Carpetright plc strategy fundamentally correct
Interim Results for the 26 weeks ended 27 October 2012 show like for likes slightly up.
The specialist carpet and floor coverings retailer said UK like-for-like revenues increased by 0.7% and excluding the expected contraction in sales from wholesale business, the core retail business like-for-like grew by 3.0%.
Gross profit percentage increased by 370 basis points to 61.7% (2011: 58.0%).
During the period 58 stores were refurbished taking the total to 92 stores, with sales uplifts of over 10% above the core retail business. Overall, the company’s store base reduced by a net 10 during the first half to 480 stores.
Rest of Europe
•Revenue in local currency, declined by 9.7% with like-for-like sales down by 10.1%.
•Difficult trading conditions in the Netherlands, where the floor coverings market remains weak.
•Net reduction of one store during the first half to 141 stores.
Commenting on the results, Darren Shapland, Chief Executive, said,"The Group grew underlying profits and generated cash in line with our expectations during the first half, with an encouraging increase in UK retail store like-for-like sales and a significant improvement in gross profit percentage year on year, although trading conditions in the Netherlands remained very difficult.
"Having been with the business for seven months and seen it trade through the important September to November peak has confirmed my initial view that the Group is well managed and that no fundamental shift in strategy is required. That said, we believe there are opportunities to accelerate the pace of a number of current self-help initiatives, notably the ongoing modernisation of the store estate, building customer awareness of our bed offer and further improving customer service, to enable us to grow our market share.
"While we expect trading conditions to remain challenging, we are confident that the combination of these self-help initiatives will underpin the positive momentum of the Group and our expectations for the year as a whole remain unchanged."
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