Carpetright's losses deepen as it works through restructuring plan
Carpetright has reported making a pre-tax loss of £11.7 million in the first half of its financial year as it works through its restructuring plan.
This was up from a loss of £0.6 million in the same period in the previous year.
In the six months to 27 October the company made an underlying EBITDA loss of £1.7 million compared to a profit of £8.6 million previously. Meanwhile, group revenue was down 15.7% to £191.1 million in the period.
Looking at the UK, like-for-like sales fell by 12.7% in the half-year. While like-for-likes declined by 16.8% in the first quarter, there was an improvement in the second quarter when like-for-likes dropped by 8.9% year-on-year.
The company said it is on track to deliver £19 million in annualised cash savings in the current financial year. This is being achieved by addressing legacy property issues with 65 underperforming UK stores closed in the period. It is also implementing a range of activities to reduce the company’s overhead costs.
Carpetright said like-for-like sales increased by 0.5% in its Rest of Europe business following management changes. This was a significant improvement from the decline experienced in the second half of the previous financial year. Underlying EBITDA for the business was £0.4 million compared to £0.2 million in the same period last year.
Wilf Walsh, Carpetright chief executive, said: "This is a transitional year for Carpetright as we work through our restructuring plan. We remain on schedule and are confident that this activity is already starting to yield benefits. This is the first stage in returning the group to sustainable long-term profitability."
During the period Carpetright continued to invest in digital technology to improve both the online and in-store experience.
While it has temporarily halted its store refurbishment programme as it looks to “achieve clarity” on the shape of its UK store portfolio, the company said the introduction of its new branding and contemporary store fit remain central to its recovery efforts.
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