28 Jan 2014 07:00
28 January 2014
Carpetright plc
Interim Management Statement
Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces its trading update for the 13 weeks ended 25 January 2014.
Summary
· Whilst our third quarter result reflects an improved UK performance, a further deterioration in trading in the Netherlands means that we now expect our full year underlying pre-tax profit to be below the lower end of current market expectations.
· UK
o Like-for-like sales (note 2) in the UK increased by 1.9%. Total sales increased by 0.6%.
o Store base decreased by one during the period to 473, of which 242 have now been modernised.
· Rest of Europe
o In local currency terms, like-for-like sales in the Rest of Europe (Netherlands, Belgium and the Republic of Ireland) decreased by 7.7%. Total sales declined by 7.5%. After the impact of currency movements this translates to a 6.3% decrease in total sales.
o Belgium and the Republic of Ireland are in line with our expectations.
Lord Harris, Executive Chairman, said:
"Tough trading conditions persisted in the UK in the third quarter of our financial year but our self-help measures have enabled us to grow sales within a difficult market. We have noted in recent announcements that the like-for-like sales performance in the UK has been volatile, and this remains the case. That said, UK profit is in line with our expectations and is expected to be ahead of last year for the year as a whole. Excluding the expected decrease in sales from our wholesale business, the core retail business would have reported a like-for-like increase of 2.5%, against a strong comparative of 4.7% growth last year.
"Trading in our Rest of Europe business continues to be dominated by the extremely difficult economic conditions in the Netherlands. As a result we now expect this business unit to be loss making for this financial year, although we still expect it to remain cash generative.
"In view of the market conditions, predicting the final outcome for the year with any accuracy is difficult and the result for the year will depend on our performance in the final quarter. In the UK, the pace of the recovery remains uncertain in the face of continuing sales volatility but we are confident that our self-help measures have further potential. However, with a further weakening of the market in the Netherlands, we now expect underlying pre-tax profits for the full year will be below the lower end of the current range of market expectations."
The Group will issue a pre-close update on Tuesday, 22 April 2014 and will report its preliminary results for the financial year ending 26 April 2014 on Tuesday, 24 June 2014.
Analyst conference call
Lord Harris will host a conference call for analysts at 08:30 GMT today.
The dial in number is 020 3003 2666 with the passcode 2189361.
Thereafter, for further enquiries please contact:
Carpetright plc
Lord Harris, Executive Chairman
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 compared to 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.
Appendix 1: Group Sales
Current Financial Year | Previous Financial Year | ||||
13 weeks to 25 January 2014 | 39 weeks to 25 January 2014 | 26 weeks to 26 October 2013 (previously reported) | 13 weeks to 26 January 2013 (previously reported) | 39 weeks to 26 January 2013 (previously reported) | |
UK | |||||
- Total | 0.6% | (1.2%) | (2.2%) | 1.6% | (0.5%) |
- Like-for-like - Like-for-like excluding wholesale | 1.9% 2.5% | 0.2% 0.9% | (0.8%) 0.0% | 3.2% 4.7% | 1.6% 3.8% |
Rest of Europe | |||||
- Total (in local currency) | (7.5%) | (8.6%) | (8.4%) | (11.2%) | (10.1%) |
- Like-for-like (in local currency) | (7.7%) | (8.5%) | (8.6%) | (11.5%) | (10.6%) |
- Total (in GBP)
| (6.3%) | (3.8%) | (2.4%) | (15.9%) | (17.3%) |
Group Sales (in GBP)
|
(0.5%) |
(1.7%) |
(2.2%) |
(1.6%) |
(3.7%) |
Appendix 2: Store portfolio
Current Financial Year | Previous Financial Year | |||||||
Store portfolio | 25 January 2014 | 26 October 2013 (previously reported) | 26 January 2013 (previously reported) | Year end 27 April 2013 (previously reported) | ||||
Stores | Sq ft | Stores | Sq ft | Stores | Sq ft | Stores | Sq ft | |
UK | ||||||||
Standalone | 457 | 4045 | 458 | 4,071 | 460 | 4,117 | 462 | 4,124 |
Concessions | 16 | 29 | 16 | 29 | 16 | 29 | 16 | 29 |
Total | 473 | 4,074 | 474 | 4,100 | 476 | 4,146 | 478 | 4,153 |
Europe | ||||||||
Republic of Ireland | 21 | 155 | 21 | 155 | 21 | 154 | 21 | 155 |
Netherlands | 95 | 1,104 | 95 | 1,104 | 95 | 1,105 | 95 | 1,104 |
Belgium | 26 | 307 | 26 | 307 | 26 | 307 | 26 | 307 |
Total | 142 | 1,566 | 142 | 1,566 | 142 | 1,566 | 142 | 1,566 |
Total Group
|
615 |
5,640 |
616 |
5,666 |
618 |
5,712 |
620 |
5,719 |