Carpetright Share Discussion Threads

[mike740] 03/7/2015 15:03

Here we are from Robbie yesterday.

I made more than £25,000 shorting Carpetright (CPR) from 700 to 315 over 2-3 years. Since then the company has got stronger with a turnaround plan.

However it is now on a massive rating at over 600p with, at least short-term all the turnaround so far now in the price. So trying a short here (short means betting in it to go down) targetting a drop to about 550p. A guaranteed stop looks to be worth trying here in case of the outside chance of a bid. I think I would be out fairly quick if there was strength above say 640p but for now buyers seem thin on the ground above the 620 level. It is quite illiquid so it can move fast.

[mike740] 03/7/2015 14:56

Does he indeed. Hes been a big fan of shorting CPR over the years.

Ill have a butchers, cheers.

[anony mous] 03/7/2015 14:18

Heading back towards 5.00 after all recent ramping.

[spob] 03/7/2015 13:06

It's worth noting that the 0% finance offer is a fairly new departure for Carpetright.

This gives an artificial temporary boost to the like for like figures by pulling sales forward.

Nevertheless as I have said before, the current market cap is dislocated from reality.

[cestnous] 03/7/2015 09:25

Expected a bit of resistance round here from the chart. Onward and upward at worst, after results imo..

[lauders] 03/7/2015 09:21

I only added just over 1100 yesterday. Still have some funds in reserve for any bigger drops that may provide a better opportunity to pound cost average ;-)

[cockneyrebel] 03/7/2015 08:44

Well the next trading update is 3 weeks on Wendnesday - why wouldn't I :-)

CR

[scottishfield] 03/7/2015 08:05

and 'snap' here :)

[shanklin] 03/7/2015 08:02

CR

I see from your own thread that you added 2k CPR yesterday.

My reaction when I read that was...

..."Snap"

Cheers, Martin

[cockneyrebel] 03/7/2015 06:29

Well I's sat that's a classic response imo saltaire111 - the whole reason I'm buying is because margins are wafer thin! The underlying operating profit is 3%.

£460m sales ! Just a 1% rise in margins adds £4.6m profit when the total pre-tax profit was $5.4m! With all the rent reductions and more efficient ways of working the profits soar even on no sales increase.

Add to that any sales increase in sales and the scope for profits to get back to 2007 levels looks all the more credible imo. In 2007, on virtually the same level of sales, CPR was making £67m pbt!

Basically they don't have to grow sales, just get margins back to where they were to be doing 60p+ eps.

Now add compound sales growth of say 5-10% over the next few years and you could be adding another £80-£160 to sales on net margins of 12% as they were back then in 2007 which would be 80p+ eps.

Of course they only just started the recovery but at least when you've seen a co at those levels before then you know what is possible imo, rather than backing a dreamer start up. And at least you have a new invigorated board with a plan rather than the same tired old board led by a tired old autocrat.


All imo/dyor etc


free stock charts from uk.advfn.com

[saltaire111] 02/7/2015 23:24

I'm not buying carpetright. Margins are wafer thin, <2%. That's awful. A couple of weeks of slow trade and margins that thin could kill the business. Not really sure what you all see i this? Am i missing something here?

Salty

[lennonsalive] 02/7/2015 20:22

Are they still marking up carpet grippers to silly prices?

I went in there once and compared the price to the local carpet guy, who came in much cheaper and fitted the whole house.

Why anyone would go with these rip off merchants is beyond me.

[5070481] 02/7/2015 12:29

Popped into the Clapham store. Firstly its nice that it no longer looks like an eyesore on the highstreet with its new logo. Layout inside was free from clutter and the store assistant i asked was very positive about the refit and how customers had been viewing it. I would still like to see them make it clearer from outaside that they are much more than just carpets but that can simply be a case of improving association after time.

[5070481] 02/7/2015 10:51

SOme very large trades going through. They must have been worked though as there hasnt been that kind of volume about for a while

[cockneyrebel] 02/7/2015 10:49

50k buy

+ 2x 52K

CR

[cockneyrebel] 02/7/2015 10:13

0912 GMT Citigroup lifts its target price for carpets and floor coverings retailer Carpetright PLC to 725p from 600p due to the firm's turnaround momentum. The brokerage's analysis points to a substantial Ebit margin expansion opportunity due to improving like-for-like sales and the active management of its property portfolio. Retains a buy rating. Carpetright shares are trading 1.1% higher at 610p

[lauders] 02/7/2015 01:37

An odd drop at the very end but not too concerned in the grand scheme of things. Also held back some funds in case their is a further dip or something else catches my eye. Well done BBD. Your 1st and 2nd buys were great. When you look back in a few months I hope the same pattern is repeated with your most recent buy ;-)

[cockneyrebel] 01/7/2015 17:21

Didn't want to give much back today imo

CR

[bigbigdave] 01/7/2015 17:13

Bought most of mine at circa 350 and then added more on the dip at 430 ish.
Have added even more today :o)

[lauders] 01/7/2015 16:04

Just took the opportunity to top-up on CPR after yesterday's results and the forward looking statement. This should go only one way and it is not down/south after the results IMO.

Commenting on the results Wilf Walsh, Chief Executive, said:

"I am pleased to able to report on a year of significant progress. The Group has delivered substantial growth in profit, strong and consistent like-for-like sales growth in the UK, a return to profit in the Rest of Europe and a net cash position at the end of the period.

"Today we're giving a progress update on a range of strategic initiatives that will broaden the appeal of the Carpetright brand and reposition the business, to ensure it is better able to capitalise on its market leadership position. We have made a promising start with these plans, establishing a real momentum for change within the business.

"I am also pleased to report that customer reaction to the first phase of activity has been positive, supporting encouraging trading in the opening period of new financial year, with UK like-for-like sales being ahead by 4.9% in the eight weeks to 27 June 2015.

"While this is just the beginning of the journey to transform Carpetright, we have a clear direction and the positive results we are seeing from a number of our initial activities give us confidence that we are on the right path."

Then there is:

Outlook

Carpetright has endured a difficult period in the years since the onset of the financial crisis but retains the fundamentals of a leading retail business - high brand recognition, critical mass and a market leadership position. Our task is to build on these strong foundations and modernise the Group to ensure it exploits these advantages to the full in the retail market of today.

We have made an encouraging start, establishing a real momentum for change within the business which is invigorating. While this is just the beginning of the journey to transform Carpetright, we have a clear direction and are already seeing positive results from a number of our initial activities which gives us confidence that we are on the right path.

Lastly there is mention of a possible reintroduction of a dividend going forward which can't be bad at all:

Dividend

The Board has decided not to pay a final dividend (2014: nil). In taking this decision, the Board has considered that whilst there has been an improvement in profitability during the year, the priority for the use of cash is to accelerate activity to reduce the fixed occupancy costs and to invest in the remaining stores to broaden the appeal of the brand. That said, if we maintain our current progress the Board would look favourably on restoring the dividend in due course.

[spob] 01/7/2015 07:38

Don't be concerned, I run a balanced diversified portfolio

Many eggs in many baskets



As Lord Rothschild once said "the reason I am so rich is because I always sold too early"


Was he talking about shorting or taking profits ?

Actually there is no difference between the two