UPDATE: Carpetright Eyes House Builders, Insurers Sales Boost

29th Jun 2010 11:32

(Adds executive comment, detail.) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Carpet and floorings retailer Carpetright PLC (CPR.LN) Tuesday said its full fiscal-year sales rose 7% on the year, partly due to new partnerships with insurers and house builders, which it hopes to expand. Sales for the 2010 fiscal year ended May 1 rose to GBP516.6 million, aided by 7.9% growth in its U.K. and Irish stores. Part of this sales growth was also due to recent partnerships with insurers to replace damaged flooring and supplying flooring to residential construction companies. "We're gaining more in the insurance business and, on the house builders front, we're going to be given a test with some of the Barratt's (BDEV.LN) homes on four sites and we've been given the same [trial] with Persimmon (PSN.LN)," Chief Executive Philip Harris told journalists on a conference call. "We expect to add about GBP10 million to GBP15 million of insurance business this year over last year," Harris said. Insurance business had started slowly this fiscal year, he said, largely due to lack of flooding in very hot weather. U.K. trading remained steady in the 2010 fiscal year as consumer confidence began to rise, but sales in the Netherlands and Belgium fell 1.7% on the year. Carpetright expects business in Europe to remain subdued, but the U.K. should pick up after the coalition government's recent Budget. "About 60% of our customers spend less than GBP100 and following the budget, which I thought was a very good budget, the low paid are going to be GBP170 better off so they may buy a carpet with that," Harris said. Finance Director Neil Page said the company was "holding its own" in Belgium, while it is opening another six stores in the Netherlands this year. However, the company has exited Poland after the brand failed to establish sufficient trading momentum since its launch four years ago. Carpetright expects to continue winning market share as more smaller competitors, such as Allied Carpets, are forced out of the market as a result of continued tightened consumer spending. Fiscal-year pretax profit rose 33% on the year to GBP22.3 million. Carpetright's fiscal 2010 gross margin dipped slightly to 62% from 62.1%, which it said was largely due to the introducing beds to its product mix. While some analysts, like Investec Securities' Natalia Marisova, expect margin pressures to continue this fiscal year, Page said the company expects to maintain gross margin this year. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] Order free Annual Report for Carpetright plc Visit http://djnweurope.ar.wilink.com/?ticker=GB0001772945 or call +44 (0)208 391 6028 (END) Dow Jones Newswires June 29, 2010 06:32 ET (10:32 GMT)