A robust set of half-year numbers sent shares in retailer Carpetright (CPR) up about 3 per cent. The group managed to grow profits and maintain its net cash position despite 22 store closures (net of openings) and ongoing investments in new store concepts. Chief executive Wilf Walsh wants to reposition the Carpetright brand by opening new outlets in more affluent areas while culling underperforming shops.
The plan - a reaction to a spate of profit warnings in 2013 and 2014 - is showing early signs of success. Strip out the impact of changes to the store portfolio and like-for-like sales grew 3.7 per cent in the UK, despite a tough comparative growth rate of 6.5 per cent in the first half of FY2015. Gross profit in the country only rose 1.3 per cent to £121.5m, reflecting the reduction in retailing space.
Although the weak euro took an inevitable toll, there were clear signs of recovery in Europe, too. In local currencies, like-for-like sales grew 5.5 per cent, compared with a 3.3 per cent decline this time last year, while gross profit nudged 0.6 per cent higher to £18.5m.
Analysts at Peel Hunt expect pre-tax profit of £17m for the year ending April 2016, giving EPS of 19.2p, compared with £14.2m and 15.4p in FY2015.
| CARPETRIGHT (CPR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 490p | MARKET VALUE: | £333m | |
| TOUCH: | 490-505p | 12-MONTH HIGH: | 629p | LOW: 333p |
| DIVIDEND YIELD: | nil | PE RATIO: | 77 | |
| NET ASSET VALUE: | 94p* | NET CASH: | £4.1m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 228 | 6.7 | 7.6 | nil |
| 2015 | 231 | 7.1 | 7.3 | nil |
| % change | +1 | +6 | -4 | - |
*Includes intangible assets of £56m, or 82p a share | ||||
