PROFITS at a Kidderminster-based carpet firm have soared by a massive 77 per cent to more than £4 million, despite "challenging" trading conditions in the UK and Australia.

Victoria Carpets, which moved all its UK carpet manufacturing operation to Worcester Road last year, highlighted recent investment in state-of-the-art plant and technology, 'operational efficiencies' and "hands-on" management in its annual report to March 31.

Group managing director Alan Bullock said: "Today we are making more carpet of higher quality with fewer people than at any time in our past."

In the UK, turnover rose by 3.4 per cent from £23.8 million to £24.7 million, while net UK net profit before tax rose by 44 per cent. Net profits before taxation for the group, including Canada and Australia, increased by 77 per cent to just under £4.4 million.

The sale of the company's Green Street premises for more than £2.1 million is not included in the annual profit figures.

Mr Bullock said: "During the year we have continued to invest in new plant and equipment to maintain our position at the forefront of the market.

"Despite market conditions in the UK claimed to be flat, Victoria Carpets' strong product portfolio and emphasis on targeted marketing has once more enabled us to further strengthen our position in the market place."

He said the firm had continued to expand its share of the UK carpets market, while export sales had risen by more than 10 per cent to £4.45 million, despite the continued strength of sterling.

He added the company had created a strong reputation for the production and supply of 'bespoke' carpeting, particularly for the hotel industry, and the firm's current list of overseas customers read "like a 'Who's Who' of five-star de-luxe category hotels."

Mr Bullock said turnover and profits were set to increase further in 2002 with the launch of five new carpet ranges this year, only one of which was a replacement range.

The group's success comes despite particularly difficult trading conditions in Australia including a general economic downturn and 'one-off' events such as the Sydney Olympics.

Mr Bullock added these conditions had conspired to check the strong advances the firm had been making in Australia over recent years.