Carpet retailer United Carpets boosted profit by 300 per cent in the first half of its financial year after reducing the size of the business.
The Rotherham-based group posted a pre-tax profit of £452,000 for the six months ended September 30 compared to £113,000 for the same period last year.
The stock-market listed company has undergone a major restructuring, following a pre-pack administration for its main trading arm in October 2012 to escape onerous leases, and reduced the number of stores from a peak of 86 to 60.
Chairman Peter Cowgill said: “The streamlining of the portfolio together with the renegotiation of rental agreements with existing landlords has meant the new network is made up of a stronger group of stores operating in many cases under improved rental agreements.”
Sales dipped in comparison with the previous six months, from £11.3m to £10.3m, reflecting the reduction in store numbers.
Like-for-like sales were down 1.6 per cent, an improvement from the previous six months when like-for-like sales were down by 9.7 per cent.
However, Mr Cowgill added that whilst sales benefitted from the smaller, more focused store network, consumer spending still remained tight.
Most of the group’s revenue comes from the sale of carpet, laminate and vinyl, and beds through franchised stores and the group’s own corporate stores.
Mr Cowgill said: “The market environment for the period under review continued to be challenging and like for like sales were slightly down by 0.3 per cent.
“Reduced levels of customer footfall have been largely offset by improved conversion rates and increases in average transaction values as we continue to focus on improving the instore customer experience.
“We believe we are being more successful at ensuring that potential customers find what they are looking for when they come into stores reflecting improved service levels and the extensive range of products each store can offer.”
Turnover in its warehousing and beds division increased slightly to £4m from £3.9m the previous six months.
Beds sales accounted for about six per cent of total sales but Mr Cowgill said its performance remained disappointing with like-for-like sales down 18 per cent.
“The process of changing the way beds are sold through the network, giving more ownership of beds sales to the franchisees, has been rolled out to virtually all stores in preparation for the seasonal upturn in beds sales in the post Christmas period,” he said.
Looking ahead, Mr Cowgill added: “As a result of the actions taken last year, the company has established a sounder, debt-free base consisting of a smaller more profitable portfolio of stores on which to build, going forward.
“Whilst there has been some encouraging signs of an improvement in the economy, this does not yet appear to have materialised in consumers feeling better off.
“We are therefore not anticipating an upsurge in consumer spending in the short term; instead we hope to gain market share from a continued focus on customer service and providing genuine value for money offers on good quality products.”
He added: “Whilst there is a smaller amount of rationalisation to be completed, like-for-like sales in the 11 weeks since the half year end have increased by 2.4 per cent showing some improvement and the benefit of operating from a smaller, more robust platform for future growth.”
Chief executive Paul Eyre said: “These results should give shareholders increasing confidence in the future of the business.”