25th Jun 2019 09:20
(Alliance News) - Carpetright on Tuesday said its turnaround plan was on track after the troubled floor coverings retailer endured a challenging financial year, but was encouraged by a return to positive like-for-like sales growth.
The company is in the midst of an emergency restructuring programme, which included closing a number of stores and entering into a company voluntary arrangement to cut rent costs.
Carpetright said is on track to make annual savings of GBP19 million from the CVA outlined in June 2018, with 80 stores closed and 23 seeing their rents cut to zero.
For the financial year ended April 27, revenue fell to GBP386.4 million from GBP446.3 million in 2018, while its pretax loss narrowed to GBP24.8 million from GBP69.8 million.
Carpetright reported underlying earnings before interest tax deprecation and amortisation of GBP2.9 million, down 59% from GBP7.1 million the year before.
In the first half like-for-like sales fell by 13%, but the second half saw a significant improvement in like-for-like sales, with a 5.4% decline, the company said.
Carpetright said it saw a significant improvement in trading in the second half, particularly in the fourth quarter, with a return to like-for-like sales growth in the new financial year.
In the UK, like for like sales in the first 8 weeks of financial 2020 were up 8.5% and in Europe like-for-like sales in the same period were up 4.3%.
The company added that it intends to return to paying a dividend when it has sufficient distributable reserves available and "the directors believe it is financially prudent to do so".
Chief Executive Wilf Walsh said: "2018-19 was a transitional year for the business as we took tough but necessary action to address our legacy property issues and restructure the UK store estate. This difficult task was carried out against the backdrop of a challenging trading environment but was essential to put the business back on the path to sustainable profitability."
"We remain the clear number one player in floor coverings, having maintained our market leadership during an exceptionally challenging period, and our brand attributes remain strong. Our work is far from finished, and while economic and political uncertainties cloud the near term outlook for the retail sector, our turnaround plan is very much on track."
Separately, Carpetright said Non-Executive Director Sandra Turner will step down from the role at the company's annual general meeting in September. Meanwhile, Pauline Best will join the company as a non-executive in August.
Carpetright was up 11% at 19.60 pence on Tuesday morning. The stock jumped as high as 22.00p in opening deals, though still well off from its 52-week high of 36.18p.
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