Carpetright has reported full-year underlying pre-tax profit tumbled from £9.7m to £4.6m as it was hit by tough trading in the Netherlands.
Carpetright’s underlying operating profits fell 39.5% to £6.9m in the 52 weeks to April 26, dragged down by the £3.8m loss recorded in Europe.
In the UK, underlying operating profit slipped 1.8% to £10.7m. Carpetright said the performance of the UK business was characterised by significant sales volatility in the year.
Carpetright reported group sales were down 2.2% to £447.7m. UK sales fell 1.5% to £375.8m and the rest of Europe dropped 5.4% to £71.9m.
In the UK, like-for-like sales were down by 0.2%. Carpetright said excluding the expected contraction in sales from the wholesale business, in the core retail business like-for-likes rose 0.5%.
In the rest of Europe, comprising the Netherlands, Belgium and Ireland, like-for-like sales slumped 8.6%. It said trading conditions remain weak in the Netherlands.
New chief executive Wilf Walsh joins on July 21 when Lord Harris will become non-executive chairman.
Harris will now remain as non-executive chairman following the AGM on September 4. He will continue in this role until a new chairman has been appointed and may remain on the board in a non-executive capacity following the appointment of a new chairman. In May, Carpetright said Harris would stand down on July 4 and remain with Carpetright in an advisory capacity only.
Harris said: “While indicators point to an overall improvement in UK economic performance over the past 12 months, it has been a challenging time for the group with our markets remaining highly competitive and deal-driven.
“The performance of the business in the rest of Europe is principally a reflection of the continued difficult trading in the Netherlands. While this business reported a loss for the year, it remained cash generative.
“Against this backdrop, we continue to take steps to develop the business. While we anticipate trading conditions will remain challenging, we expect these actions will underpin an improvement in group performance in the new financial year.”
Carpetright is investing in the beds business as a complementary revenue stream. Its Sleepright by Carpetright offer is now in 260 stores. Beds now represent 7.6% of the total UK sales revenue.
Carpetright replicated the beds proposition in seven stores in the Netherlands but said the trials had been disappointing and a further roll-out is on hold.