RISHTON-based carpet group Gaskell plc is facing a further shake-up after announcing record losses for the first half of the year.

But chief executive Gerry Wheeler today assured the 600 workers at the company's three East Lancashire factories that their jobs were safe.

Sales by the group, once the third largest in the UK, fell 18 per cent to below £30 million, leading to a pre-tax loss of £2.3 million compared to a profit last year of £240,000. Mr Wheeler said the sites at Rishton, Clayton-le-Moors and Bamber Bridge represented the profitable core of the Gaskell group on which the future of the business would be built.

"These are performing strongly and we will continue to invest in state-of-the-art manufacturing equipment.

"We have an excellent workforce which, unfortunately, has borne some of the suffering and we are proud of them."

Gaskell shareholders have been told they will not receive a dividend and the company's share price slumped by more than 20 per cent to an all-time low of 18p within hours of the news.

Chairman Alan Chamberlain admitted the first half of 2002 had been "very disappointing" and said the directors were now looking at plans for a shake-up of the business.

"Since becoming chairman, I have been impressed by the underlying strength and resilience of our core titles and contract broadloom businesses," he said.

"However, the continuing burdens of significant bank debt and final salary pension liabilities are of concern for a relatively small public company.

"Under these circumstances, the Board is reviewing options for a broader restructuring than planned."