Carpetright suffers more profit woe

FLOOR covering retailer Carpetright saw its shares fall 9p, or 1.5 per cent, to 598p after another profits warning prompted by “weak and volatile” markets.

The group made £16.9 million in its previous financial year but now estimates underlying profits for the year to 28 April will be in the region of £3m to £4m. The City had adjusted its forecast down to £7m in January, while the most recent downgrade is sharply down from the £12m to £17m the company forecast in October.

Carpetright, which has 491 stores in the UK, blamed the gloomy update on disappointing bed sales and a deterioration in trading in continental Europe.

Chairman and chief executive Lord Harris said a return to like-for-like sales growth in its core UK business over the 11 weeks to April 14 offered some hope for this financial year.

However, he added: “The fragile confidence of our customers continues to produce a weak and volatile floorcoverings market.”

The company said sales were down 4.3 per cent over the financial year.

Harris founded the company with a single store in Canning Town, east London, in 1998 and floated on the London Stock Exchange five years later. He has a near-20 per cent stake in the business, while Microsoft billionaire Bill Gates owns about 6 per cent.

Carpetright updated its range of beds at the start of this year, resulting in marginal growth on a year ago in the quarter.

However, there were some encouraging signs from the UK, with the 32 stores refurbished to date outperforming the rest of the estate.