The Investment Column: Carpetright looks decent value
Thursday 18 December 1997
But with the shares down 10p to 459p yesterday - compared to their 644p in June - the downside looks limited.
Yesterday's 16 per cent rise in interim profits to pounds 16m was below some forecasts, but news on current trading was more encouraging. Though same- store sales in the first half were up 4 per cent Lord Harris reckons Carpetright has achieved double-digit sales increases in the past seven weeks. That's against a UK carpet market that is down over 10 per cent.
The group claims it only needs 4 per cent comparable sales growth each year to achieve its goal of a 30 per cent share of the market by the year 2000. That will mean expanding the number of Carpetright stores from the current 226 to 300 and doubling the number of larger Carpet Depot outlets to 150.
Though sales gains may be hard, the shift towards higher-margin mid-price carpets is boosting margins. Carpetright is also pushing the Crossley carpet range, which comes with a free five-year guarantee. From a standing start in May, these now account for 12 per cent of total sales. Carpets by Harris, an in-house brand with a 10-year guarantee, will be launched soon.
On full year forecasts of pounds 41m the shares trade on a forward p/e of just 13 - almost no premium to rival Allied Carpets. Higher interest rates and the absence of windfalls means 1998 may not be the year to hold retail stocks, but Carpetright looks decent value.
- 2 Caitlyn Jenner car crash: Driver who died in collision sued by surviving passengers for $18.5m
- 3 Watch the Supermoon live: How to see the brightest Moon of the year tonight
- 4 Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Caitlyn Jenner car crash: Driver who died in collision sued by surviving passengers for $18.5m
Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
Watch the Supermoon live: How to see the brightest Moon of the year tonight
Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Stock up on canned food for stock market crash, warns former Gordon Brown adviser
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...