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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Carpetright plc    CPR   GB0001772945

CARPETRIGHT PLC

(CPR)
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Carpetright sees sales improvement despite British retail gloom

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04/25/2019 | 05:17am EDT
A branch of Carpetright is seen in south west London

(Reuters) - Shares in UK flooring retailer Carpetright surged on Thursday after it said UK sales had improved in the fourth quarter, a year after its creditors and investors backed a rescue plan which saw it close dozens of underperforming stores.

Its losses had ballooned in the first half of its financial year, hit by weak demand and the fallout of its rescue.

A series of British retailers have either gone out of business or announced plans to close shops, as they struggle against subdued consumer spending, rising labour costs, higher taxes and growing online competition.

Carpetright raised 65 million pounds through an equity issue last June after creditors and shareholders in April backed a Company Voluntary Arrangement (CVA) restructuring to close stores and cut jobs.

The company lost almost 90 percent of its share value in 2018.

Last year Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality plunged into administration. 2019 has seen household names like Debenhams fall into the hands of lenders.

Carpetright, which opened its first store in 1988, said UK like-for-like sales trend improved significantly in the fourth quarter, compared to the year to date, as customer confidence in the business started to return following its restructuring.

Carpetright's performance was in contrast to upholstery retailer DFS Furniture and floor coverings distributor Headlam, who have blamed weak consumer confidence and flagged a softer trading backdrop in the UK.

Trading in the rest of Europe continued to track ahead of the same period last year, driven by a strong performance in the Netherlands, Carpetright said. It also operates in Belgium and Ireland.

"Whilst consumer confidence remains challenged in the UK, the work we have done to reposition the business is starting to deliver the benefits necessary to put Carpetright back on the path to sustainable profitability," Chief Executive Officer Wilf Walsh said.

Carpetright, which also sells mattresses, headboards, engineered wood flooring and vinyl tiles, it was on course to achieve a 19 million pound annual cash savings target announced as part of its recapitalisation.

"Carpetright's trading update implies an improvement in like-for-like sales performance towards flat and a recovery in profitability sufficient to deliver a positive EBITDA for the full year," Peel Hunt analysts said.

Its shares were up 25.16 percent at 19.15 pence at 0834 GMT, after rising almost 40 percent in early trade.

Carpetright's Thursday's gains take the stock back to levels seen in February, when Chief Financial Officer Neil Page announced his retirement after more than a decade in the role.

(Reporting by Shashwat Awasthi and Karina Dsouza; writing by Noor Zainab Hussain in Bengaluru; editing by Shounak Dasgupta and Jason Neely)

By Karina Dsouza and Shashwat Awasthi

Stocks mentioned in the article
ChangeLast1st jan.
CARPETRIGHT PLC 1.88% 24.4 Delayed Quote.39.03%
DFS FURNITURE PLC -0.81% 244 Delayed Quote.34.21%
DUNELM GROUP PLC 1.41% 864 Delayed Quote.59.70%
HEADLAM GROUP PLC 6.02% 484 Delayed Quote.18.05%
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Financials (GBP)
Sales 2019 387 M
EBIT 2019 -
Net income 2019 -
Debt 2019 -
Yield 2019 -
P/E ratio 2019 -
P/E ratio 2020
Capi. / Sales 2019 0,19x
Capi. / Sales 2020 0,19x
Capitalization 74,1 M
Chart CARPETRIGHT PLC
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Technical analysis trends CARPETRIGHT PLC
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TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 1
Average target price 0,70  GBP
Spread / Average Target 187%
Managers
NameTitle
Wilfred Thomas Walsh Chief Executive Officer & Director
Robert Lewis Ivell Non-Executive Chairman
Neil Lloyd Page Executive Director & Chief Financial Officer
Sandra Turner Independent Non-Executive Director
David Phillimore Clifford Senior Independent Director
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