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Carpetright PLC (CPR)

  Print      Mail a friend       Annual reports

Tuesday 10 December, 2013

Carpetright PLC

Half Yearly Report

RNS Number : 1013V
Carpetright PLC
10 December 2013
 



Carpetright plc

Interim Results Announcement for the 26 weeks ended 26 October 2013

 

Carpetright plc, Europe's leading specialist carpet and floor coverings retailer, today announces its interim results for the 26 week trading period ended 26 October 2013.

 

Group Financial Summary

 


H1 FY14

£m

H1 FY13

£m

Change

 

Group revenue  (Note 1)

222.2

227.2

(2.2%)

·    UK

185.0

189.1

(2.2%)

·    Rest of Europe  (Note 2)

37.2

38.1

(2.4%)





Underlying operating profit/(loss)  (Note 3)

4.1

5.4

(24.1%)

·    UK

5.5

5.2

5.8%

·    Rest of Europe

(1.4)

0.2






Underlying profit before tax

3.0

4.5

(33.3%)

Underlying earnings per share

3.2p

3.8p

(15.8%)





Exceptional items  (Note 4)

(1.1)

(12.4)


Profit/(loss) before tax

1.9

(7.9)


Basic earnings/(loss) per share

2.8p

(9.5p)






Net debt

(14.3)

(16.3)

Down £2.0m

Dividend per share

Nil

Nil


 

Highlights

 

UK

•     Self-help initiatives continued to show growth against a backdrop of volatile trading conditions.

•     Like-for-like revenues (Note 5) decreased by 0.8%.  Excluding the expected contraction in sales from the wholesale business, like-for-like sales in the core UK retail business were flat year-on-year.

•     Gross profit percentage increased by 140 basis points to 63.1% (H1 FY13: 61.7%).

•     The number of stores reduced by a net four during the period to 474 stores, trading from 4.1m sqft, being 2.3% lower year-on-year.

•     Modernised a further 38 stores, making a total of 224 stores now completed.

 

Rest of Europe

•     Revenue in local currency declined by 8.4% with like-for-like sales down by 8.6%.

•     Continued difficult trading conditions in the Netherlands, where the floor coverings market remains weak.  Focus remains on our self-help measures to improve the performance in the second half.

•     Belgium and Republic of Ireland performing as expected.

•     The number of stores remains unchanged at 142, trading from 1.6m sqft.

 

 

Commenting on the results, Lord Harris, Executive Chairman, said:

 

"Against a backdrop of volatile trading conditions, our first half performance reflects an improvement in profits in the UK, driven by the continued success of our self-help initiatives, offset by a move into loss in our Rest of Europe business, primarily from a continuation of very difficult trading conditions in the Netherlands.

 

"Historically, the trend in UK mortgage approvals has been a useful lead indicator of consumer demand in our sector, bearing a positive correlation with floor covering sales.  Approvals began to show encouraging signs of improvement during the first half, although this is from a very low base by historic standards.  In the past, we have seen a lag of around six months before the impact of a change in the mortgage approval trend has been reflected in our sales.

 

"The success of our self-help activities in improving Group performance during the period continues to be encouraging, demonstrating that a focus on factors within our control can
yield good results.  While we anticipate trading conditions will remain challenging, we expect these self-help initiatives will underpin an improvement in Group performance in the second half and our expectations for the year as a whole remain unchanged."

 

 

 

 

Notes

1.     All sales figures are quoted after deducting VAT.

2.     Rest of Europe comprises the Netherlands, Belgium and the Republic of Ireland.

3.     Where this review makes reference to "Underlying" these relate to profit / earnings before exceptional items and related tax.

4.     Exceptional items comprise of net losses on disposals of properties of £1.1m.   The comparable figure for the prior year of £12.4m comprised of onerous lease provisions of £6.5m, net losses on disposal of properties of £1.2m, non-cash impairment of freehold property assets of £4.3m and impairment of other assets of £0.4m.

5.     Like-for-like sales calculated as this year's net sales compared to last year's net sales for all stores that are at least 12 months old at the beginning of our financial year.  Stores closed during the year are excluded from both years.  No account is taken of changes to store size.  Sales from insurance and house building contracts are supplied through the stores and included in their figures.

6.     The comparative period for the first half is the 26 week period ended 27 October 2012.

 

 

Results presentation

 

Carpetright plc will hold a presentation to analysts and investors at Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB at 9:00am today.

 

A listen only conference call facility is available on +44 (0)1452 560 297, conference ID: 17063622.

 

A copy of this interim statement can be found on our website www.carpetright.plc.uk.

 

 

For further enquiries please contact:

 

Carpetright plc

Lord Harris, Executive Chairman

Neil Page, Group Finance Director

Tel: 01708 802000

 

Citigate Dewe Rogerson

Kevin Smith / Lindsay Noton

Tel: 020 7638 9571

 

 

 

Forthcoming News flow:

Carpetright will release its Interim Management Statement for the third quarter on
28 January 2014.

 

 

Certain statements in this report are forward looking.  Although the Group believes that the expectations reflected in these forward looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements contain risks and uncertainties, actual results may differ materially from those expressed or implied by these forward looking statements. We undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

 

 

 

 

Interim Results

 

A summary of the reported financial results for the 26 weeks ended 26 October 2013 is set out below:

 


 H1 FY14
£m

H1 FY13
£m


Change

Revenue

222.2

227.2

(2.2%)

Underlying operating profit

4.1

5.4

(24.1%)

Net finance charges

(1.1)

(0.9)

(22.2%)

Underlying profit before tax

3.0

4.5

(33.3%)

Exceptional items

(1.1)

(12.4)


Profit/(loss) before tax

1.9

(7.9)


Earnings/(loss) per share (pence)




- underlying

3.2p

3.8p


- basic

2.8p

(9.5p)


Dividends per share (pence)

Nil

Nil


Net debt

(14.3)

(16.3)

£2.0m

 

Note - Where this review makes reference to "Underlying" these relate to profit / earnings before exceptional items.

 

 

Overview

Total Group sales decreased by 2.2% to £222.2m, with the UK business down 2.2% and a decline of 2.4% in the Rest of Europe.  During the half year, the Group opened seven stores and closed 11 which gave a net decrease of four stores, resulting in a store base of 616.  Total store space declined by 0.9% to 5.7 million square feet.

