REG - Victoria PLC - Audited results for the year ended 29 March 2025
Thu 07:02
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RNS Number : 3976S Victoria PLC 24 July 2025
Victoria PLC
('Victoria', the 'Company', or the 'Group')
Audited results
for the year ended 29 March 2025
Revenue and earnings in line with market expectations
Initiatives delivered by the end of FY2025 underpin expected significant
uplift in FY2026 performance
Refinancing announced for SSRCF and 2026 Senior Secured notes
Victoria, the international designer, manufacturer, and distributor of
innovative flooring, today publishes its annual results for year ended 29
March 2025, and has made separate announcements confirming the refinancing of
its Super Senior Revolving Credit Facility ("SSRCF") and an exchange
transaction for its 2026 Senior Secured Notes, extending the maturity to 2029
(together, the "Refinancing"). The Annual Report & Accounts for the
financial year ended 29 March 2025 will be posted today to shareholders who
have requested a hard copy, and will be available on the Company's website at
www.victoriaplc.com.
FY2025 Financial and Operational highlights
Year ended Year ended
29 March 2025 30 March 2024
Underlying revenue £1,115.2m £1,226.4m
Underlying EBITDA(1) £113.7m £159.0m
Underlying EBITDA (Pre IFRS-16) £81.0m £128.7m
Underlying operating profit(1) £29.5m £73.0m
Statutory operating loss (£225.4m) (£64.8m)
Underlying (loss)/ profit before tax(1) (£11.5m) £31.1m
Statutory net loss after tax (£239.6m) (£95.7m)
Underlying free cash flow(2) (£36.2m) £35.0m
Net debt, including IFRS 16 lease debt(3) £897.9m £840.0m
Net debt / EBITDA 7.9x 5.3x
Earnings / (loss) per share:
- Basic (210.26p) (83.15p)
- Diluted adjusted(1) (5.18p) 19.35p
· Performance in FY2025 was impacted by lower volumes as a result of
macroeconomic headwinds across our end-markets, with demand c. 15-25% below
2019 levels across different geographies, and margins impacted by operational
leverage
· Management have been proactive in implementing significant
"self-help" throughout the year and these are expected to benefit margins in
FY2026 irrespective of market conditions
· These improvements are already taking effect and the Group's EBITDA
margin performance in H2 was significantly stronger than H1 (H1: 8.8%, H2:
11.6%), and Q4 FY2025 was the strongest margin performance since Q1 2024
· The cost savings opportunities identified and announced at H1,
totalling £32m, are already delivered or on track, with a further £50m being
targeted with full run-rate to be achieved by the end of FY2027
· These savings are expected to return the business back to a mid-teen
EBITDA margin before the impact of cycle recovery. The cost saving projects
span procurement (£10m), integration (£10m), and manufacturing efficiencies
and reorganisation (£30m).
· The Refinancing, which has binding support from more than 90% of the
2026 noteholders, is expected to address the 2026 maturities in full,
providing the Company with significant maturity runway to execute its cost
synergies program and benefit from the expected recovery in demand ahead of
its future maturities.
· Once completed, which is expected in late August, the Company will
have material liquidity, no financial covenants, no short-term maturities and
a materially extended maturity profile, and the transaction will not dilute
equity holders.
· The Board has begun the process to appoint a new independent
non-executive director who will be appointed as part of the Board's ongoing
strengthening of governance and controls, which will be a focus throughout
FY2026 alongside operational efficiency improvements.
· Market conditions remain at trough levels although there are
tentative signs of stabilization, particularly in the UK and Southern Europe.
The Group remains focused on improving margins and being disciplined on
pricing, and average selling prices ("ASP") in Q1 are therefore ahead of last
year. Volumes overall remain behind FY2025, but with an improving trend.
· The Board expects revenue to return to a more typical H2 weighted
seasonality after successive years of a contracting market, and H2 will also
benefit from the ongoing self-help cost initiatives.
· The Board remains confident in medium term recovery in volume and
pricing
Commenting on Victoria's Outlook, Geoff Wilding, Executive Chairman, said:
"After nearly three years of intense macroeconomic headwinds there are
tentative signs that the trading environment has stabilised. Nevertheless, the
Board and management remain firmly focused on factors within our control.
Significant initiatives, outlined to shareholders in the FY2025 Interim
Report, were executed, delivering the most profitable quarter of the year in
Q4 and underpinning the expected significant uplift in margins in FY2026.
