28th Jun 2016 08:59
LONDON (Alliance News) - Carpetright PLC on Tuesday reported growth in profit in its recently-ended financial year due to lower property costs as it repositions its UK store portfolio, although store closures did have a knock-on effect on revenue, and the retailer said it is cautious going forward of the impact from last week's Brexit vote.
The carpet and floor coverings retailer said its pretax profit in the year ended April 30 grew to GBP12.8 million from GBP6.6 million the year before, although revenue declined to GBP456.8 million from GBP469.8 million.
Like-for-like sales increased by 2.8% in the UK and by 4.8% in the rest of Europe, but overall revenue was hit by the closure of net 25 underperforming stores in the UK. The UK estate now covers 435 stores while the rest of Europe store base remains unchanged at 137.
Carpetright plans to refurbish 100 UK stores within the next year at a cost of GBP10 million, following the successful trial of its new store format.
Profit, meanwhile, was helped by a "substantial reduction" in property costs resulting from the repositioning of the UK store portfolio and a strengthening performance in the rest of Europe, Carpetright said.
Carpetright added that UK like-for-like sales declined by 1.0% in the eight weeks to June 25 as a "difficult" May failed to be offset by a "significantly better" June, while rest of Europe like-for-likes were up 1.3% on a local currency basis.
"Trading conditions in the early weeks of the new financial year have been more challenging, against strong comparatives in the prior year and in a market which is increasingly competitive, particularly in the UK. The outlook has been further complicated by the outcome of last week's referendum, and we are cautious about the impact the associated uncertainty will have on consumer confidence," Chief Executive Wilf Walsh said in a statement.
"Whilst we have a long journey ahead in transforming Carpetright, we have a clear direction and are confident that our plans for repositioning the business will yield positive results," he added.
Shares in Carpetright were trading down 16% at 230.43 pence on Tuesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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