Birmingham, England, January 6, 2006--Floors 2 Go, the UK's largest specialist retailer of laminate and wooden flooring, announces that it expects the full year profit before tax to be toward the lower end of the range of market expectations.
This is due to second half LFL sales declining 25.8% and second half total sales being down 13.2%, as market conditions have remained tough and volatile.
Tight cost controls and management of gross margin have mitigated the impact of the shortfall in sales. The company continues to introduce a number of initiatives throughout the business to further reduce costs. This has benefited operational cash flow, which remains positive.
The introduction of the central warehouse in 2005 has been successful and gives the business a platform for its growth strategy going forward.
The company opened 28 new stores in 2005, closed eight (all Texstyle World stores), and relocated two stores, taking the total number of outlets to 139 as at the year end. However, until market conditions improve the new store opening programme will be scaled back for 2006. The company expects to open 15 stores this year.
Simon Farnsworth, CEO, Floors 2 Go commented: 'We have continued to see tough and volatile market conditions and this has impacted on our sales performance. However, continued focus on cost and improvements in the gross margin have helped to partially offset this. We will continue to manage the business tightly, reflecting the market conditions in which we are operating.
The current market remains challenging, but we are confident that our new stores, extended range of products and improvements we have made throughout our business mean that we will benefit from any uplift in consumer spending. The laminate and wooden flooring market continues to have great potential in the UK, where it remains undeveloped compared to the rest of Europe. Our aim is to continue to offer the widest product range in the market at the most competitive prices.
We remain focused on improving cost efficiencies and investing to sustain long-term growth and improved returns for shareholders.'
