(UCG) United Carpets Grp
Summary
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| 23-12-11 | RNS |
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RNS Number : 5506U United Carpets Group plc 23 December 2011
UNITED CARPETS GROUP plc
Interim results for the period ended 30 September 2011
United Carpets Group plc ("the Group" or "the Company" or "United Carpets"), the second largest chain of specialist retail carpet and floor covering stores in the UK, today announces its interim results for the period ended 30 September 2011.
Key points
· Network sales increased 1.9% to £34.86m (2010: £34.20m)
· Revenue edged up to £13.47m (2010: £13.36m)
· Like for like gross sales 0.8% below the previous year
· Adjusted operating profit* decreased to £308,000 (2010: £534,000)
· Profit before tax was £267,000 (2010: £604,000)
· Cash and cash equivalents of £1.72m (2010: £1.85m)
· Like for like gross sales since the period end to 15 December 2011 up 4.4%
* Adjusted operating profit excludes impairment of property, plant and equipment, charges/releases in respect of onerous contracts and profits/losses on disposal of property, plant and equipment,
Paul Eyre, Chief Executive, said:
'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. 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."
Enquiries:
Chairman's statement
The Group has delivered a reasonable performance in a difficult market environment, benefiting from operating its established franchise model and its focus on offering product ranges that represent real value for money for customers. Sales levels have been maintained close to the previous year demonstrating the Group's continuing customer appeal and although Group profitability decreased as a result of a higher number of corporate stores, it is believed that gains in market share have been achieved.
Financial review
Network sales across the Group, including the value of retail sales by our franchisees (to give a measure of the Group's turnover on a more comparable basis to a conventional retailer), were slightly up at £34.86m (2010: £34.20m). Revenue, which as in previous years includes marketing and rental costs incurred by the Group and recharged to franchisees, was just ahead of last year at £13.47m (2010: £13.36m).
Like for like gross sales across the whole of the network were just 0.8% lower compared to the previous period. Given United Carpets' franchise structure, like for like sales are not necessarily the best measure of the Group's financial performance but they do provide a good steer on the overall trading performance. Within the like for like gross sales performance, the core flooring business was up 0.2% whilst bed sales were down by 11.7%. As we have seen before, when the general environment is more challenging, customers tend to put off the purchase of higher value items such as beds to a greater degree than for the more affordable flooring items.
Gross margin of 66.0% compares to 66.3% in the same period last year and 66.6% for the full year to 31 March 2011. Gross margins in each reported business segment have shown modest improvements in comparison to the same period last year and to the full year to 31 March 2011. The small reduction in overall gross margin principally reflects the increased proportion of warehouse revenue (at relatively low rates of gross margin) to total revenue as the in-house cutting operation continues to expand.
Distribution costs, which rose by 3.1% in comparison to the same period last year, include staff costs at the corporate stores and the increase arises from the increase in the average number of corporate stores. During the period, costs of £42,000 were incurred clearing sites in Mexborough (re-location) and South Emsall (closure). Adjusting for exceptional items in both periods, administrative expenses increased by 3.2% as a result of the increase in the average number of corporate stores.
Profit before tax was £267,000 (2010: £604,000) and earnings per share were 0.22p (2010: 0.48p).
Other than a small number of minor hire purchase contracts, the Group has no borrowings and cash and cash equivalents as at 30 September 2011 were £1.72m (2010: £1.85m).
Dividend
Reflecting the current market environment and continued political uncertainty, the Board believes that it is important to preserve the current financial position of the Group. As a result, to conserve cash, the Board has decided not to pay an interim dividend and will review the payment of a final dividend at the time of the full year results.
Operations review
The majority of Group revenues are derived from the sale of floor coverings, predominantly carpet, laminate and vinyl flooring through franchised stores and the Group's own corporate stores. The Group ended the period under review with 85 branded stores across Northern and Central England, compared to 86 at the end of the previous financial year. With the exception of 17 corporate stores, the remaining 68 were all franchises operating under United Carpets' bespoke franchise model.
