Full-year results for carpet & floorings retail group Carpetright, published today, reveal falling sales and profits as the result of weak consumer demand.
Profit before tax (PBT) totalled £6.6 million for the 52 weeks ending April 30th 2011, whereas last year it reached a far healthier £22.3 million, a fall of over 70 per cent.
Total sales for the year ended at £486.8 million, down 5.8 per cent year-on-year, whilst like-for-like trading in its key market of the UK & Ireland fell six per cent compared to last year.
As long ago as February the retailer had been warning the market on its full-year profits, but the 40.1 per cent decline in underlying PBT will be much steeper then many had imagined.
Lord Harris, Chairman and CEO of Carpetright, said: “In my statement last year I said I expected consumer demand to remain subdued in the coming year and this indeed proved to be the case.
“As a result, the group faced very challenging trading conditions in the year under review, with fragile consumer confidence producing a weak floor coverings market, leading to a reduction in sales volume and profitability.”
No dividend is being paid by Carpetright to shareholders for the second half of the year, meaning total dividend for the year finished at 8.0p per share.
Carpetright predicts the consumer environment to remain challenging in its home improvements market for another two years but argues that changes it has made to its structure will allow it to remain competitive until spending levels rise again.
Total store numbers for the retailer in the UK & Ireland decreased by 27 over the period, with 50 closures and 23 openings, with overall selling space now down to 4,659 sq ft.
Harris continued: “Looking forward, I see no respite from the challenging environment over the next year.
“That said, I remain confident the group is well positioned to deliver future profitable sales growth once consumer demand improves.”