The continued expansion of its range of floorcoverings contributed to Headlam Group notching up its best ever annual performance last year.

The Warwickshire-based carpet and flooring distributor noticed tougher trading as part of the wider retail downturn last year.

But adding nearly 2,500 new carpet lines and 700 vinyl floorings helped prolong its popularity among developers and people doing up their homes.

In the year to December 31, pretax profits increased by six per cent to £40.8 million, while sales increased by 4.7 per cent to £486.6 million.

On a like-for-like basis, sales rose 2.4 per cent, while the company completed its £13 million investment in a new distribution centre in Tamworth, which employs 220. Headlam, which has 250 people at its national HQ in Coleshill, had also experienced a strong start to this year.

Tony Brewer, group chief executive, said: "The flooring market has been tough in the last 12 months but we have continued to grow.

"We now have 46 individual businesses operating from 21 locations, each with their own individual sales teams which are really concentrating in delivering."

The separate businesses ensured strong long-term relationships with floorcovering manufacturers and offered

independent floorcovering retailers and contractors a wide breadth of product, including the latest trends and innovations, he said.

The continental European businesses in France, Switzerland and the Netherlands continued to improve their sales and profitability, Mr Brewer added. Total carpet sales which represent 50 per cent of UK turnover increased by four per cent.

The group said its chairman, Trevor Larman, would retire from the board following the forthcoming annual general meeting and be replaced by executive director Graham Waldron.

During the second half of 2005 and the first quarter of 2006, the firm invested in additional sales people in order to enhance its market position and accelerate sales growth in the contract sector.

During 2005 it acquired the businesses of Clarendon Carpets and Gaskell Wool Rich and was examining sales and marketing of new products for both of these businesses.

Following a successful 2005 the group has made a positive start to 2006 with like-for-like sales in the United Kingdom increasing by 3.2 per cent in the first quarter.

Mr Brewer said: "With each of our businesses clearly focused on maximising their individual market presence, and with the contribution from all of these initiatives, we look forward to achieving another successful year."