REG - Victoria PLC - AGM Statement

VictoriaAnnouncement

29/09/2023 07:00

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RNS Number : 0869O  Victoria PLC  29 September 2023

Victoria PLC

('Victoria' or the 'Company')

 

AGM Statement

 

Victoria PLC (LSE: VCP), the international designers, manufacturers and
distributors of innovative flooring, provides an update to shareholders ahead
of its Annual General Meeting ('AGM') today at the offices of Berenberg, at 60
Threadneedle Street, London, EC2R 8HP at 2.30 p.m. BST.

 

Executive Chairman Geoff Wilding commented:

Our audited results for the year ended 1 April 2023 showed the Company's tenth
consecutive year of revenue and underlying profit growth. We sold in excess of
200 million square metres of flooring products and for the first time in the
Company's history we recorded annual revenues of over £1.45 billion. As a
result, we have achieved a scale that, once current integration projects
complete, will result in higher productivity, more efficient logistics, wider
distribution, and lower input costs than almost all our competitors.

 

However, over this last week the strong outlook for Victoria has been
overshadowed by the considerable reaction to our auditor's qualified opinion
deriving from incomplete accounting records at a small subsidiary, Hanover
Flooring Limited - a business which as a whole represents less than 1.25% of
Group turnover. The Board wishes to stress that there was no wrong-doing
whatsoever at Hanover that impacts the Group's financial statements and nor
are the auditors alleging this. Hanover's issue was predominantly one of
having heightened financial risk due to inadequate accounting records
associated with no more than £400,000 of customer receipts.

 

I would like to assure our stakeholders that we had identified the issues at
this small subsidiary and allocated additional experienced finance resources
who have put appropriate controls in place to ensure adequate accounting
records and internal controls will be maintained to the high levels we have
solidly embedded across the rest of the Group. From the extensive work
undertaken by ourselves and a 'Big-Four' accounting advisor, we are very clear
that all payments due have been received, no money is unaccounted for and
Victoria has suffered no loss. We are also very clear that there are no other
such concerns across the rest of the Group and our auditors have confirmed
that these accounts give a true and fair view of the Company. All of this has
sadly detracted from the fact that Victoria continues to trade solidly, and we
expect to see a material step-up in earnings and free cash flow, delivering
deleveraging and shareholder value creation.

 

Therefore, turning to our future outlook, I would like to remind our
stakeholders that FY2024 is expected to be a year of two halves, with stronger
H2 earnings as the productivity gains from completion of the major integration
projects come to fruition. As outlined in our full year results, once
completed these projects are expected to conservatively result in a £20+
million per annum increase in EBITDA and we expect our free cash flow to
increase sharply from H2 FY2024, and further in FY2025 as we receive the full
annual benefits of the integration.

 

As already confirmed, Q1 trading was in line with the Board's forecast and
consistent with consensus expectations for FY2024. Demand remains generally
stable across the Group's markets and margins are improving in line with a
fall in input costs. Our objective in FY2024 is not to chase volumes but to
protect and improve margins and we have right-sized production capacity to
promote this whilst anticipating modest volume growth in the coming quarters.
Our ability to create 'design to cost' products allows us to maintain margins
while continuing to meet customer demand at given price points.

 

Given the anticipated productivity improvements, cost savings, and working
capital enhancements expected later this year and the increase in financial
performance these bring, the Board remains confident that Victoria PLC will
continue to deliver outsized returns for its shareholders.

 

For more information contact:

 

 Victoria PLC                                                         www.victoriaplc.com/investors-welcome

                                                                    (http://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)                                    +44 (0)20 7496 3095

 Rick Thompson, Phil Davies, James Fischer

 Berenberg (Joint Broker)                                             +44 (0)20 3207 7800

 Ben Wright, Richard Bootle

 Peel Hunt (Joint Broker)                                             +44 (0)20 7418 8900

 Adrian Trimmings, Andrew Clark

 Walbrook PR (Media & Investor Relations)      +44 (0)20 7933 8780 or victoria@walbrookpr.com

                                             (mailto:victoria@walbrookpr.com)
 Paul McManus, Louis Ashe-Jepson,

                                             +44 (0)7980 541 893 / +44 (0)7747 515 393 /
 Alice Woodings

                                               +44 (0)7407 804 654

 

About Victoria PLC (www.victoriaplc.com (http://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 Worcester, 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 7,300 people across more than 30 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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