7th Mar 2019 11:10
LONDON (Alliance News) - United Carpets Group PLC on Thursday issued a profit warning, expecting annual profit to halve due to a challenging trading environment.
United Carpets shares were trading down 15% at 4.25 pence each.
For its year ending March 31, the carpet and floor covering retailer expects annual pretax profit between GBP550,000 and GBP650,000.
A year ago the company posted pretax profit of GBP1.5 million, meaning that, even in the best outcome, the company expects a 57% reduction.
This was due partly to the "exceptionally warm summer" and the football world cup which negatively affected sales during the company's first half.
Since then, the company said it invested in marketing to maintain like-for-like sales at a similar level compared to a year ago.
However, the run up to Brexit led to weakened consumer confidence, created a softer housing market and an retail environment riddled with aggressive competition, United Carpets explained.
It added: "Marketing investment and support for the franchisee network have continued to impact on group profitability as has aggressive pricing to match competitor discounting. The group also continues to develop online activities and new opportunities which, while increasing total revenue, are not yet making a positive contribution to profit before tax."
"Looking ahead, the board is confident the fundamentals of the business remain sound, and is well placed to take advantage of any improvement in market conditions."
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