Carpet and flooring specialist reports a 7% sales boost for the year, driven by competitors exiting the UK market and a "trend back to carpet".
Carpetright's preliminary results for the 52 weeks ended May 1, 2010, revealed a 7% increase in total group sales to £516m, while underlying profit before tax and exceptionals jumped 64% to £28.2m.

The flooring and carpet retailer reported a 7.9% sales boost in the UK and ROI, taking total revenue to £425.2m. The inclusion of bed brand Sleepright To Carpetright's offer accounted for 2% of this increase.

According to the company, the increase in UK sales has been predominantly carpet, while its vinyl business has also grown. Sales of laminated and wood categories have continued to decline for Carpetright, which the retailer believes is a reflection of "the growing customer appreciation of the benefits of vinyl and a trend back to carpet".

Sales growth was also boosted, said the company, by the withdrawal of competitor Allied Carpets from the UK market. Gross profit also increased by 7.8% to £263.7m, representing a gross profit margin of 62%.

The introduction of beds in to the retailer's product mix, with the addition of Sleepright, accounted for a 0.7 percentage point decline, said the company, as the category operates on a lower grow margin than floor coverings. However, Carpetright feels the integration of the Sleepright brand into its offer presents an opportunity to capitalise on its existing store locations and grow sales per square foot.

International sales performance was not as strong, with a 1% drop in like-for-like sales in the Netherlands and Belgium, and an underlying loss of £1.7m in Poland. The company has since exited the Polish market, closing all stores, which contributed towards exceptional charges of £5.9m for the year.

Earlier this year, Carpetright warned of below market-level profits and explained that the pace of recovery it had seen towards the end of 2009 was not sustained in 2010. However, the retailer's chairman and chief executive Lord Harris is pleased to report that things have picked up.

Lord Harris said of the results: "In a challenging year, I am pleased to report that Carpetright has delivered an improved performance... These results have been delivered through a period of economic recession, with fears of unemployment and tax increases adversely affecting consumer confidence. Throughout the period we continued to manage the business by exerting tight control over all costs, capital expenditure, stock and cash flow."

He added: "Although we are planning for consumer demand across Europe to remain subdued, we have market leading positions in all our geographical areas with strong value led retail brands. I believe this enables us to look confidently to the future as and when the economic conditions improve."