 

Although UK economic data has begun to indicate improved prospects, this has yet to impact consumer spending in our categories, where the retail environment has remained challenging.  Overall sales patterns remained volatile across the first half, with the solid sales momentum established early on significantly impacted by the July heat-wave, and the sales trend remaining unpredictable in the second quarter.  Like-for-like sales in the UK declined by 0.8%, with core retail stores like-for-like sales being flat.  Against this backdrop, our self-help actions continue to deliver positive results.  Further good progress was made in increasing the gross profit percentage, which grew by 140 basis points to 63.1% through a combination of improved sourcing and promotional planning.  Our previous guidance of a full year gross profit percentage improvement in the range of 60-100 basis points above the prior year remains unchanged.

 

The key driver in the performance of the Rest of Europe continues to be the deterioration of consumer confidence in the Netherlands, where the floor coverings market remains weak.  Sales in local currency were down 8.4%, with like-for-like sales down 8.6%.  Taking into account the depreciation of Sterling relative to the Euro, this translates to a total sales decline of 2.4%.

 

Overall, Group underlying operating profit declined to £4.1m.  Underlying net finance charges were £0.2m higher at £1.1m, primarily the result of changes to accounting for pension costs.   These factors combined to generate an underlying profit before tax of £3.0m (H1 FY13: £4.5m).

 

Exceptional charges totalled £1.1m (H1 FY13: £12.4m) reflecting net losses on the disposal of property. As a result, the profit before tax was £1.9m (H1 FY13:  pre-tax loss of £7.9m).  Basic earnings per share were 2.8p (H1 FY13: loss per share of 9.5p).

 

The combination of cash flow from continued underlying profitability and the level of net capital expenditure, enabled year-on-year net debt to be reduced by £2.0m to £14.3m (H1 FY13: £16.3m).  The cash flow strength of the Group is highlighted by the fact that in the past four and half years, net debt has been reduced by over 85% from £97.1m as at May 2009.

 

 

Executive Chairman's review

 

Although the Group's underlying profits declined in the first half, the UK business delivered an increased profit in tough trading conditions, characterised by significant sales volatility throughout the period.  In the Rest of Europe, trading conditions in the Netherlands remained difficult whilst progress continues to be made in the recovery plan for the Republic of Ireland and Belgium continues to trade in line with expectations.

 

The improvement in UK performance has been driven, in large part, by the continued success of our programme of self-help measures.  Key areas of focus during the first half have been:

 

·     Modernising the estate

We are part way through a three year programme of refurbishing the UK store estate, introducing an updated store design, with a new, more contemporary feel, in which it is easier for customers to shop.  This has involved improving natural light, updating signage, developing new layouts, replacing floor coverings and upgrading in-store lighting. 

 

During the first half we modernised a further 38 stores, making a total of 224 stores now completed, being 47% of the estate.  We continue to be satisfied with the post-refurbishment sales uplifts being achieved but, as previously announced, this is diminishing as we work our way through the estate to 5% when compared to the un-invested estate.  This lower rate of growth was expected and reflects the prioritisation of the refurbishment of stores with the greatest potential in the early part of the programme.  In the second half of the year, we expect to complete a further 45 refurbishments to bring the total to 269 stores, being 57% of the portfolio.   

 

As previously announced, following the success of the UK plan, we have a similar refurbishment programme in the Rest of Europe to adapt to changing customer preferences.  During the first half, we refurbished a further three stores with positive initial results, making a total of 23 completed to date.  Although trading conditions in this business remain challenging, we are planning a further ten store refurbishments in the Netherlands during the second half of this financial year.

 

·     Adjusting the store portfolio

At the end of October 2013 we had 474stores trading in the UK and during the last six months we opened seven stores and closed 11.  This net reduction is primarily the result of implementing the plan from our catchment analysis work which identified a small number of overlaps, where having more than one store in a town was not beneficial to profit or cash flow.  In the past six months we have negotiated exits from two locations where we had onerous leases, removing us from all future liabilities.

 

We continue to take a robust view at lease renewal, which provides an opportunity to secure lower rental cost for future years.  In the period we achieved an average rent reduction at lease renewal of over 10%.  Within the next five years 20% of the estate has lease renewals scheduled.

 

In the Rest of Europe we had 142 stores trading as at the end of October 2013, with no openings or closures in the last six months.  We now have 16 stores operating as 'sample only' with a small takeaway range format, which has the benefit of lower operating costs without negatively affecting customer choice.  This format is allowing us to reduce fixed occupancy costs by either sub-letting or handing back space to the landlord, hence benefiting profitability.    

 

·     Optimising digital as part of a multi-channel offering

Our UK customer research indicates that the nature of our product means that the vast majority of customers prefer to visit a store to make their purchase, to give them the opportunity to see and touch their choice of floor covering.  However, the internet has become a vital research tool for many customers and the rapid growth of smart phone and tablet use has made an effective and integrated multi-channel proposition a necessity. 

 

We have continued to develop our website to improve the customer experience and drive sales.  One specific improvement has been the recent re-launch of the bed section, with significantly enhanced navigation filters.  We have been encouraged by the increased visitor numbers and subsequent sales growth this has produced.

        

By the end of the first half, on a weekly basis we were achieving an average of over 98,000 unique visitors to our website, a 22% increase on the same period last year, and this has produced a corresponding increase in appointment leads and sample requests.  Some of the increase is attributable to an enhanced search engine optimisation programme and increased investment in pay-per-click.  We have also continued to focus on improving our conversion to sales ratio, through a call centre and improved follow-up at store level.  Sales from this combination of the call centre and an online capability have grown significantly during the period and by October 2013 were the equivalent of one of our top 20 stores.

 

We are transferring much of this learning to our Dutch business, with the launch of an updated website.  The new site will have the functionality of sample ordering, booking of appointments, 'call to buy' via a freephone number and online payment of outstanding customer balances.  We expect to have this operational before the end of January 2014.

 

·     Developing our bed proposition

Beds provide an important complementary revenue stream, in our UK business, to our core floor coverings offer and we believe this category has significant further growth potential.  At the end of October 2013 the offer 'Sleepright by Carpetright' was trading from 263stores.  The business delivered an increase in sales of 4.6% in the period as a whole, with the sales momentum accelerating to 14.2% in the second quarter.  Beds now represent 7.1% of total UK sales revenue (H1 FY13: 6.6%) and 10.1% of the sales mix in those stores where they are available.  We are pleased with this performance and are stepping up our investment in marketing to establish greater customer awareness of the strength of our beds offer.

