Profits collapse at two more high street giants

Profits have plunged at two more high street retailers – electrical outlet Comet and Carpetright, Britain’s biggest carpet retailer.

Both companies have slashed dividends and warned of “extremely difficult” trading conditions.

Comet, owned by Kesa, posted a massive 71% fall in first-half profits and halved its dividend to 1.75p. The company also owns French electrical retailer Darty.

Profits at Kesa were £13m for the six months to October 31 – down from £45.1m a year ago..

Carpetright ‘s annual profits will come in “significantly” below expectations. The company says first-half profits collapsed by 67% and cut dividends from 22p to 18p. Profits for the six months to November 1 were £8.8m from £27.2m last year.

Lord Harris, Carpetright’s chairman and chief executive, said: “As I have previously said, I expected my 51st year of selling carpets to be extremely challenging, and it has proved to be the case. Market conditions and consumer confidence have declined through the first half, leading to reduced profits year-on-year due to lower sales.”

He added: “Trading during November was below expectations and like all non-food retailers, we expect it will remain very difficult.

The government is helping first time buyers get a foot in the door with a scheme with 130 developers to sell 18,000 unsold homes.

The government has a loan kitty of £400m to help first-time buyers through a shared equity scheme. The loan is free of charge for five years and is proposed as a deposit to cover up to 30% of the purchase price.

A first–time buyer could purchase a house worth £180,000 for as little as £126,000, the government said.

The Pound lost more ground against the euro, slipping from 1.11 to 1.12 and strengthened slightly against the US dollar from, $1.48 to $1.49.

The FTSE and DOW hardly moved in advance of today’s interest rate announcement from the US Federal Reserve. The FTSE dropped just three points from 4280 to 4277 and the DOW fell 64 points from 8628 to 8564.

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