Lord Harris set to stay at Carpetright
Plans by Lord Harris to step down from the board of Carpetright have been put on hold.
Harris had planned to leave the board after the flooring and bed chain's AGM on 4 September, but will now stay on as non-executive chairman until a successor is found and 'may remain on the board in a non-executive capacity following the appointment of a new chairman'. The Harris family is the chain's largest shareholder, with a holding of about 20%.
Baroness Noakes, Carpetright deputy chairman is leading the hunt for a new chairman and will leave once the appointment has been made. She has stepped down from the audit, remuneration and customer and corporate responsibility committees.
Wilf Walsh is due to become chief executive on 21 July.
The change came as Carpetright confirmed that losses at its Netherlands operations meant pre-tax losses rose from £5.1m to £7.2m in the year to 26 April.
UK sales were 1.5% lower at £375.8m, but core retail like for like sales were up 0.5%. UK operating profit dipped by £200,000 to £10.7m.
'While indicators point to an overall improvement in UK economic performance over the past 12 months, it has been a challenging time for the group with our markets remaining highly competitive and deal-driven,' says Harris.
'The performance of the business in the rest of Europe is principally a reflection of the continued difficult trading in the Netherlands. Whilst this business reported a loss for the year, it remained cash generative.
'Against this backdrop, we continue to take steps to develop the business. While we anticipate trading conditions will remain challenging, we expect these actions will underpin an improvement in group performance in the new financial year.'
Joshua Raymond, Cityindex.co.uk chief market strategist was unimpressed by the results.
'Carpetright shares rallied more than 2% in trading on Tuesday despite posting a 53% slump in [underlying] annual profit. Following three profit warnings in the past year, investor expectations had been severely low in the run up to today's announcement and therefore as their profit before tax and one off items came in within the previous guidance range at £4.6m, the reaction was somewhat warm. This is a classic case of the market taking bad numbers in their stride on sheer relief that the firm's performance was not worse,' he says.
'Carpetright has been in the middle of revamping its stores as it seeks to meet high competition in the sector as the UK housing market booms. Given the fact that the firms share price remains down by some 20% in the last nine months, I don't believe this report is anything to celebrate.'