 

Building on the lessons learnt in the UK, we are replicating the bed proposition in the Netherlands, albeit adjusted to reflect the needs of the local consumer.  We have extended the trial to a further four stores, bringing the total to six stores.  The performance of these trial stores will be evaluated by the end of the financial year and a decision on a further roll-out will be taken at that point. 

 

Board

On 4 October 2013, I was disappointed to have to announce the departure of Darren Shapland from his role as Chief Executive, but he left with our thanks and we wish him well for the future.  From that date I have taken on the role of Executive Chairman and am enthusiastic about tackling the challenges that the business continues to face in these difficult economic times.  I am pleased that Graham Harris has joined the Board and is working alongside me as Chief Operating Officer.

 

Dividend

The Board feels it is important to see a sustained recovery reflected in the financial results of the Group before restoring the dividend and believes the difficult decision not to pay an interim dividend is in the best interests of the business.  The Board will continue to review the dividend policy on a biannual basis.

 

Outlook

Historically, the trend in UK mortgage approvals has been a useful lead indicator of consumer demand in our sector, bearing a positive correlation with floor covering sales.  Approvals began to show encouraging signs of improvement during the first half, although this is from a very low base by historic standards.  In the past, we have seen a lag of around six months before the impact of a change in the mortgage approval trend has been reflected in our sales.

 

The performance of our Rest of Europe segment is predominantly a reflection of continued difficult trading in the Netherlands.  Whilst this business has reported a loss in the first half, it remains cash generative.  We believe a revised promotional programme will drive incremental sales and margin in the second half, in a challenging consumer environment.

 

The success of our self-help activities in improving Group performance during the period continues to be encouraging, demonstrating that a focus on factors within our control can
yield good results.  While we anticipate trading conditions will remain challenging, we expect these self-help initiatives will underpin an improvement in Group performance in the second half and our expectations for the year as a whole remain unchanged.

 

 

 

Lord Harris

Executive Chairman

9 December 2013

 

 

 

 

Financial review

 

UK

 

UK - Key financial results

 

 

H1 FY14

£m

H1 FY13

£m

 

Change

Revenue

185.0

189.1

(2.2%)

Like-for-like sales

(0.8%)

0.7%


Gross profit

116.6

116.6

0.0%

Gross profit %

63.1%

61.7%

1.4ppts

Costs

(111.1)

(111.4)

0.3%

Underlying operating profit

5.5

5.2

5.8%

Underlying operating margin %

3.0%

2.7%


 

In volatile trading conditions total revenue decreased by 2.2% to £185.0m.  The number of stores reduced by a net four during the period to 474 stores, trading from 4.1m sqft, being 2.3% lower year-on-year.

 

At the period end, the store portfolio comprised:

 

UK store base

Store numbers

Gross Sq ft ('000)

27 April

2013

 

Openings

 

Closures

 

 

26 Oct

2013

27 April

2013

26 Oct

2013

Standalone

462

7

(11)


458

4,124

4,071

Concessions

16

-

-


16

29

29


478

7

(11)


474

4,153

4,100

As at 27 Oct 2012



480

4,198







Included in standalone stores :






Bed departments

271

2

(10)


263



As at 27 Oct 2012





276



 

Like-for-like sales decreased by 0.8%. Excluding the expected contraction in sales from the wholesale business, the core retail business was level with the prior year.

 

Gross profit was level with the prior year at £116.6m, with the gross profit percentage increasing by 140 basis points to 63.1%. This was the result of:

·    An improvement in the floor covering margin through improved sourcing and promotional planning.

·    A decline in wholesale sales, which have a lower gross margin, resulting in a favourable mix impact.

 

The total UK cost base decreased by £0.3m to £111.1m.  Store payroll continued to be managed closely to the volume of retail sales with inflationary increases primarily within utilities and business rates being offset by rent savings.  Marketing expenditure increased year-on-year reflecting a greater investment in both digital and traditional media to drive customers to our stores.

 

All of the above elements combined to produce an underlying operating profit that increased by £0.3m to £5.5m.

 

 

Rest of Europe

 

Rest of Europe - Key financial results

 

 

H1 FY14

£m

H1 FY13

£m

Change

(Reported)

Change

(Local

Currency)

Revenue

37.2

38.1

(2.4%)

(8.4%)

Like-for-like sales (local currency)

(8.6%)

(10.1%)



Gross profit

21.5

21.7

(0.9%)

(7.0%)

Gross profit %

57.8%

57.0%

0.8ppts


Costs

(22.9)

(21.5)

(6.5%)

(0.1%)

Underlying operating profit/(loss)

(1.4)

0.2



Underlying operating margin %

(3.8%)

0.5%



 

Total net sales declined by 2.4% to £37.2m with the key driver being the continued deterioration of consumer confidence and political and economic uncertainty across the Netherlands.  In local currency terms this was a decline of 8.4% with like-for-like sales down 8.6%.

 

At the period end, the store portfolio comprised:

Rest of Europe

store base

Store Numbers

Sq ft ('000)

27 April

2013

 

Openings

 

Closures

26 Oct

2013

 

27 April

2013

26 Oct

2013

Netherlands

95

-

-

95

1,104

1,104

Belgium

26

-

-

26

307

307

Republic of Ireland

21

-

-

21

155

155


142

-

-

142

1,566

1,566

As at 27 Oct 2012




141


1,559

 

The gross profit percentage increased by 80 basis points to 57.8%, but was not enough to offset the decline in sales, resulting in a decline in gross profit to £21.5m.  In local currency terms, this represented a 7.0% decline.

 

Against the background of lower sales, cost management activities were put in place as part of a profit protection plan and total costs were broadly level in local currency terms. 

 

In local currency terms the underlying operating profit decreased by €2.0m, which translated into a £1.6m decline, leading to a reported loss of £1.4m.

Group financial review

 

Exceptional items

The Group recorded a net charge of £1.1m in the half year (H1 FY13: £12.4m):

 


(Charge) / Gain


H1 FY14

£m

H1 FY13

£m

Loss on disposal of properties

(1.1)

(1.2)

Store Impairment charge - freehold properties

-

(4.3)

Store Impairment charge - store assets

-

(0.4)

Onerous lease charge

-

(6.5)

Net Charge

(1.1)

(12.4)

 

We continued to trade our property portfolio, although the weakened UK out-of-town retail property market has made this more challenging.  A net loss on disposal of properties of £1.1m was made in the half year (H1 FY13: £1.2m) principally the result of surrender premiums being paid to exit loss making locations.

