16 Oct 2012 07:00
Embargoed until 7am, 16 October 2012
16 October 2012
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 13 October 2012.
Highlights
·; The Group result for the year to date is in line with management's expectations.
·; UK
o Like-for-like sales (note 2) in the UK increased by 0.6%. Total sales in the UK declined by 0.6% due to the reduction in the number of stores year on year.
o Store base decreased by two during the period to 484, of which 82(note 3) have now been refurbished.
·; 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 12.7%. Total sales declined by 12.2%.
o Store base decreased by two to 141, expanded the bed trial to two stores in the Netherlands.
Darren Shapland, Chief Executive, said:
"We are pleased to report like-for-like sales growth in the UK. Excluding the expected contraction in sales from the wholesale business (note 4), our core UK retail business would have reported like-for-like sales growth of 2.4% for the period. Whilst the underlying floor coverings market remains volatile, our self-help actions such as the development of our bed proposition, extension of our laminate range to more stores and the impact of our store refurbishment programme, continue to deliver positive results.
"Gross margin for the period continued to improve in line with our previously announced expectations and our guidance of a full year gross margin improvement in the range of 200-250 basis points above the prior year, remains unchanged. The majority of this margin improvement will be realised in the first half, as we annualise the margin improvement measures implemented in the second half of last year (note 5).
"The key driver in the performance of the Rest of Europe continues to be the deterioration of consumer confidence in the Netherlands, where the floor coverings market remains very weak.
"The Group result for the year to date is in line with management's expectations and, our view for the year as a whole remains unchanged."
The Group will report its interim results for the first half of its financial year on 11 December 2012.
Analyst conference call
Darren Shapland will host a conference call for analysts at 08:15 BST today.
The dial in number is +44 (0) 20 3003 2666 with the passcode 5742102
Thereafter, for further enquiries please contact:
Carpetright plc
Darren Shapland, 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/removal of third party concessions. Sales from insurance and house building contracts are supplied through the stores and included in their figures.
3. 34 stores had been refurbished as at 28 April 2012, 63 as at 24 July 2012.
4. Wholesale business included sales through insurance replacement and house builders.
5. H1 2012 58.0%, 4.3ppts down on H1 2011, H2 2012 60.0%, 2.1ppts down on 2011, FY 2012 58.9%, 3.3ppts down FY 2011.
6. There have been no significant changes to the Group's financial position during the period.
7. 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: Group sales
| 12 weeks to 13 October 2012 | 12 weeks to 24 July 2012 (previously reported) | 24 weeks to 13 October 2012 |
UK | |||
- Total | (0.6%) | (2.1%) | (1.3%) |
- Like-for-like | 0.6% | 1.7% | 1.2% |
- Like-for-like excluding wholesale | 2.4% | 5.3% | 3.8% |
Rest of Europe | |||
- Total (in local currency) | (12.2%) | (5.2%) | (8.9%) |
- Like-for-like (in local currency) | (12.7%) | (6.3%) | (9.6%) |
- Total (in GBP) | (20.4%) | (13.6%) | (17.5%) |
Group Sales | (4.4%) | (4.3%) | (4.4%) |
Appendix 2: Store portfolio
Store portfolio | 13 October 2012 | 24 July 2012 (Previously reported)
| 28 April 2012 (Previously reported) | 29 October 2011 (Previously reported)
| ||||
Stores | Sq Ft | Stores | Sq Ft | Stores | Sq Ft | Stores | Sq Ft | |
UK | ||||||||
Standalone | 468 | 4,195 | 470 | 4,211 | 474 | 4,241 | 480 | 4,275 |
Concessions | 16 | 29 | 16 | 29 | 16 | 29 | 23 | 46 |
Total | 484 | 4,224 | 486 | 4,240 | 490 | 4,270 | 503 | 4,321 |
Europe | ||||||||
Republic of Ireland | 20 | 147 | 20 | 147 | 20 | 147 | 20 | 147 |
Netherlands | 95 | 1,104 | 95 | 1,104 | 94 | 1,094 | 92 | 1,078 |
Belgium | 26 | 307 | 28 | 329 | 28 | 329 | 28 | 329 |
Total | 141 | 1,558 | 143 | 1,580 | 142 | 1,570 | 140 | 1,554 |
Total Group | 625 | 5,782 | 629 | 5,810 | 632 | 5,840 | 643 | 5,875 |