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United Carpets reports improved trading following restructure

United Carpets, one of the UK’s biggest carpet retailers, said trading in its second half was better than expected.

The Rotherham-based group said like-for-like sales rose 5.4 per cent in the first 21 weeks of its second half to date.

The firm said that while this is encouraging, it should be viewed in the context of a weaker trading period last year when the group was hit by heavy snowfall.

Despite this it said the positive trading performance shows the benefits of its restructuring.

In 2012 the group decided to close a significant number of stores to create a smaller company that was better able to operate in the current retail environment.

The restructuring was put in place during 2012 and 2013 and, while a small amount of rationalisation is still ongoing, it has left the group with 59 stores, down from 85.

Of these 48 are franchised and 11 are owned by the company.

The group said that its core store network is benefiting from the restructuring, particularly in the last few months.

On top of this, the firm reported a slight improvement in confidence amongst consumers although it said that the overall market still remains very challenging.

It added that its focus on high quality and good value flooring ranges together with improvements to customer service is producing positive results.

As a result the group expects final results for the year to March 31 to be “materially better” than market expectations.

Chief executive Paul Eyre said: “We have been encouraged with trading in the early part of this calendar year which will flow through to better than expected year end numbers.

“The changes we have made have transformed our business and with the economy as a whole appearing to move in the right direction, I am increasingly optimistic about the future.”

Analyst Freddie George, at Cantor, said: “The company has benefited from easier comparatives with the previous year impacted by snow and a slight pick-up in confidence amongst consumers.”

He has increased 2014 profit forecasts by 50 per cent to £900,000.

“Management has now established a profitable base of stores with the support of a relatively solid balance sheet and an improving trend in sales.

“It is now set on the ‘road to recovery’ and should benefit from a pick-up both in the macroeconomic environment and housing transactions,” he added.

Source : Yorkshire Post

24 February 2014
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