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Carpetright Says Gaining Share Of Shrinking Market

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http://www.reuters.com/article/idUSLDE65S14F20100629

LONDON, June 29 (Reuters) - Britain's biggest floor coverings retailer Carpetright (CATVU.L) said it was increasing its share of a falling market as smaller rivals go bust amid the pressures of increased taxes and unemployment.

"It's very, very tough out there but we're holding our own and gaining market share," Chairman and Chief Executive Philip Harris told reporters on Tuesday after the firm revealed a 64 percent increase in 2009-10 pretax profit.

The stock was down 9.5 percent at 643 pence at 1048 GMT, valuing the business at about 431 million pounds ($648.9 million).

Before Tuesday, shares in Carpetright had lost a quarter of their value over the last six months, underperforming a 9 percent fall in the UK general retailers index .FTASX5370, reflecting a profit warning in March and a further downbeat statement in April.

"There's a lot of small businesses going out of business and we've got to pick up their market share," Harris said, adding the overall UK market was down about 24 percent year-on-year.

Harris, who has been selling carpets for 52 years, warned that increased taxes and rising unemployment would continue to restrain demand in 2010-11.

Carpetright, which trades from 703 stores in the UK, Ireland, the Netherlands and Belgium, currently has around 33 percent of the UK floor coverings market.

Harris said the firm will tightly control costs, capital expenditure, stock and cash flow and try to maintain gross margins in the current year by managing promotions and benefiting from the movement of the euro versus sterling.

The company, which regards itself as typically "first in, first out" of recession, would also exploit new revenue streams in the insurance and house building sectors, he added.

DOUBLE DIP?

UK retailers are emerging from a deep recession but fear measures from the coalition government to rein in a record public deficit, such as higher taxes and public spending cuts, will hit consumer confidence in the months ahead.

Last week a survey said British retail sales improved less than economists expected in June, while official data on Tuesday said British mortgage approvals were unexpectedly flat on the month in May. [iD:nAHLLHE63F] [iD:nLDE65S0OE]

"We are concerned that the housing market is beginning to stall as evidenced from the latest data and mortgage volumes, which are a key driver of carpet sales, are slowing," said Seymour Pierce analyst Freddie George, who cut his 2010-11 profit forecast to 35 million pounds from 40 million pounds.

Carpetright made an underlying pretax profit of 28.2 million pounds in the year to May 1 compared with analysts' consensus forecast of 30.1 million pounds, according to Thomson/Reuters I/B/E/S. That is up from 17.2 million pounds in 2008-09 but is under half the 62.1 million pounds made in 2007-08.

Revenue increased 7.0 percent to 516.6 million pounds in the year to May 1, with UK gross margins down 0.1 percentage points to 62 percent.Carpetright, which ended the year with net debt of 71.3 million pounds, is doubling its dividend payment to 16.0 pence. Harris' family own around 25 percent of the shares.Current year revenue from insurers will rise by up to 15 million pounds, helped by contract wins from Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L), Harris said. Revenue from housebuilders will reflect trials with Barratt Developments (BDEV.L) and Persimmon (PSN.L).The firm is also targeting business from 390,000 UK public sector workers by offering discount cards. (Editing by Mike Nesbit, Elaine Hardcastle) ($1=.6638 pounds)

The analyst seems to be suggesting low volumes are here to stay. Even the company saying the carpet industry is in terrible shape.

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http://www.reuters.com/article/idUSLDE65S14F20100629

The analyst seems to be suggesting low volumes are here to stay. Even the company saying the carpet industry is in terrible shape.

The CEO or whatever of Carpetright was very much on top of the financial crisis. even before the sh*t hit the fan good and proper he was telling his staff to batten down the hatches in their personal lives. He was interviewed on Radio 4 early in in 2008 or late 2007. Seemed like a decent chap, with his head screwed on and he knew that the party was ending.

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The CEO or whatever of Carpetright was very much on top of the financial crisis. even before the sh*t hit the fan good and proper he was telling his staff to batten down the hatches in their personal lives. He was interviewed on Radio 4 early in in 2008 or late 2007. Seemed like a decent chap, with his head screwed on and he knew that the party was ending.

No pun?

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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