ONE of Kidderminster's largest carpet manufacturers has said workers' jobs are safe despite seeing profits drop by nearly a quarter.

Victoria, of Worcester Road, recorded a fall in operating profits from £1.79 million to £1.35 million on the comparative half-yearly financial figures for 2004.

The firm, which employs 285 people in the town, did enjoy a sales increase of 2.3 per cent in the months until the end of October and employees have been assured their jobs are not in danger.

Alan Bullock, group managing director, said despite the results, which included a pre-tax profit fall of almost 30 per cent from £1.41 million to £990,000, the company was still in a "strong position".

He explained: "The positive thing is that the company is still strongly profitable and market share in the UK and Australia has grown. The results will have no impact on jobs and the future for employees looks good.

"Market forecasts show that Victoria will report profits of £2 million for the year. It is just that we are not making the higher level of profits that we did in past years."

The business, which has been making carpets in the town for more than 100 years, has had to contend with increased competition and higher energy prices.

Despite experiencing "the most difficult trading conditions of the past decade" the company, which closed its Axminster plant earlier this year, gained market share from its competitors.

Mr Bullock said: "Trade will be difficult until the end of the financial year and my personal view is that these conditions could continue.

"It does not matter if you sell cars, carpets and garments, the consumer is not spending the money they did in the past."

Chairman, Bob Gilbert, in his report to the Stock Exchange, said the firm faced increasingly challenging market conditions.

He added: "Overall, the group is well placed to deal with the prevailing market conditions and to exploit fully the upturn in the retail market when it re-emerges."