Third profits warning at Carpetright as troubled flooring firm fails to benefit from housing boom
Carpetright has issued its third profits warning in six months after the beleaguered flooring firm failed to cash in on the soaring housing market.
Higher mortgage approvals usually lead to a boom in sales as home-owners deck out their new abodes. But – unlike peers such as Topps Tiles – Carpetright has seen no uplift.
It said annual pre-tax profits would be £3.5-£5.5million – compared to the £7-8million it had said in January.
Executive chairman Lord Harris said: ‘We had expected to see some recovery as UK housing transaction volumes improved. This has yet to materialise and the momentum established in the third quarter was not sustained.’
Shares, which have lost more than a sixth of their value in the last six months, slumped 5 per cent to 556.5p.
Sales at stores that have been open for more than a year rose 0.2 per cent in the eight weeks to March 22, below the 1.9 per cent in the previous three months. Sales on the same basis in its European business fell 5.3 per cent, dragged down by tough trading in the Netherlands.
The group’s ailing European business accounts for 16 per cent of group revenue and gross profit. Carpetright previously announced it had hired former Dreams boss Nick Worthington as European director in an attempt to revive its fortunes.
It also had to bring back Lord Harris after previous chief executive Daren Shapland left 18 months into a five-year turnaround plan.The company issued another profits warning just days after his departure in October.
Finance director Neil Page yesterday said: ‘What we’re seeing is growth but it’s not at the level that we expected.’
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