Group
• Underlying profit before tax up 33.1% to £17.3m (2015: £13.0m) in-line with market expectations.
• Group revenue decreased by 1.3% to £456.8m (2015: £462.6m), compared to store space reduction of 5.4% associated with rationalisation of the estate.
• Underlying earnings per share up 40.9% to 19.3p (2015: 13.7p).
• Statutory profit before tax of £12.8m, an improvement of £6.2m (2015: £6.6m 53 week basis).
UK
• Like-for-like sales increased by 2.8%.
• Underlying operating profit up 17.5% to £16.8m (2015: £14.3m).
• Significant progress made in reducing the number of underperforming stores - net 25 closures to reduce the UK estate to 435 stores.
Rest of Europe
• Like-for-like sales growth of 4.8%.
• Underlying profit of £2.5m, an improvement of £2.2m on the £0.3m delivered in 2015.
• Store base unchanged at 137, after eight openings and eight closures.
Strategic Update
• Successful trial of new store format and branding completed in the year. Positive customer reaction with LFL sales growth of 9.1% being achieved, providing proof of concept ahead of wider roll-out.
• Range of strategic initiatives to update and broaden the appeal of the Carpetright brand being announced today, including:
‐ New Carpetright branding/identity being introduced across the business from 1 July 2016.
‐ Phased refurbishment of the UK store estate - 100 stores to be completed within the next 12 months at a capital cost of £10m.
‐ Following double digit sales growth in the category, new hard flooring sections being introduced into UK stores, featuring established brands including Balterio, Kronospan and Quickstep.
‐ New 'Exclusive to Carpetright' ranges and introduction of 'Essential Value' brand to strengthen Carpetright's authority as the leader in floorcoverings.
‐ Focus on improving customer service - stronger satisfaction metrics being achieved.
Current Trading
• We have had a challenging start to the new financial year, against strong comparatives in the prior year and in a market which is increasingly competitive. In the UK, while May was a difficult month with like-for-like sales down 7.6%, June has been significantly better, being up 6.3%. These figures combine to give a decline of 1.0% for the eight weeks to 25 June 2016. In the Rest of Europe, like-for-like sales up by 1.3%, on a local currency basis over the same period.
Commenting on the results Wilf Walsh, Chief Executive Officer, said:
"I am pleased to able to report on another year of significant progress. The Group has again delivered solid growth in profit, accompanied by consistent like-for-like sales growth in both the UK and Rest of Europe, whilst establishing real momentum with its plans to update and revitalise its business.
"Today we're giving a progress update on the range of strategic initiatives that will continue to broaden the appeal of the Carpetright brand and reposition the business, to ensure it is better able to capitalise on its market leadership position. Customer reaction to the initiatives trialled in our four concept stores during the period was overwhelmingly positive and we are excited about the opportunity of extending these to the wider estate commencing on 1 July 2016.
"Trading conditions in the early weeks of the new financial year have been more challenging, against strong comparatives in the prior year and in a market which is increasingly competitive, particularly in the UK. The outlook has been further complicated by the outcome of last week's referendum and we are cautious about the impact the associated uncertainty will have on consumer confidence.
"Whilst we have a long journey ahead in transforming Carpetright, we have a clear direction and are confident that our plans for repositioning the business will yield positive results."
