Flooring retailer Carpetright posted a 76 per cent drop in full year underlying profit but said it is well positioned to deliver future profitable sales growth once consumer demand improves.
Underlying pre-tax profit tumbled to £4m for the 52 weeks to 28 April 2012 from £16.9m in 2011. Pre-tax profit more than doubled to £13.5m from £6.6m previously while total group revenue fell by 3.1% to £471.5.
Net debt reduced by £46.6m to £19.1m. No final dividend payment has been recommended.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The group, which has issued a string of profit warnings in the last 18 months, said UK sales weakened. UK total revenue fell 3.8% to £381.6m while like-for-like sales slipped 0.2% after a 2.4% decline in the first half. Gross margin reduced by 330 bps to 58.9% following increased promotional discounts. The number of stores decreased by 49 to 490 in the year.
Rest of Europe revenue fell 0.3% to £89.9m and like-for-like sales were down 1.2%. The number of stores increased by 2 to 142.
Chairman Lord Harris commented: "The group faced difficult trading conditions leading to a reduction in sales volume, but we remain profitable and continue to generate strong operating cash flows."
Looking ahead the group said it remains mindful that fragile consumer confidence continues to produce a weak and volatile floor coverings market.
"We are encouraged to see a positive impact from the self-help actions taken during the year, whilst recognising within our plans that economic conditions will remain difficult. The group is well positioned to deliver future profitable sales growth once consumer demand improves," the company said in a statement.
Shares on Monday closed at 653.5p.
CJ
