TIDMVCP
RNS Number : 2667X
Victoria PLC
25 April 2023
For Immediate Release
25 April 2023
Victoria PLC
('Victoria' or the 'Company', or the 'Group')
Full Year Trading Update
Strong growth in line with market expectations
Confident outlook for further earnings and cash flow growth
Victoria PLC (LSE: VCP), the international designers,
manufacturers and distributors of innovative flooring, provides a
trading update for the financial year ended 1 April 2023,
confirming the Board expects Group revenues and underlying EBITDA
to be in line with consensus market expectations[1], successful
progress in earnings enhancing integration of acquisitions, and a
confident outlook for FY24 following management actions to mitigate
near term macro-economic pressures influencing consumer demand and
inflation.
Trading update
Despite challenging macro-economic conditions, Victoria PLC, is
set to deliver its tenth consecutive year of revenue and underlying
operating profit growth. Total volume sold will exceed 200 million
square metres (more than 29,500 football fields) for the first time
in the Company's history with revenues for the year ended 1 April
2023 of more than GBP1.45 billion, alongside continued growth in
underlying operating cashflow.
Earnings enhancing reorganisation of Balta on track
In April 2022, the Company acquired the rugs and UK carpet
divisions of Balta Group, together with the internationally-known
brand, "Balta" , establishing Victoria as Europe's largest carpet
and rug manufacturer.
The integration of Balta is proceeding successfully with the
reorganisation programme on schedule and the Board anticipates
completion this calendar year, with a materially positive impact on
future earnings and cash flow. The Board expects to realise synergy
gains of no less than EUR15 million per annum (+2% margin for the
division) upon completion.
This reorganisation consists of three key projects:
(i) The relocation of Balta's carpet manufacturing from Belgium
to the Group's more modern and more productive UK factories in
Wales and Yorkshire, with a net reduction of 295 employees. 80% of
Balta's carpet is sold in the UK, Europe's largest carpet market,
and this move will enable Balta to sell the same historical
quantity (c. EUR 100 million revenue per annum), but with lower
production and transport costs alongside improved customer service
from shorter delivery times.
(ii) The consolidation of the Balta rug manufacturing operation
onto Victoria's large site at Sint-Baafs Vijve, Belgium, with the
closure of the nearby factory at Avelgem, together with the
relocation of some production to Usak, Turkey, where the Group has
two very modern rug and yarn extrusion factories . These changes
will improve efficiency and lower production costs, with the same
output (c. EUR240 million revenue per annum) being achieved with
220 fewer employees .
(iii) The sale of non-core assets acquired with the Balta
transaction where the opportunity for synergies with the Group's
existing businesses are minimal, with the proceeds being used
alongside the Group's operational cash generation to further reduce
Group leverage.
Outlook
The Directors' conviction that Victoria is well-positioned to
deliver further earnings and cash flow growth in FY24 and beyond is
underpinned by the known synergy gains from completion of the Balta
reorganisation. Furthermore, whilst the Group is not immune to the
external factors that impact consumer demand or inflationary
pressures, the Board is confident that Victoria's inherently low
operational gearing, combined with price increases (where
essential), cost savings, and tight supply chain management, will
mitigate the financial impact of any macro-economic uncertainty in
the year ahead.
Consequently, Victoria remains competitively very well placed in
its markets to defend its position and capitalise on opportunities
where gaps appear, and the Directors are confident in the Company's
ability to continue to create wealth for shareholders.
Date of Preliminary Results
The Board expects to announce the Group's preliminary results
for the year ended 1 April 2023 in July 2023.
Executive Chairman Geoff Wilding said,
"We are laser-focussed on the reorganisation of Balta and the
integration of other recent acquisitions. Completion of these
projects is expected to deliver a significant uplift in
productivity and cash flow, even during a period of economic
uncertainty, which underpins our confidence in outlook for FY24
earnings growth and deleveraging."
[1] The latest Group-compiled view of analysts' expectations for
FY 2023 gives a range of GBP1,364m-GBP 1,519m for revenue, and a
range of GBP196m-GBP203m for underlying EBITDA.
Note: Underlying performance is stated before exceptional and non-underlying items
For more information contact:
Victoria PLC www.victoriaplc.com/investors-welcome
Geoff Wilding, Executive Chairman Via Walbrook PR
Philippe Hamers, Group Chief Executive
Brian Morgan, Chief Financial Officer
Singer Capital Markets (Nominated Adviser
and Joint Broker)
Rick Thompson, Phil Davies, James Fischer +44 (0)20 7496 3095
Berenberg (Joint Broker)
Ben Wright, Richard Bootle +44 (0)20 3207 7800
Peel Hunt (Joint Broker)
Adrian Trimmings, Andrew Clark +44 (0)20 7418 8900
Walbrook PR (Media & Investor Relations) +44 (0)20 7933 8780 or victoria@walbrookpr.com
Paul McManus, Lianne Applegarth, +44 (0)7980 541 893 / +44 ( 0)7584
Alice Woodings 391 303 /
+44 (0) 7407 804 654
About Victoria PLC ( www.victoriaplc.com )
Established in 1895 and listed since 1963 and on AIM since 2013
(VCP.L), Victoria PLC, is an international manufacturer and
distributor of innovative flooring products. The Company, which is
headquartered in Kidderminster, UK, designs, manufactures and
distributes a range of carpet, flooring underlay, ceramic tiles,
LVT (luxury vinyl tile), artificial grass and flooring
accessories.
Victoria has operations in the UK, Spain, Italy, Belgium, the
Netherlands, Germany, Turkey, the USA, and Australia and employs
approximately 5,800 people across 31 sites. Victoria is Europe's
largest carpet manufacturer and the second largest in Australia, as
well as the largest manufacturer of underlay in both regions.
The Company's strategy is designed to create value for its
shareholders and is focused on consistently increasing earnings and
cash flow per share via acquisitions and sustainable organic
growth.
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END
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April 25, 2023 02:00 ET (06:00 GMT)
Victoria (LSE:VCP)
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