Carpetright sees slump in profits

The long-serving boss of Carpetright has revealed a 72% profits slump

The long-serving boss of Carpetright has revealed a 72% profits slump as he warned more normal trading conditions are still more than 12 months away.

Lord Harris of Peckham, the company's chairman and chief executive, described his 51st year of selling carpets as "extremely challenging" after like-for-like sales slumped 13.5% in the UK and Ireland during the year to May 2.

Pre-tax profits fell to £16.7 million from £59.5 million a year earlier, despite continued growth from the company's estate of European stores.

Lord Harris said: "Although there have been a significant number of actions taken by the Government to improve the economy, we do not expect a return to more normal trading conditions for at least 12 months."

The uncertain outlook and need to maintain financial flexibility meant the company slashed its dividend for shareholders by 87% to 4p a share.

The company's expansion slowed during the year, with the net addition of eight stores following the closure of 21 sites as a result of an ongoing programme to move to lower cost locations.

It boasted 567 stores in the UK and Ireland at the start of May, with a further 20 outlets due to open in the current financial year.

Carpetright said the first full year of its new warehouse and cutting facility had been a "real success story," enabling the company to pursue additional business with large insurers and housebuilders.

The company increased its store base in the Netherlands, Belgium and Poland by 12 to 128 during the year, while operating profits for the division also increased by a third to £7.2 million.