Floor coverings retailer Carpetright said profits had fallen 18.9 per cent as it struggled to cope with weak market conditions.
The group, which has 500 stores and concessions across the UK and Europe including 18 in the Midlands, made £24.9 million in the 26 weeks to October 29.
It blamed low levels of consumer confidence and fewer house sales in its largest market - the UK and Ireland, where operating profits slipped 31 per cent to £21.6 million and like-for-like sales fell seven per cent.
Chairman Lord Harris said the company had increased its market share and 12 new stores opened in the UK and Ireland during the period.
There are plans to open ten more in the next half as well as two stores in Poland.
He believed the group was "well positioned" to grow sales and profits as soon as the market improved.
"The housing market has affected us but in the last six weeks there has been an upturn and we have made a satisfactory start to the second half," Lord Harris said.
"Despite weak market conditions the group has continued to deliver robust operating profits and cashflows.
"Our UK and Republic of Ireland business has grown market share with strong offers and high levels of customer service.
"In Europe sales growth remains strong in both Belgium and The Netherlands. The store re-branding programme is complete and the group is now focusing on store expansion as well as continuing to grow sales in stores."
In October, the company reported that its summer offers, such as knocking a third off the price of carpet rolls and increasing the discount on its regular sales, had a negative impact.
The deals ate into profitability and Carpetright said gross margins in the financial year were lower than a year ago.
Increased overheads compounded problems, with costs up by two per cent to £1.7 million because of higher rents and advertising costs. Staff costs were cut after a reduction in the "central headcount" early this year.
Around 26 new stores opened in the UK and Ireland and 14 closed during the period -leaving Carpetright trading from 415 outlets and remaining on track to reach its target of 450 stores and 100 concessions by 2010.
Eleven new concessions opened in Debenhams department stores, including branches in Hull and Sheffield, and the company's first television advertising campaign in Ireland was launched during the six months.
The company, which is based in Rainham, Essex, said initiatives to improve its performance in the coming years included a new distribution facility and IT system.