The impact of a bloated store estate significantly explained the full-year reported loss at carpet retailer, Carpetright (CPR). Indeed, adjust for £14.8m of costs related to onerous leases and freehold property impairments, and underlying pre-tax profit actually grew 143 per cent to £9.7m.
In the UK, self-help initiatives - such as store refits - helped grow second-half sales and like-for-like UK revenue rose by a decent 2.2 per cent in the period. Moreover, UK underlying operating profit improved to £10.9m from last year's £2.8m - thanks to better sourcing and promotional planning as well as improved margins at the floor coverings segment. A net 12 UK stores were closed and 154 refurbished, with modernised stores returning a 10 per cent sales uplift. Low-margin wholesale business, however, fell 54.4 per cent - which offset a rise in lower-margin bed sales. Trading in Europe, largely Belgium and Holland, remained tough as austerity measures discouraged consumers from spending. Accordingly, sales there tumbled 15.5 per cent (or 11 per cent on a like-for-like basis), while underlying operating profit tumbled 90.5 per cent to £0.5m.
Broker N +1 Singer expects adjusted pre-tax profit of £14.5m for 2014, giving EPS of 16.7p (from 10.2p in 2013).
CARPETRIGHT (CPR) | ||||
---|---|---|---|---|
ORD PRICE: | 606p | MARKET VALUE: | £410m | |
TOUCH: | 604-615p | 12-MONTH HIGH: | 716p | LOW: 580p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 97p* | NET DEBT: | 16% |
Year to 27 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2009 | 483 | 16.7 | 17.6 | 8.0 |
2010 | 517 | 22.3 | 23.5 | 16.0 |
2011 | 487 | 6.60 | 6.80 | 8.0 |
2012 | 472 | 13.5 | 16.4 | nil |
2013 | 458 | -5.10 | -9.80 | nil |
% change | -3 | - | - | - |
*Includes intangible assets of £60.8m, or 90p a share |