25 Oct 2016 07:00
Carpetright plc
Trading Update
& Analyst Site Visit
Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces an update on trading for the 25 weeks ended 22 October 2016.
Highlights
· The Group's full year profit expectations are unchanged. (note 1)
· UK
o Like-for-like sales down 2.9%. (notes 2, 3)
o Full year guidance of a decline in gross profit percentage revised to between 150 and 200 basis points, a combination of increased sourcing costs resulting from the devaluation of sterling, competitive market conditions and a mix impact.
o 49 stores now trading under the new brand identity, delivering sales growth above comparable stores in the rest of the estate.
o One store was opened and seven closed in the year to date, giving a net reduction of six leaving 429 trading locations.
· Rest of Europe
o In local currency terms, like-for-like sales in the Rest of Europe (Netherlands, Belgium and the Republic of Ireland) increased by 0.9%.
o Full year guidance of an increase in gross profit percentage maintained at between 100-150 bps.
o During the period, four stores were opened and four closed leaving 137 trading locations.
Wilf Walsh, Chief Executive, said:
"Trading conditions in the UK in the first half reflect variable consumer demand and increased competitive pressures. Against this background, our plan to revitalise the UK business remains on track and we are now almost halfway towards our target of 100 store refurbishments in the current financial year, with investment in the first half weighted to the latter part of the period.
"The initial trading performance of these newly refurbished stores has been encouraging - they are outperforming comparable stores in the estate, giving us confidence that where we invest we are able to drive a material improvement in performance. In addition, the introduction of new hard flooring sections in 26 stores, has contributed to a 15% increase in laminate/luxury vinyl tile sales. We continue to make progress with our plans to reduce property costs.
"Trading in the Rest of Europe continues to improve and is a little ahead of our expectations.
"As we enter the second half, we are looking forward to implementing the next phase of our refurbishment and rebranding programme as we continue our drive to update and revitalise the business. With the benefit of recent UK investment expected to flow through as the second half progresses, further significant refurbishment work already underway and a continued improvement in the Rest of Europe, our guidance for the year as a whole remains unchanged."
Site visit
Carpetright is hosting a site visit for analysts today to its recently refurbished stores at Croydon and Epsom, Surrey. Presentation materials from the visit will be available on http://www.carpetright.plc.uk/investors/ later today. No new material information will be provided.
The Group will report its interim results for the first half of the current financial year on Tuesday, 13 December 2016.
For further enquiries please contact:
Carpetright plc
Wilf Walsh, Chief Executive
Neil Page, Chief Financial Officer
Tel: 01708 802000
Citigate Dewe Rogerson
Kevin Smith / Nick Hayns
Tel: 020 7638 9571
Further information on Carpetright plc, including an alert service for latest company news, can be found at http://www.carpetright.plc.uk/
A copy of this trading statement will be available on our website from 7.00am today.
Notes
1. Consensus for the year ending 29 April 2017 is for Group underlying profit before tax to be £18.5m, with a range from £15.2m to £20.5m.
2. Sales represents amounts payable by customers for goods and services before deducting VAT and other charges.
3. Like-for-like sales calculated as this year's sales compared to last year's 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.
4. There have been no significant changes to the Group's financial position during the period.
Notes to Editors
Carpetright plc is Europe's leading specialist floor coverings and beds retailer. Since the first store was opened in 1988 the business has developed both organically and through acquisition within the UK and other European countries. The Group is organised into two geographical regions, the UK and the Rest of Europe (comprising The Netherlands, Belgium and the Republic of Ireland).
Appendix 1: Group Sales
| Current Financial Year | Previous Financial Year | |
| 25 weeks to 22 Oct 2016 | 26 weeks to 31 Oct 2015 | 52 weeks to 30 April 2016 |
UK |
|
|
|
- Total | (5.5%) | 2.6% | (1.3%) |
- Like-for-like | (2.9%) | 3.7% | 2.8% |
Rest of Europe |
|
|
|
- Total (in local currency) | (0.2%) | 5.5% | 4.9% |
- Like-for-like (in local currency) | 0.9% | 5.5% | 4.8% |
- Total (in GBP)
| 15.2% | (5.0%) | (1.2%) |
Group Sales (in GBP)
|
(2.7%) |
1.4% |
(1.3%) |
Appendix 2: Store portfolio
| Current Financial Year | Previous Financial Year | ||||
Store portfolio | 22 Oct 2016 | Interim 31 Oct 2015
| Year end 30 April 2016 | |||
| Stores | Sq ft '000 | Stores | Sq ft '000 | Stores | Sq ft '000 |
UK |
|
|
|
|
|
|
Standalone | 415 | 3,678 | 425 | 3,799 | 420 | 3,734 |
Concessions | 14 | 26 | 13 | 19 | 15 | 29 |
Total | 429 | 3,704 | 438 | 3,818 | 435 | 3,763 |
Europe |
|
|
|
|
|
|
Republic of Ireland | 21 | 157 | 22 | 162 | 21 | 157 |
Netherlands | 93 | 962 | 94 | 1,044 | 93 | 985 |
Belgium | 23 | 236 | 22 | 247 | 22 | 245 |
Total | 137 | 1,356 | 138 | 1,453 | 137 | 1,387 |
Total Group
|
566 |
5,060 |
576 |
5,271 |
572 |
5,140 |