Carpetright profit surges as UK business improves

Total group revenue jumped 7% to £516.6m, while UK & Ireland underlying operating profit surged 67.9% to £26.2m.

Domestic revenue increased 7.9% to £425.2m, with like-for-likes up 3.1%. The retailer said “the return to sales growth of the UK & Republic of Ireland business was the key driver” for the improvement in underlying operating profit.

In its Netherlands and Belgium businesses, total revenue increased by 4.1% to £89.2m while underlying reported operating profit increased 10.3% to £9.6m.

Chairman and chief executive Lord Harris said: “In a challenging year, I am pleased to report that Carpetright has delivered an improved performance.  The Group has grown sales and commenced the development of new revenue streams in the house building and insurance sectors, helping to deliver a significant recovery in profitability over the depressed level reported in the prior year.

 “These results have been delivered through a period of economic recession, with fears of unemployment and tax increases adversely affecting consumer confidence.  Throughout the period we continued to manage the business by exerting tight control over all costs, capital expenditure, stock and cash flow.

 “Although we are planning for consumer demand across Europe to remain subdued, we have market leading positions in all our geographical areas with strong value led retail brands.  I believe this enables us to look confidently to the future as and when the economic conditions improve.”

Carpetright said the year got off to a good start but in January sales became “more subdued”.

It said that while the economy in the Republic of Ireland remains “fragile” and has “inevitably impacted our business there”, it remains “committed” to trading there. It added that “in the light of the prevailing economic conditions” it reduced prices “with the aim of increasing volumes”.

Carpetright gained additional sales through its insurance replacement business and said “significant activity” was devoted to developing an “appropriate offer for the house builder market”.