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Courtaulds sells vinyl tiles firm

The reshaping of Courtaulds continued yesterday as the chemicals company that recently announced the departures of both its chairman and chief executive disposed of Amtico, the vinyl business whose luxury tiles grace the smartest floors.

The sale of Amtico to its management team will raise pounds 49m for Courtaulds, which will retain a 10 per cent stake in the company, backed in the buyout by Electra Fleming, the private equity investment firm.

In the year to March, Amtico made an operating profit of pounds 3.3m from sales of pounds 35.2m. It had net assets at that time of pounds 25.4m.

Eryl Morris, Courtaulds' deputy chief executive, said: "This is good for Amtico and good for Courtaulds. Our strategy is to focus on core businesses where the group has particular strength internationally. Amtico is an excellent business but it is not core to Courtaulds' activities."

Amtico designs, manufactures and markets a range of high quality floor tiles from its Coventry headquarters and has a string of showrooms in the UK and abroad. The UK and Germany are its largest markets although it sells into 26 countries.

The sale of Amtico is the latest move in a turbulent month for Courtaulds, which saw its profits slide 16 per cent in the six months to September from pounds 81m to pounds 68m as galloping raw material prices wreaked havoc with the company's ability to price profitably.

A tripling of the price of acrylonitrile, from which acrylic yarn is made, and a doubling of wood pulp caused a slump in profits from fibres and chemicals, one of Courtaulds' main divisions. That took the shine off results from the rest of the business, which came in ahead of analysts' expectations.

The results were followed a week later by the unexpected announcement of the joint departures of Sir Christopher Hogg, chairman for 15 years, and Sipko Huismans, chief executive for five years.