 

At 27 April 2013 there were 25 vacant properties in the UK and five in the Republic of Ireland (RoI) classed as onerous leases, against which we carried a provision.  During the half, we successfully disposed of two of these properties, removing us from all associated future liabilities.  In addition, two properties have now closed but we remain liable for lease costs.  The net impact is not material, resulting in no charge in the financial statements.

 

We have reviewed, using a method consistent with the approach taken in previous years, the carrying value of store assets in our balance sheet.  The models used to value these assets include a number of assumptions relating to market growth and inflationary expectations.  There was no movement in the impairment provision as at the half year end.

 

Net finance charges

Underlying net finance charges were £0.2m higher at £1.1m (H1 FY13: £0.9m), primarily the result of changes to accounting for pension costs.

 

Taxation

The estimated effective tax rate on profits is 0.5% (Actual FY13: 29.3%).  This fall is largely due to a 1.0% reduction in the UK tax rate to 23.0% effective from April 2013 and a further 3.0% reduction in future tax rates as enacted in the Treasury Budget July 2013 which reduces our deferred tax liabilities.

 

The underlying rate is 28.8% (FY13: 31.3%).

 

Dividend

The Board has decided not to pay an interim dividend (H1 FY13: nil).

 

Balance sheet

The Group hasnet assets of £67.9m (Year end FY13: £65.3m) an increase of £2.6m since 26 April 2013.

 

Summary Balance sheet

 


26 Oct

2013

£m

26 April

2013

£m

Movement

 

£m

Freehold and long leasehold property

74.4

75.0

(0.6)

Other non current assets

117.3

118.0

(0.7)

Stock

37.1

37.6

(0.5)

Trade & other current assets

27.8

19.8

8.0

Creditors < 1 year

(107.0)

(103.2)

(3.8)

Creditors > 1 year

(62.7)

(66.6)

3.9

Net debt

(14.3)

(10.2)

(4.1)

Pension deficit

(4.7)

(5.1)

0.4

Net Assets

67.9

65.3

2.6

 

During the period, one freehold property disposal was completed.  The Group continues to own a significant property portfolio, most of which is used for trading purposes.  The portfolio is estimated to have a market value of £79.2m compared to a net book value of £74.4m.

 

Net debt and cash flow

The Group's net debt at 26 October 2013 was £14.3m, an increase of £4.1m from the year end FY13 position of £10.2m.  This increase was driven by the underlying operating profit performance being offset by a £1.8m cash outflow related to provisions, £0.4m contributions to closed defined benefit pension schemes and a £7.6m increase in working capital.  The latter was partly a consequence of a seasonal movement on prepayments, which is expected to reverse in the second half.  The resulting net inflow of cash generated by operations of £1.1m was more than offset by net capital expenditure, interest and tax net outflows totalling £5.3m.

 

The Group's average cost of funding was 6.5% (H1 FY13: 6.6%) with an average net debt of £19.1m (H1 FY13:  £25.8m). 

 

 

 

 

Summary cash flow


H1 FY14

£m

H1 FY13

£m

Underlying operating profit

4.1

5.4

Depreciation and non-cash items

7.1

7.1

Exceptional items

-

-

(Increase)/Decrease in stock

0.5

(2.0)

(Increase)/Decrease in working capital

(8.4)

(3.4)

Provisions paid

(1.8)

(1.5)

Post-employment benefits paid

(0.4)

(0.4)

Cash generated by operations

Net interest paid

(0.8)

(0.9)

Corporation Tax paid

Net capital expenditure

(4.2)

(1.0)

Free cash flow

(4.2)

2.4

Dividends paid

-

-

Other

0.1

0.4

Movement in net debt

Opening net debt

(10.2)

(19.1)

Closing net debt

(14.3)

(16.3)

 

Gross capital expenditure was £4.6m (H1 FY13: £5.0m), with the majority of this relating to the store refurbishment programme.  After allowing for proceeds from property disposals, net capital expenditure was £4.2m (H1 FY13: £1.0m). 

 

 

 

H1 FY14

£m

H1 FY13

£m

Capital expenditure

(4.6)

(5.0)

Proceeds from property disposals

0.4

4.0

Net capital (expenditure)/receipts

(4.2)

(1.0)

 

Current liquidity

Gross bank borrowings (excluding unamortised fees) at the balance sheet date were £18.2m (H1 FY13: £21.4m) of which £0.7m is term based, with the balance of £17.5m being drawn down from overdraft facilities.  The Group had further undrawn facilities of £43.8m at the balance sheet date.  The term of the majority of these facilities is to July 2015 and they are subject to a number of covenants, against which the Group monitors compliance.  The Group has sufficient headroom to enable it to comply with the covenants on its existing borrowings. 

 

Pensions

At 26 October 2013 the IAS 19 net retirement benefit deficit was £4.7m (27 April 2013:  £5.1m).  The half year discount rate was 4.2% (27 April 2013: 4.2%), reflecting prevailing corporate bond rates, this alongside the higher market value of plan assets and additional company contributions led to a decrease of £0.4m in the calculation of the net pension liability for accounting purposes at 26 October 2013.  As previously announced, the company scheme was closed to future accrual with effect from 1 May 2010.

 

The Company agreed a recovery plan with the Trustees in 2012 and this will be reviewed following the completion of the next triennial valuation, which will be performed as at 5 April 2014.

 

 

 

Neil Page

Group Finance Director

9 December 2013

 

 

 

 

 

Condensed consolidated income statement

for 26 weeks ended 26 October 2013

 



26 weeks to 26 October 2013

(unaudited)


26 weeks to 27 October 2012

(unaudited) restated


52 weeks to 27 April 2013

(audited) restated

 


Notes

Before

Exceptional

items

£m

Exceptional

Items

(note 5)

£m

Total

£m


Before

Exceptional

items

£m

Exceptional

Items

(note 5)

£m

Total

£m


Before

Exceptional

items

£m

Exceptional

Items

(note 5)

£m

Total

£m

Revenue

4

222.2

-

222.2


227.2

-

227.2


457.6

-

457.6

Cost of sales


(84.1)

-

(84.1)


(88.9)

-

(88.9)


(179.3)

-

(179.3)

Gross profit


138.1

-

138.1


138.3

-

138.3


278.3

-

278.3

Administration expenses


(134.1)

-

(134.1)


(134.1)

(11.2)

(145.3)


(269.2)

(13.6)

(282.8)

Other operating income/(expenses)


0.1

(1.1)

(1.0)


1.2

(1.2)

-


2.3

(1.2)

1.1

Operating profit/(loss)

4

4.1

(1.1)

