United Carpets falls on profit drop, Brexit gloom

United Carpets Group shares fell on Thursday after profits dropped and its chief executive warned there were “no immediate signs of respite” amid Brexit uncertainties.

For the six-month period ended 30 September the carpet and beds retailer’s profit before tax came in at £0.1m, down from £0.6m over the same period last year, as an 18% jump in administrative expenses to £6.4m countered an 8% increase in revenue to £10.8m.

Furthermore, a number of individual franchisees struggled to meet ongoing financial commitments and so the company increased the level of bad debt provision resulting in a net charge of £91,000 for the period, compared to a release of provision of £50,000 in the same period last year.

Chief executive Paul Eyre said: "As we said in our September trading update, over the summer months the exceptionally warm, sunny weather and the World Cup combined to make the first half of this financial year a very challenging trading period. We worked hard to maintain sales levels but to do so required increased investment in marketing and further support for the franchise network."

At the end of the period the AIM-traded company had cash and cash equivalents of £2.1m, up from £1.6m at the same point last year.

"With no immediate signs of respite in the general environment and continuing Brexit uncertainties, we entered the second half cautiously, however, recent trading performance has shown some more encouraging signs which, if sustained, should result in a better second half result and a reasonable outcome for the year," said Eyre.

United Carpets’ shares were down 8.00% at 5.75p at 1113 GMT.