United Carpets Group plc Store review update / Change of ARD / Suspension (7606K)
24 August 2012 - 1:30PM
UK Regulatory
TIDMUCG
RNS Number : 7606K
United Carpets Group plc
24 August 2012
24 August 2012
United Carpets Group plc
("the Group" or "the Company" or "United Carpets")
Update on Store Review and Change to Accounting Reference
Date
As announced on 15 June 2012, following a prolonged period of
tough market conditions, a significant proportion of the Company's
franchise network has found trading very challenging, resulting in
a situation which has become increasingly unsatisfactory for the
Company.
A review of the Group's 85 stores is being undertaken and this
has led to the closure of 6 stores and a further 17 franchised
stores being either taken back into the Group or refranchised. The
review is ongoing and a further 8 stores are expected to close over
the next few weeks. Negotiations have also commenced with the
landlords of a number of other stores in an attempt to agree rent
reductions in order to improve trading prospects and viability.
The impact of the closures to date and those currently
anticipated is being quantified and will require a non-cash
provision for impairment of property, plant and equipment of
GBP1,012k as well as a significant non-cash increase in the
provision against onerous contracts. The future cash impact of
these closures will depend upon the terms relating to exit of the
leases.
The outcome of the ongoing negotiations with landlords is
uncertain as is the possibility of further closures. It may be that
more closures than the 14 that have occurred or are already
anticipated may be necessary. Depending upon the outcome of the
ongoing negotiations and considerations, further, potentially
substantial, non-cash provisions may also be required.
In order to allow time to complete this review and to provide
shareholders with a full report of all of the actions which it is
considered necessary to take, as well as the full financial impact
on the Group of those actions, the Company has decided to extend
its current accounting reference date from 31 March 2012 to 30
September 2012.The Board believes that not taking this step would
result in a set of accounts which would not give a truly
representative picture of the Group's ongoing operations. The Board
believes that they would not reflect the full financial
implications of the present review and the remedial actions which
might need to be taken following its conclusion. Following the
change to the accounting reference date, the Company's next
financial results will be its audited accounts for the 18 months
ended 30 September 2012 which the Company intends to publish before
31 January 2013.
Whilst the Board is disappointed by the need to take these
actions, the Directors continue to believe that, with appropriately
adjusted central costs, the core of locations that will continue
following the completion of the review will be able to operate
successfully on an ongoing basis.
Since the Company will not be in a position to publish financial
results for the year ended 31 March 2012 by 30 September 2012 as
required by the AIM Rules, trading in the Company's shares is
suspended until the publication of the audited report and accounts
for the 18 month period ending 30 September 2012.
Enquiries:
United Carpets 01709 732 666
Paul Eyre, Chief Executive
Ian Bowness, Finance Director
Cardew Group 020 7930 0777
Tim Robertson
Seymour Pierce
Jonathan Wright/Mark Percy (Corporate Finance) 020 7107 8000
Katie Ratner (Corporate Broking)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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