Carpetright profit slumps on uneven demand, sterling depreciation

13th Dec 2016 07:56

(ShareCast News) - Carpetright posted a 42% slump in pre-tax profit for the 26 weeks ended 29 October as revenue fell amid uneven consumer demand and as the company took a hit from the weakening of the pound versus the euro.Pre-tax profit fell to £4.1m from £7.1m in the first half a year ago, on revenue of £222.3m, down 3.8%.Underlying pre-tax profit fell to £5m from £9m and the group had net cash of £0.4m at the period end, versus £4.1m the year before.In the UK, like-for-like sales declined by 2.9% versus a 3.7% increase in the same period a year ago, reflecting uneven consumer demand in an increasingly competitive market.In the rest of Europe, LFL sales were down 1.5% in local currency compared to a 5.5% rise the year before.Still, the company said it has experienced a promising start to the second half, with LFL sales in the UK up 2.6% in the six weeks to 19 December and sales in the rest of Europe up 5.9%, giving it confidence that its strategy remains on track and will deliver.Chief executive Wilf Walsh said: "We have had a challenging first half - the full impact of the UK decision to leave the EU remains unclear; consumer demand remains uneven; the market is extremely competitive and the impact of currency movements have combined to give us substantial trading headwinds. To address these challenges and revitalise the business, we have a programme of activities underway, but these will take time to deliver their full effect."