Carpetright insisted trading was set to improve after a tough half year left it nursing sliding UK sales and sharply lower group profits.

Founder and executive chairman Lord Harris, who returned to the helm in October, said while the floorings chain was yet to feel the benefit of Britain's economic revival, the booming housing market suggested a turnaround was on the cards.

Group underlying pre-tax profits slumped by a third to £3 million in the six months to October 26 as losses across its wider European business wiped out a 5.8% improvement in UK earnings.

Britain's summer heatwave contributed to a 0.8% fall in UK like-for-like sales, with trading since then remaining "unpredictable".

This marked a reversal of its earlier sales rebound, which helped it more than double profits in its last financial year.

Carpetright pointed out that sales were flat in its core UK estate and that there was hope of a delayed boost from the wider recovery in the economy and housing market.

Lord Harris said: "In the past, we have seen a lag of around six months before the impact of a change in the mortgage approval trend has been reflected in our sales."

A raft of "self-help" measures helped UK underlying operating profits rise to £5.5 million in the first half in spite of the sales slip.

"While we anticipate trading conditions will remain challenging, we expect these self-help initiatives will underpin an improvement in group performance in the second half," Lord Harris said.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said the results offer some "tangible relief" after October's profit warning and the shock departure of former chief executive Darren Shapland, which saw Lord Harris step in to take over day-to-day running of the firm.

Carpetright has been revamping UK outlets and reviewing the locations of its store estate.

It has modernised 224 of its 474 UK stores so far under the programme and is extending the refurbishment plan to its 142-strong European chain.

The firm hopes a new promotional programme will also help turn around dire trading in the Netherlands, which was behind an 8.6% plunge in like-for-like sales across the European arm.

The division, which also includes Belgium and Ireland, slumped £1.4 million into the red in the first half, against profits of £200,000 a year earlier.

Freddie George, retail analyst at Cantor Fitzgerald, cast doubt over a marked reversal in fortunes at the group.

He said: "We have concerns that the company has successfully fought off all its multiple competitors and we believe its new refurbished format is not effective enough against the independents.

"It is too focused on price, in our view, and not aspirational enough for mainstream customers."