United treads warily in tough conditions

The Rotherham-based group said like-for-like sales of carpets and flooring are just in positive territory, but bed sales are down 15 per cent to give a total like-for-like sales decline of 1.3 per cent in the first 15 weeks of the new financial year.

United’s chairman Peter Cowgill said: “Given the volatility seen in the year under review it is hard to extrapolate much from a short period of trading and we remain cautious about the remainder of the year in the absence of any significant improvement in consumer confidence.”

In the year to March 31, the group saw a modest rise in profits – up one per cent to £1.48m – which it described as a credible performance in the current market.

Chief executive Paul Eyre said: “In the context of the current market environment, this was a resilient performance slightly ahead of market expectations.

“We continue to attract customers into our stores by offering good quality products at prices that represent real value for money.”

The group reported a small increase in network sales and a subsequent increase in profitability.

“Coupled with a healthy balance sheet, the business is well positioned to continue to develop the network of franchised stores and increase our share of the flooring and beds market, alongside any improvement in trading conditions,” said Mr Eyre.

The group said that against a very challenging market environment, it delivered increases to network sales and profits over the year.

“This was a reassuring performance at a time when customers have become increasingly cautious,” said Mr Cowgill.

“The need to have the right offers in each of our stores has become increasingly important and we have focused primarily on continuing to deliver value for money to our customers.”

Over the year to March 31, total store numbers increased from 82 to 86 at the year end and it has continued to focus on expanding the number of franchised stores.

Like-for-like sales across the whole of the network were 1.4 per cent lower than the previous year reflecting consumer caution.

Sales improved during the second half of the financial year and United said they compare favourably to competitor performance and across the wider retail spectrum.

Within the like-for-like annual sales performance, the core floor coverings business was flat while the beds business saw a decline, reflecting the difficulty of selling higher priced items such as beds in the current market. The majority of group revenues are derived from the sale of floor coverings, predominantly carpet, laminate and vinyl flooring through franchised stores and the group’s own corporate stores.

Similar to the overall performance of the group, sales from this division were weaker throughout the first three quarters of the year, but started to recover in the last quarter.

Following a difficult first half against tough comparatives, bed sales improved significantly in the second half to end the year with like-for-like sales down 13.5 per cent, which Mr Cowgill described as a disappointing performance for this division.

“The beds division with its higher average cost per item, tends to suffer more than flooring when there is a drop-off in consumer confidence but we are confident that the division will recover as the wider market improves,” he added.

The balance sheet had net funds of £2.5m at the year end, up from £2.1m in 2010.

The group is paying out a final unchanged dividend of 0.5p per share, which together with the interim dividend of 0.25p per share, makes a total ordinary dividend of 0.75p per share.

Leader in its field

United Carpets has established itself as the UK’s largest franchised carpet retailer.

The company was a family owned and run business until its public offering in 2005 when it floated on the Alternative Investment Market.

The group is focused on value for money flooring.

It has 86 stores established across the UK and covers every aspect of flooring, from carpets and rugs to laminates, real wood floor and vinyl.

It has also established the United Beds division, which sells a wide range of beds, headboards and mattresses.

The group’s advertising is focused on regional television, particularly in its main area of trading, namely Northern and Central England.