THE SARS outbreak and war in Iraq have failed to stop a Kidderminster carpet firm making more money than it expected in the current financial year.

Victoria plc has posted another stockmarket upgrade and now estimates pre-tax profits of not less than £2.9 million - almost £1m higher than it expected just a few months ago.

Uncertainty in the tourist industry across the world is still hitting exports but group managing director Alan Bullock said strong sales to homeowners in the UK and Australia had boosted the profits.

"We had strong trading before Christmas and we were likely to significantly exceed our forecasts of £2.1m profit," he said.

"Trading continued to be strong at the start of this year and we increased our forecast to £2.5m.

"Now we've had to upgrade it again and that's in a time when a lot of firms are posting profit warnings. We're very pleased with the performance across the group."

He said exports were still down at 13 per cent of the UK turnover from around 20 percent a couple of years ago.

They were expected to stay low because of fears of the respiratory disease SARS hitting international tourism.

"Around 90 percent of our export sales are to the hotel and restaurant industries and these have been badly hit," he said.

"The tourist industry is very sensitive to political issues.

" First, there was September 11, then the Bali bomb, followed by war in Iraq. Now the SARS outbreak will stop people travelling."

The preliminary announcement of audited results will be made in June.

One of the Victoria directors, Brian Priest, is due to retire in July. Mr Priest, 65, founded the capet yarn spinner Westwood Yarns Ltd in Yorkshire, which was bought by Victoria in 1989.