LONDON (ShareCast) - Commercial flooring manufacturer James Halstead said profits for the year to 30 June 2008 will be materially ahead of market expectations.

The group said it has continued to make good progress since its interims in March. Growth in its home market continued at the levels seen in the first six months of trading despite problems in the commercial property sector.

It said the European markets have made further progress, especially the German market, while its Australian subsidiary is also trading at record levels.

The group did warn about energy costs though. “Though energy costs and raw materials remain of concern and market price competition is fierce the Group remains confident, but nevertheless vigilant and cautious, in this period of economic uncertainty,” it said.

“The Manchester factory has seen inevitable margin erosion on some product lines but overall the product mix and the continued outsourcing programme have enabled us to manage these pressures effectively,” added the group.

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