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Carpetright warns on profits

Leading specialist carpet and floor coverings retailer Carpetright plc today announced an update on trading for the eight weeks ending 22nd March 2014, and its expectations for the full year.

It announced that, while its UK like-for-like sales performance was positive over the period, the pace of recovery seen in Q3 was not sustained, and the group is yet to see any significant benefit from the improvement in UK housing market transactions. This, along with continued difficult trading conditions in the Netherlands, means that the group now expects underlying pre-tax profit for the year ending 26th April 2014 to be in the range of £3.5 to £5.5m.

Like-for-like sales in the UK increased by 0.2%, while total sales declined by 0.8%. Carpetright expects its full year UK gross margin to be 80-100 basis points above the prior year.

Carpetright also announced that Nick Worthington, previously chief executive of Dreams, has been appointed operations director for Europe.

Executive chairman Lord Harris says: “In our last trading statement, we reported that like-for-like sales in the UK were volatile, and this remains the case. Nevertheless, based on previous experience we had expected to see some recovery as UK housing transaction volumes improved. In the event, this has yet to materialise and the momentum established in the third quarter was not sustained. Excluding the expected decrease in sales from our wholesale business, the core retail business would have reported a like-for-like increase of 0.9%.

“Trading in our Rest of Europe business continues to be dominated by the extremely difficult economic conditions in the Netherlands. The leadership of the Rest of European business has been strengthened with the recent appointment of Nick Worthington as operations director - Europe. Nick brings with him a wealth of retail experience, with a strong focus on home furnishings.

“With the important Easter trading period still to come, we are continuing to concentrate on a range of self-help measures as we seek to improve the group’s performance.”

Source : Paul Farley - Furniture News
www.furniturenews.net/news/articles/2014/03/1234880708-carpetright-reports-slow-uk-recovery

26 March 2014
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