Company overview Carpetright plc is a European retailer of floor coverings, which apply themselves to selling all kinds of carpets, rugs, vinyl and laminates along with the associated accessories. (From: reportlinker. com). Current estimates that market share account for 21. 4% of the UK total floorcoverings market. The Company controls 703 stores in two main geographical segments (From: carpetright. plc. uk). Until May 2010, this company totally has 561 stores in UK, 25 Stores in Ireland. In the Rest of Europe, it totally has 28 stores in Belgium and 89 stores in Netherlands. From: Annual report 2010). Compare with 2009 stores: Regional| 2010| 2009| UK| 561| 541| Rol| 25| 26| Belgium| 28| 28| The Netherlands| 89| 88| Poland| 0| 12| (Figure 1, Store sites) (Source from: Annual report 2010&2009) It was very clearly that in 2010, Carpetright close Poland’s the entire subsidiary. Every region has different contributions. 1 May 2010| Revenue| Underlying operating profit| Trading space sq ft’ 000| UK & Rol| ? 425. 2million | ? 26. 2 million| 4808| Rest of Europe| ? 89. 2 million| ? 9. 6 million| 1398| Figure 2 Regional performance) (Source from: Annual report 2010) Through Figure 2, it demonstrates no matter on revenue, underling operating profit and trading space, the UK & Rol still high than the Rest of Europe. These data indicate two elements: firstly, this company’s main capital is in the UK & Rol. Secondly, despite every data in Rest of Europe looks like lower than the UK & Rol, but it also indicate that this company have more development spaces in the Europe. Carpetright get the vast majority of their products from the UK and EU.
Because the company put focus on the higher quality wool product, so they have introduced a new Timber Policy and ensure all of their wood products have attained 100% Forest Stewardship Council certification where the FSC scheme operates. Semotionusly, Carpetright demands all the supplier need compliance with to their new Ethical and Environmental Policy. The major business carpet suppliers are from Europe, they are demanded by conform to a Europe –wide set of industry standard for chemicals. (From: Carpetright CSR report).
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This high standard is conforming the UK government and international development tendency in green products’ demand. Besides, this company main rug’ sources are from India and China. 5 years financial trends The author gives 5 year summary in the Appendixes Figure 3, Revenue as an essential item need to be analysis. | 2010 ? million| 2009? million| 2008? million| 2007? million| 2006? million| Gross profit| 316. 0| 295. 8| 323. 1| 290. 8| 270. 6| (Figure 4) (Source from: annual report 2010-2006) The figure 4 is very clear show the 5 years revenue change trends.
It was very clearly that 2009 was lower than the 2008; the main reason is economic environment was impact consumer confidence and spending after 2008 financial crisis. But in 2010, the revenue is increased 7% to the 516. 6million. The annual report shows, it opened 53 stores and closed 45 stores, the net increased 7 stores may be give the main revenue increase power to the Carpetright. Semotionusly, the gross profit change trend was still following the revenue trend. This phenomenon indicates this company could control the cost of sales are well. But another problem also appeared in the profit before tax. | 2010 ? illion| 2009? million| 2008? million| 2007? million| 2006? million| Administration expenses| 290. 2| 275. 3| 272. 4| 234. 3| 213. 6| (Figure 5) (Source from: annual report 2010-2006) According to the figure 5, Carpetright profit before tax have significant decline from 2008 to the 2010, from analysis company income statement, the main one of the bigger reason is Administration expenses are jumped substantially from 2008 to 2010. this vast expense give some influence in this company’s profit before tax aspect, it indicate company have to take some efficient activity to control Administration expenses.