Our near-term priority is to continue executing internal self-help initiatives
that drive margin improvements, earnings and enhance cash generation and
return on capital, ensuring the Group emerges stronger regardless of the pace
or shape of the macro recovery."
(1) Underlying performance is stated before exceptional and non-underlying
items. In addition, underlying profit before tax and adjusted EPS are stated
before non-underlying items within finance costs.
(2) Underlying free cash flow represents cash flow after interest, tax and
replacement capital expenditure, but before investment in growth, financing
activities and exceptional items.
(3) Net debt shown before preferred equity.
Investor presentation
Geoff Wilding, Executive Chairman, Philippe Hamers, Group Chief Executive and
Alec Pratt, Chief Financial Officer will provide a live presentation relating
to the annual results via the Investor Meet Company platform on Friday 25 July
at 13:00 BST.
The presentation is open to all existing and potential shareholders. Investors
can sign up to Investor Meet Company for free to attend the presentation here
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.investormeetcompany.com_victoria-2Dplc_register-2Dinvestor&d=DwMFAg&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=JFUgJLAfY4whia_YFhMDVP9aJqmlIGnTohFccVhQ75I&m=R1kkSJBLHxnHkeYIjS_b3ZXOszb8hcbybHyAhCmWiGpSz9yn1wNaRrzBDgSuroYI&s=oYLfO6LVOUCqxalbC1fQYtVIi7Ykrqfe6deSTepbDME&e=)
.
Investors who already follow Victoria PLC on the Investor Meet Company
platform will automatically be invited.
The results presentation will be made available on the Company's website on
the day of results here (https://www.victoriaplc.com/reports/) .
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
Alec Pratt, 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, Harry Nicholas, Tom Ballard
Edelman Smithsfield (Joint Investor Relations) +44 (0)7970 174 353 or alex.simmons@edelmansmithsfield.com
(mailto:alex.simmons@edelmansmithsfield.com)
Alex Simmons
Walbrook PR (Joint Investor Relations) +44 (0)20 7933 8780 or victoria@walbrookpr.com
(mailto:victoria@walbrookpr.com)
Paul McManus / Alice Woodings
+44 (0)7980 541 893 / +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, rugs, 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 5,350 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.
Victoria PLC
Chairman and CEO's Review
The trading environment for the flooring industry has remained unusually
difficult over the past three years. Like most industries, cyclicality is
inherent in our sector although the scale and persistence of the recent
downturn are unprecedented in recent memory. We nevertheless remain confident
that the factors behind this decline are not structural in nature, and that
Victoria is well placed to benefit as conditions improve.
This confidence is based upon the temporary nature of the reasons for the
downturn:
1. Demand has been dampened by a confluence of factors: the unwinding of
COVID-era pull-forward of spending (which had delivered more than 30% organic
growth in some of our divisions during that period), whilst inflation, lower
consumer confidence, and high interest rates reduced housing transactions
specifically and discretionary spending more broadly.
2. Additionally, the surge in energy costs following the invasion of
Ukraine in 2022, coupled with the highest inflation levels in a generation,
placed significant upward pressure on input costs across the sector -
particularly in labour and raw materials. Muted consumer demand also
constrained manufacturers' ability to pass these costs through to the market,
compressing operating margins.
With the benefit of hindsight, we did not fully anticipate the duration or
severity of these headwinds. While operational changes were made last year in
response to softening demand and rising costs, they were not sufficient to
protect earnings. As a result, FY2025 marks the second consecutive year of
declining revenue and profitability, following over a decade of consistent
growth. This is not a trajectory we will allow to continue, and the fact
Victoria has outperformed competitors in many of its key markets is of small
comfort.
The Group is focussed on controlling what is in its control, in order to
become a more efficient business that will be stronger as underlying markets
improve. The following sections of this report outline a comprehensive set of
"self-help" actions that are planned and underway in each division to restore
momentum, rebuild margins, improve return on capital employed, and return the
business to sustainable growth - irrespective of market conditions.
(£ million - continuing) FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
Revenue 255.2 330.4 417.5 566.8 621.5 662.3 1,009.2 1,397.0 1,226.4 1,115.2
Underlying
EBITDA - Pre IFRS16 (1,2) 32.3 45.7 64.7 96.3 107.2 112.0 140.4 161.7 128.7 81.0
( )
% margin 12.7 13.8 15.5 17.0 17.2 16.9 13.9 11.6 10.5 7.3
Underlying
EBITDA - Post IFRS 16 118.0 127.4 159.5 185.8 159.0 113.7
% margin 19.0 19.2 15.8 13.3 13.0 10.2
(1) The KPIs in the table above are alternative performance measures used by
management along with other figures to measure performance. Full financial
commentary is provided in the Financial Review below and the 'alternative
performance measures' are reconciled to IFRS-compliant measures in the
Financial Review.
