26 Mar 2014 07:00
Embargoed until 7am, 26 March 2014
26 March 2014
Carpetright plc
Trading Update
Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces an update on trading for the 8 weeks ended 22 March 2014 and expectations for the full year.
Summary
· Whilst our UK like-for-like sales performance was positive in the period, the pace of recovery seen in Q3 was not sustained and the Group is yet to see any significant benefit from the improvement in UK housing market transactions.
· This factor, along with continued difficult trading conditions in the Netherlands, means that we now expect underlying pre-tax profit for the year ended 26 April 2014 will be in the range of £3.5m to £5.5m.
· UK
o Like-for-like sales (note 2) in the UK increased by 0.2%. Total sales declined by 0.8%.
o Full year gross margin expected to be 80-100 basis points above the prior year.
· 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 5.3%. Total sales declined by 5.3%. After the impact of currency movements this translates to an 8.5% decrease in total sales.
o Nick Worthington, previously Chief Executive of Dreams, appointed Operations Director - Europe, with effect from 18 March 2014.
Lord Harris, Executive Chairman, said:
"In our last trading statement, we reported that like-for-like sales in the UK were volatile, and this remains the case. Nevertheless, based on previous experience we had expected to see some recovery as UK housing transaction volumes improved. In the event, this has yet to materialise and the momentum established in the third quarter was not sustained. Excluding the expected decrease in sales from our wholesale business, the core retail business would have reported a like-for-like increase of 0.9%.
"Trading in our Rest of Europe business continues to be dominated by the extremely difficult economic conditions in the Netherlands. The leadership of the Rest of European business has been strengthened with the recent appointment of Nick Worthington as Operations Director - Europe. Nick brings with him a wealth of retail experience, with a strong focus on home furnishings.
"With the important Easter trading period still to come, we are continuing to concentrate on a range of self-help measures as we seek to improve the Group's performance."
The Group 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 + 44 (0) 20 3003 2666 with the passcode 'Carpetright'.
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 | |||||
8 weeks to 22 March 2014 | 13 weeks to 25 January 2014 (previously reported) | 21 weeks to 22 March 2014 | 47 weeks to 22 March 2014
| 12 weeks to 20 April 2013 (previously reported) | 51 weeks to 20 April 2013 (previously reported) | |
UK | ||||||
- Total | (0.8%) | 0.6% | 0.1% | (1.1%) | 4.4% | 0.6% |
- Like-for-like - Like-for-like excluding wholesale | 0.2% 0.9% | 1.9% 2.5% | 1.3% 1.7% | 0.2% 0.9% | 5.6% 6.7% | 2.5% 4.4% |
Rest of Europe | ||||||
- Total (in local ccy) | (5.3%) | (7.5%) | (6.7%) | (8.0%) | (10.2%) | (10.1%) |
- Like-for-like (in local ccy) | (5.3%) | (7.7%) | (6.8%) | (8.0%) | (10.2%) | (10.5%) |
- Total (in GBP)
| (8.5%) | (6.3%) | (7.4%) | (4.7%) | (7.3%) | (14.8%) |
Group Sales (in GBP)
|
(2.2%) |
(0.5%) |
(1.1%) |
(1.7%) |
2.1% |
(2.3%) |
Appendix 2: Store portfolio
Current Financial Year | Previous Financial Year | |||||||
Store portfolio | 22 March 2014 | 25 January 2014 (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 | 4,047 | 457 | 4,045 | 460 | 4,117 | 462 | 4,124 |
Concessions | 15 | 20 | 16 | 29 | 16 | 29 | 16 | 29 |
Total | 472 | 4,067 | 473 | 4,074 | 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
|
614 |
5,633 |
615 |
5,640 |
618 |
5,712 |
620 |
5,719 |