London, England, June 28--Carpetright PLC, the UK's largest carpet and floor coverings retailer, reported a 4.1 pct fall in full year underlying profit but hiked its dividend payout 6.8 pct and said it is "well placed" to make further market share gains despite the more difficult market, according to the Interactive Investor.
For the year to April 30 2005 the group, 28 pct owned by the family of Lord Harris of Peckham, its founder, chairman and chief executive, made a profit before tax, goodwill and one off property gains of 62.3 mln stg -- above analysts' forecasts of about 61.5 mln stg but down from 65.0 mln stg last time.
Analysts had trimmed their forecasts on April 26 after a disappointing second half trading statement which highlighted tougher market conditions as consumers tightened their belts.
Turnover was broadly flat at 462.5 mln stg, while pretax profit was up 8 pct at 72.5 mln stg.
Carpetright highlighted strong cash generation with operating cash flow of 72.6 mln stg. But it also noted cost pressures from increased rent and the dual running costs of its new distribution operations.
A final dividend of 28.0 pence was proposed, giving a total of 47.0 pence, payable from basic earnings per share of 75.3 pence, up 9.4 pct.
"There is no doubt that the UK floor coverings market has become more difficult since the start of 2005 in line with several other DIY and housing related sectors as well as retail in general," said Harris.
"However the Carpetright business is well placed, with its strong competitive position, to continue to grow market share," he maintained.
"This, alongside our clear UK and European expansion plans, continued drive for margin growth, ongoing profits from property and strong cash generation should enable the business to continue to deliver good returns for shareholders going forward."
He noted the UK and Ireland expansion plans are on track. The group has a target of 450 stores within three years.
Carpetright also plans to add 20 pct more space to its business in Belgium and the Netherlands.