3.0


5.4

(12.4)

(7.0)


11.4

(14.8)

(3.4)

Finance costs1


(1.1)

-

(1.1)


(0.9)

-

(0.9)


(1.7)

-

(1.7)

Profit/(loss) before tax


3.0

(1.1)

1.9


4.5

(12.4)

(7.9)


9.7

(14.8)

(5.1)

 

Tax

6

(0.8)

0.8

-


(1.9)

3.4

1.5


(3.2)

1.7

(1.5)

 

Profit/(loss) for the financial period attributable to owners of the parent


2.2

(0.3)

1.9


2.6

(9.0)

(6.4)


6.5

(13.1)

(6.6)

 

 

Basic earnings per share (pence)

7

3.2

(0.4)

2.8


3.8

(13.3)

(9.5)


9.6

(19.4)

(9.8)

 

Diluted earnings per share (pence)

7



2.8




(9.5)




(9.8)

 

1 Restated for adoption of IAS 19 (revised).

All material items in the income statement arise from continuing operations.

 

 

Condensed consolidated statement of comprehensive income

for 26 weeks ended 26 October 2013

 


Notes

26 weeks to

26 October

2013

(unaudited)
£m

26 weeks to

27 October

2012

(unaudited)
£m

52 weeks to

27 April

2013

(audited)
£m

Profit/(loss) for the financial period


1.9

(6.4)

(6.6)

Other comprehensive income/(loss)





Items that will not be reclassified to the income statement





Remeasurements of defined benefit plans

11

0.1

(0.8)

(1.6)

Tax on items that will not be reclassified to the income statement


0.1

0.2

0.1

Total items that will not be reclassified to income statement


0.2

(0.6)

(1.5)






Items that may be reclassified subsequently to the income statement





Exchange gain/(loss) in respect of hedged equity investments


0.7

(1.0)

1.9

Tax on items may be reclassified subsequently to the income statement


-

-

-

Total items that may be reclassified subsequently to the income statement


0.7

(1.0)

1.9

Other comprehensive income/(loss) for the period


0.9

(1.6)

0.4

Total comprehensive income/(loss) for the period attributable to owners of the parent


2.8

(8.0)

(6.2)

 

The notes on pages 19 to 24 form an integral part of this consolidated interim financial information.

 

 

Condensed consolidated statement of changes in equity

for 26 weeks ended 26 October 2013

 


Share

capital
£m

Share

premium
£m

Treasury

shares
£m

Capital

Redemption

reserve
 £m

Translation

reserve
£m

Hedging

reserve
 £m

Retained

earnings
 £m

Total

£m

At 27 April 2013 (audited)

0.7

16.6

(0.3)

0.1

7.0

-

41.2

65.3

Total comprehensive income for the financial period

-

-

-

-

0.7

-

2.1

2.8

Issue of new shares

-

-

-

-

-

-

-

-

Share-based payments and related tax

-

-

-

-

-

-

(0.2)

(0.2)

At 26 October 2013 (unaudited)

0.7

16.6

(0.3)

0.1

7.7

-

43.1

67.9




















Share

capital
£m

Share

premium
£m

Treasury

shares
£m

Capital

Redemption

reserve
 £m

Translation

reserve
£m

Hedging

reserve
 £m

Retained

earnings
 £m

Total

£m

At 28 April 2012 (audited)

0.7

16.3

(0.3)

0.1

5.1

-

48.8

70.7

Total comprehensive loss for the financial period

-

-

-

-

(1.0)

-

(7.0)

(8.0)

Issue of new shares

-

0.3

-

-

-

-

-

0.3

Share-based payments and related tax

-

-

-

-

-

-

0.1

0.1

At 27 October 2012 (unaudited)

0.7

16.6

(0.3)

0.1

4.1

-

41.9

63.1

 

The notes on pages 19 to 24 form an integral part of this consolidated interim financial information.

 

 

Condensed consolidated balance sheet

as at 26 October 2013

 


Notes

26 October

2013

(unaudited)

£m

27 October

2012

(unaudited)

£m

27 April

2013

(audited)

£m

Assets





Non-current assets





Intangible assets

9

60.2

60.4

60.8

Property, plant and equipment

9

107.9

108.5

108.6

Investment property


20.2

19.9

20.2

Deferred tax assets


2.6

2.5

2.6

Trade and other receivables


0.8

0.8

0.8



191.7

192.1

193.0






Current assets





Inventories


37.1

40.1

37.6

Trade and other receivables


27.8

27.5

19.8

Cash and cash equivalents

10

6.0

7.7

7.9



70.9

75.3

65.3






Total assets


262.6

267.4

258.3






Liabilities





Current liabilities





Trade and other payables


(105.3)

(111.6)

(102.9)

Obligations under finance leases

10

(0.1)

(0.1)

(0.1)

Borrowings and overdrafts

10

(11.7)

(20.3)

(12.2)

Current tax liabilities


(1.7)

(1.0)

(0.3)



(118.8)

(133.0)

(115.5)






Non-current liabilities





Trade and other payables


(31.2)

(31.3)

(31.6)

Obligations under finance leases

10

(2.4)

(2.5)

(2.5)

Borrowings

10

(6.1)

(1.1)

(3.3)

Provisions for liabilities and charges


(9.5)

(11.2)

(11.1)

Deferred tax liabilities


(22.0)

(20.5)

(23.9)

Retirement benefit obligations

11

(4.7)

(4.7)

(5.1)



(75.9)

(71.3)

(77.5)






Total liabilities


(194.7)

(204.3)

(193.0)






Net assets


67.9

63.1

65.3






Equity





Share capital


0.7

0.7

0.7

Share premium


16.6

16.6

16.6

Treasury shares


(0.3)

(0.3)

(0.3)

Other reserves


50.9

46.1

48.3






Total equity attributable to owners of the parent


67.9

63.1

65.3

 

The notes on pages 19 to 24 form an integral part of this consolidated interim financial information.

