Carpetright Q3 in line, CFO to retire

Flooring retailer Carpetright said on Tuesday that third-quarter trading was in line with expectations as it announced the departure of chief financial officer Neil Page after more than 10 years in the role.

In an update for the 13 weeks to 26 January, the company said its overall performance was in line, with UK like-for-like sales remaining negative, as expected, although the trend did improve from the first half.

"Trading patterns have remained volatile week to week, against a backdrop of uncertainty and weak consumer confidence," Carpetright said.

Meanwhile, trading in the rest of Europe has been tracking consistently ahead of the same period a year ago, thanks to a strong performance in the Netherlands.

The group said it remains on track to achieve the £19m of annualised cash savings announced as part of its recapitalisation in May 2018.

Carpetright also announced that Page will be stepping down from the board on 25 February but will continue to work in the business until the end of the financial year on 30 April. He will be succeeded by Jeremy Simpson, who will become CFO on 25 February.

Simpson was CFO of Sureserve - previously Lakehouse- from 2014. He has also held senior finance roles at Hunting and Shanks Group, where he joined as UK finance director in 2011, before becoming group development director in 2013.

Chief executive Wilf Walsh said: "As CFO, Neil has made an outstanding contribution to Carpetright over many years and the board wishes to express its gratitude for his unstinting commitment to the business, particularly through the recent challenging period of restructuring. We are delighted that Jeremy is joining us as CFO - he has a strong plc track record and will be able to integrate swiftly into the executive team."

At 1000 GMT, the shares were down 2.3% to 20.80p.

Shore Capital said that given consumer sentiment, it is not a surprise to see management highlighting volatile trading.

"After their CVA and rights issue last Spring, Carpetright has given themselves the headroom to trade the business and now has an average lease length of just over two years. For now, we reiterate our hold rating," it said.

Meanwhile, Peel Hunt said the key message from the update is that performance remains in keeping with market expectations.

"Sales transfers from closed stores are on track, the cost saving initiatives have been deployed to hit the annualised £19m target and overall trading, while volatile, is also in keeping with expectations.

"The final quarter will see Carpetright trade against prior year disruption, a point after which we would expect LFL sales to turn positive.

"Our take is that Carpetright has come through peak in reasonable shape. Conditions remain fairly volatile and consumers have required reasons to convert, although discounts and promotions are consistent with gross margin forecasts."