(2) EBITDA figures shown are underlying, before the impact of exceptional and
non-underlying items.
The objectives of this report are to help our shareholders better understand
the business and be able to reach an informed view of the value of the
Company, its future prospects, and its financial resilience.
To communicate this information, we include both IFRS and non-IFRS performance
measures. The review focuses on the underlying operating results of the
business, which delivered underlying EBITDA of £113.7 million (FY2024:
£159.0m) and underlying EBIT of £29.5 million (FY2024: £73.0m). The
Financial Review covers non-underlying items in detail, following which the
IFRS reported operating loss was £225.4 million (FY2024: loss £64.8m), and
additionally covers financial items and tax.
FY2025 OPERATIONAL REVIEW
Overview
While we fully expect demand to normalise over time- reversion to the mean is
a powerful market force within cyclical consumer industries - we are not
waiting passively for recovery. Across each division, we are executing a
targeted programme of operational and strategic initiatives, evaluated
rigorously against five key criteria:
1. Return on Capital. Each initiative is assessed through a disciplined
capital allocation lens. While some projects - such as centralised procurement
- require minimal or no investment, others necessitate targeted capital
expenditure. Only those with the strongest, near-term returns across the group
are being pursued, ensuring we optimise shareholder value at every stage.
2. Driving Cost Efficiency. Despite cost actions taken to date, we
continue to identify meaningful opportunities to drive further efficiencies
across procurement, logistics, and administrative functions using our scale to
our advantage. These improvements will enhance our through-cycle
profitability, regardless of market conditions.
3. Improving Productivity. We are accelerating operational integration and
selectively consolidating production across sites and relocating manufacturing
capacity to lower cost geographies. These steps will enhance our margins and,
importantly, they will also position us to benefit disproportionately from any
upswing in demand through the amplifying effect of operational leverage.
4. Generating Cash. A key priority for the Group is the generation of
meaningful and sustained cash flow. Every initiative underway is designed with
this imperative in mind - to support investment where justified, strengthen
the balance sheet, and provide flexibility in a more volatile macroeconomic
environment.
5. Preserving Capacity. Although current volumes are subdued, we are
taking care to preserve our ability to respond to future demand growth. By
maintaining critical production and distribution capacity, we are safeguarding
our ability to scale efficiently and take market share when the cycle turns.
As we review each of the divisions in this report below, we will also outline
some of the projects planned and underway to deliver improved earnings and
cash flow.
DIVISIONAL REVIEW
This section focuses on the underlying operating performance of each
individual division, excluding exceptional and non-underlying items, which are
discussed in detail in the Financial Review.
UK & Europe Soft Flooring - Reinforcing UK strength and optimising cost
structure
FY25 FY24 Growth
Volumes (sqm) 123.8 million 124.0 million -0.2%
Underlying Revenue £581.2 million £636.2million -8.6%
Underlying EBITDA £64.3 million £82.8 million -22.3%
Underlying EBITDA margin 11.1% 13.0% -195bps
Underlying EBIT £18.9 million £34.6 million -45.4%
Underlying EBIT margin 3.3% 5.4% -219bps
Victoria continues to be Europe's largest soft flooring manufacturer and
distributor incorporating carpet, underlay, rugs, LVT, and artificial grass.
In previous years we have explained to shareholders the sustainable strategic
advantage Victoria's integrated logistics platform, Alliance Distribution,
provides to our UK business. This operation has now been expanded further into
the Republic of Ireland, Northern Ireland, and Scotland, where it continues to
provide best-in-class service - opening additional markets for Victoria's
product range. Last year Alliance also began providing services to third party
soft flooring manufacturers, generating income for the Group, and reinforcing
the strength of our network. In addition, in April 2025 we began using
Alliance's distribution capabilities to expand the product offering to our
customers, outlined below, which will provide additional growth potential
within our existing distribution network.
