Half-year profits have plunged nearly 30 per cent for Midland carpet manufacturer Victoria, but it expects to benefit from a raft of new products in the second period.
The group, which employs around 300 people in Kidderminster, said pretax profits for the six months to October 1 had fallen 29.8 per cent, from £1.41 million to £990,000.
Revenue for the period rose 2 . 3 per cent, from £ 25 . 43 million to £26.02 million.
Operating profit was down 24 . 6 per cent, from £1.79 million to £1.35 million, while basic earnings per share fell 28.7 per cent, from 14.13p to 10.07p. Chairman Bob Gilbert told shareholders: " During the first six months of this financial year the group has faced increasingly challenging market conditions in each of its three principal trading areas, the UK, Ireland and Australia.
"Within the UK, the market is estimated to be down by as much as ten per cent, and we have experienced what have possibly been the most difficult trading conditions of the past decade.
"Despite this, in both value and volume terms, the group has managed to gain market share from our competitors although margins have been adversely affected by both intense competition and escalating cost pressures brought about by higher oil and energy prices." Mr Gilbert said the group's free cash flow had improved, largely as a result of eliminating losses from the discontinued Axminster weaving activities.
In the UK, revenues rose 4.3 per cent, from £11.09 million to £12.42 million.
"During the period, we have concentrated on achieving organic growth through an increased investment in new ranges, patterning and instore point of sale display material," said Mr Gilbert.
"The cost of this investment, as is normal for the company, has been borne in full in the period, and should bring longer-term benefits going forward," he added.
During the period Victoria Carpets UK launched no fewer than nine products.
"This extension to the product range should start to have a positive impact in the second half of the financial year and thereafter," said Mr Gilbert.
"The company will continue to focus on bringing new, innovative and fashionable products to the market, and there are several key ranges planned for launch in the second half of this year, which are important to the company's success."
Market conditions in Ireland have been equally challenging for Victoria, which in total employs around 750 workers, including 300 in Australia.
"We believe this reflects a further gain in market share from our competitors, albeit recently at the expense of margin," he said.
"Market conditions in both the UK and Australia remain depressed and offer limited forward visibility, with little sign at present of consumers returning to the buying pattern that we have enjoyed over recent years."
