Carpet manufacturer lays down strong interims

VICTORIA, the Midlands based carpet and floorcovering manufacturer, has announced a 178% increase in interim pre-tax profits for the half year to October 2.

The company said a number of new initiatives and products had helped to increase revenue and profitability.

It saw revenues rise 10.4% on the same period last year from £30.17m to £33.31m. Pre-tax profits rose from £0.2m in the same period last year to £0.56m.

Group operating profit rose 48.7% to £0.78m and basic earnings per share rose 178% to 5.17p. It said its balance sheet remained strong with borrowings of £8.55m and net gearing at 18.5%.
 
Commercial highlights during the period saw revenues in the UK and Canada increase despite overall market declines. In Ireland the increasing weakness of the domestic economy further reduced revenues.

Gross margin in Australia recovered significantly aided by better plant utilisation and a strong Australian Dollar.

However, it said the UK margins continued to be affected by substantial increases in raw material costs. Also in the UK, a new generation of EASICARE™ synthetic pile carpets is being launched in Q3 which is expected to improve the customer offering into the second half.

Carpet sales to the insurance replacement market are now live and the company said business within this new market was developing well.

In its interim statement, the firm said: “The overall outlook for the group is satisfactory, with the growth in Australia helping offset some of the softer market conditions that remain in other geographies.

“In the UK, strong new range introductions, particularly in the synthetic carpet area, coupled with further progress expected in the insurance replacement market, should help to mitigate any further market weakness, in what is the generally more buoyant second half.  Raw material cost increases have now been passed on and this should help in restoring margin.

“In summary, whilst we remain cautious about the outlook for consumer spending, the Group is well positioned to exploit some of the new initiatives that it is developing in the floorcovering market and we remain confident of achieving the expectations set for this financial year.”

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