Buoyant Carpetright plans to keep opening new stores

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The Independent Online
Carpetright, the retail group run by Sir Philip Harris, continued its successful run yesterday with the announcement of a sparkling set of sales figures and plans to continue its rapid expansion programme.

Carpetright intends to open a further 20 stores over the next six months and an additional 10 in the next financial year.

Sir Philip's carpet warehouse chain, which he floated on the stock market in June 1993, already has 173 outlets and plans a total of 250 within the next two years.

The company has opened four stores in Northern Ireland and says they are among the best-performing outlets in its portfolio.

The company says the peace dividend in Northern Ireland had made it the ideal trading environment. If the success of the existing stores continues, Carpetright will open a further six branches there, the company said.

Sir Philip commented: "There's not much competition. You get people selling carpets from church halls and that kind of thing. They tend to be very expensive."

Sir Philip also said that the company would not be making any acquisitions. A share buy-back, however seems certain. Carpetright has been building up a cash mountain and it had net cash balances of £19.2m at the end of October last year.

Sir Philip said that a board meeting on the subject had been held and they would be seeking permission from the shareholders to buy back some of the shares.

Sir Philip was speaking as Carpetright unveiled a healthy set of interim figures for the six months to 26 October. Pre-tax profits increased by 46 per cent to £8.05m on sales up 28 per cent to £64.7m.

Carpetright now has 12 per cent of the UK carpet market and plans to increase its share to 20 per cent.

Sir Philip said his stores cost just £110,000 to open and were profitable almost immediately. Like-for-like sales in his existing outlets had increased by 4 per cent.

This was achieved in difficult conditions, as the carpet market has shrunk by around 10 per cent.

Sir Philip also pointed out that last year's warm summer and the mild winter had adversely affected sales of carpets, but Carpetright had managed to buck the trend. He said that he expected to create 200 full-time jobs per year.

Earnings per share were 6.8p (4.7p) and the half-year dividend was increased from 2.7p to 3.9p. The shares finished 10p higher at 255p.