Carpetright scraps divi and slips into the red on sales dip

Lord Harris of Peckham, the Tory peer and retail magnate, was out of pocket to the tune of £1 million when his Carpetright business was forced to scrap the half year dividend payment to shareholders.

The chairman owns 12.7 million shares in the business which managed a payout of 8p this time last year.

Falling sales and a loss before tax of £800,000 for the 26 weeks to 29 October left the company in no position to reward investors.

That loss compares to a profit of £9.8 million a year ago when the economy and, crucially, the housing market seemed in better shape.

Sales are down 3.9% to £238 million and margins have slumped 4.3%.

In the UK, the figures were even worse. Sales are down 5.6% to £192 million in this country, with the rest of Europe faring a little better.

Lord Harris said: "Like many other retailers we are continuing to experience a very challenging trading environment, with significant sales volatility and a corresponding decrease in the gross margin."

Carpetright has issued a string of profit warnings in recent months, the latest coming in October.

The company, with 643 stores in Britain, Ireland, Belgium and the Netherlands, has been particularly hard hit because consumers have cut back most on large purchases that can be deferred, like carpets.

Kate Calvert at Seymour Pierce said: "The big ticket, housing related markets continue to struggle with the housing market in its fourth year of weak transaction numbers. Despite being a highly geared business, Carpetright has the cash generation and dominant market position to ride out this downturn and will emerge a market leader."

The shares moved up 41.6p to 437p. That leaves the company valued at £294 million.