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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 : 4254J
United Carpets Group plc
18 December 2015
18 December 2015
UNITED CARPETS GROUP plc
Interim results for the 6 month period ended 30 September 2015
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 interim results for the 6 month period ended 30 September 2015.
Key points
-- Network sales* were GBP27.1m (2014: GBP25.6m) -- Revenue was GBP10.1m (2014: GBP9.1m) -- Like for like sales* increased by 5.0% -- Underlying operating profit increased 15.0% to GBP583,000 (2014: GBP507,000) -- Profit before tax increased 10.1% to GBP588,000 (2014: GBP534,000) -- Earnings per share increased 45.2% to 0.61p (2014: 0.42p) -- Cash and cash equivalents increased to GBP2.2m (2014: GBP1.8m) -- Special dividend of 1.0p per share paid 19 June 2015 -- Interim dividend of 0.125p per share payable 22 January 2016 -- Like for like sales* since the period end remain positive against tough comparatives
* Network sales and like for like sales are defined under financial review
Paul Eyre, Chief Executive, said:
"The period under review has been characterised by improvements to revenue and profitability across the Group. We continue to benefit from a reasonable market environment which has improved the returns we have made from our 61 strong portfolio of stores. With consumer confidence and the housing sector showing signs of a generally improving trend, the Board is confident in the long term prospects for the Group."
Enquiries:
United Carpets Group plc Paul Eyre, Chief Executive Ian Bowness, Finance Director 01709 732 666 Novella Communications Ltd Tim Robertson Ben Heath 020 3151 7008 Cantor Fitzgerald Europe Marc Milmo,Catherine Leftley (Corporate Finance) David Banks, Tessa Sillars (Corporate Broking) 020 7894 7000
Chairman's statement
With market conditions beginning to show some encouraging signs and the Group continuing to improve performance, I am pleased to report an increase in profit before tax of 10.1% compared to the same period in 2014, driven by an increase in network sales and revenue in the period.
We had a total of 62 stores at 30 September 2015 (2014: 58), with 48 of those franchised (2014: 47) and 14 corporate (2014: 11). Since the period end, a further 5 of our corporate stores have been franchised so that today there are 53 franchised stores.
The housing market continues to show generally improving levels of activity with demand tending to exceed supply. The current low interest environment looks unlikely to change imminently and when it does it is forecast to be gradual. As a consequence we expect this will help to further support current levels of market activity with consumers looking to refurbish their new homes.
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 GBP27.1m (2014: GBP25.6m). Revenue, which as in previous years includes marketing and rental costs incurred by the Group and recharged to franchisees, was GBP10.1m, an increase of 11% on the same period in 2014.
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 5.0%, a significant improvement over like for like performance in previous years.
Gross margin was 63.9% compared to 65.3% in the same period in 2014 reflecting an increase in the average number of corporate stores. Underlying gross margins were very similar to the same period in 2014. Distribution costs and administrative expenses excluding exceptional items were 58.6% of revenue, a reduction from 60.2% in the same period last year. The improvement arose from further savings in the ongoing costs of supporting the franchise network as a result of improving performance together with increased distribution efficiencies.
Operating profit increased by 9.8% to GBP583,000 (2014: GBP531,000), while underlying operating profit (excluding the costs of reducing the number of operational stores, net gains arising in relation to the Group reorganisation and other exceptional income in the same period in 2014) increased by 15.0% to GBP583,000 (2014: GBP507,000).
Profit before tax increased to GBP588,000 (2013: GBP534,000) and, as a result of a reduction in the effective tax rate compared to the same period in 2014, basic earnings per share improved by 45.2% to 0.61p (2014: 0.42p).
Cash and cash equivalents in the period were GBP2.2m at 30 September 2015 (2014: GBP1.8m).
Dividend
As announced by the Board on 22 May 2015, a special dividend of 1.0 pence per share was paid on 19 June 2015 to all shareholders on the register on the relevant date.
The Board recommends an interim dividend of 0.125 pence per share to be paid on 22 January 2016 to all shareholders on the register at the close of business on 8 January 2016. The ex-dividend date will be on 7 January 2016.
Operations review
At the start of the period under review, there were 61 stores of which 47 were franchised and 14 were corporate stores. The size of the network remained largely unchanged with 62 stores at the period end being 48 franchised stores and 14 corporate stores. During the period, we opened 3 new stores, 2 of which were relocations within towns where we had existing stores.
Since the period end, 2 existing, experienced franchisees have expanded their respective portfolios of franchised stores and taken on a further 5 corporate stores as franchises. One store has been closed and one re-located so that today, the total number of stores is back to 61. With 53 franchises and 8 corporate stores the network is approaching the optimum balance between the two categories.
The general performance across the network has progressed further and the number of underperforming stores continues to reduce. As always, the management team are working on strategies to improve performance and further closures are now expected to be quite limited in number.
The United Carpets brand continues to be promoted across a range of media, including print and television, with the unique offering and competitive pricing being a focus.
