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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| United Carpets Group Plc | LSE:UCG | London | Ordinary Share | GB00B05J4D26 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.05 | 0.10 | 10.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMUCG
RNS Number : 8995E
United Carpets Group plc
22 July 2016
22 July 2016
UNITED CARPETS GROUP PLC
Unaudited Preliminary Results for the year ended 31 March 2016
United Carpets Group plc ("the Group" or "the Company" or "United Carpets"), the second largest chain of specialist retail carpet and floor covering stores in the UK, today announces its preliminary results for the year ended 31 March 2016.
Highlights
-- Network sales* were GBP56.1m (31 March 2015: GBP54.2m) -- Like for like sales* increased by 5.8% -- Revenue for the year was GBP21.4m (31 March 2015: GBP20.1m) -- Profit before tax was GBP1.49m (31 March 2015: GBP1.21m) -- Earnings per share were 1.51p (31 March 2015: 1.36p) -- Store numbers maintained at 61 -- Purchase of 3 freehold properties for GBP1.0m
-- Special dividend of 1.0p per share paid 19 June 2015 and interim dividend of 0.125p per share (31 March 2015: nil) paid 22 January 2016
-- Recommending a final dividend of 0.265p per share (31 March 2015: 0.25p per share) payable on 14 October 2016
-- After dividend payments and property acquisition, net funds were GBP1.59m (31 March 2015: GBP2.53m)
*Network sales and like for like sales are defined under Financial Review
Paul Eyre, Chief Executive, said:
"Our trading performance for these 12 months has been good, building upon the momentum begun in the previous year. We achieved a like for like sales increase of 5.8% across the business demonstrating sound underlying trading which led to a 23% increase in profit before tax. The Group continues to be virtually debt free, cash generative and is growing organically at a sustainable rate. The Board therefore believes the Group to be well positioned to continue this progress supported by a store network that is in good shape."
Enquiries:
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Premium
United Carpets Group plc
Paul Eyre, Chief Executive
Ian Bowness, Finance Director 01709 732
666
Novella Communications Ltd
Tim Robertson
Toby Andrews 020 3151 7008
Cantor Fitzgerald Europe
Marc Milmo, Catherine Leftley (Corporate
Finance)
David Banks (Sales) 020 7894 7000
Chairman's statement
I am pleased to be able to report on an encouraging period of trading for the Group. During the 12 months to 31 March 2016, while the store network remained the same size the Group generated significant increases in revenue and profit before tax, up 6% and 23% respectively. The new financial year has also begun positively and as a result, the Board is recommending an increased final dividend.
At 31 March 2016, the store network totalled 61 (2015: 61) of which 52 were franchised (2015: 47) and 9 were corporate stores (2015: 14).
In the Board's view, demand from our target customers has improved during the 12 months under review, benefiting from a modest increase in consumer confidence. Whilst uncertainty over the outcome of the EU referendum had a negative effect on wider consumer confidence more recently, we believe that market conditions continued to be broadly positive. It will take some time to assess the real impact of the decision to leave the EU, however, the housing market in our core areas appears to have been generally moving forwards a little which may bring some additional benefits to our traditional growth drivers of renovations and home improvements.
Financial review
Network sales across the Group, including the value of retail sales by our franchisees (to give a measure of the Group's turnover on a more comparable basis to a conventional retailer), were GBP56.1m (2015: GBP54.2m). Revenue, which includes marketing and rental costs incurred by the Group and recharged to franchisees, was GBP21.4m (2015: GBP20.1m).
Like for like sales across the whole of the network (based on stores that have traded throughout both the period under review and the corresponding period in the prior year and thus excluding stores that closed during either period) were up 5.8%. This was a pleasing result given it is against an improved performance in the prior year and was again helped by a significant increase in the sale of beds.
Gross margin was 63.8% compared to 64.3% in the prior year primarily reflecting the change in the mix of revenue between Franchising and Retail and Warehousing.
Distribution costs and administrative expenses, which include rent, rates and staff costs at the corporate stores, increased by GBP0.4m largely due to increased marketing expenditure. Distribution costs and administrative expenses decreased from 58.8% of revenue to 57.2% principally reflecting the reduction in the proportion of revenue derived from corporate stores.
Profit before tax was GBP1.49m (2015: GBP1.21m) and earnings per share was 1.51p (2015: 1.36p).
The statement of financial position included net funds of GBP1.59m at 31 March 2016 (31 March 2015: GBP2.53m). This is after the purchase of GBP1.0m of freehold properties and the payment of a special dividend of 1.0p per share in June 2015 and reflects the cash generative nature of the business.
