Birmingham, England, September 3--Floors-2-Go laid down its maiden first-half figures yesterday with turnover up 124 per cent from pounds 15.6 million to pounds 34.9 million, according to the Birmingham Post & Mail Ltd.
Before goodwill amortisation, interest and tax, operating profit increased by 314 per cent from pounds 700,000 to pounds 2.9 million.
But there will be no mid-term dividend for shareholders "as the company wants to keep its money in the business to expand," said Simon Farnsworth, chief executive.
The company also wanted to bring down its debts totalling pounds 15 million of which pounds 13 million is senior debt.
The company was launched on the Alternative Investment Market in April and is the UK's largest multi-site retailer of solid wood, engineered hardwood and laminate flooring products. The company has 117 stores employing 600 staff and its strategy is to create a portfolio of between 250 and 300 stores in the UK by 2009.
Farnsworth, chief executive, said the increase in turnover was due to taking market share from the carpet sector and benefiting from the DIY boom. Growth remained strong with overall sales up by 69 per cent and like-for-like sales up 22 per cent for the nine weeks ended August 31. Gross margins had risen from 45.6 per cent to 47.3 per cent.
Farnsworth said the strong performance would continue to encourage confidence and the business was poised for another year of significant growth.
"The organic growth was achieved against a background of an 11 per cent increase in the wooden flooring market," he said.
"At this stage the board is being prudent with the company's cash, conserving it for future development and investment. We will not, therefore, be proposing an interim dividend. We want to increase shareholder value and many of them will hold shares more for the longer term development of the company than coming in for a quick fix. The business has done much better than anticipated since our flotation."
Floors-2-Go has a policy of dealing directly with the manufacturers of its products and, unlike most of its rivals, does not use a distributor which it says is a cost-saving measure.
During the six months ended June 30, five new sites were opened and three were closed.
New sites are breaking even within three months of opening despite fit-out costs of pounds 40,000 and pounds 78,000 of stock to start off the operation.
The company is weakest geographically in London, where it has about 12 stores, and the South-east where it is hoping to open more outlets.
The rate of expansion was deliberately less aggressive than 2003 as the business went through a process of consolidation and reviewed its portfolio.
Farnsworth said "We also completed the acquisition of the business from the founding family, and floated it on the AIM market.
"We continue to identify new sites and plan to re-accelerate our expansion into 2005."
In the last nine weeks, said Farnsworth, trading had continued to be very satisfactory with like-for-like sales increases of 21.8 per cent.
