Carpetright 'will not go private'

LORD Harris of Peckham, the chairman and chief exdecutive of Carpetright, Britain's largest floorcoverings retailer, today scotched City rumours that he wants to take the company private.

He rejected suggestions that he could take the company private, insisting that he was '100% committed' to Carpetright remaining a plc. Lord Harris's comments come just a week after rumours swirled around the City that he had sounded out some of Carpetright's investors with a view to taking the company off the market.

The 61-year old peer was rumoured to have contacted major shareholders Saudi Arabian investor Olayan Group, which holds 14.1%, and value investor Harris Associates, with 5.2%, about a possible exit price. Today's comments, however, appear to put paid to the rumours for now.

Underlying profits, however, dropped 4.1% last year as market conditions worsened and shoppers stayed away. Although headline profits rose 8% to £72.5m, the company said that the underlying figure ? which excludes goodwill amortisation and profits from the disposal of property - was down to £62.3m,

Lord Harris said he believed Carpetright had been experiencing a market downturn for some time but he detected a recovery sometime around the end of 2005. He added: 'We think we've been in this slowdown for quite a while, probably as long as 12 to 18 months. Carpet always goes into the slowdown first and comes out first. Our opinion is that we'll come out of it in November of this year or March of next year.'

Carpetright's UK and Ireland business grew its share of the floorcoverings market and improved gross margins as well, despite the slowdown in consumer spending. Lord Harris expressed optimism about prospects and shareholders were rewarded with a final dividend of 28.0p, giving a total of 47.0p for the year, up 6.8% on a year ago.

'There is no doubt that the UK floorcoverings market has become more difficult since the start of 2005 in line with several other DIY and housing-related sectors as well as retail in general. However, the Carpetright business is well placed, with its strong competitive position, to continue to grow market share.

'This, alongside our clear UK and European expansion plans, continued drive for margin growth, ongoing profits from property and strong cash generation should enable the business to continue to deliver good returns for shareholders.'