Carpetright profits slump in the face of weak consumer demand

Pretax profit slumped from £22.3m to £6.6m in the year to April 30.

Total group revenue decreased by 5.8% to £486.8m.

In the UK & Ireland like-for-likes were down 6%, while total revenue fell 4.9% to £404.5m.

Underlying profit in the domestic arm declined 45% to £14.4m.

The results were in line with analyst expectations.

27 stores were closed in the period bringing its total to 559.

Chairman and chief executive Lord Harris said:  “In my statement last year I said I expected consumer demand to remain subdued in the coming year and this indeed proved to be the case. As a result, the Group faced very challenging trading conditions in the year under review, with fragile consumer confidence producing a weak floor coverings market, leading to a reduction in sales volume and profitability.

“Looking forward, I see no respite from the challenging environment over the next year. That said, I remain confident the Group is well positioned to deliver future profitable sales growth once consumer demand improves.”

Harris added that Carpetright has “taken a number of management actions to adapt the product proposition whilst retaining competitiveness in the market. These have been completed alongside activities to address the cost base and to review the shape and size of our future store estate”.

In its European arm, underlying reported operating profit slumped 29.2% to £6.8m while total revenue fell 7.7% to £82.3m.

Harris added: “The decision not to pay a final dividend reflects the weaker than anticipated profitability in the second half, with the total dividend for the year of 8.0p per share, being the same as that paid in 2009 on a similar level of full year profit. In future, the Board would expect to rebalance the dividend so that the interim payment is a smaller proportion of the total.”