Woollen yarn spinner and manufacturer to the carpet industry, Lawton Yarns, has reported a slight reduction in turnover while profit fell into the red.

According to its latest filed accounts for the year ended 30 September 2023, total sales fell 2.9% to £32.7m from £33.7m in 2022.

Pre-tax losses resulted at £231,000, down from a profit of £83,000 recorded in the previous year.

UK sales were flat at £31.5m, while export sales dipped 47% to £1.1m from £2.1m.

Stated within its report, the company said: “The year to 30 September 2023 brought a new set of challenges to the business as the major cost categories all saw substantial increases. The UK economy saw inflation drive to 9.1%, interest rates climbed from 2.25% to 5.25%, National Minimum Wage rates leapt by 9.6% to £10.42 and, whilst nowhere near the previous years’ levels, the utility prices settled at around 25% ahead of 2020 prices.

“In the face of these pressures price increase and continued customer loyalty has enabled the directors to secure volume to preserve viability. This strategy saw turnover stable at £32.7m with improved productivity increasing gross margin 11% (2022- 9.8%).

“Inflationary pressures across the purchase ledger cancelled out the gross margin gains reducing operating profit to £82,069. The continued focus on customer service has been the success story of the year retaining customer loyalty as demand remains robust.

“The directors continue to focus on cost controls and constantly review productive efficiency and procurement to ensure that product quality and service meet our customer requirements.”