Carpetright warns over markets

The group made £16.9m in its previous financial year but now estimates underlying profits for the year to April 28 will be in the region of £3m and £4m – below City forecasts of £7m.

Carpetright, which has 491 stores in the UK, blamed weaker than expected sales of bed ranges and a deterioration in trading in the Netherlands and Belgium for the latest in a series of downgrades.

Chairman and chief executive Lord Harris said a return to like-for-like sales growth in its core UK business over the 11 weeks to April 14 offered some hope for the new financial year.

However, he added: “The fragile confidence of our customers continues to produce a weak and volatile floorcoverings market.”

The group’s sales were down 4.3 per cent over the financial year.

Seymour Pierce analyst Freddie George said it appeared the chain was too much focused on price rather than value for money and service.

He added: “It is yet another profit warning from the company and there must be concerns that the decline in profitability over the last five years is partly structural and not all down to the market.”

The company was founded with a single store in east London in 1998 and floated on the London Stock Exchange five years later.

Lord Harris, who has worked in the sector for 55 years, has a near-20 per cent stake in the business.

Carpetright’s underlying pre-tax profits were £62.1m in the 2008 financial year.

Carpetright has 32 stores in Yorkshire.