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Carpetright upbeat on profit forecasts as trading improves

LONDON (Reuters) - Britain's biggest floor coverings retailer Carpetright said it expected full-year profit to be towards the upper end of market forecasts after trading improved both at home and abroad.

The group, which had made a string of recent profit warnings due to tough trading in the Netherlands and weak demand in the UK, said on Monday underlying pretax profit had more than doubled to 6.7 million pounds in the six months to Oct 25.

Sales at UK stores open over a year grew by 6.5 percent in the period, aided by promotions which pushed its gross profit margin down 140 basis points to 61.7 percent.

Carpetright's rest of Europe division, made up of Ireland, Belgium and the Netherlands, saw underlying sales fall 3.3 percent but the unit returned to profit in the half due to lower costs and improved sourcing which boosted its margins.

"Having made a solid start to the year, we now expect full year underlying pretax profits to be towards the upper end of current market expectations," Carpetright's Wilf Walsh, who joined as chief executive in July, said.

The firm said current market expectations for the year to May 2 ranged from 8 million pounds to 11 million pounds.

Shares in the group, which trades from 463 UK stores and 139 in its European unit, closed at 313.25 pence on Friday, down 40 percent on a year ago and valuing the firm at 213 million pounds.

(Reporting by Neil Maidment, Editing by Paul Sandle)