Carpetright’s first-half profit to be lower in volatile trade
LONDON (Reuters) – Britain’s largest floor coverings retailer Carpetright <CPRC.L> said on Tuesday trading conditions in its markets had been volatile in the first half and profit for the period would be below that of the current year.
The firm forecast a better second half and said it expected profit for the full 2017-18 year within the range of analysts’ expectations – pretax profit of 13.8-16.7 million pounds ($18.2-$22.1 million).
Carpetright, which trades from 419 UK stores and 136 overseas, made 14.4 million pounds in 2016-17, a 21 percent decline.
The firm, whose fortunes are closely tied to the strength of the housing market, said like-for-like sales in its UK division rose 0.8 percent in the 25 weeks to Oct. 21 – a slowdown from growth of 2.0 percent in the first seven weeks of the half.
British consumers’ discretionary spending is under pressure from rising inflation, subdued wage growth and ongoing uncertainty in the UK economy.
Like-for-like sales in the Rest of Europe division – made up of the Netherlands, Belgium and Ireland – rose 6.3 percent in local currency terms.
“We are pleased with the improvement in sales in the Rest of Europe and beds in the UK over the past few weeks. When these are combined with continued progress in our core flooring category we expect a significantly stronger second half with full year profit within the current range of market expectations,” said Chief Executive Wilf Walsh.
Analysts at Peel Hunt downgraded their full year pretax profit forecast by 8 percent to 15.4 million pounds but maintained their “buy” stance.
Shares in Carpetright, up 19 percent so far this year, closed Monday at 180 pence, valuing the business at 122 million pounds.
($1 = 0.7572 pounds)
(Reporting by James Davey, Editing by Paul Sandle)