Broker snap: Poor margin performance at Carpetright

10th May 2011 13:23

Singer Capital Markets has kept its negative stance on carpet and floor coverings retailer Carpetright, after the fiscal year ended 1 May 2011ended up worse than 2009.The UK and Republic of Ireland saw like-for-like sales fall 6.3% in the final 11 weeks of the year, while Europe suffered a 5.7% decline."The combination of persistent weak trading and new margin pressure in the final quarter of the year means guidance for the year has been downgraded, beyond what was laid out a month earlier," Singer said.Previous guidance for a 25-50 basis point improvement has now been cut to flat for the full year, which the broker says implies that fourth quarter margin was about 100 basis points below plan as the group contained price rises.The target price has been cut to 550p, from 600p, while a 'sell' rating is kept.---BC