The UK is by some considerable margin the largest carpet market in Europe,
consuming c.125 million sqm per year (by comparison, the second-largest market
is Germany, which buys c.30 million sqm of soft flooring per year), of which
Victoria has about an 18% market share. However, there are about 60 million
sqm of other flooring product groups being sold in the UK market and which are
actionable for Victoria through its different brands:
· Cushioned vinyl 22 million m²
· Laminate (excl DIY) 12.5 million m²
· LVT 15
million m²
· Engineered Wood 10 million m²
Victoria's current market share in these products is c. 2%. A plan to triple
volumes across these categories, acting as a pure distributor and leveraging
Alliance's logistics capability is being executed, which would generate at
least £20 million per annum of additional revenue at margins ahead of the
divisional average.
In FY2025 the volume rugs segment (Balta) experienced a difficult environment
generally, but particularly in two of its largest markets, the US and Germany.
This created a material drag on this division's margins. Excluding the impact
of Balta, the soft flooring division's margins for FY2025 increased by
c.200bps to 15.4%. Significant cost saving initiatives at Balta have already
been completed, but management are now looking closely at the opportunity to
further orientate the manufacturing footprint towards Turkey, where the
Company already has two modern, certified and low-cost factories. A lot of
upside opportunity remains, with lower production costs and improved margins
expected to increase the international competitiveness of Balta's rugs.
UK & Europe Ceramic Tiles - structural transformation underway to unlock
long-term value
FY25 FY24 Growth
Volumes (sqm) 32.6 million 35.9 million -9.1%
Underlying Revenue £280.2 million £320.8 million -12.6%
Underlying EBITDA £34.9 million £58.7 million -40.5%
Underlying EBITDA margin 12.5% 18.3% -582bps
Underlying EBIT £7.7 million £31.3 million -75.5%
Underlying EBIT margin 2.7% 9.8% -702bps
The ceramics division experienced a challenging year, with revenues and
margins under pressure across the entire sector due to a combination of market
dynamics and short-term disruptions. Furthermore, the high operational
leverage inherent in ceramics production (kilns must operate continuously
regardless of volume) meant lower volumes had a disproportionate impact on
earnings. Therefore, we have implemented significant restructuring and
strategic initiatives during H2 FY2025, to deliver improved near-term earnings
whilst positioning the business for stronger performance and profitability as
demand conditions improve.
A management decision to hold prices in the face of very weak demand to
safeguard brand equity impacted near-term volumes but was judged to be
important for the medium-long term. Price, once discounted by a premium brand,
is extremely difficult to recover and can lead to a permanent loss of margin.
Consequently, despite the very weak market, the average sales price per square
metre (EUR) fell only modestly by 2.3%, reflecting this disciplined pricing
approach. To compensate, management were able to reduce average production
cost per square metre by 6.8% during the year due to labour savings of €1.9
million, a 25% reduction in customer claims from quality improvements,
improved energy costs, and value engineering of certain products.
A step-change in earnings will become apparent with the completion later this
year of the V4 production line in Spain. Shareholders may recall work began on
this large and ultra-efficient line in FY2024 and completion has been bought
forward into Q3 FY2026. Production costs will reduce by £16-19 million per
annum when this line comes on-stream at full capacity.
SKU rationalisation reduced SKUs c.30%, enhancing inventory efficiency and
improving On-Time In-Full (OTIF) delivery performance to 92%. Further gains
are possible, with a consequential improvement in working capital.
The sale of our Turkish ceramics business, Graniser, in November 2024 removed
a revenue contributor that generated approximately €15 million in H2 FY2024.
While this sale reduced FY2025 revenue on a like-for-like basis, it released
capital to reduce debt, and included a long-term sourcing agreement that
preserves access to low-cost, high-quality tile manufacturing-thereby
retaining the original strategic rationale of the acquisition.
All results are shown on a continuing operations basis, unless stated
otherwise (Graniser, Turkish ceramics has been classified as discontinued).
It is important to note that notwithstanding all the steps taken to
restructure the ceramics business, reduce costs, and improve operational
efficiency, the structural capacity remains intact to support an eventual
recovery in demand, but with improved cost control, optimised product
portfolios, and better use of manufacturing assets which is expected to
enhance profitability over the medium term. Savings executed throughout H2
FY2025 has meant that the ceramics division now possesses an excellent
industrial gross margin, reflecting solid underlying efficiency and
significant potential for earnings recovery as volume returns.
