest of Europe (The Netherlands, Belgium and the Republic of Ireland) decreased by 2.3% with like-for-like sales down 1.7%. After allowing for the movement in exchange rates, this translates to a total sales increase of 1.7%.
| 12 weeks to 23 July 2011 | 12 weeks to 23 July 2011 (previous basis)3 | 13 weeks to 31 July 2010 (previously reported)3 |
Group Sales | (1.5%) | (1.5%) | (2.5%) |
UK | |||
- Total | (2.3%) | (2.7%) | (0.9%) |
- Like-for-like | (0.2%) | (0.3%) | (3.4%) |
Rest of Europe | |||
- Total (in GBP) | 1.7% | 4.2% | (6.2%) |
- Total (in local currency) | (2.3%) | 0.0% | (3.3%) |
- Like-for-like (in local currency) | (1.7%) | (1.1%) | (4.2%) |
Lord Harris of Peckham, Chairman and Chief Executive, said:
"As announced previously, we had expected consumer demand across Europe to remain subdued as we entered our new financial year, and this view is reflected in the update announced today.
"That said, we have seen an encouraging movement in UK like-for-like sales from the exit rate of the previous financial year, driven in part by our investment to support strong promotional activity, the growth of our bed sales and the roll out of our new laminate offer. This investment, combined with an increasing proportion of beds in the sales mix, has diluted the gross margin and we currently expect the full year figure to be around 200 basis points lower than the prior year. We continue to implement cost management initiatives and expect our full year UK costs to be below last year.
"The Group closed a net 25 stores in the first quarter. This was predominantly a result of the forced exit of our concessions in 16 Focus stores following that business entering administration in June. As referenced at our recent full year results announcement, we anticipate a continuing evolution of our UK store estate, with customers' greater use of the internet as a research tool leading to a reduction in the geographic store density in certain areas, counterbalanced by ongoing opportunities to open new stores in specific catchments where we are currently under-represented.
"Notwithstanding tough trading conditions in The Netherlands and Belgium, we believe we continue to grow market share in these markets and plan to open five stores in The Netherlands during the year.
"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 pre-close trading update for the first half of its financial year on 25 October 2011.
Change to reporting
As announced at the Preliminary Results analyst presentation on 28 June 2011, the Group has implemented a planned change to the reporting of its financial results. In light of a move in internal reporting structures, our operations in the Republic of Ireland now report into the Operations Director for Europe. The Group has decided to report on its continuing operations based on two principal geographic regions. These being "The UK" and "The Rest of Europe" (comprising The Netherlands, Belgium and the Republic of Ireland). The move will better reflect the operational structure of the Group and meets the objectives of IFRS8 - segmental reporting.
Analyst conference call
Lord Harris will host a conference call for analysts at 08:30 BST today.
The dial in number is 0208 817 9301 with the passcode 5277898.
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. The Group's previously reported geographic regions were "The UK and Republic of Ireland" and "The Rest of Europe" (comprising The Netherlands and Belgium).
4. There have been no significant changes to the Groups financial position during the period.
5. 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 | 23 July 2011
| 30 April 2011
| ||
Sites | Sq Ft '000 | Sites | Sq Ft '000 | |
UK | ||||
Standalone | 489 | 4,342 | 497 | 4,416 |
Concessions | 25 | 49 | 42 | 98 |
Total | 514 | 4,391 | 539 | 4,514 |
Rest of Europe | ||||
Republic of Ireland | 20 | 147 | 20 | 145 |
The Netherlands | 92 | 1,078 | 92 | 1,078 |
Belgium | 28 | 329 | 28 | 335 |
Total | 140 | 1,553 | 140 | 1,558 |
Total Group | 654 | 5,944 | 679 | 6,072 |