Thursday, December 19, 2013

News: Signs of improvement at United Carpets


Rotherham-based United Carpets, the UK's largest franchised carpet retailer, has seen another increase in profits following its significant restructure.

In its financial update for the six month period ended September 30 2013, the Bramley-based business reported sales across the group of £28m with profit before tax of £452,000, an increase from £113,000 seen in the same period last year.

The profits were achieved despite a decline in like for like sales of 1.6% and sales for the period of £10.3m, a decrease in comparison with the previous six month period, reflecting a reduction in store numbers. United Carpets has reduced the number of stores from a peak of 86 to 60; removing stores from the network which had been consistently underperforming and were threatening to undermine the stability of the business.

The group now operates from 60 stores of which 51 were franchised and nine were corporate. As lease and rent negotiations continue the board stated that they "anticipate a small number of further closures but the key changes have largely been made and the store network is in a stronger position."

In August 2012, United Carpets had its shares temporarily suspended after admitting it would not be able to publish its full-year results on time. In October 2012, a pre-pack administration deal saw United Carpets Group acquire the business and assets of its trading subsidiary United Carpets (Northern) Limited.

The firm was readmitted to the AIM stock exchange earlier this year after delivering its delayed final results for the period ended October 5 2012.

The restructuring has helped to improve profit margins and reduce distribution costs and administrative expenses including rent, rates and staff costs.

Paul Eyre, chief executive of United Carpets, said: "These results should give shareholders increasing confidence in the future of the business. The restructuring programme, begun last year and continued into this year, has reduced the number of stores to 60, down from a peak of 86 stores, removing those which were no longer viable. As a result the business is in a much better position with which to operate successfully in what continues to be a challenging market."

Peter Cowgill, chairman of United Carpets, added: "As a result of the actions taken last year, the Company has established a sounder, debt free base consisting of a smaller more profitable portfolio of stores on which to build, going forward.

"Whilst there has been some encouraging signs of an improvement in the economy, this does not yet appear to have materialised in consumers feeling better off. We are therefore not anticipating an upsurge in consumer spending in the short term; instead we hope to gain market share from a continued focus on customer service and providing genuine value for money offers on good quality products."

Like for like sales in the 11 weeks since the half year end have increased by 2.4% showing some improvement.

United Carpets website

Images: United Carpets / Facebook


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