Shares in Carpetright were down nearly ten per cent on the FTSE 250 and are a recommended sell, despite the group reporting a rise in pre-tax profit of 33 per cent and a doubling of its full year dividend.

The carpet seller said that total group revenue increased seven per cent to £516.6 million in the full year ended 1 May. Pre-tax profit increased by a third during the year to reach £22.3 million.

In Britain and Ireland total revenue rose 7.9 per cent to £425.2 million, up 3.1 per cent on a like for like basis. Underlying operating profit rose 67.9 per cent to £26.2 million while the store base increased by 19 to 586.

In the Netherlands and Belgium total revenue rose 4.1 per cent to £89.2 million while underlying reported operating profit increased 10.3 per cent to £9.6 million.

The group said its proposed final dividend would be doubled from the previous year to 8.00 pence per share, making for a full year dividend of 16.00 pence per share, also doubled from 2009.

Net debt at the group was reported as being £71.3 million at the end of the year, down from £97.1 million at the same time last year.

Lord Harris of Peckham, Chairman and Chief Executive of Carpetright, said, "In a challenging year, I am pleased to report that Carpetright has delivered an improved performance. The Group has grown sales and commenced the development of new revenue streams in the house building and insurance sectors, helping to deliver a significant recovery in profitability over the depressed level reported in the prior year.

"These results have been delivered through a period of economic recession, with fears of unemployment and tax increases adversely affecting consumer confidence. Throughout the period we continued to manage the business by exerting tight control over all costs, capital expenditure, stock and cash flow.

"Although we are planning for consumer demand across Europe to remain subdued, we have market leading positions in all our geographical areas with strong value led retail brands. I believe this enables us to look confidently to the future as and when the economic conditions improve."

Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented, "The results provide few if any surprises. Profits have recovered in line with the economic rebound in the UK, while currency movements have provided the group's overseas operations with a favourable tailwind. Furthermore, the group's move to supply the insurance industry has contributed, albeit in a small fashion, whilst the company's website offerings have been re-launched.

"On the downside, uncertainty surrounding the outlook for the UK housing market is gathering pace, while the closure of the group's fledgling Polish business highlights the challenges in expanding overseas. In all, whilst a leading market share position in the UK (over 30pc) and highly regarded management provide some comfort for the group's long term prospects, the absence of near term growth catalysts continues to support a negative (sell) market consensus opinion."

By 09:42 shares in Carpetright were down 9.79 per cent on the FTSE 250 to 640.50 pence per share.

Unemployment FTSE