Carpetright, the UK’s biggest floor coverings specialist, generated pre-tax profit growth of 15.8% to £11m in its first half and is considering further expansion in Europe.
Total group revenue rose 9% to £258m in the 26 weeks to October 31. Like-for-like sales in the 590 UK & Ireland shops jumped 3.9% - the strongest half-year performance since 2004.
Domestic total sales climbed 9.6% to £213.3m. Bed business Sleepright accounted for 3.6% of the growth.
Group commercial director Martin Harris said Carpetright has “made a good start to the second half”. He said that Carpetright would consider opening stores in neighbouring countries to its
existing overseas markets of Belgium and Holland, possibly through acquisitions.
He added that international expansion is “definitely a long-term growth opportunity”, but the retailer is exiting Poland, where it has been unable to build sufficient scale because of a lack of available properties and lower profits.
Underlying operating profit in the UK & Ireland rocketed 67.9% to £14.1m in the first half as Carpetright benefited from the “contraction of Allied Carpets” as well as improved mortgage approval figures.
Its European arm, comprising 126 stores, suffered a like-for-like sales slide of 3.8% but total sales grew 5.9% in a market Carpetright said had declined by around 15%.
In the UK & Ireland the retailer said its high street format, revealed by Retail Week (May 8), was performing well and it is looking for opportunities to open more stores.
Lord Harris said he was “delighted” with the improved performance. Despite caution about the retail market “through 2010”, after a positive start in the second half and with the “added potential of more insurance and house builder business to come”, Carpetright directors are confident that the retailer is well positioned to make further progress.
The transactional website, launched this month, is trading “ahead of expectations”, said Harris.
Carpetright said its promotional stance “remains consistent”, and upped its ad spend 24%, focusing on “strong price theme, and product quality and service credentials”.
Singer analyst Matthew McEachran said the performance of the insurance and house-building business has been “excellent to date” and expects it to drive revenue for Carpetright next year.