Good morning!

Apologies for the break in service over the past couple of days.



(Please note that I hold shares in UCG)

United Carpets (LON:UCG)

  • Share price: 8.6p (unch.)
  • No.of shares: 81.4 million
  • Market cap: £7 million

Half-year Report

I thought I might briefly mention this chain of carpet stores as it's something I've held a position in for a while, and it might be relevant to those of you interested in Carpetright (LON:CPR), SCS (LON:SCS) and others in this sector.

The market cap is very small here, only £7 million, and it's a tiny company, so I'm certainly not suggesting that anybody else should buy shares in it.

Fortunately, the like-for-like revenue performance remained stubbornly resilient, up 2.9%. This is despite overall revenues falling, as the mix of stores became a little bit more heavily weighted towards franchisees rather than corporate-owned stores, compared to a year ago.

It earns a higher return on franchise stores, so that doesn't bother me at all.

To support its growing online activities and the Beds operations, there was a slight increase in distribution and administrative expenses.

Overall, then, operating profit reduced by about 7.5% to £590k.

Outlook statement is very nice. It acknowledges the extent of economic uncertainty which prevails, while also noting that like-for-like performance continues to improve:

Trading in October was similar to the first half before improving strongly in November. Like for like sales for the 10 weeks since the period end to 7 December 2017 show further improvement on the first half performance. 
We have started the lead up to Christmas well, which places the Group in a good position for the year. The market remains unpredictable and so our focus will continue to be on protecting our position through maintaining margins and focusing on our delivery of quality and value to our customers. We do see incremental opportunities to expand the business looking ahead into 2018 through the addition of new stores and development of new trading formats but fundamentally the focus is on good execution across our existing business.

My opinion

While not totally relaxed about it, I'm a happy holder here.

It has net funds of £1.6 million, so…

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