Carpetright issues a fresh profit alert

CARPETRIGHT yesterday said full year profits would be at the lower end of forecasts as it announced another fall in sales.

The group, which has issued a string of profit warnings in recent months, said underlying pre-tax earnings for its full financial year would be towards the lower end of a forecast range of £11.8-£16.9m.

That would be down from £16.9m in the last financial year.

Carpetright said sales at British stores open over a year fell three per cent in the 12 weeks to 22 October – worse than a 0.2 per cent drop in the first quarter.

Like-for-like sales in the rest of Europe were down 1.7 per cent, Carpetright said. The company’s strategy to boost falling sales has been to lower prices, expand into selling beds, upgrade its range of laminate flooring and cut around £4m in costs, finance director Neil Page said.

He added that the group was pulling out of concessions in department store chain House of Fraser, but was interested in more concessions with home improvements retailer Homebase, which is looking at selling carpets.

“Carpetright has the cash generation and dominant market position to ride out this downturn, but is a highly geared business,” said Seymour Pierce analyst Kate Calvert.

The firm’s shares closed up one per cent as some of its latest figures beat dire City forecasts.