During the period the central management team was reshaped with the appointments of Mark Prior and Paul Newton as Operations Managers. Mark has previously been Managing Director of a large, multi-site flooring retailer and Paul has previously held Operations Directors roles in two major flooring retailers. Ray Tricker, who was Retail Operations Director, left after nearly 5 years with the Company during which time he was influential in the expansion of the store portfolio. On behalf of the Board, I would like to thank Ray for his significant contribution to the Group. Both Mark and Paul join with extensive retail experience and have already begun to introduce new practices across the Group. Greater emphasis is being placed on performance management within the stores, both franchised and corporate, utilizing information from the recent investments in retail systems and footfall counting. Early indications are encouraging and these self-help initiatives will continue to be developed to further drive sales during this prolonged period of difficult trading conditions.
There is no doubt it is a challenging market environment for retailers and we believe the United Carpets franchise model has important competitive advantages such as scale and each franchised store being operated by an owner manager. We continue to see opportunities to enhance our customer appeal through the value, quality and range of products we offer accompanied by our desire to give exceptional customer service. It is in these areas that our management team has been focused and we continue to provide a truly diversified product range with a particular emphasis on providing 'value for money' offers that aim to differentiate United Carpet stores from independent operators and other smaller chains.
Advertising remains a key part of the Group's marketing strategy, aimed at increasing brand awareness and promoting individual offers that underline our value for money ranges. In the period under review, we continued to carry out television advertising in targeted areas where we have sufficient critical mass of stores for this to generate economic returns. We also use radio, print and direct advertising strategies to increase brand awareness and drive sales across the Group. Utilising the better information that we now have on footfall and other sales statistics, we are able to monitor the results of our marketing spend more closely and increasingly adapt our approach to improve the effectiveness of that spend.
Franchising Store numbers during the period have remained broadly flat over the last 12 months with just one store closure in the period (South Emsall) and currently there are 85 United Carpet stores of which 68 are franchised. The focus continues to be upon securing quality candidates for existing corporate stores over and above increasing the total number of stores. The Group also continues to manage the store portfolio and, where appropriate, taking those franchised stores which underperform, back in-house with a view to improving performance and then seeking to re-franchise them over time. Whilst our successful franchisees have continued to perform well during these difficult times, a number of franchisees have experienced significant difficulties and the Group continues to support those franchisees whenever it is practical to do so. Inevitably some will however fail and this may adversely impact on the Group. Retail
The majority of Group revenues are derived from sales of flooring which, as a result of the self-help initiatives previously referred to, have been reasonably resilient and on a like for like basis gross sales were 0.2% up against last year in the period under review. However in a number of cases, considerable effort is needed to improve performance to an acceptable level with the results of the Retail division being adversely affected in the meantime. The ranges have continued to evolve and we have probably benefitted from a milder period of weather this year. Since the half-year, trading has been positive on a like for like basis with flooring sales up 4.9% for the 11 weeks since 30 September 2011. Whilst sales have been more encouraging, it is important to remember that this period last year included two weeks of heavy snowfall which significantly affected the comparative figures.
Beds
Sales of beds have been disappointing and the decrease in sales was a significant factor in the reduced profitability for the period. Since the period end there has been some improvement in the level of bed sales and on a like for like basis gross sales were down 2.1% for the 11 weeks since 30 September 2011. It remains a key focus for the management team to support bed sales and transfer knowledge and experience around the Group to help do this.
Warehouse
During the period, sales to the franchised network increased by 20%, on top of a similar increase last year. Whilst this division is now close to breakeven, it is not intended to be a primary profit driver as it is a critical cutting and distribution service for the Group to offer, ensuring all stores are able to provide a high quality service at excellent value for money.
People
As always the Board would like to thank all those involved directly or indirectly with the Group for their significant contributions as franchisees, supplier partners and colleagues and looks forward to continuing to work closely together in 2012.
Outlook
Despite the continuing uncertainty surrounding the economic recovery and the outlook for Europe, sales in the 11 weeks since the half-year have, as noted above, shown some encouraging signs with overall like for like gross sales up 4.4% against weather affected comparatives although the Board remains cautious with regard to the outlook. This is primarily driven by the wider market conditions and the expectation that there is unlikely to be a significant improvement in the short term. However, the Board is confident that the Group through its franchise structure, focus on the value end of the market and with the opportunity to further exploit self-help initiatives, is well positioned to deliver better performance from the existing network of stores and take advantage of any upturn in the economy when it is eventually realised.