Dividend
As part of the Board's intention to pay a progressive dividend broadly in line with the future growth of the business, the Board is pleased to be recommending a final dividend of 0.265p per share. Subject to approval at the Annual General Meeting, this dividend will be paid on 14 October 2016 to all shareholders on the register at the close of business on 30 September 2016. The ex-dividend date will be on 29 September 2016.
Operations review
The Group's store network is in good shape with the great majority of stores performing satisfactorily or better. The number of stores remained the same during the financial year totalling 61 although the mix between the number of corporate and franchise stores did change.
At 31 March 2015, there were 61 stores of which 47 were franchised and 14 were corporate stores. Over the following 12 months, 7 corporate stores were matched with new or existing franchisees, 3 franchised stores became corporate stores, 1 new store opened as a franchise and 1 corporate store closed. As a result, at the end of the financial year, the Group had 61 stores of which 52 were franchised and 9 were corporate. In addition, 2 franchised stores and a corporate store were re-located to new sites within their towns. Since the year end, the Group has closed a corporate store and re-located 2 franchised stores to new sites within their towns so currently the store network stands at 60.
There are few underperforming stores in the portfolio now and, subject to Brexit uncertainties, market conditions in our core areas remain generally positive. The Group is therefore again looking at selectively expanding the network while being extremely focused on supporting the core portfolio. Two of the recent re-locations have been to slightly more prominent positions within their towns and results to date have been generally encouraging. The Group is looking for a small number of similar opportunities as they arise to test further the success of such switches.
Supporting the United Carpets franchise network is a primary management focus. The Group is significantly extending the training programme organised for franchisees and corporate stores with the emphasis on customer service and ways to enhance the shopping experience of each store visit. Alongside this, the Group continues to support the network with a centralised programme of marketing, underpinning awareness of the brand and group-wide offers on specific products designed to increase footfall across the store network.
Franchising and Retail
Floor coverings are the Groups' primary driver of sales (predominantly carpet, laminate and vinyl floorings) through both franchised stores and the Group's own corporate stores. The period under review reflected a solid retail performance, with sales up 4.3% on a like for like basis and underpinned by a general improvement in consumer sentiment and the increasing strength of the store network. Trends in fashion are monitored continuously resulting in new products and reflecting the shift in tastes from beige to grey.
Particularly pleasing has been the performance of beds sales which historically has tended to underperform its potential. On a like for like basis beds sales were up 27.2% and while still a small part of the overall sales of the Group, the Board believe the combination of selling flooring and beds works well together and there remains significant further upside to be had from the sale of beds across the Group.
Warehousing
Our in-house cutting operation continues to support the whole network and a small number of third parties, providing a quick, efficient cutting and delivery service enabling attractive retail price points with good margins. Combining the separate Flooring and Beds warehouses into one location and improvements to the infrastructure increased efficiencies and enabled 7 day a week cover for Beds home deliveries. Together with the introduction of new products, like luxury vinyl tiles, this led to our Warehousing division being voted "Most Improved Supplier" by the store network in March 2016.
Property
A unique opportunity arose during the period to acquire the freehold of 2 of the Group's long established stores. Rather than allow ownership to pass to a competitor, the Company acquired the 2 sites plus a further non-core site for GBP1.0m in February 2016. It is the Group's intention to sell the non-core site in due course.
People
As always the Board would like to thank all of its franchisees, suppliers, employees and other stakeholders connected to the Group directly and indirectly for their contribution to the business and looks forward to continuing to work together in the future.
I am delighted to welcome Paul Newton to the Board. Paul has worked in the flooring sector for some 31 years and has been Operations Director at United Carpets since September 2011. He is responsible for the retail operations of the Group's network of corporate and franchised stores and Paul has made a significant contribution to the recent performance of the Group.
Outlook
Like for like sales for the 15 weeks since the period end to 14 July 2016 have continued to be positive.
The business is in good shape as shown by the positive trading performance driven by a generally improving market environment and the gradual transformation of the Group's store portfolio over the last 3 years creating a stronger base from which to develop. While uncertainties surrounding the decision to leave the EU are likely to continue for some time, the Board are confident the Group can continue to progress in the current environment. The medium term priorities will continue to be to selectively expand the store network whilst safeguarding the core business with the aim of generating consistent and increasingly attractive returns for shareholders.
