Flooring textiles manufacturer Phoenox Textiles has reported a decline in sales and profit.

According to its latest filed accounts for the year ended 31 March 2023, total sales fell 13.3% to £19.4m from £22.4m in 2022.

Pre-tax profit resulted at £2.5m, down from £3.7m recorded in the previous year.

Stated within its report, the company said: “The business traded satisfactorily in 2022/2023 after the effects of Brexit & Covid, but not as strongly as in previous years. There has been a reduction in gross profit, mainly due to increases in raw material prices, energy costs and wastage on implementing new machinery, together with a reluctance to increase prices for our customers.

“The company has also recorded higher depreciation charges due to significant investment in machinery. The initial costs of perfecting the use of the new printing line and coating machine were much higher than anticipated and is estimated that almost £1m was consumed in damaged finished goods that could not be sold and considerable down time in production.

“The production team have worked extremely hard to rectify these issues and the business is now well placed to increase capacity and quality.

“Trading for 2023/2024 has had a strong start & sales up to our third quarter are showing a 16.02% increase on 2022/23 and an improvement in gross margins. Whilst profits look strong, we will be investing a further £3m in new plant and machinery to encourage future growth so cash flow remains neutral and will be through to 2025.

“New products for 2024 look strong and we envisage further growth in sales of £5m to bring budgeted turnover to around £27m. The company intends to attend a number of exhibitions in Europe during 2024 to encourage further growth in overseas sales.

“Further investment in our Wood Street site will have to commence 2024 to increase operating capacity, this will give us only an extra amount of space and further premises may be required to allow us to grow to our target sales beyond £30m.”