‘Lacklustre retail environment’ hits sales at listed flooring business
United Carpets Group, the third largest chain of specialist retail carpet and floor covering stores in the UK, has seen its like for like sales fall by 4.3%.
Publishing its interim results for the year ended 31 March 2020, the Mexborough-headquartered business, says its revenue for the year increased by 19.2% to £28.58m (2019: £23.98m).
The business recorded a loss before tax and IFRS 16 adjustments of £445,000 (2019: profit before tax of £595,000) after charging £597,000 of provisions related to the Covid-19 pandemic.
United Carpets says its like for like sales for the nine weeks since post lockdown re-opening have been “positive and encouraging”.
Paul Eyre, chief executive, said: “Excluding the impact from the Covid-19 pandemic, trading for the year was in line with the update the company provided in February 2020.
“Whilst total sales were up 19%, this was as a result of the Group’s new instalment payment channel.
“Like for like sales from the store network, however, decreased by 4.3%, which was a 1.6% decrease excluding those weeks affected by lockdown.
“This reflected a lacklustre retail environment and, combined with higher start up and servicing costs associated with the instalment payment channel, meant profitability was reduced for the year.
“Like all businesses, our focus since the year end has been to manage the Group during the current Covid-19 crisis.
“We reported the opening of the store network from 23 May and it is pleasing to confirm a positive like for like sales performance across our store network for the nine weeks since then.
“We recognise that it is still early days, but believe it to be encouraging.”
As of 31 March 2020, there were 56 stores in the Group estate, of which 46 were franchised and 10 were corporate stores.
During the period under review, the Group opened two new corporate stores, and transferred a corporate store to an experienced franchisee. A further two franchised stores and two corporate stores were also closed.
The firm’s update adds: “The focus for the company is to support the existing store network and maintain trading levels in this extraordinary period post the outbreak of Covid-19.
“To date, results have been encouraging. However, it is hard to predict how consumers will act over the coming months and the Group will necessarily have to remain flexible to be able to respond to situations as they arise.
“This is new territory for all retailers, but if restrictions remain limited a return to normal, longer-term trading levels can hopefully be achieved.”