United Carpets pre-tax profits halve in H1

Carpet & floor covering specialists United Carpets has announced today that gross like-for-like (LFL) sales in the first half of its financial year fell 0.8 per cent compared to the same period in 2010.

In the six months ending September 30th 2011, total revenue crept up from £13.36 million to £13.47 million year-on-year but profit before tax fell by more than half to just £267,000 for the period.

Trading has taken an upturn since the end of the period however, helped by weather affected comparisons, with LFL sales growing 4.4 per cent from the start of October to December 15th 2011.

Paul Eyre, CEO of United Carpets, commented on the results: “We are pleased to have maintained a similar level of sales to last year given the continued uncertainty and inflationary increases impacting upon UK consumers.

“We have benefitted from our franchise model and our focus on providing good value to our customers but the increase in the number of less productive corporate stores together with a difficult trading environment for beds has adversely affected profitability in this period.”

The squeeze on disposable incomes seen over the last year has impacted on LFL trading for the retailer’s larger items, with bed sales down 11.7 per cent over the half-year while sales in its core floor business rose 0.2 per cent.

Gross margins remained relatively flat, falling just 30 base points to 66 per cent, but distribution costs rose by 3.1 per cent year-on-year, with two site clearings in Mexborough and South Emsall, and administrative expenses grew 3.2 per cent compared to last year.

Eyre added: “Overall, I believe this represents a reasonable performance in a challenging market but, while there is so much uncertainty in the UK and across Europe, the board believes it is important to adopt a conservative approach and looks to preserve the group’s current financial position.”

Source : Jon Whiteaker – Retail Gazette
www.retailgazette.co.uk/articles/14341-united-carpets-pretax-profits-halve-in-h1