Carpetright reports thumping losses

Flooring retailer Carpetright said half year losses plunged deeper into the red as weak consumer confidence continues to plague business, particularly in the Netherlands.

The group, which operates in the UK, Ireland, Belgium and the Netherlands, said pre-tax losses widened to £7.9m in the 26 weeks ended October 27th 2012 from a loss of £0.8% the year before. Group revenue for the six-month period fell 4.7% to £227.2m.

Carpetright took exceptional charges of £12.4m relating to lease provisions, net losses on disposal of properties and non-cash impairment of property assets, the group explained.

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Underlying earnings per share rose to 3.8p compared to 1.2p while net debt reduced to £16.3m from £55m. No dividend has been recommended.

UK like-for-like revenues increased by 0.7% while like-for-like sales in the rest of Europe tumbled 10.1%.

Difficult trading conditions in the Netherlands persisted, where the floor coverings market remains weak, it said. Carpetright expects conditions to remain challenging.

"The group has remained cash generative, despite the sustained period of recessionary trading. However, short term economic conditions continue to remain uncertain and consequently the board continues to believe that it is appropriate to further reduce the group's reliance on debt rather than pay an interim dividend for this financial year," it said in a company statement.

Chief Executive Darren Shapland added: "While we expect trading conditions to remain challenging, we are confident that the combination of self-help initiatives will underpin the positive momentum of the group and our expectations for the year as a whole remain unchanged."

Carpetright said expectations for the year as a whole remain unchanged.

CJ