Carpetright plc (lon:cpr)
CarpetRight Is there About To Be Recovery Or More Years Of 'One Off Costs'


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Title: CarpetRight Is there About To Be Recovery Or More Years Of 'One Off Costs'
Company: CPR - Carpetright plc
Share Price Then: 185p
Author: Ian Smith
Date: Fri 28 Jul 2017
Comments: CarpetRight are suppliers of floor covering and beds in the UK and parts of Europe, with around 420 stores in the UK and 137 across the Netherlands, Belgum and Eire.

They paid dividends in 2004-2011 but not since, yet confidence in the company seemed to remain until the start of 2016.

This may reflect a period of complacency, al la MFI, from which they may be recovering. As the names suggests they were mostly offering carpets when much of the market wanted laminate flooring!

At that time the share price had been moving between 500p and 650p, a fairly constant drop through 2016 ended up with a 150p share price and 2017 has shown a plateau around 160p-230p

Only the faithful and the desperate remain?

The last annual report did show a tiny profit of £1m on sales of £457m and an increase in debt from £1.1m to £9.8m. Although this looks terrible there were about £13.5m of one off costs related to store leases, if this is genuinely a one off then the underlying profits become £14.5m which is healthy for the sector.

The profit margins in retail are so tiny I don't see how a private investor can make an informed decision, you have to either ignore the sector or go with the management as they seem to know/not know what they are doing.

This seems to be a Retail Share Taders share with tiny volumes and large spreads, as high as 2%-5%, ouch.
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