Axminster firm's profit warning

Higher interest rates and a slowdown in carpet sales led to a profit warning yesterday from Victoria. The maker of Axminster saw its shares fall 26% to 212.5p.

The firm admitted in July that the US residential sector was slower than usual, but last night Victoria blamed "a general malaise in the UK economy" for ensuring that annual profits would be "significantly lower" than expected. The firm also accepted that operational difficulties integrating the Navan carpets business in Ireland had also taken a toll.

Victoria will not now meet the £2.22m interim pre-tax profits to October 2 that the City had anticipated nor the £4.4m for the full 12 months.

The Midlands company said it still hoped to maintain the dividend payout at its current level.

It said the Australian business was still as strong as expected and a new carpet range was being well received. The company is divided into a variety of divisions and operates under the banners: Victoria Carpets, Munster Carpets, and Westwood Yarns.