 

 

Condensed consolidated statement of cash flows

for 26 weeks ended 26 October 2013

 


Note

26 weeks to

26 October

2013

(unaudited)

£m

26 weeks to

27 October

2012

(unaudited)

£m

52 weeks to

27 April

2013

(audited)

£m

Operating activities





Profit/(loss) before tax


1.9

(7.9)

(5.1)

Adjusted for:





Depreciation and amortisation


6.8

7.0

14.1

Losses on property disposals


1.1

1.2

1.2

Exceptional non-cash items


-

11.2

13.6

Other non-cash items


0.3

0.1

0.5

Net finance costs


1.1

0.9

1.7

Operating cash flows before movements in working capital


11.2

12.5

26.0

Increase/(decrease) in inventories


0.5

(2.0)

1.0

(Increase)/decrease in trade and other receivables


(8.0)

(3.9)

3.5

Increase/(decrease) in trade and other payables


(0.8)

0.1

(9.7)

Provisions paid


(1.8)

(1.5)

(3.4)

Cash generated by operations


1.1

5.2

17.4

Interest paid


(0.8)

(0.9)

(1.4)

Corporation taxes paid


(0.3)

(0.9)

(1.4)

Net cash flows from operating activities


-

3.4

14.6






Investing activities





Purchases of intangible assets


(0.1)

(0.4)

(0.6)

Purchases of property, plant and equipment and investment property


(4.5)

(4.6)

(10.6)

Proceeds on disposal of property, plant and equipment and investment property


0.4

4.0

4.6

Net cash flows from investing activities


(4.2)

(1.0)

(6.6)






Financing activities





Issue of new shares


-

0.3

0.3

New loans


3.5

-

-

Repayment of borrowings

10

(0.8)

(8.6)

(13.9)

Net cash flows from financing activities


2.7

(8.3)

(13.6)






Net decrease in cash and cash equivalents in the period

10

(1.5)

(5.9)

(5.6)

Cash and cash equivalents at the beginning of the period


(4.1)

1.5

1.5

Exchange differences


0.1

(0.2)

-

Cash and cash equivalents at the end of the period

10

(5.5)

(4.6)

(4.1)

 

For the purposes of the cash flow statement, cash and cash equivalents are reported net of overdrafts repayable on demand.  Overdrafts are excluded from the definition of cash and cash equivalents disclosed in the balance sheet.

 

The notes on pages 19 to 24 form an integral part of this consolidated interim financial information.

 

 

Notes to the financial statements

 

1.  General information

This condensed consolidated half-yearly information was approved for issue on 9 December 2013.

This interim report does not comprise statutory financial statements within the meaning of Section 434(3) of the Companies Act 2006.  It has been reviewed but not audited by the Group's auditors.  The statutory financial statements for the year ended 27 April 2013 were approved by the Board of Directors on 24 June 2013 and delivered to the Registrar of Companies.  The report of the auditors on those financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

 

2.  Basis of preparation

The interim financial report for the 26 weeks ended 26 October 2013 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union.  It should be read in conjunction with the annual financial statements for the 52 weeks ended 27 April 2013, which have been prepared in accordance with IFRSs as adopted by the European Union.

The Directors, after reviewing the Group's operating budgets, forecasts and financing arrangement, consider that the Group has, at the date of this report, sufficient financing available for the estimated requirements for the foreseeable future.  Accordingly, the Directors are satisfied that it is appropriate for these financial statements to be prepared on a going concern basis.

Financial assets and liabilities and foreign operations are translated at the following rates of exchange:


26 weeks to

26 October

2013

£m

26 weeks to

27 October

2012

£m

52 weeks to

27 April

2013

£m

Euro




Average

1.17

1.25

1.23

Closing

1.17

1.25

1.19

Zloty




Average

4.95

5.26

5.12

Closing

4.92

5.12

4.93

 

3.  Accounting policies

The accounting policies adopted are consistent with those of the annual financial statements for the 52 weeks ended 27 April 2013, as described in those annual financial statements except  where set out below:

IAS 1 (amendment) 'Presentation of financial  statements', the amendment requires items presented in the statement of other comprehensive income to be grouped into those items that may be reclassified subsequently to the income statement and those items that will not be reclassified.  In accordance with the standard the amendments have been applied retrospectively and the presentation of the statement of other comprehensive income has been adjusted.

IAS 19 (revised) 'Employee benefits', amends the accounting for employment benefits.  The Group has applied the standard retrospectively in accordance with the transition provisions of the standard.  The impact on the group has been:

·      The standard replaces the interest costs on the defined benefit obligation and the expected return on plan assets with a net interest cost based on the net defined benefit liability and the discount rate measured at the beginning of the year.  In the period there is a charge of £0.1m to the income statement.

·      There is a new term "remeasurements".  This is made up of actuarial gains and losses and the difference between actual investment returns and the return implied by the net interest costs.

·      The impact of IAS 19 (revised) is immaterial and has not required a restatement of reserves or the plan deficit.

 

IFRS 13 'Fair value measurement'.  The Group has included the disclosures required by the standard.  The application of the standard has not had a material impact.

Taxes on income for interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

There are no new standards, amendments to existing standards or interpretations that are effective for the first time in the financial year beginning on 28 April 2013 that would be expected to have a material impact on the Group's result.

New standards and amendments to standards which are mandatory after 27 April 2013 are currently expected to be not relevant or not material for the Group.

 

4.  Segmental analysis

The operating segments have been determined based on reports reviewed by the Board that are used to make strategic decisions. 

The reportable operating segments derive their revenue primarily from the retail of floor coverings and beds.  Central costs are incurred principally in the UK and are immaterial.  As such these costs are included within the UK segment.  Sales between segments are carried out at arm's length.

The segment information provided to the Board for the reportable segments for the 26 weeks ended 26 October 2013 is as follows:


26 weeks to 26 October 2013

26 weeks to 27 October 2012 (restated)


UK
£m

Europe
£m

Group
£m

UK
£m

Europe
£m

Group
£m

Gross revenue

187.1

37.2

224.3

191.4

38.1

229.5

Inter-segment revenue

(2.1)

-

(2.1)

(2.3)

-

(2.3)

Revenues from external customers

185.0

37.2

222.2

189.1

38.1

227.2








Gross profit

116.6

21.5

138.1

116.6

21.7

138.3








Underlying operating profit

5.5

(1.4)

4.1

5.2

0.2

5.4

Exceptional items

(1.1)

-

(1.1)

(12.3)

(0.1)

(12.4)

Operating profit/(loss)

4.4

(1.4)

3.0

(7.1)

0.1

(7.0)

Intercompany interest

(0.1)

0.1

-

(0.1)

0.1

-

Finance costs1

(1.0)

(0.1)

(1.1)

(0.9)

-

(0.9)

Profit/(loss) before tax

3.3

(1.4)

1.9

(8.1)

0.2

(7.9)

Tax

(0.1)

0.1

-

1.6

(0.1)

1.5

Profit/(loss) for the financial period

3.2

(1.3)

1.9

(6.5)

