United Carpets Warns On Full-Year Profits

United Carpets has updated the market on full-year trading for the year ended 31st March 2020:

Disappointingly, there does not appear to have been any uplift in trading following the decisive result in the General Election and the retail environment has continued to be challenging. As announced, in our Interim Results in December 2019, trading in the key quarter leading up to the Christmas period was comparatively poor, reflecting weakened consumer confidence and making the outcome for the full-year vulnerable to any further market weakness.

While total sales for the Group are expected to be significantly ahead of the prior year, driven by the Group’s new instalment payment channel, like for like sales, from the store network, for the 8 weeks since the announcement of the half-year results were -5.7%. The new instalment payment channel has, in the Board’s opinion, significant future potential, however, start-up and higher than anticipated servicing costs has meant it will not be profitable in the current year.

Current market conditions are very competitive as all retailers compete for every sale leading to aggressive discounting and we have acted to provide increased support for our franchise network. The combination of these factors means that the Board now expects profit before tax for the full year to be below current market expectations of £0.5m and in the range of £0.15m to £0.20m (before non-cash costs associated with IFRS16).

Importantly, United Carpets remains a well-positioned business with a strong brand and well established, predominantly franchised, store network. The Company has significant cash balances and virtually no debt, creating a platform that together with its experienced management team means it is well placed to benefit from any upturn in market conditions.

Source : United Carpets

Image : United Carpets

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