UPDATE 3-Carpetright says no quick recovery as profits slide

* FY underlying pretax 17.2 mln stg vs f'cst 18 mln

* Final div cut to 4p vs 30p

* Says cautious about short-term prospects

* Shares down 3 pct at 0811 GMT

(Adds detail, CEO, analyst comments, shares)

By James Davey

LONDON, June 30 (Reuters) - Britain's biggest carpet retailer, Carpetright Plc (CATVU.L), said normal trading conditions would not resume for at least 12 months as it posted a 72 percent slump in full-year profit and slashed its dividend.

"People have got a little bit more money in their pockets because interest rates are down, fuel prices are down ... They're not spending money on cars, they're not spending money on holidays and normally that's very good for us," chairman and chief executive Philip Harris told reporters on Tuesday.

"But the thing that everyone's worried about is their job."

Harris, a 51-year industry veteran, estimated the overall UK carpet market was currently down at least 20-25 percent year-on-year but said Carpetright was winning a greater share.

His view resonated with comments last week from British electrical retailers DSG International Plc DSGI.L and Kesa Electricals Plc (KESA.L), which both reported slumps in profit and gloomy outlook statements. [ID:nLM41774] [ID:nLM694677]

However, a survey said British consumer morale hit a 14-month high in June. [ID:nLT385627]

Shares in Carpetright have lost 16 percent of their value over the past year but have gained 45 percent over the last three months, outperforming the FTSE All Share General Retailers Index .FTASX5370 by 22 percent.

The stock was down 3 percent at 582.5 pence at 0811 GMT valuing the business at 386 million pounds ($635.3 million).

'SHARES STILL EXPENSIVE'

"We continue to believe that its shares are expensive. This reflects, in part, a view that (UK) house prices have further to fall and that this will have a knock-on impact on transactions," said David Stoddart, analyst at Altium Securities.

Carpetright, which trades from 695 stores in the UK, Ireland, the Netherlands, Belgium and Poland, made an underlying pretax profit of 17.2 million pounds in the year to May 2.

This compares with analysts' consensus forecast of 18 million pounds, according to Reuters Estimates, and with 62.1 million pounds in the previous year. Total revenue fell 7.4 percent to 482.8 million pounds, with like-for-like sales down 13.5 percent in UK and Ireland.

The group, which ended the year with net debt of 97.1 million pounds, cut its final dividend to 4 pence from 30 pence last time, making 8 pence for the year, down 85 percent. The cut will save the firm 31 million pounds.

Carpetright said its new warehouse and cutting facility in Purfleet, Essex, has provided additional capacity, enabling the firm to pursue additional business with large insurance companies and housebuilders - markets it estimates are each worth 100 million pounds a year. [ID:LE886759]

"Negotiations (with insurers) ... are continuing. We've got one large insurer that is trialling well at the moment," said finance director Neil Page.

"On the housebuilders we've got one and we're still in negotiations with lots of others."

(Editing by Mark Potter, Will Waterman, John Stonestreet)