Carpetright is floored by 60% dive in profits

Flooring specialist Carpetright on Tuesday warned on profits after it was spooked by recent drama on the High Street and battered consumer confidence.

Chief executive Wilf Walsh said: “Given the backdrop, with problems at Multiyork and Toys R Us, we thought I’d be more prudent to points towards the lower end of market expectations.”

Profits sank by almost 60% to £2.1 million for the half year to 28 October, as the business grappled with increased competition, poor gross margins in Europe and a revamp of its beds range.

“We’re had issues in Belgium with margin dilution and discounted promotion, which we’ve now reversed,” said Walsh. However, revenues were up 2.6% boosted by a 20% growth overseas, which offset the 0.8% drop at home.

The retailer said sales over the first six weeks of the second half have been “encouraging”, with same-store sales picking up.

The shares were down by 6.5% on the news, 12p to 173p.