0.1

(6.4)








Segment assets:







Segment assets

206.7

99.9

306.6

213.8

96.7

310.5

Inter-segment balances

(23.7)

(20.3)

(44.0)

(22.5)

(20.6)

(43.1)

Balance sheet total assets

183.0

79.6

262.6

191.3

76.1

267.4








Segment liabilities:







Segment liabilities

(191.6)

(47.1)

(238.7)

(200.9)

(46.5)

(247.4)

Inter-segment balances

20.3

23.7

44.0

20.6

22.5

43.1

Balance sheet total liabilities

(171.3)

(23.4)

(194.7)

(180.3)

(24.0)

(204.3)








Other segmental items:







Depreciation and amortisation

5.6

1.2

6.8

5.9

1.1

7.0

Additions to non-current assets

4.8

0.7

5.5

3.5

0.7

4.2

1 Restated for adoption of IAS 19 (revised).

Carpetright plc is domiciled in the UK.  The Group's revenue from external customers in the UK is £185.0m (H1 FY13: £189.1m) and the total revenue from external customers from other countries is £37.2m (H1 FY13: £38.1m).  The total of non-current assets (other than financial instruments and deferred tax assets) located in the UK is £152.1m (H1 FY13: £153.7m) and the total of those located in other countries is £81.1m (H1 FY13: £79.0m).

Carpetright's trade has historically shown no distinct pattern of seasonality with trade cycles more closely following economic indicators such as consumer confidence and mortgage approvals.

 

5.  Exceptional items

 



26 weeks to

26 October

2013

£m

26 weeks to

27 October

2012

£m

52 weeks to

27 April

2013

£m

Loss on property disposals


(1.1)

(1.2)

(1.2)

Impairment of property, plant and equipment


-

(4.7)

(5.5)

Onerous lease provision


-

(6.5)

(8.1)

Exceptional items before tax


(1.1)

(12.4)

(14.8)

The onerous lease provision relates to properties in the UK that are not trading and are either empty or leased at below the passing rent.  The provision covers the period until full cost recovery is expected.

 

In accordance with IAS 36 assets are reviewed for impairment whenever changes in circumstances indicate that the carrying value may not be recoverable.    No impairments recognised in the 26 weeks to 26 October 2013 (H1 FY13 an impairment provision of £4.3m was recognised on certain freehold properties belonging to the Group, and £0.4m for other store related assets).

 

 



26 weeks to

26 October

2013

£m

26 weeks to

27 October

2012

£m

52 weeks to

27 April

2013

£m

Included within administration expenses





Impairment of property, plant and equipment


-

(4.7)

(5.5)

Onerous lease provision


-

(6.5)

(8.1)



-

(11.2)

(13.6)






Included within other operating income/(expenses)





    Loss on property disposals





       UK and Europe


(1.1)

(1.2)

(1.2)



(1.1)

(1.2)

(1.2)











Exceptional items before tax


(1.1)

(12.4)

(14.8)

Tax on exceptional items


0.1

2.6

1.7

Exceptional tax benefit from tax rate change


0.7

0.8

-

Exceptional items after tax


(0.3)

(9.0)

(13.1)

 

 

6.  Tax

The Finance Act 2012 included legislation to reduce the main rate of corporation tax from 26% to 24% from 1 April 2012 and to 23% from April 2013.  The December 2012 budget statement announced that the main corporation tax rate would be reduced to 21% from 1 April 2014 and then 20% from 1 April 2015.  These rate reductions were substantively enacted in July 2013 and have therefore be reflected in the interim consolidated financial statements.

The tax charge is recognised based on management's best estimate of the full year weighted average annual tax rate based on the estimated full year profits.  The estimated average annual tax rate for the year to 26 April 2014 is 0.5% (Actual rate 2013: 29.3%).  The decrease on last year is mainly due to the reduction in the main rate of corporation tax and its impact on deferred tax balances.  The reduction on the main tax rate has resulted in a deferred tax credit of £2.7m in the financial year to 26 April 2014.

 

7.  Earnings per share

Basic earnings per share is calculated by dividing earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period, excluding those held by the Group's LTIP Trust which are treated as cancelled.

In order to compute diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares.  Those share options granted to employees and Executive Directors where the exercise price is less than the average market price of the Company's ordinary shares during the period, represent potentially dilutive ordinary shares.


26 weeks ended 26 October 2013

26 weeks ended 27 October 2012

52 weeks ended 27 April 2013


Earnings/

(loss)

£m

Weighted

average

number of

shares

Millions

Earnings/

(loss)

per share

Pence

Earnings/

(loss)

£m

Weighted

average

number of

shares

Millions

Earnings/ (loss)

per share

Pence

Earnings/

(loss)

£m

Weighted

Average

number of

shares

Millions

Earnings/

(loss)

per share

Pence

Basic earnings per share

1.9

67.6

2.8

(6.4)

67.5

(9.5)

(6.6)

67.5

(9.8)

Effect of dilutive share options

-

0.3

-

-

0.3

-

-

0.3

-

Diluted earnings per share

1.9

67.9

2.8

(6.4)

67.8

(9.5)

(6.6)

67.8

(9.8)

 

The Directors have presented an additional measure of earnings per share based on underlying earnings.  This is in accordance with the practice adopted by most major retailers.  Underlying earnings is defined as profit excluding exceptional items and related tax.


26 weeks ended 26 October 2013

26 weeks ended 27 October 2012

52 weeks ended 27 April 2013


Earnings/

(loss)

£m

Weighted average number of shares Millions

Earnings/

(loss)

per share

Pence

Earnings/ (loss)

£m

Weighted average number of shares Millions

Earnings/

(loss)

per share

Pence

Earnings/

(loss)

£m

Weighted average number of shares Millions

Earnings/

(loss)

per share

Pence

Basic earnings per share

1.9

67.6

2.8

(6.4)

67.5

(9.5)

(6.6)

67.5

(9.8)

Adjusted for the effect of exceptional items:










Exceptional items

1.1


1.6

12.4


18.4

14.8


21.9

Tax thereon

(0.1)


(0.1)

(2.6)


(3.9)

(0.9)


(1.3)

Exceptional tax benefit from tax rate change

(0.7)


(1.1)

(0.8)


(1.2)

(0.8)


(1.2)

Underlying earnings per share

2.2

67.6

3.2

2.6

67.5

3.8

6.5

67.5

9.6

 

8.  Dividends

No dividends were paid or proposed in the 26 weeks to 26 October 2013 or in the 26 weeks to 27 October 2012.

