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27 Apr 2011 07:00
Embargoed until 7am, 27 April 2011
27 April 2011
Carpetright plc
Interim Management Statement
Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces a trading update for the 11 weeks ended 16 April 2011.
Highlights
·; Group sales declined by 6.5%, with the year on year effect of closing our operations in Poland accounting for 0.2% of this decline.
·; The Group's store base decreased by 12 to 682 stores at the period end.
·; UK and Republic of Ireland sales declined by 6.5%, with like-for-like sales2 down 6.3%.
·; In local currency terms, total sales in Rest of Europe (The Netherlands and Belgium) decreased by 4.4% with like-for-like sales down 5.7%. After allowing for the movement in exchange rates, this translates to a total sales decline of 6.1%.
·; Underlying profit before tax for the year ended 30 April 2011 is expected to be slightly below the level of profits achieved in the 2009 full year.
| 11 weeks to 16 April 2011 | 24 weeks to 16 April 2011 | 50 weeks to 16 April 2011 |
Group Sales | (6.5%) | (6.5%) | (5.0%) |
UK & RoI | |||
- Total | (6.5%) | (5.7%) | (4.1%) |
- Like-for-like | (6.3%) | (6.1%) | (5.5%) |
Rest of Europe (continuing businesses) | |||
- Total (in GBP) | (6.1%) | (9.8%) | (9.2%) |
- Total (in local currency) | (4.4%) | (3.9%) | (2.6%) |
- Like-for-like (in local currency) | (5.7%) | (5.3%) | (3.7%) |
Lord Harris of Peckham, Chairman and Chief Executive, said:
"Tough trading conditions in the UK and Republic of Ireland continued into the fourth quarter of our financial year, with fragile consumer confidence producing a weak floor coverings market. While the sales figures announced this morning do not include Easter trading, we do not expect the trend up to the financial year end, 30 April 2011, to be materially different.
"Increases in raw material costs continued in the final month of the quarter, leading to an acceleration of carpet price inflation. While we have, where possible, looked to pass some of this increase on to customers, the ongoing difficult trading conditions have required us to hold sale prices on many lines to ensure they remain at a competitive level. As a consequence, we now expect the total UK & Republic of Ireland margin will be flat year on year.
"As a consequence of the above factors, underlying profit before tax for the year ended 30 April 2011 is expected to be slightly below the level of profits achieved in the 2009 full year.
"Trading conditions in the Republic of Ireland remain very difficult, with our sales having fallen by over 50% over the last three years. A review of operations has been completed and actions taken to reduce the store portfolio by six stores to bring the cost base back into line with the prevailing market opportunity. These actions leave the region in a stronger position as we await a recovery in economic conditions.
"The Group's existing finance facilities run to July 2012 and, as part of the normal cycle, we have begun our discussions for their renewal.
"The business remains well placed to capitalise on opportunities when economic conditions improve."
Carpetright will announce its preliminary results for the year ended 30 April 2011 on Tuesday28 June 2011.
Analyst conference call
Lord Harris will host a conference call for analysts at 08:15 BST today.
The dial in number is 020 8817 9301 with the passcode 4713165.
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. 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 | 16 April 2011
| 29 January 2011 (Previously reported) | ||
Sites | Sq Ft | Sites | Sq Ft | |
UK & RoI | ||||
Standalone | 520 | 4,586 | 532 | 4,671 |
Concessions | 42 | 99 | 42 | 99 |
Total | 562 | 4,685 | 574 | 4,770 |
Rest of Europe | ||||
The Netherlands | 92 | 1,077 | 92 | 1,077 |
Belgium | 28 | 335 | 28 | 335 |
Total | 120 | 1,412 | 120 | 1,412 |
Total Group | 682 | 6,097 | 694 | 6,182 |
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