UCG.L Regulatory News (UCG)

United Carpets Group plc

Trading update

United Carpets Group plc ("the Group" or "the Company" or "United Carpets"), the specialist retail carpet and floor covering operator, announces the following trading update in respect of the year ended 31 March 2012 and the period since the year end.

The difficult market environment, uncertainty surrounding the economic recovery and the outlook for Europe that was noted at the time of the Company's interim announcement has continued. As a consequence, apart from occasional, short-lived, promotion-led activity, trading for retailers generally and for "big ticket" retailers in particular has been extremely challenging.

This challenging environment has led to a significant proportion of our franchise network finding it increasingly difficult to operate satisfactorily, with particular issues in meeting their liabilities to creditors and the Group. These difficulties are occurring despite the considerable investment made by the Group in technology to provide detailed information on footfall and conversion rates to improve marketing effectiveness and retail performance, wide reaching changes to the retail operations management structure and substantial ongoing financial support from the Group.

As a consequence, since the year end it has been necessary to terminate a number of franchises. This is likely to have a detrimental affect on the performance of the Group as it is proving increasingly challenging in the current environment to turnaround failing stores.

The Board has resolved to review a number of stores in order to ascertain whether they can remain viable under the current franchise model. The purpose of any rationalisation of the Group's store portfolio would be to meet the more stringent criteria which it is felt are required to trade successfully in these difficult times and to prevent an accumulation of poorly performing stores creating an unsustainable financial burden on the Group.

The Board will also consider the impact of such a review on the Group's results for the year ended 31 March 2012. Whilst such impact could be material, the Board anticipates that, with appropriately adjusted central costs, the continuing core of locations will be able to operate successfully on an ongoing basis. In light of this review, it is proposed that the preliminary results, incorporating the outcome of the review, will be announced in late August 2012.

Enquiries:

United Carpets 01709 732 666

Paul Eyre, Chief Executive

Ian Bowness, Finance Director

Cardew Group 020 7930 0777

Tim Robertson

Seymour Pierce

Jonathan Wright 020 7107 8000