United turns to ‘self help’ as profits tumble

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Stockbroker Seymour Pierce said United Carpets’ interim results for the six months to the end of September were broadly in line with expectations, with current trade in the 11 weeks to December 15 encoura- ging.

However, the company’s house broker said it is reducing its full-year 2012 pre-tax profit forecast to £1m, down from £1.1m, taking its earnings per share estimate down to 0.84p from 0.92p, predominantly because of concerns on the first-quarter 2012 outlook. For full-year 2013, Seymour Pierce is also reducing its pre-tax profit forecast to £1m, from £1.3m, and downgrades its dividend forecasts, following the interim cut, to 0.25p from 0.75p.

The broker reduced its target price for United Carpets to 10p from 13p but retained a ‘buy’ recommendation on the stock as it thinks it remains undervalued at 7.1 times full-year 2012 earnings.