Peter Cowgill
Chairman
Preliminary announcement of results for the year ended 31 March 2016
Consolidated statement of comprehensive income
Year Year
ended ended
31 March 31
Note 2016 March
2015
As restated
GBP'000 GBP'000
Revenue 2 21,369 20,133
Cost of sales (7,730) (7,195)
Gross profit 13,639 12,938
Distribution costs (299) (334)
Administrative expenses (11,925) (11,495)
Other operating income 63 98
Operating profit 1,478 1,207
Financial income 12 7
Financial expenses (3) (3)
Profit before tax 1,487 1,211
Income tax expense 3 (258) (104)
Profit for the year* 1,229 1,107
Earnings per share 4
- Basic (pence per share) 1.51p 1.36p
- Diluted (pence per share) 1.49p 1.36p
*All activities relate to continuing operations and are attributable to the owners of the parent.
There were no items of other comprehensive income and therefore no separate section of other comprehensive income has been presented.
Preliminary announcement of results for the year ended 31 March 2016
Consolidated statement of financial position
At 31 At 31
March March
2016 2015
GBP'000 GBP'000
Non-current assets
Property, plant
and equipment 2,105 1,122
Investment property 100 -
Deferred tax assets 208 231
2,413 1,353
Current assets
Inventories 1,628 1,374
Trade and other
receivables 2,651 2,363
Current tax debtor - 123
Cash and cash
equivalents 1,671 2,610
5,950 6,470
Total assets 8,363 7,823
Capital and reserves
Issued capital 814 814
Retained earnings 3,361 3,251
Total equity attributable
to owners of the
parent 4,175 4,065
Non-current liabilities
Borrowings - finance
leases 24 44
Trade and other
payables 640 394
Provisions - 144
664 582
Current liabilities
Borrowings - finance
leases 52 38
Trade and other
payables 2,984 3,034
Provisions 240 104
Current tax liabilities 248 -
3,524 3,176
Total liabilities 4,188 3,758
Total equity and
liabilities 8,363 7,823
Preliminary announcement of results for the year ended 31 March 2016
Consolidated statement of changes in equity
Total equity
attributable
Issued Share Retained to owners
capital premium earnings of the parent
GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2014 4,070 1,106 (2,218) 2,958
Profit for the year - - 1,107 1,107
Capital restructuring (3,256) (1,106) 4,362 -
At 31 March 2015 814 - 3,251 4,065
Profit for the year - - 1,229 1,229
Equity dividends paid - - (1,119) (1,119)
At 31 March 2016 814 - 3,361 4,175
Following approval by shareholders on 20 August 2014 and by the High Court on 17 September 2014, the nominal value of the Company's issued share capital was reduced from 5p to 1p each and the share premium reserve was cancelled.
Preliminary announcement of results for the year ended 31 March 2016
Consolidated statement of cash flows
Year Year
ended ended
31 March 31 March
Note 2016 2015
GBP'000 GBP'000
Cash flows from operating
activities
Cash generated from operations 6 1,396 1,720
Interest paid (3) (3)
Income tax received/(paid) 136 (198)
Net cash flows from operating
activities 1,529 1,519
Cash flows from investing
activities
Acquisition of property,
plant and equipment (1,216) (562)
Acquisition of investment
property (100) -
Proceeds from sale of property,
plant and equipment 5 23
Interest received 12 7
Net cash flows from investing
activities (1,299) (532)
Cash flows from financing
activities
Payment of finance lease
liabilities (50) (55)
Equity dividends paid (1,119) -
Net cash flows from financing
activities (1,169) (55)
(Decrease)/increase in
cash and cash equivalents
in the year (939) 932
Cash and cash equivalents
at the start of the year 2,610 1,678
Cash and cash equivalents
at the end of the year 1,671 2,610
Preliminary announcement of results for the year ended 31 March 2016
Notes to the preliminary announcement
1. Basis of preparation
The financial information contained in this unaudited preliminary announcement does not constitute accounts as defined by section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2015 is derived from the statutory accounts for that period which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The statutory accounts for the year ended 31 March 2016 will be finalised based on the information in this unaudited preliminary announcement and will be delivered to the Registrar of Companies in due course. The Group has prepared its consolidated financial statements for the year ended 31 March 2016 in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The accounting policies applied are consistent with those included in the financial statements of the Group for the year ended 31 March 2015.
A number of reclassifications between revenue, cost of sales and administrative expenses have been made in the consolidated statement of comprehensive income in the year which are considered to better reflect the Group's operations. There is no (2015: GBPnil) impact on reported profits. The prior year numbers have been restated to ensure comparability with an increase in revenue of GBP1,067,000 (2015: GBP992,000), increase in cost of sales of GBP915,000 (2015: GBP849,000) and an increase in administrative expenses of GBP152,000 (2015: GBP143,000).
