Carpet manufacturer Victoria Carpets has reported a sharp rise in profits despite substantial increases in raw material costs.

The Kidderminster-based firm saw revenues rise by 10.4 per cent to £33.3 million in the half-year to October 2.

Profits more than doubled on the back of the increase, to £560,000.

The company benefited from sales rises in Australia, the UK and Canada despite overall market declines.

However, the company which owns Irish firms Munster Carpets and Navan Carpets, admitted sales from Ireland had been hit as the country endures tough economic times.

A company spokesman 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.”

In a statement to the London Stock Exchange, Victoria also revealed that group borrowings reduced to £8.6 million, from £9.5 million at the same period last year.

Overall, UK revenues increased by 1.6 per cent, from £11.1 million to £11.3 million, compared to the corresponding period last year.

The state of the Irish economy hit the firm hard, with sales from that country in the first half falling by 26 per cent, from £1.6 million to £1.2 million and an operating loss of £245,000 recorded over the period.