Carpetright 2015 interim results

DividendMax Ltd.

Carpetright 2015 interim results

Highlights

Group

Solid first half with total sales growth of 2.6%

Underlying profit before tax of £6.7m, up by 123.3%

Profit before tax up from £1.9m to £6.7m, an increase of 252.6%

Improved trading performance, tight control on capital expenditure and robust working capital management moved the Group into a net cash position of £3.2m at period end

Strategic review in progress following appointment of new Chief Executive

Plans to revitalise the Carpetright brand, while retaining our well-established value heritage, being finalised, for implementation in 2015

Full year underlying profit before tax now expected to be towards the upper end of current market expectations (Note 6)

UK

Like-for-like revenues increased by 6.5%

Gross profit percentage reduced by 140 basis points to 61.7% (H1 FY14: 63.1%)

Stores estate reduced by a net nine during the period to 463, trading from 4.0m sq ft, being 2.2% lower year-on-year

290 stores now modernised, 63% of the estate

Rest of Europe

Like-for-like sales down by 3.3% in local currency terms

Gross profit percentage increased by 270 basis points to 60.5% (H1 FY14: 57.8%)

Improvement in underlying operating profit of £1.5m to £0.1m, reversing the losses experienced in the first half of the prior year

The number of stores reduced by a net three during the period to 139, trading from 1.6m sqft, being 2.8% lower year-on-year

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

"I am pleased to report that the Group grew profits during the first half, with an encouraging increase in UK like-for-like sales, a return to underlying profit in the Rest of Europe and a net cash position at the end of the period. Having made a solid start to the year, we now expect full year underlying pre-tax profits to be towards the upper end of current market expectations.

"We believe that, with a well researched and well executed strategy, we can begin to reshape Carpetright to ensure the business fully capitalises on its market leading position.

"These changes will take time to take full effect but we are absolutely focused on maintaining the recent improvements in the performance of the Group, as well as devoting our energies to revitalising our brand and operations in line with contemporary customer expectations. As a team we are excited by the potential that exists and are concentrating hard on execution of this new strategy as we enter 2015."

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