Peter Cowgill Chairman Independent review report to United Carpets Group plc
Introduction We have been engaged by the Company to review the interim set of financial statements in the half-yearly financial report for the six months ended 30 September 2011 which comprises the condensed consolidated interim income statement, the condensed consolidated interim balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated interim statement of cash flows and related notes We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union. Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim set of financial statements in the half-yearly financial report for the six months ended 30 September 2011 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.
RSM Tenon Audit Limited Statutory Auditor Nottingham 23 December 2011
Condensed consolidated interim income statement
For the six months ended 30 September 2011
All amounts are attributable to the equity holders of the parent, and all arise from continuing operations. No amounts were recognised directly in equity, and therefore no separate statement of other comprehensive income has been presented.
* Adjusted operating profit excludes impairment of property, plant and equipment, charges/releases in respect of onerous contracts and profits/losses on disposal of property, plant and equipment,
Condensed consolidated interim balance sheet
As at 30 September 2011
Condensed consolidated statement of changes in equity
For the six months ended 30 September 2011
Condensed consolidated interim statement of cash flows
For the six months ended 30 September 2011
Notes to the condensed consolidated interim financial statements
1. Basis of preparation
United Carpets Group plc (the "Company") is a company domiciled in the United Kingdom. The condensed consolidated interim financial statements of the Company for the six months ended 30 September 2011 comprise the Company and its subsidiary undertakings (together referred to as the "Group").
The Group financial statements for the year ended 31 March 2011 were approved by the Board of Directors on 6 September 2011 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) and 498(3) of the Companies Act 2006. These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006. These condensed consolidated interim financial statements for the period ended 30 September 2011 are unaudited but have been reviewed by the auditors and their Independent Review Report is included with these statements.
The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2011.
2. Segment reporting
Segment information is presented in the condensed consolidated interim financial statements in respect of the Group's business segments, which are the primary basis of segment reporting. The business segment reporting format reflects the Group's management and internal reporting structure.
Inter-segment pricing is determined on an arm's length basis.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Business segments
The Group is comprised of the following main business segments:
§ Franchising § Retail § Beds § Warehouse
For the six months ended 30 September 2011
Notes to the condensed consolidated interim financial statements (continued)
3. Income tax expense
The tax charge accrued in these interim results reflects an estimated effective tax rate of 32% (30 September 2010: 35%) as a result of expenses not deductible for tax purposes and non-qualifying depreciation.
4. Property, plant and equipment
Acquisitions and disposals
During the six months ended 30 September 2011 the Group acquired assets with a cost of £935,000 (six months ended 30 September 2010: £787,000). Assets with a net book value of £Nil were disposed of during the six months ended 30 September 2011 (six months ended 30 September 2010: £13,000), resulting in a loss on disposal of £Nil (six months ended 30 September 2010: £Nil).
Capital commitments
There were no capital commitments contracted for but not provided for at the period end (30 September 2010: £Nil).
5. Basic and diluted earnings per share
Basic earnings per share
The calculation of basic earnings per share for the six months ended 30 September 2011 was based on the profit attributable to ordinary shareholders of £181,000 (six months ended 30 September 2010: £392,000, year ended 31 March 2011: £794,000) and a weighted average number of ordinary shares outstanding during the six months ended 30 September 2011 of 81,400,000 (six months ended 30 September 2010: 81,400,000, year ended 31 March 2011: 81,400,000).
Diluted earnings per share
There are no share options which give rise to a dilution at 30 September 2011 (30 September 2010: 2,155,171, 31 March 2011: 2,155,171).
