United Carpets, one of the UK’s biggest carpet retailers, said profits doubled over the past year following a pick-up in consumer confidence and the housing market.
The Rotherham-based group said network sales rose to £56m in the year to March 31 and like-for-like sales rose 2.2 per cent.
Pre-tax profits jumped from £250,000 in the six months to March 2013 to £940,000 in the year to March 2014. The group changed its year end which means direct comparatives are not available.
Five underperforming stores were closed over the year leaving the group with an estate of 59. A further two have since shut.
Paul Eyre, chief executive, said: “We are pleased to be announcing a good uplift in profitability, helped by an increase in like-for-like sales as consumer confidence increases slightly and the housing market also improves.
“This trading performance also reflects the benefits of the management actions taken two years ago to reduce significantly the size of the store portfolio, removing the majority of underperforming stores.”
The group said the market has improved and shows signs of recovery although the market remains fragile.
Chairman Peter Cowgill said: “There are a number of hurdles still to come such as increases in interest rates which are expected in the not-too-distant future.” The company expects to close a “small number” of stores which are either underperforming or where it has been unable to negotiate a satisfactory new lease. It has agreed leases for 52 stores.
Mr Cowgill said that with the restructuring largely completed, the management team has been able to focus on developing the business.
It is exploring a limited trial of smaller store formats.
“Employment levels have increased ahead of expectations and so has the housing market,” he said. “Our base is stronger. We have removed the majority of the weaker stores from our portfolio.”
The group said that consumer demand has shown some signs of improving although the second quarter of the calendar year softened compared with the first quarter.
Like-for-like sales in the first 16 weeks of the current year are down 2.3 per cent.
“Trading has been a little patchy, but we believe the overall picture is generally moving forward, underpinned by higher levels of employment and a more active housing market,” said Mr Cowgill.