Franchising and Retail
Floor coverings are the Group's primary driver of sales (predominately carpet, laminate, and vinyl flooring) through both franchised stores and the Group's own corporate stores. On a like for like basis, Flooring sales improved by 3.1% over the period, representing a sound performance against modest comparatives.
Bed sales have continued their more recent success story with a double digit like for like increase during the period. It has long been a management focus to improve the performance of bed sales and while this was against relatively soft comparisons last year, the trend is very positive confirming that the sale of beds alongside carpets is a good fit.
Warehousing
Revenue from our in-house cutting operation has increased by 11% to GBP2.78m (2014: GBP2.51m). The service is quick and efficient and offers support to the entire network of franchise and corporate stores. The increase in revenue reflects the increase in consumer confidence and the more buoyant market conditions when compared to the same period in the previous year.
Property
The property division leases properties from third parties and sublets those properties to the store network. Some temporarily favourable rent arrangements which benefitted the same period in 2014 have come to an end and a small amount of cost previously borne by Franchising and Retail is now more appropriately included within Property.
People
As ever, the Board would like to thank all the franchisees, suppliers, employees and other stakeholders in United Carpets for their continued support and hard work. We look forward to working together towards completing another successful year for the business.
Outlook
Like for like sales since the period end remain positive against much tougher comparatives in the second half of last year and the Group appears well positioned to complete this financial year successfully. The business is transitioning from a period of retrenchment to the next phase of growth from a sustainable base. The Group has negligible borrowings, the network of stores continues to strengthen, the market is showing greater stability and there are opportunities, if carefully selected, to increase revenues be it through new stores or new marketing initiatives. Overall, the Board remains confident that the Group will continue to generate improving returns for shareholders.
Peter Cowgill
Chairman
18 December 2015
Independent review report to United Carpets Group plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the 6 month period ended 30 September 2015 which comprises the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
(MORE TO FOLLOW) Dow Jones Newswires
December 18, 2015 02:00 ET (07:00 GMT)
This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "'Review of Interim Financial Information performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing and presenting the half-yearly financial report in accordance with the AIM Rules for Companies issued by the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee pronouncements as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the presentation, recognition and measurement criteria of International Financial Reporting Standards and International Financial Reporting Interpretations Committee pronouncements, as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 6 month period ended 30 September 2015 is not prepared, in all material respects, in accordance with the presentation, recognition and measurement criteria of International Financial Reporting Standards and International Financial Reporting Interpretations Committee pronouncements, as adopted by the European Union, and the AIM Rules of the London Stock Exchange.
RSM UK Audit LLP
Chartered Accountants
Suite A, 7th Floor
City Gate East
Tollhouse Hill
Nottingham
NG1 5FS
18 December 2015
Consolidated statement of comprehensive income
For the 6 month period ended 30 September 2015
Hot Features
Premium
6 month 6 month Year
period ended period ended ended
30 September 30 September 31 March
2015 2014 2015
Note Unaudited Unaudited Audited
Total Total Total
GBP'000 GBP'000 GBP'000
Revenue 3 10,146 9,097 19,141
Cost of sales (3,659) (3,160) (6,346)
Gross profit 6,487 5,937 12,795
Distribution costs (139) (183) (334)
Administrative expenses (5,805) (5,272) (11,352)
Other operating income 40 49 98
Operating profit 2 583 531 1,207
Financial income 6 4 7
Financial expenses (1) (1) (3)
Profit before tax 588 534 1,211
Income tax expense 4 (90) (189) (104)
Profit for the period* 3 498 345 1,107
Earnings per share 6
- Basic (pence per share) 0.61p 0.42p 1.36p
- Diluted (pence per share) 0.61p 0.42p 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 statement of other comprehensive income has been presented.
Consolidated statement of financial position
As at 30 September 2015
At At At
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
Note Total Total Total
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 5 1,315 884 1,122
Deferred tax assets 153 298 231
1,468 1,182 1,353
Current assets
Inventories 1,332 1,276 1,374
Trade and other receivables 2,391 2,482 2,363
Current tax debtor - - 123
Cash and cash equivalents 2,166 1,831 2,610
5,889 5,589 6,470
Total assets 7,357 6,771 7,823
Capital and reserves
Issued capital 814 814 814
Retained earnings 2,935 2,489 3,251
Total equity attributable
to owners of the parent 3,749 3,303 4,065
Non-current liabilities
Borrowings - finance leases 50 63 44
Trade and other payables 441 372 394
Provisions 75 - 144
566 435 582
Current liabilities
Borrowings - finance leases 52 38 38
Trade and other payables 2,652 2,773 3,034
Provisions 193 - 104
Current tax liabilities 145 222 -
3,042 3,033 3,176
Total liabilities 3,608 3,468 3,758
Total equity and liabilities 7,357 6,771 7,823
Consolidated statement of changes in equity
For the 6 month period ended 30 September 2015
Issued Retained Total equity attributable
Note capital Share premium earnings to owners 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 period - - 345 345
Capital restructuring (3,256) (1,106) 4,362 -
At 30 September 2014 814 - 2,489 3,303
Profit for the period - - 762 762
At 31 March 2015 814 - 3,251 4,065
Profit for the period - - 498 498
Equity dividends paid 7 - - (814) (814)
At 30 September 2015 814 - 2,935 3,749
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.
