Textile companies defy economic woe

Leeds Group, which is based in Leeds but operates mainly in Germany through its Hemmers subsidiary, said pre-tax profits lifted 20 per cent, to £895,000, in the six months to the end of March. Sales grew three per cent, to £15.3m.

Carpet-maker Victoria, which spins yarn at its mill in Holmfirth, West Yorkshire, said its UK operations witnessed their “toughest environment for years”. But it reported a 12 per cent rise in revenues, to £70.5m, in the year to the start of April, and a 77 per cent increase in profits, to £1.92m.

Leeds Group, which sells fabric imported mainly from the Far East throughout Europe, said high cotton prices have dented its order book.

Chairman Kathryn Davenport said it had lifted prices to protect margins but added “it remains to be seen whether order levels pick up as the year progresses and it becomes clearer to customers that current price levels are not a short-term phenomenon that can be avoided by delaying orders”.

The Leeds-based company, which is 23.5 per cent owned by Swedish investor Peter Gyllenhammar, added that the current economic environment “remains challenging”. Cotton prices hit an all-time high in February.

Upmarket carpet maker Victoria, which supplied Westminster Abbey for the recent Royal wedding, said its UK arm bounced back robustly after a weak start to its financial year.

Chairman Nikki Beckett said the business had made a good start to its financial year, but warned the market will be challenging.

“We are expecting trading conditions in the year ahead to be tough, with raw material price increases remaining a challenge,” she said. “Consumers are cautious about the future, and their confidence is still at a low level; therefore discretionary spending is likely to stay under pressure on big-ticket items, including carpets.”