The calculation of diluted earnings per share for the six months ended 30 September 2011 was based on profit attributable to ordinary shareholders of £181,000 (six months ended 30 September 2010: £392,000, year ended 31 March 2011 £794,000) and a weighted average number of ordinary shares outstanding during the six months ended 30 September 2011 of 81,400,000 (six months ended 30 September 2010: 81,535,942, year ended 31 March 2011: 81,535,942), calculated as follows:
6. Employee benefits
Pension plans
The Group provides employee benefits under defined contribution pension plans, the details of which are disclosed in the most recent annual financial statements.
Expense recognised in the consolidated interim income statement
Theexpense recognised in the consolidated interim income statement consists of contributions made to the defined contribution scheme. For the six months ended 30 September 2011, the Group recognised expense of £48,000 (six months ended 30 September 2010: £48,000, year ended 31 March 2011: £79,000).
Notes to the condensed consolidated interim financial statements (continued)
7. Financial instruments
Interest-bearing loans and borrowings
In the opinion of the directors there is no significant difference between the fair value of hire purchase contracts and the carrying value in the financial statements.
Trade and other receivables/payables
The carrying value is deemed to reflect the fair value for all trade and other receivables/payables.
8. Cash generated from operations
This information is provided by RNS The company news service from the London Stock Exchange More |
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| 04-11-11 | RNS |
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RNS Number : 5570R United Carpets Group plc 04 November 2011
United Carpets Group plc ('United Carpets' or 'the Group')
Holding in Company
The Company was notified on 3 November 2011 that, following a disposal of ordinary shares on that date, Brookwell Limited no longer has a notifiable interest in the issued share capital of the Company.
Enquiries:
United Carpets 01709 732 666 Paul Eyre, Chief Executive Ian Bowness, Finance Director
Seymour Pierce Jonathan Wright 020 7107 8000 This information is provided by RNS The company news service from the London Stock Exchange More |
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| 30-09-11 | RNS |
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RNS Number : 2719P United Carpets Group plc 30 September 2011
United Carpets Group plc ('United Carpets' or 'the Group')
AGM Statement
The following statement was made at the Annual General Meeting of United Carpets held today at 10.00am.
'I am pleased to confirm the Group continues to trade in line with market expectations for the full year. However, the trading environment during the first 25 weeks of this financial year to 22 September 2011 has been challenging and like for like sales were 0.6% lower against the comparable period last year. Given the ongoing economic uncertainty across the UK and with the austerity measures now resulting in job cuts throughout the public sector, consumers have continued to spend their money cautiously.
Whilst it remains our strategy to reduce, over time, the number of corporate (non franchised) stores, that number, in fact, increased from 14 to 18 during the 25 week period. As these additional stores were loss making they will have a greater adverse impact on Group profitability in the first half than if they had continued as franchised stores.
Sales of flooring were slightly ahead of the comparable period last year. As ever, customers have recognised the value for money we offer and the opportunity to choose from our extensive ranges of flooring. We believe our trading performance continues to compare favourably with our nearest retail peers. The beds division has again struggled despite relatively weak comparatives, with consumers apparently still reluctant to spend on larger value items.
In September, the Group was voted the UK's leading Flooring Retailer (3+ stores) at the "Interiors Monthly" 2011 Awards. The award recognises the Group's achievements to date and its constant striving to do even better. Approximately 80% of all United Carpets stores operate under a franchised structure which is a key element in combining the advantages of a multiple retailer with the entrepreneurial drive of an independent. This is particularly important when the wider economic environment is subdued and it requires increased effort from the individual store management teams to maintain sales levels.
The Group's long term future remains sound, supported by significant cash balances, and the Group will report our interim results for the 6 months ended 30 September 2011 in December 2011.'
Enquiries:
United Carpets 01709 732 666 Paul Eyre, Chief Executive Ian Bowness, Finance Director
Cardew Group 020 7930 0777 Tim Robertson
Seymour Pierce Jonathan Wright/Mark Percy (Corporate Finance) 020 7107 8000 Katie Ratner / Jacqui Briscoe (Corporate Broking) This information is provided by RNS The company news service from the London Stock Exchange More |
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| 12-09-11 | RNS |
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RNS Number : 0374O United Carpets Group plc 12 September 2011 United Carpets Group plc (the "Company")
Report and Accounts and Notice of AGM
The Company announces that its annual report and accounts for the year ended 31 March 2011 has been sent to shareholders and is available on the Company's website, www.unitedcarpetsandbeds.com.
