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Carpetright continues to make profit in tough trading conditions

17
Dec '08

Carpetright plc, Europe's leading specialist carpet and floor covering retailer trading within the UK, Republic of Ireland, The Netherlands, Belgium and Poland, announces its interim results for the 26 weeks to 1 November 2008.

Highlights

Group
• Total Group revenue of £236.8m (2007: £251.0m)
• Underlying* profit before tax of £8.8m (2007: £27.2m)
• Profit before tax of £9.5m (2007: £28.1m)
• Underlying* earnings per share of 9.4p (2007: 28.4p)
• Basic earnings per share of 10.1p (2007: 29.5p)
• Interim dividend of 4.0p (2007: 22.0p)

UK and Republic of Ireland
• Underlying* operating profit decreased 67.1% to £8.4m (2007: £25.5m)
• Total sales decreased by 11.1%, with LFL sales down by 13.0%
• Store base increased to 561

Rest of Europe
• Underlying* operating profit increased by 29.2% to £3.1m (2007: £2.4m)
• Total sales increased by 31.9% with like for like sales up by 23.3% (5.9% in constant currency)
• Store base increased to 128

* 'Underlying' excludes profits on property disposals and non-recurring items together with associated tax

Lord Harris, Chairman and Chief Executive, said: “As I have previously said, I expected my 51st year of selling carpets to be extremely challenging, and it has proved to be the case. Market conditions and consumer confidence have declined through the first half, leading to reduced profits year on year due to lower sales.

Our plan is to manage the business through this period of economic downturn by continuing to exert tight control over all costs, capital expenditure, stock and cashflow. Our expansion into Europe over the past few years has delivered increased profit.This part of the business continues to show good growth.

Trading during November was below expectations and like all non-food retailers, we expect it will remain very difficult. The Board anticipates the results for the full year will be significantly below current consensus.

Given the first half performance and degree of uncertainty in the general economic/retail outlook, the Board believes it is appropriate to reduce the interim dividend to 4.0p.

Notwithstanding the current difficulties faced by consumers, Carpetright has a strong brand and we are confident in our ability to compete by continuing to improve our operational delivery, focusing on value, choice and service. We are continuing to make profits and take market share through this downturn and will be in a good position once confidence returns.”

Carpetright plc

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