UCG.L Regulatory News (UCG)

24 February 2014

UNITED CARPETS GROUP PLC

("the Group" or "the Company" or "United Carpets"),

TRADING UPDATE

United Carpets, the UK's second largest chain of specialist retail carpet and floor covering stores, is pleased to announce that trading, in the second half of the current financial year, has been better than expected.

On a like for like basis, sales for the 21 weeks of our second half to date are up 5.4% against the comparable period last year. Whilst encouraging, the trading improvement should be viewed in the context of a weaker trading period last year which was affected by heavy snowfall.

Notwithstanding this, the positive trading performance shows the benefits of the actions taken to restructure the business. During 2012, the Group decided to close a significant proportion of its store base and re-evaluate the business, to create a smaller entity, better able to operate successfully in the current retail environment. The restructuring was implemented over the latter half of 2012 and during 2013 and, whilst a small amount of rationalization is still ongoing, this has resulted in a reduction in the number of stores from 85 to 59 today of which 48 are franchised and 11 are corporate stores. The core store network has responded well to the changes and is showing the benefits of the restructuring, particularly in the last few months.

The Board also believes there has been a slight improvement in confidence amongst consumers, however the overall market still remains very challenging. Our core combination of providing high quality and good value flooring ranges together with a continued focus on improving the instore customer experience is producing positive results.

Consequently, the Board now expect its final results for the year ended 31 March 2014 to be materially better than market expectations.

Paul Eyre, Chief Executive, said: "We have been encouraged with trading in the early part of this calendar year which will flow through to better than expected year end numbers. The changes we have made have transformed our business and with the economy as a whole appearing to move in the right direction, I am increasingly optimistic about the future."

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