Carpetright suffers a 72 per cent drop in profits with little sign of recovery

CARPETRIGHT, Britain’s biggest carpet retailer, yesterday said normal trading conditions would not resume for at least 12 months as it posted a 72 per cent slump in full-year profit and slashed its dividend.

The group reported an underlying pre-tax profit of £17.2m in the year to 2 May. This compares with analysts’ consensus forecast of £18m, and with £62.1m the year before. Total revenue fell 7.4 per cent to £482.8m, with like-for-like sales down 13.5 per cent in UK and Ireland.

The group, which ended the year with net debts of £97.1m, cut its final dividend to 4p from 30p.

Chairman and chief executive Lord Harris of Peckham, said: “People have got a little bit more money in their pockets because interest rates are down, fuel prices are down … They’re not spending money on cars, they’re not spending money on holidays and normally that’s very good for us.” He added: “But the thing that everyone’s worried about is their job.”

Harris, a 51-year industry veteran, estimated the overall UK carpet market was currently down at least 20 to 25 percent year-on-year but said Carpetright was winning a greater share.

His view chimed with comments last week from British electrical retailers DSG International and Kesa Electricals which both reported slumps in profit and gloomy outlook statements.