3rd Quarter Results (4343W)

TIDMCPR

RNS Number : 4343W

Carpetright PLC

31 January 2012

Embargoed until 7am, 31 January 2012

31 January 2012

Carpetright plc

Interim Management Statement

Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces its trading update for the 12 weeks ended 21 January 2012.

Highlights

   --    Group sales(1) declined by 3.8%. 
   --    Sales in the UK declined by 4.8%, with like-for-like sales(2) down 0.5%. 

-- In local currency terms, total sales in Rest of Europe (The Netherlands, Belgium and the Republic of Ireland) decreased by 0.1% with like-for-like sales up 0.3%. After allowing for the movement in exchange rates, this translates to a total sales increase in Rest of Europe of 1.1%.

-- Whilst self-help initiatives are improving the Group's performance, based on the current pace of sales and margin improvement, full year underlying pre-tax profit is expected to be slightly below the lower end of current market expectations.

   --    Year end net debt expected to be around GBP43m (2011: GBP65.7m). 
 
                                     12 weeks to        38 weeks to 
                                 21 January 2012    21 January 2012 
                               ----------------- 
 Group Sales                              (3.8%)             (4.1%) 
 
 UK 
 - Total                                  (4.8%)             (5.3%) 
 - Like-for-like                          (0.5%)             (1.7%) 
 
 Rest of Europe 
 - Total (in GBP)                           1.1%               1.7% 
 - Total (in local currency)              (0.1%)             (1.8%) 
 - Like-for-like (in local 
  currency)                                 0.3%             (1.3%) 
-----------------------------  -----------------  ----------------- 
 

Lord Harris of Peckham, Chairman and Chief Executive, said:

"Tough trading conditions in the UK persisted in the third quarter of our financial year with fragile consumer confidence producing a difficult floor coverings market. We have said in the past that the like-for-like sales performance has been volatile, and this continues to be the case, with volumes remaining sensitive to levels of promotional discounting. Excluding sales from our insurance replacement business, which has been disappointing, our core retail business would have reported like-for-like growth of 1.0%.

"Against this tough backdrop we have continued to focus on a range of self-help initiatives and have made progress in each of these areas. The response to the re-launch of our bed proposition in January was encouraging and we have completed the refurbishment of 27 stores, which are delivering good growth. The gross profit margin decline seen the in first half was 430 basis points. This is expected to moderate to around 300 basis points in the second half, slightly down on our previous expectation, reflecting the continued need to drive value for the consumer to maintain sales momentum. We have continued to take a determined approach to reducing the cost base and expect this to be down by approximately GBP5m year on year, in line with our previous expectations.

"We are delighted that the actions taken in our Rest of Europe operations are now delivering growth in like-for-like sales and an improvement in profitability. We are particularly pleased with the success of the recovery plan in the Republic of Ireland.

"In this current environment, predicting the final outcome for the year with any accuracy is difficult. The result for the year will depend on our performance in the final quarter when we see some weak comparatives but, with sales volatility continuing to impact on the pace of margin improvement, we expect underlying pre-tax profits for the full year will be slightly below the lower end of the current range of market expectations. We expect the year end net debt to be significantly down on the previous year, at around GBP43m.

"Looking forward, I see no respite from the challenging environment over the next 12 months but remain confident the Group will emerge in a strong position to deliver future growth once consumer demand improves."

The Group will report its usual year end pre-close trading update on Tuesday 24 April 2012 in advance of its year end on 28 April 2012.

Analyst conference call

Lord Harris will host a conference call for analysts at 8.00am GMT today.

The dial in number is [phone] with the passcode 374 6482

Thereafter, for further enquiries please contact:

Carpetright plc

Lord Harris of Peckham, Chairman and Chief Executive

Neil Page, Group Finance Director

Tel: [phone]

Citigate Dewe Rogerson

Kevin Smith / Lindsay Noton

Tel: [phone]

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 divided by 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.

4. Certain statements in this report are forward looking. Although the Group believes that the expectations reflected in these forward looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements contain risks and uncertainties, actual results may differ materially from those expressed or implied by these forward looking statements. We undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

Appendix 1: Store portfolio

 
 Store portfolio                 21 Jan 2012         29 Oct 2011         30 April 2011 
                            -------------------  -------------------  ------------------- 
                             Sites   Sq Ft '000   Sites   Sq Ft '000   Sites   Sq Ft '000 
--------------------------  ------  -----------  ------  -----------  ------  ----------- 
 UK 
      Standalone               479        4,273     480        4,275     497        4,416 
      Concessions               22           44      23           46      42           98 
 Total                         501        4,317     503        4,321     539        4,514 
--------------------------  ------  -----------  ------  -----------  ------  ----------- 
 Rest of Europe 
      Republic of Ireland       20          147      20          147      20          145 
      The Netherlands           93        1,088      92        1,078      92        1,078 
      Belgium                   28          329      28          329      28          335 
 Total                         141        1,564     140        1,554     140        1,558 
--------------------------  ------  -----------  ------  -----------  ------  ----------- 
 Total Group                   642        5,881     643        5,875     679        6,072 
--------------------------  ------  -----------  ------  -----------  ------  ----------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

QRTLLFFALAIIVIF