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November 24, 2013 4:11 pm
The economic recovery in Dubai is being felt in an unlikely location: Kidderminster.
A resurgence of five-star hotels and fancy developments across the Middle East has helped Brintons, the 230-year-old Midlands-based carpet manufacturer, triple its earnings year-on-year.
“There are thousands of upscale five-star luxury projects, almost all of which got canned with the banking crisis,” said Don Coates, managing director of the group. “Those projects are coming back on stream again.”
The manufacturer of plush carpets saw its earnings before interest, tax, depreciation and amortisation triple from £3m to £9.1m for the year to September. This came despite revenues at the group broadly staying flat at £81m.
The performance marks a remarkable turnround for the group, which specialises in fitting out commercial buildings.
It comes just two years after Carlyle, the private equity group, bought out Brintons in a pre-pack administration – a pre-negotiated sale of an insolvent business – to the chagrin of its owners at the time, the Brinton family. The family had controlled the company for more than two centuries.
“The insolvency came as a bit of a shock to Brintons employees,” said Mr Coates. “They weren’t aware of the precarious nature of the business.”
Mr Coates said the group did attempt to do a deal that did not involve going into administration, but that effort failed. The company was eating up £1m of cash a month. “When you have a near-death experience, you have a burning platform for change,” said Mr Coates.
Carpet manufacturing in the UK has suffered from the country’s stagnant housing market. Axminster Carpets fell into administration earlier this year, making 300 of its 400 workers redundant.
Fellow Kidderminster-based company Victoria Carpets has also struggled as new management attempt to strip costs out of the business.
Although Brintons made about 250 staff redundant following its pre-pack administration, it is looking to hire people once more as business picks up and it opens offices across the globe – including one office in Dubai.
While the US, UK and Australia still account for three-quarters of Brintons’ sales, the Middle East and Asia are counting for an increasingly large chunk of the remainder. “[Asia and the Middle East] are where we all believe that there will be substantial growth,” said Mr Coates.
“In the shorter term, we see more evidence of growth in the US,” he added.
Confidence is returning to the market, insists Mr Coates. “Our sales are someone else’s capex,” he said. “It’s only when you see a real recovery that people are prepared to spend £250,000 on a new ballroom.”
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