Rotherham-based United Carpets reports 29% rise in pre-tax profit despite dip in revenue

Rotherham-based United Carpets Group plc has reported a 29% increase in pre-tax profit whilst revealing the financial results for the year ending 31 March 2015.

Overall, the second largest chain of specialist retail carpet and floor covering stores in the UK has seen a successful trading year, which is mainly due to the restructuring the firm has undergone in the past several years.

Like for like sales across the whole of the business were up by 2.7%. The combination of a strengthening market and an improving contribution from Bed sales made this a satisfying result.

Furthermore, the United Bed’s gross margin was at 66.8% compared to last year’s 61.7%, which directly reflects the change in the mix of revenue between Franchising and Retail and Warehousing.

During this time, distribution costs and administrative expenses, including rent, rates and staff costs at the corporate stores, were reduced by £500k due to savings in the ongoing cost of supporting the franchise network as a result of improving performance.

Due to these financial results the firm’s balance sheet included net funds of £2.53m at 31 March 2015 (31 March 2014: £1.68m).

However, network sales were £54.2m (2014: £55.7m), and revenue, also dipped to £19.1m (2014: £21.1m). But, the reduction in these figures compared to the prior year is a reflection of the change in the Beds sales process, which now gives more ownership of Beds sales to franchisees, and a reduction in the number of third parties serviced by the warehouse.

At this current time, United Bed’s operates out of 61 stores (2014: 59), of which 47 are franchised (2014: 48) and 14 are corporate (2014: 11).

Paul Eyre, Chief Executive, said: “It is very pleasing to report improving results demonstrating the success of the changes we have made and showing that we have created a new base for delivering sustainable growth and returns over the longer-term.

“Our like for like sales performance showed a creditable increase, up 2.7%, contributing to an increase in profit before tax of 29%. This, together with a strengthened balance sheet and no material borrowings means the Group is well placed for the future. This is reflected in our decision to re-introduce a final dividend for the year as part of our intention to pay a progressive dividend in line with the future growth of the business.”