 

9.  Capital commitment

During the period, additions were £0.1m (H1 FY13: £0.3m) on intangible assets and £5.4m (H1 FY13: £3.9m) on the acquisition and fit out of stores. Net proceeds from the sale of freehold property interests during the period were £0.4m (H1 FY13: £4.0m).

Capital commitments contracted but not provided for at the end of the period are £2.1m (H1 FY13: £1.5m) principally for store fit outs.

 

10.  Movement in cash and net debt


27 April

2013




26 October 2013



Total
£m

Cash
flow
£m

Exchange
differences
£m


Revaluation
£m


Total
£m

Cash and cash equivalents in the balance sheet

7.9




6.0

Bank overdrafts

(12.0)




Cash and cash equivalents in the cash flow statement

(4.1)

0.1


Borrowings



Current borrowings

(0.2)



Non-current borrowings

(3.3)




(3.5)


Obligations under finance leases



Current obligations under finance leases

(0.1)



Non-current obligations under finance leases

(2.5)




(2.6)


0.1





Net debt

(10.2)

-

0.1

 


28 April

2012




27 October 2012



Total
£m

 Cash
flow
£m

Exchange
differences
£m


Revaluation
£m


Total
£m

Cash and cash equivalents in the balance sheet

9.6




7.7

Bank overdrafts

(8.1)




(12.3)

Cash and cash equivalents in the cash flow statement

1.5

(5.9)

(0.2)


(4.6)

Borrowings






Current borrowings

(1.4)




(8.0)

Non-current borrowings

(16.5)




(1.1)


(17.9)

8.6

0.2


(9.1)

Obligations under finance leases






Current obligations under finance leases

(0.1)




(0.1)

Non-current obligations under finance leases

(2.6)




(2.5)


(2.7)



0.1

(2.6)







Net debt

(19.1)

2.7

-

0.1

(16.3)

 

 

11.  Retirement benefit obligation


26 weeks to

26 October

2013

£m

26 weeks to

27 October

2012

£m

52 weeks to

27 April

2013

£m

Deficit in scheme at beginning of period

(5.1)

(4.3)

(4.3)

Net interest expense

(0.1)

-

-

Employer contributions

0.4

0.4

0.8

Actuarial gains/(losses)

0.1

(0.8)

(1.6)

Deficit in scheme at end of period

(4.7)

(4.7)

(5.1)





Fair value of pension scheme assets

22.7

19.6

21.7

Present value of pension scheme obligations

(27.4)

(24.3)

(26.8)

Retirement benefit obligations

(4.7)

(4.7)

(5.1)

 

The key assumptions used, determined in conjunction with independent qualified actuaries, are:


26 weeks to

26 October

2013

%

26 weeks to

27 October

2012

%

52 weeks to

27 April

2013

%

RPI inflation

3.5

2.2

3.4

Discount rate

4.2

4.0

4.2

Expected return on scheme assets

N/A

4.7

4.4

The amount of the deficit varies if the main financial assumptions change, particularly the discount rate.  If the discount rate increased/decreased by 0.1% the IAS 19 deficit would decrease/increase by approximately £0.4m.

 

12.  Financial instruments

The condensed interim financial statements do not include all the financial risks management information and disclosures required in the annual financial statements, this should be read in conjunction with the Group's annual financial statements as at 27 April 2013.  There have been no changes in the risk management since the year end.

The Group has no financial assets or liabilities that are measured at fair value. 

Borrowings are measured at amortised costs, and the Directors' are of the opinion that the carrying value of the borrowings approximate to their fair value. The carrying amount of all other financial assets and liabilities approximate their fair value.

 

13.  Related party transactions

Details of transactions during the period with Companies of which Lord Harris and/or M J Harris is a director and/or in which Lord Harris and/or M J Harris holds a material interest are set out below:

 


Lease and concession agreement payments made

Supply of goods/services payments made

Supply of goods/services payments received


26 weeks to 26 October 2013

£'000

26 weeks to 27 October 2012

£'000

26 weeks to 26 October 2013

£'000

26 weeks to 27 October 2012

£'000

26 weeks to 26 October 2013

£'000

26 weeks to 27 October 2012

£'000

Edinburgh Retail LLP

150

137

-

-

-

-

Greenock Retail LLP

127

135

-

-

-

-

Harris Ventures Ltd

31

31

3

2

-

-

Hull Unit Trust

193

193

-

-

-

-








As at 26 October 2013 the Group owed related parties £nil (H1 FY13: £nil).

 

 

 

Principal risks and uncertainties

The Board has considered the principal risks and uncertainties for the remaining six months of the financial year and determined that the risks presented on pages 15 -16 of the 2013 Annual Report, described below, remain for the rest of the financial year:

Development and execution of a strategy

Economic uncertainty

Cost control

Reputation

People

Product and service quality

Compliance

Finance and treasury

These are detailed on pages 15 and 16 of the 2013 Annual Report, a copy of which is available on the Group's website www.carpetright.plc.uk.

 

Forward looking statements

Certain statements in this half year report are forward looking.  Although the Group believes that the expectations reflected in these forward looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct.  Because these statements contain risks and uncertainties, actual results may differ materially from those expressed or implied by these forward looking statements.  We undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

 

Statement of Directors' responsibilities

The condensed financial information has been prepared in accordance with IAS 34, as adopted by the European Union, and the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 namely:

An indication of important events that have occurred during the period and their impact on the interim financial statements, and a description of the principal risks and uncertainties for the remainder of the financial year.

Material related party transactions in the period and any material changes in the related party transactions described in the last Annual Report.

The Directors of Carpetright plc are listed on the Group's corporate website www.carpetright.plc.uk.

 

By order of the Board

 

 

 

Neil Page

Group Finance Director

9 December 2013

 

 

 

 

Independent review report to Carpetright plc

 

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the 26 week period ended 26 October 2013, which comprises the Condensed consolidated income statement, Condensed consolidated statement of comprehensive income, Condensed consolidated statement of changes in equity, Condensed consolidated balance sheet, Condensed consolidated statements of cash flows and the 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.

 

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 Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, 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.  This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose.  We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

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 enquiries, 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 condensed set of financial statements in the half-yearly financial report for 26 week period ended 26 October 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

 

PricewaterhouseCoopers LLP
Chartered Accountants

9 December 2013
1 Embankment Place, London, WC2N 6RH

 

Notes:

a.          The maintenance and integrity of the Carpetright plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

b.          Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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