RECESSION-busting plans to invest £2 million in new state-of-the-art machinery have been unveiled by a Kidder-minster carpet firm.

Victoria Carpets says the machinery, which is due to come into use by February, will give it a "significant" commercial advantage and maintain its position at the forefront of the quality market.

News of the investment came as the company released preliminary figures for the year ending March 30 showing a fall in profits compared with the previous year.

Sales to home markets fell by 4.5 per cent and exports by 4.2 per cent, leading to pre-tax profits of £1.56 million compared with £2.2 million the previous year.

But despite declining demand for carpet across the world, group managing director Alan Bullock sounded an upbeat, even bullish, note about recent performance and prospects for the near future.

He said: "We believe Victoria has enjoyed a satisfactory result, doing significantly better than many of our competitors and continuing to take market share.

"The trend towards better quality carpeting suits us too as this is the area in which we excel."

The volume of carpet manufactured in the UK fell by more than eight per cent in 2001 and has continued to decline in the first quarter of 2002.

Victoria's exports over the past year were "disappointingly" down by 4.2 per cent to £4.2 million, a development Mr Bullock attributed solely to the September 11 terrorist attack in New York and its effect on the hotel industry.

"Prior to September 11 we were doing very well in our export sales, which at that time were up on the previous year by 13 per cent," he added.

But while he said the industry could not rely on any significant improvement in the UK carpet market, Victoria was expecting good returns from investment in new products and merchandising, while its £2 million investment in more energy-efficient and high-speed machinery would bring good returns.

"Overall, we anticipate seeing a return to growth and an improvement in profitability in the current year," he added.