Britain's specialist carpet and floor covering retailer Carpetright plc (CPR.L) 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."
About the company's performance, Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers commented, "Profits have recovered in line with the economic rebound in the UK, while currency movements have provided the group's overseas operations with a favourable tailwind. Furthermore, the group's move to supply the insurance industry has contributed, albeit in a small fashion, whilst the company's website offerings have been re-launched."
Further, Carpetright said its Board has proposed a final dividend of 8.0 pence per share, double the prior year's 4.0 pence, bringing the full year dividend to 16.0 pence, up from 8 pence in 2009. The company said its decision to double the dividend reflects the improved underlying profitability in fiscal 2010, as well as the continued uncertainty on the economic outlook.
The proposed dividend is subject to approval by the shareholders at the Annual General Meeting, with record and payable date in September 2010.
Looking ahead, the company said it expects the consumer environment to remain difficult, and that it has adapted plans accordingly.
Lord Harris added, "Although we are planning for consumer demand across Europe to remain subdued, we have market leading positions in all our geographical areas with strong value led retail brands. I believe this enables us to look confidently to the future as and when the economic conditions improve."
According to Equity Analyst Bowman, the uncertainty surrounding the outlook for the UK housing market is gathering pace, while the closure of the company's fledgling Polish business highlights the challenges in expanding overseas. "In all, whilst a leading market share position in the UK (over 30pc) and highly regarded management provide some comfort for the group's long term prospects, the absence of near term growth catalysts continues to support a negative (sell) market consensus opinion," he added.
On the London Stock Exchange, CPR.L is currently trading at 654.00 pence, down 56.00 pence or 7.89%, on a volume of 40 thousand shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.