Carpet, laminate and vinyl floorings firm United Carpets (UCG:AIM) reports yet another set of surprisingly robust results in the face of 'a slightly unsettled market environment', reassuring news that sees the shares weave 1.5% higher to 10.4p on Friday.

Encouragingly, Cantor Fitzgerald Europe analyst Freddie George believes United Carpets has 'not been affected by Brexit or the development of the Tapi concept, which has had a marked impact on Carpetright’s (CPR) figures both in terms of sales and margins.'

ON A ROLL

Click here to read the half year results statement from the UK's third biggest specialist carpet and floor covering store chain chaired by Peter Cowgill, this week forced to launch an investigation into working conditions at his other retail charge JD Sports Fashion (JD.).

United Carpets' taxable profits are up almost 9% to £640,000 for the six months to end-September, reflecting the improving quality of the store portfolio and 2.1% growth in like-for-like sales, which 'have continued to be positive' in the 10 weeks to 8 December, according to Cowgill.

TAPI THREAT

This is a creditable achievement given tough comparatives and the fact ambitious flooring upstart Tapi, the brainchild of Martin Harris, son of Carpetright's founder lord Harris of Peckham, is snapping at the heels of Carpetright.

Cowgill comments: 'Despite the challenging political and economic background, the outlook for the financial year is positive having completed a successful first half. Our markets are driven to a large extent by consumer confidence and while we have ongoing political uncertainty over Brexit, the underlying base case is satisfactory, supported by a low interest rate environment combined with a housing market that continues to function reasonably well. Consequently, this should mean that our business will continue to perform.'

As for Cantor's George, he writes: 'Following this update, we are for the time being retaining our FY17 pre-tax profit forecasts of £1.55m (EPS: 1.52p). Risks, however, in our view, are on the upside to forecasts.' The retail sage has a 'buy' rating and 19.5p price target for United Carpets, one implying potential upside of 87.5%.

George also explains United Carpets, proposing an interim dividend increase from 0.125p to 0.13p, 'has a relatively strong balance sheet with c.30% of its market value in cash, which will enable it to pay further special dividends in future years.'

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