Going Dutch puts Carpetright in red

CARPETRIGHT has been forced to issue another profit warning after a dearth of Dutch customers offset improved trading in the UK.

Britain’s biggest flooring retailer, now led again by chairman Lord Harris after chief executive Darren Shapland stood down at the end of last year, said the Dutch business would make a loss.

Consumer confidence in the Netherlands is poor and consumers are not replacing their flooring.

Harris said: ‘Whilst our third quarter results reflect an improved UK performance, a further deterioration in trading in the Netherlands means that we now expect our full year underlying pretax profit to be below the lower end of current market expectations.’

Analysts had been expecting a pretax profit of between £9m and £10m.

While underlying sales in the UK increased by 1.9pc for the 13 weeks ending January 25 sales in the rest of Europe decreased by 7.7pc.

Harris said: ‘Trading in our rest of Europe business continues to be dominated by the extremely difficult economic conditions in the Netherlands. As a result we now expect this business unit to be loss making for this financial year, although we still expect it to remain cash generative.’

In Europe Carpetright (down 13p to 555p) has 146 stores of which 95 are Dutch.

Clive Black, an analyst at Shore Capital, estimates underlying sales fell 11pc in the country and that management are taking steps to slash costs.

‘The self-help programme continues, with 23 stores refurbished so far, with a further four to be updated before the end of the year,’ he said.

‘Of those refurbished 15 are now sample only stores and thereby resulting in a reduction to stock levels.’

Harris is seeking to turn the business around following a profit warning last October days after Shapland stood down.

Shapland had suggested he would stay in the role for five years when he joined in May 2012 but 18 months later could not commit to that period.