4 Oct 2013 07:00
4 October 2013
Carpetright plc
Trading Update
Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces its trading update for the 10 weeks ended 29 September 2013.
Summary
o Whilst the self help activities are continuing to deliver, as a result of a combination of a softer UK market and a further step down in the Netherlands, it is likely the Group's full year profit will be significantly below our previous expectations.
· UK
o Volatile trading in the UK during the period with like-for-like sales (note 2) down 2.5%. Total sales decreased by 4.1%.
o Self-help activities continue to deliver growth on last year.
o Improvement in gross profit percentage of 140bps in the first half.
o Store base increased by one during the period to 474, of which 218 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 7.6%. Total sales declined by 7.8%. After the impact of currency movements this translates to a 1.9% decrease in total sales.
o Improvement in gross profit percentage of 70bps in the first half.
o Key driver of performance continues to be the weak Netherlands economy, with the Group's Dutch business now expected to be loss-making in the first half. Further operational actions have been taken to mitigate the loss and maintain a positive cash contribution.
o Belgium and the Republic of Ireland are in line with our expectations.
· Changes to Board being announced separately today
Lord Harris, Executive Chairman, said:
"Trading conditions in the UK have been volatile throughout the period. Excluding the expected decrease in sales from our wholesale business, the core retail business would have reported a like-for-like decline of 1.7%, against a strong comparative of up 2.4% last year. Our self-help activities continue to deliver growth, although the underlying market remains soft despite recent improvements to mortgage approvals and consumer confidence.
"Trading in our Rest of Europe business continues to be dominated by the extremely difficult economic conditions in the Netherlands. We have taken further operational action to mitigate the loss and maintain a positive cash contribution.
"Whilst we have improved the margin and maintained a tight control on costs, the shortfall in sales in this trading period is lowering our previous expectations."
The Group will report its interim results for the first half of its financial year on 10 December 2013.
Analyst conference call
Lord Harris 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 2166411.
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 | ||||
10 weeks to 29 Sept 2013 | 12 weeks to 20 July 2013 (previously reported) | 22 weeks to 29 Sept 2013
| 12 weeks to 13 Oct 2012 (previously reported) | 26 weeks to 27 Oct 2012 (previously reported) | |
UK | |||||
- Total | (4.1%) | (3.3%) | (3.6%) | (0.6%) | (1.6%) |
- Like-for-like - Like-for-like excluding wholesale | (2.5%) (1.7%) | (1.9%) (1.0%) | (2.2%) (1.3%) | 0.6% 2.4% | 0.7% 3.0% |
Rest of Europe | |||||
- Total (in local currency) | (7.8%) | (10.9%) | (9.6%) | (12.2%) | (9.7%) |
- Like-for-like (in local currency) | (7.6%) | (10.6%) | (9.3%) | (12.7%) | (10.1%) |
- Total (in GBP)
| (1.9%) | (4.4%) | (3.2%) | (20.4%) | (17.7%) |
Group Sales (in GBP)
|
(3.7%) |
(3.5%) |
(3.6%) |
(4.4%) |
(4.7%) |
Appendix 2: Store portfolio
Current Financial Year | Previous Financial Year | |||||||
Store portfolio | 29 Sept 2013 | 20 July 2013 (previously reported) | Interim 27 Oct 2012 (previously reported) | Year end 27 April 2013 (previously reported) | ||||
Stores | Sq ft | Stores | Sq ft | Stores | Sq ft | Stores | Sq ft | |
UK | ||||||||
Standalone | 458 | 4,075 | 457 | 4,064 | 464 | 4,165 | 462 | 4,124 |
Concessions | 16 | 29 | 16 | 29 | 16 | 33 | 16 | 29 |
Total | 474 | 4,104 | 473 | 4,093 | 480 | 4,198 | 478 | 4,153 |
Europe | ||||||||
Republic of Ireland | 21 | 155 | 21 | 155 | 20 | 147 | 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 | 141 | 1,559 | 142 | 1,566 |
Total Group
|
616 |
5,670 |
615 |
5,659 |
621 |
5,757
|
620 |
5,719 |