Consolidated statement of cash flows
(MORE TO FOLLOW) Dow Jones Newswires
December 18, 2015 02:00 ET (07:00 GMT)
For the 6 month period ended 30 September 2015
6 month 6 month Year
period ended period ended ended
30 September 30 September 31 March
2015 2014 2015
Note Unaudited Unaudited Audited
Total Total Total
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 8 378 422 1,720
Interest paid (1) (1) (3)
Income tax recovered/(paid) 256 (5) (198)
Net cash flows from operating activities 633 416 1,519
Cash flows from investing activities
Acquisition of property, plant and
equipment (250) (241) (562)
Proceeds from sale of property, plant
and equipment 5 10 23
Interest received 6 4 7
Net cash flows from investing activities (239) (227) (532)
Cash flows from financing activities
Payment of finance lease liabilities (24) (36) (55)
Equity dividends paid (814) - -
Net cash flows from financing activities (838) (36) (55)
(Decrease)/increase in cash and cash
equivalents in the period (444) 153 932
Cash and cash equivalents at the
start of the period 2,610 1,678 1,678
Cash and cash equivalents at the
end of the period 2,166 1,831 2,610
------------- ------------- ---------
Notes to the condensed consolidated interim financial statements
1. Basis of preparation
United Carpets Group plc (the "Company") is a company domiciled in the United Kingdom. The condensed consolidated interim financial statements of the Company for the 6 month period ended 30 September 2015 comprise the Company and its subsidiary undertakings (together referred to as the "Group").
The Group financial statements for the year ended 31 March 2015 were prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee pronouncements as adopted by the European Union, approved by the Board of Directors on 2 September 2015 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) and 498(3) of the Companies Act 2006. These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. These condensed consolidated interim financial statements for the 6 month period ended 30 September 2015 are unaudited but have been reviewed by the auditors in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity' and their Independent Review Report is included within these statements.
The accounting policies applied are consistent with those of the financial statements for the year ended 31 March 2015 and those that are expected to be adopted in the financial statements for the year ending 31 March 2016.
The Group does not consider that any standards or interpretations issued by the International Accounting Standards Board (IASB) but not yet applicable will have a significant impact on the financial statements of the Group when the relevant standards come into effect for periods commencing on or after 1 April 2015.
2. Operating profit
Operating profit is arrived at after charging/(crediting):
6 month 6 month Year
period ended period ended
30 September ended 31 March
2015 30 September 2015
2014
GBP'000 GBP'000 GBP'000
Costs of reducing the number of operational - 27 -
stores
Net gains arising in the current period - (41) -
relating to the Group reorganisation
Other exceptional income - (10) -
Other exceptional income was a profit on disposal of property, plant and equipment.
3. Segment reporting
Segment information is presented in the condensed consolidated interim 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 properties 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.
Notes to the condensed consolidated interim financial statements (continued)
3. Segment reporting (continued)
Franchising Warehousing Property Consolidated
and Retail
6 month 6 month
period ended period ended
30 September 30 September
2015 2014 2015 2014 2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 6,223 5,508 2,782 2,508 1,141 1,081 10,146 9,097
Segment results 487 427 89 (108) (58) 128 518 447
Unallocated income 25 35
Other operating income 40 49
Operating profit 583 531
Financial income 6 4
Financial expenses (1) (1)
Income tax expense (90) (189)
Profit for the period 498 345
------------- -------------
4. Income tax expense
The tax charge accrued in these interim results reflects an estimated effective tax rate of 15.3% (6 month period ended 30 September 2014: 35.4%, year ended 31 March 2015: 8.6%). This includes a net credit of GBP38,000 (6 month period ended 30 September 2014: GBP65,000 charge, year ended 31 March 2015: GBP147,000 credit) which relates to adjustments in respect of prior periods. Excluding those items, the effective tax rate was 21.8% (6 month period ended 30 September 2014: 23.2%, year ended 31 March 2015: 20.7%), slightly higher than the standard rate of corporation tax of 20% due to expenses not deductible for tax purposes.
5. Property, plant and equipment
Acquisitions and disposals
During the 6 month period ended 30 September 2015 the Group acquired assets with a cost of GBP294,000 (6 month period ended 30 September 2014: GBP379,000, year ended 31 March 2015: GBP699,000). Assets with a net book value of GBP4,000 were disposed of during the 6 month period ended 30 September 2015 (6 month period ended 30 September 2014: GBP4,000, year ended 31 March 2015: GBP6,000), resulting in a profit on disposal of GBP1,000 (6 month period ended 30 September 2014: profit of GBP10,000, year ended 31 March 2015: loss of GBP17,000).
Capital commitments
There were no capital commitments contracted for but not provided for at the period end (30 September 2014: GBPNil, 31 March 2015: GBPNil).
6. Earnings per share
Basic earnings per share
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December 18, 2015 02:00 ET (07:00 GMT)
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