2. Segment reporting
Segment information is presented in the financial statements in respect of the Group's business segments, which are the primary basis of segment reporting. The business segment reporting format reflects the Group's management and internal reporting structure.
Franchising and Retail is the income that the Group receives from its franchise activities together with the results of its corporate stores. Warehousing reflects the results of the Group's in-house cutting operation which services the franchised and corporate stores and a small number of third parties. The Property division leases properties from third parties and sublets those to the store network.
Inter-segment pricing is determined on an arm's length basis. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Franchising Warehousing Property Consolidated
and Retail
Year
Year ended
ended 31 March
31 March 2015
2016 2015 2016 2015 2016 2015 2016 As restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gross sales 13,004 12,636 8,393 7,521 3,076 2,917 24,473 23,074
Inter-segment - - (2,426) (2,255) (678) (686) (3,104) (2,941)
sales ____ ____ ____ ____ ____ ____ ____ ____
Segment 13,004 12,636 5,967 5,266 2,398 2,231 21,369 20,133
revenue ____ ____ ____ ____ ____ ____ ____ ____
Segment 1,005 724 311 174 31 135
results ____ ____ ___ ____ ___ ____ 1,347 1,033
Unallocated
income 68 76
Other operating 63 98
income ____ ____
Operating
profit 1,478 1,207
Financial
income 12 7
Financial
expenses (3) (3)
Income (258) (104)
tax expense ____ ____
Profit 1,229 1,107
for the _____ _____
year
Preliminary announcement of results for the year ended 31 March 2016
Notes to the preliminary announcement (continued)
3. Income tax expense
Analysis of charge for the year:
Year Year
ended ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Current tax:
Current year 269 120
Adjustment in respect
of prior periods (34) (181)
---------- ----------
235 (61)
Deferred tax:
Current year 41 131
Adjustment in respect
of prior periods (18) 34
---------- ----------
Total income tax expense
recognised in the current
year 258 104
========== ==========
The acquisition of the trade from a connected company gave rise to a deferred tax asset in United Carpets (Franchisor) Limited. The prior period adjustments in the comparative year principally reflects a re-assessment of the estimate of that deferred tax asset.
The tax charge for the year differs to the standard rate of corporation tax in the UK of 20% (2015: 21%). The differences are explained below:
Year Year
ended ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Profit before tax 1,487 1,211
Profit before tax multiplied by
the rate of corporation tax in
the UK of 20% (2015: 21%) 297 254
Effect of:
Expenses not deductible for tax
purposes 12 10
Prior period adjustments (52) (147)
Other 1 (13)
Total tax 258 104
================ ===========
4. Earnings per share
Basic earnings per share
The calculation of basic earnings per share for the year ended 31 March 2016 was based on the profit attributable to ordinary shareholders of GBP1,229,000 (2015: GBP1,107,000) and a weighted average number of ordinary shares outstanding during the year ended 31 March 2016 of 81,400,000 (2015: 81,400,000).
Preliminary announcement of results for the year ended 31 March 2016
Notes to the preliminary announcement (continued)
4. Earnings per share (continued)
Diluted earnings per share
The calculation of diluted earnings per share for the year ended 31 March 2016 was based on the profit attributable to ordinary shareholders of GBP1,229,000 (2015: GBP1,107,000) and a weighted average number of ordinary shares outstanding and potential ordinary shares due to options during the year ended 31 March 2016 of 82,286,571 (2015: 81,400,000).
5. Equity dividends
Year Year
ended ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Special dividend paid during the 814 -
year on ordinary shares of 1.0p per
share
Final dividend in respect of 2014/15 203 -
paid during the year on ordinary
shares of 0.25p per share
Interim dividend in respect of 2015/16 102 -
paid during the year on ordinary
shares of 0.125p per share
1,119 -
============ ===========
A final dividend of 0.265p per share in respect of the year ended 31 March 2016 has been recommended.
6. Cash generated from operations
Year Year
ended ended
31 March 31 March
2016 2015
GBP'000 GBP'000
Profit before tax 1,487 1,211
Depreciation and other non-cash items:
Depreciation of property, plant
and equipment 208 138
Impairment of property, plant and 62 -
equipment
Loss/(profit) on disposal of property,
plant and equipment 2 (17)
Changes in working capital:
Increase in inventories (254) (274)
(Increase)/decrease in trade and
other receivables (288) 265
Increase in trade and other payables 196 153
(Decrease)/increase in provisions (8) 248
Financial income (12) (7)
Financial expenses 3 3
------------ -----------
Cash generated from operations 1,396 1,720
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SESFDFFMSEEW
(END) Dow Jones Newswires
July 22, 2016 02:00 ET (06:00 GMT)
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