Mexborough, England, January 11-—United Carpets plans to double its number of stores by raising £5m from a flotation on the Alternative Investment Market (AIM).
The company, based in Mexborough, South Yorkshire, hopes to use the cash to increase its network of franchise stores from 50 to 100 by 2008, and possibly fund acquisitions.
United Carpets, which is the third largest chain of specialist floor covering stores in the UK, is expected to have a market capitalisation of around £20m.
Apart from funding expansion, the company's management believe the initial public offering (IPO) will raise awareness of the group nationally and motivate staff.
United Carpets wants a bigger share of the UK's floorcoverings and bedroom furniture markets, which were worth £2.35bn and £3bn respectively in 2003.
Founded in 1997, the company has grown rapidly using a franchise model. The stores sell carpets, beds, vinyl and wood laminate floor coverings. They are mainly out of town and range in size from 5,000 to 8,000 sq ft.
United Carpets operates 22 franchises in Yorkshire and the North East, with stores in Leeds, Bradford, Hull, Batley, Dewsbury, Doncaster, Grimsby, Sheffield, Shipley and Rotherham. The company plans to open another 14 stores in Yorkshire and the North East in the near future.
For the 12 months ended March 31 2004, year on year operating profit grew 54 per cent, from £1.15m to £1.77m.
Paul Eyre, United Carpet's chief executive, said: "The flotation represents an opportunity to build on this success by using our proven franchise model to increase the number of stores we operate from 50 to approximately 100 within the next three years.
"Joining the AIM market will increase the profile of the group, encourage potential franchisees to participate in our success and enable us to seek out potential bolt-on acquisitions."
The company plans to buy some of its regional competitors, and leverage benefits from the increased scale of the business. Seymour Pierce has been appointed as adviser and broker in connection with the IPO.
