Carpetright has reported a narrowing of losses and a return to like-for-like sales growth for the full year as it continues to roll out its turnaround plan.
Revenue fell 13.4 per cent to £386.4m in the 52 weeks to the end of April.
Statutory loss before tax narrowed from £69.8m to £24.8m.
Net debt decreased by £25.6m to £27.4m.
Why it’s interesting
It has not been a smooth ride for Carpetright, which last year entered into a company voluntary arrangement (CVA) to close dozens of stores as it struggled with ballooning losses.
Trading in the first half of the year was weak, particularly in the UK, with revenue falling almost 13 per cent.
But it was a “year of two halves”, according to chief executive Wilf Walsh, with “significant improvement” in second half trading, particularly in the fourth quarter.
Like-for-like sales grew by 8.5 per cent in the first eight weeks of the new financial year compared to the same period in 2018.
The London-listed floor covering specialist said it had addressed its legacy property issues and was on track to deliver £19m of annual savings as part of the CVA.
Shares in Carpetright jumped almost 17 per cent in early trading.
Carpetright welcomed the results, but warned it was not out of the woods yet, with economic and political uncertainties weighing on the short-term outlook.
The firm said a further 90 stores were subject to flexible terms, meaning they remained under review for potential relocation or closure.
“Today’s full year numbers, while still a little disappointing, do appear to show that the company is heading in the right direction, however the business isn’t being helped by the difficult retail environment,” said Michael Hewson, chief market analyst at CMC Markets.
“Time will tell whether Carpetright can reinvigorate its reputation, however the omens are positive. It is clear that over 12 months on from the company’s CVA, the business is looking a lot less threadbare, and in a much better position to survive what continues to be a very tough retail environment.”
Carpetright also announced that non-executive director Sandra Turner will step down after nearly nine years’ service on the board.
The retailer said Turner, who is also a non-executive director at Greene King and Greggs, will leave the role after the firm’s annual general meeting in September.
Turner will be replaced by HR veteran Pauline Best, who will join the board from August.
What Carpetright said
Chief executive Wilf Walsh said: “It was a transitional year for the business as we took tough but necessary action to address our legacy property issues and restructure the UK store estate. This difficult task was carried out against the backdrop of a challenging trading environment but was essential to put the business back on the path to sustainable profitability.
“From a trading standpoint it was, as expected, a year of two halves, with the first six months reflecting the impact of the CVA implementation, followed by a significant improvement in the second half and, in particular, during the fourth quarter.”