Yahoo Finance Carpetright Profit Trampled By Consumer Fears
High street (BSE: HIGHSTREE.BO - news) flooring firm Carpetright (LSE: CPR.L - news) has seen its full-year pre-tax profit drop by more than half, which the firm is blaming on falling consumer confidence.
It said in the 52 weeks to April 26, group pre-tax profit was £4.6m, down 52.6% from £9.7m a year earlier.
Total (NYSE: TOT - news) revenue for the year was £448m, down 2.2% on the 2013 figure of £458m.
UK like-for-like sales declined 0.2% in the year, while European operations reported a significant loss.
The company said in a statement: "Operations in the UK continued to be challenged by a fragile consumer environment where the disposable incomes of our customers remained under pressure."
Carpetright said the drop was also partially the result of the costs involved in ending or renegotiating leases at unprofitable out-of-town stores.
The company, which has a large freehold property portfolio, reduced its total store count by six in the year and now has 614 stores.
It has 472 outlets in the UK, 95 in the Netherlands, 26 in Belgium and 21 in Ireland (Other OTC: IRLD - news) .
The most significant impact came from an overhaul of its Dutch operations, in what it described as "extremely difficult trading conditions".
It added: "The key driver in the performance of the rest of Europe continues to be the deterioration of consumer confidence in the Netherlands, where the floor coverings market remains weak."
Carpetright said it was expanding its online presence, improving search engine optimisation and has modernised more than half of its stores.
No dividend would be paid to shareholders.
The company has sought to renegotiate leases in the unprofitable out-of-town locations and expects to reduce the store count further when lease contracts expire within the next four to five years.
