Carpetright plunges to £70.5m loss as it powers on with CVA

1271
carpetright update

Carpetright has swung to a loss in its 2017-18 year, just weeks after it launched a CVA that will lead to the closure of 81 stores by September in order to stay afloat.

The embattled flooring retailer recorded an underlying loss before tax of £8.7 million for the year to April 28, having made profit of £14.4 million the year before and in line with its latest guidance.

But after taking into account the costs of the CVA deal, Carpetight plunged to a loss before tax of £70.5 million.

Revenue also fell by three per cent year-on-year, down from £457.6 million to £443.8 million, and net debt grew from £9.8 million to £53 million.

Carpetright said its latest results reflected weaker trading but also the tightening of credit terms by suppliers responding to adverse publicity surrounding its CVA.

The retailer also managed to raise new equity valued at around £60 million after shares in the retailer crashed 81 per cent over the last year.

“After a difficult trading year impacted by reduced consumer spend, increased competition and the legacy of an unsustainable, over-rented store portfolio – the CVA and recapitalisation offers us the chance to rebuild Carpetright which remains the clear market leader in floor coverings with outstanding consumer brand awareness,” chief executive Wilf Walsh said.

Click here to sign up to Retail Gazette‘s free daily email newsletter