Shares in Carpetright were down on the FTSE 250 in morning trading after the group reported a fall in pre-tax profit and dividends in the full year ended 30 April.
Group revenue dropped 5.8 per cent from the previous year to £486.8 million, while pre-tax profit plummeted from £22.3 million to £6.6 million. On an underlying basis pre-tax profit dropped 40.1 per cent to £16.9 million.
Net debt at the end of the period was £65.7 million, down from £71.3 million at the end of the previous year. The number of stores also fell by 27 to 559 in the period.
The group said that its full year dividend would be cut from 16.0 pence per share to 8.0 pence per share.
Lord Harris, Chairman and Chief Executive of Carpetright, said, "In my statement last year I said I expected consumer demand to remain subdued in the coming year and this indeed proved to be the case. As a result, the Group faced very challenging trading conditions in the year under review, with fragile consumer confidence producing a weak floor coverings market, leading to a reduction in sales volume and profitability.
"Against this background, we have taken a number of management actions to adapt the product proposition whilst retaining competitiveness in the market. These have been completed alongside activities to address the cost base and to review the shape and size of our future store estate.
"The decision not to pay a final dividend reflects the weaker than anticipated profitability in the second half, with the total dividend for the year of 8.0p per share, being the same as that paid in 2009 on a similar level of full year profit. In future, the Board would expect to rebalance the dividend so that the interim payment is a smaller proportion of the total.
"Looking forward, I see no respite from the challenging environment over the next year. That said, I remain confident the Group is well positioned to deliver future profitable sales growth once consumer demand improves."
Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented, "The slashed dividend payment appears to mark yet another warning for the UK's embattled housing market. Group costs are being cut, as housing transactions continue to dwindle. Management outlook comments provide little if any inspiration, while the company's offering is seen as catering to harder pressed lower income groups.
"On the upside, management is still highly regarded, debt is being reduced, and its online channel expanded.
"In all, while the group's market share provides some comfort, an improvement in consumer health is still viewed as some way off. As such, market consensus opinion continues to denote a strong sell."
By 10:05 shares in Carpetright were down 3.77 per cent on the FTSE 250 to 664.00 pence per share.