Carpetright profits slump 70% in 'challenging' trading
Carpetright has seen its annual profits slump by 70% in the face of "very challenging trading conditions".
Pre-tax profit for the year to 30 April was £6.6m, down from £22.3m a year earlier, with trading hit by reduced consumer spending and the continuing weakness in the housing market.
Annual revenues at the carpet and floor covering retailer were 6% lower at £486.8m. Carpetright said it was reviewing the number of its stores.
Its shares fell 5% in early trading.
The company had already issued two profit warnings earlier this year.
Carpetright chairman and chief executive Lord Harris said: "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 volumes and profitability.
"Against this backdrop we have taken a number of management actions to adapt the product proposition whilst retaining competitiveness in the market."
During the year, Carpetright reduced its number of stores across the UK and the Irish Republic by 27 to 559, as part of wider cost-cutting measures.
Annual revenues at its business in continental Europe were down 8%.
The most recent government figures showed that UK retail sales fell 1.4% in May, while the Halifax said house prices last month were 4.2% lower than a year earlier.
Lord Harris added: "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."