Carpetright FY10 Profit Climbs; Doubles Dividend - Update

(RTTNews) - Britain's specialist carpet and floor covering retailer Carpetright plc (CPR.L: News ) reported Tuesday a 33.5% increase in pre-tax profit for fiscal 2010, reflecting strong revenue growth mainly in the UK and Ireland region. Further, the company doubled its final dividend, reflecting improved underlying performance and ongoing uncertainty on the economic outlook.

Pre-tax profit for the 52 weeks ended May 1 grew to GBP 22.3 million from GBP 16.7 million last year. The annual results included exceptional charges of GBP 5.9 million, mainly a combination of the cost of exiting the Polish market and non-cash store impairment charges, while prior year's charges were GBP 0.5 million.

Underlying pre-tax profit for the year, which excludes exceptional items, surged 64% to GBP 28.2 million from GBP 17.2 million a year ago.

On an after-tax basis, profit for the year attributable to equity shareholders of the company rose to GBP 15.8 million, or about US$24 million, from GBP 11.8 million in the previous year. Earnings per share improved 33.5% to 23.5 pence from 17.6 pence in 2009. Underlying earnings per share were 31.6 pence, up 73.6% from 18.2 pence in the year earlier period.

Total annual revenue increased 7% to GBP 516.6 million from GBP 482.8 million in the comparable period, reflecting growth across all continuing businesses.

Operating profit grew to GBP 28.2 million from last year's GBP 22.3 million. Underlying operating profit climbed 49.6% to GBP 34.1 million from GBP 22.8 million a year ago.

Geographically, UK and Republic of Ireland generated revenues of GBP 425.2 million, up 7.9% from GBP 394.1 million a year ago. Like-for-like sales for the period grew 3.1%, compared to a 13.5% decline last year. Underlying operating profit for the region increased 67.9% year-over-year to GBP 26.2 million.

Revenues from the Netherlands and Belgium rose 4.1% from last year to GBP 89.2 million, benefiting from a favorable move on exchange rates. Meanwhile, sales in local currency declined 1.7%, and like-for-like sales fell 1%, compared to last year's 2.7% increase. Underlying operating profit increased 10.3% to GBP 9.6 million.

Poland revenues fell 26.7% to $2.2 million, and the decline was 23% in local currency.

During the year, Carpetright opened 53 stores and closed 45, which resulted in a net increase of eight stores and a total store base of 703. The total store space edged up 0.8% to 6.2 million square feet.

Commenting on the results, Lord Harris of Peckham, Chairman and Chief Executive, said, "In a challenging year, I am pleased to report that Carpetright has delivered an improved performance. The Group has grown sales and commenced the development of new revenue streams in the house building and insurance sectors, helping to deliver a significant recovery in profitability over the depressed level reported in the prior year."

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