UK DIY News
Carpetright: A Year of Two Halves
Carpetright has reported full-year results for the 52 weeks ended 27 April 2019, stating: "Business turnaround on track with an encouraging return to positive like-for-like sales growth"
Financial Highlights
UK
• | Challenging first half, with like-for-like revenues down 12.7%, as the Group implemented the CVA and associated restructuring of its store portfolio |
• | Second half performance improved significantly with like-for-like sales decline reduced to 5.4%, and Q4 reduced further to 2.3% |
• | Full year revenue decline of 17.0% and like-for-like decline of 9.1% |
• | 80 stores closed as part of the CVA and 23 stores retained on a nil rent basis |
• | Underlying EBITDA loss of £0.4m (2018: profit of £3.4m) in line with expectations |
Rest of Europe
• | Revenue growth of 1.9% and like-for-like growth of 3.4% (2018: 1.2%) |
• | Second half particularly strong, with like-for-like revenue increase of 6.4%, following introduction of new leadership team |
• | Slight decline in underlying EBITDA to £3.3m (2018: £3.7m), reflecting change in sales mix |
Group
• | Group revenue decreased by 13.4% to £386.4m (2018: £446.3m) |
• | Underlying EBITDA of £2.9m (2018: £7.1m), in line with expectations |
• | Statutory loss before tax of £24.8m (2018: loss of £69.8m) |
• | Net debt of £27.4m (2018: £53.0m) at the period end |
• | Cash outflows related to pre-tax losses resulting from the turnaround of the Group and a continued tightening of trading terms - the impact of which has now abated and is starting to improve |
• | Separately reported items of £7.9m (2018: £61.8m), driven mainly by non-cash asset impairment and ERP dual running costs |
Current Trade
• | UK like-for-like sales in the first eight weeks of the new financial year were ahead by 8.5% against our prior year comparative (2018: 14.6% decline)
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• | Like-for-likes sales in Rest of Europe were ahead by 4.3% in the same eight week period (2018: 10.6% growth)
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Board update
• | Sandra Turner, non-executive director, to step down from the Board on 5 September 2019, after nearly nine years' service |
• | Appointment of Pauline Best to the Board as an independent non-executive director with effect from 1 August 2019 being announced separately today |
Commenting on the results Wilf Walsh, Chief Executive, 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.
"From a trading standpoint it was, as expected, a year of two halves, with the first six months reflecting the impact of the CVA implementation, followed by a significant improvement in the second half and, in particular, during Q4. We are pleased to report today that this positive trend has continued into the new year with a return to like-for-like sales growth in the first eight weeks of the period, when UK LFL sales grew by 8.5%.
"We remain the clear number one player in floorcoverings, 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."
Source : Insight DIY Team and Carpetright
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