The report and accounts contain a notice of the Company's annual general meeting to be held at Moorhead House, Moorhead Way, Bramley, Rotherham, S66 1YY on Friday 30 September 2011 at 10.00am.
ENDS This information is provided by RNS The company news service from the London Stock Exchange More |
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| 29-12-11 | ||||
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I bought some a few month back, and even though at a small loss(if excluding the reinvestment) Im intent on holding.
They have cut the interim previously, I noticed, then paid the final. By paying no interim, its saved approx. 250-300k, which is about what the past six months have cost in terms of wages etc, so its perhaps prudent given this year is expected to be hard. Carpetright is most likely on its way out unless a miracle happens, too, so we could end up profiting from that. If the final is cut, then I expect 3p or less...if before the final is cut it reaches 3p, I will most likely buy more; not sell. If we get this years final, which is likely given the amount of cash in the bank and little debt, with just that were rewarded with a yield of just over 8% at todays price. I agree, its very risky...but then, how many other carpet retailers can match or beat United carpets on flooring prices? The biggest problem I can see is from the beds; they need to stock cheaper divans, or lesser priced beds to guarantee at least some increase in bed sales. They could easily buy standard bases/divans at £20-40 depending on the volume purchased, and sell at 50-65 and beat the likes of Tesco/Dreams etc on price. They sell the cheaper mattresses, but not the cheaper bases/divans. It doesnt make any sense, really. Deals on cheaper items coupled together, such as a deal on a basic base/divan and their cheapest mattress selling for around £80 would increase sales of beds in no time if delivered free too. Profit might be small, between £10-£15 but thats still £10-£15 more than currently being achieved from bed sales. People are short, so they cant afford to be fussy and go for the £300 beds like whats currently being sold at UCG, or not sold in UCGs case. |
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| 28-12-11 | ||||
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with no yield it looks best to avoid until we can see that the bottom has come.
with prices rising 15% last year lfl were well down. I can see 3p or less here. Tiger |
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| 30-09-11 | ||||
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Carpets still flying
30/09/2011 Ben Jaglom http://www.growthcompany.co.uk/news/1658558/carpets-still-flying.thtml Carpets and beds outfit United Carpets Group (UCG) has issued a trading update in which it bemoans the 'ongoing austerity measures'. The AIM-quoted group opined that over the 25 weeks to 22 September trading had been 'challenging' with like-for-like sales falling 0.6 per cent against the same period last. United argued that with the ongoing austerity measures its consumers have 'continued to spend their money cautiously'. The Yorkshire-headquartered company maintained that while it was looking to reduce its store count, it had in fact increased from 14 to 18 over the period. It added that as these new stores are loss making they will have a 'greater adverse impact on group profitability' than if they had continued as franchised stores. Sales of its flooring products were up against last year with United arguing its customers recognise 'The value for money we offer and the opportunity to choose from our extensive ranges.' It argues that its performance 'continues to compare favourably with our nearest retail peers' however its bed division was said to be 'struggling'. Analysts at house broker Seymour Pierce are forecasting profits of £1.1 million (EPS: 0.92p) for the year to March 2012. Shares in United are certainly not volatile, having traded over the last year between a range of 7.25p-9p. Currently trading at 7.38p, valuing the company at £6 million the shares have insufficient volatility and potential upside to warrant a speculative buy rating. A relative minnow in the sector compared to giants such as Carpetright the shares look fairly valued at the current price. Hold. Tags: AIM market, British businesses, Carpets, Penny shares, Trading update Sector: General Retailers Companies: United Carpets |
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| 31-07-11 | ||||
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Sunday Times
http://bit.ly/o9hlMi ⢠Inside the City: Matthew Goodman thinks that the odds on Ladbrokes buying Sportingbet have shortened on news that the online group was seeking to offload its Turkish operation, with a possible take-out price of 80p a share against Friday's close of 55p. ⢠United Carpets has managed to survive tough times in the High Street so far, helped by its franchised business model providing greater certainty of income. [ p.3.16 |
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