Australia - Resilient performance and positive outlook
FY25 FY24 Growth
Volumes (sqm) 22.7 million 22.3 million 1.8%
Underlying Revenue £103.7 million £106.1 million -2.3%
Underlying EBITDA £14.0 million £13.4 million 3.9%
Underlying EBITDA margin 13.5% 12.7% +80bps
Underlying EBIT £8.6 million £8.7million -1.7%
Underlying EBIT margin 8.3% 8.2% +6bps
The Australian business continued to perform well, delivering a solid result
despite continued softer demand, largely reflecting the same aforementioned
macroeconomic headwinds experienced across Victoria's other markets.
Nonetheless, the business maintained healthy margins, supported by disciplined
cost control and price adjustments in response to moderating input costs.
All core product segments, synthetic carpet, wool carpet, and underlay,
performed in line with budget expectations. The LVT segment encountered a more
competitive landscape, but continued product development already in process
and innovation are expected to support further growth. Opportunity remains to
deliver cost savings through efficiencies across our Australian businesses,
which management are actively exploring.
Victoria's strong market share and operational expertise in Australia have
been key factors in the business's resilience. With no structural changes in
market dynamics and ongoing drivers such as population growth through inward
migration and new household formation, the Company anticipates a recovery in
demand as macroeconomic pressures ease.
North America - Resilient positioning in a challenging market
FY25 FY24 Growth
Volumes (sqm) 6.7 million 6.8 million -2.0%
Underlying Revenue £150.0 million £163.3 million -8.1%
Underlying EBITDA £7.5 million £11.8 million -36.5%
Underlying EBITDA margin 5.0% 7.3% -224bps
Underlying EBIT £2.1 million £6.8 million -68.9%
Underlying EBIT margin 1.4% 4.1% -274bps
Victoria's North American operations are exclusively focused on distribution,
supplying a mix of own-manufactured products such as rugs, artificial turf,
and ceramic tiles, produced in our European facilities, alongside third-party
sourced flooring. As has been widely reported by peers in the sector, North
American trading conditions remain highly challenging. Elevated mortgage rates
have driven U.S. housing transactions to their lowest levels in 27 years,
significantly dampening demand across the industry.
In this context, operational efficiency has been a significant focus for
management, and cost savings are being rapidly executed. These have included
pricing initiatives, minimum order quantities and reduction of heads. The
benefits of these began to be realised in Q4 FY2025 and will benefit FY2026.
Whilst of little impact in FY2025, the recently announced US tariff regime has
obviously been a focus post year end. Firstly, it is important to note that as
currently structured the tariffs impact Victoria's US business less than many
of our competitors. For example, lumber-based flooring, which is 20% of our US
revenue is exempt from tariffs. More importantly, as a pure distribution
business, the division has the flexibility to source from lower tariff
jurisdictions (including US domestic manufacturers) unlike competitors with
fixed production sites in higher tariff countries.
However, management also took swift action to mitigate the residual tariff
exposure. Ahead of the tariff announcement we built inventory - either within
the U.S. or in transit, which is exempt from tariffs - to provide management
an opportunity to negotiate vendor concessions and evaluate customer price
adjustments before shipping products subject to the new tariffs. We expect
imports to remain a significant proportion of the US market into the medium
term as there is not currently production capacity domestically to supply the
current demand.
The Board remains vigilant for any second order impacts of the tariff related
disruption, but currently believes the self-help initiatives being implemented
will be more material to improving the division's performance in FY2026.
CASHFLOW & LIQUIDITY
Net operating cash flow was in line with management expectations with Free
Cash Flow of £(56.8) million after movements in working capital, tax,
interest payments, capex, and all exceptional costs.
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
IFRS Reported EBITDA 5.3 8.7 30.4 43.1 53.5 72.5 60.3 120.3 134.1 85.0 69.0 (98.4)
Adj EBITDA 5.1 15.8 32.3 45.7 64.7 96.3 118.0 127.4 159.5 185.8 159.0 113.7
Adj EBITDA (pre IFRS-16) 5.1 15.8 32.3 45.7 64.7 96.3 107.2 112.0 140.4 161.7 128.7 81.0
FCF(1) 18.3 8.4 15.3 22.5 12.5 8.9 32.2 30.2 20.1 5.9 32.1 (21.3)
FCF post pref(2) 18.3 8.4 15.3 22.5 12.5 8.9 32.2 27.6 10.6 (12.9) (12.3) (56.8)
(1) FCF: Net cash flow from operating activities after movements in working
capital, tax, interest payments, all capex, and all exceptional costs.
(2) FCF post-pref: Net free cash flow defined as above but assuming 100% of
the preferred share dividend was paid in cash instead of PIK.
As previously guided, capital expenditure normalised during the year, with
total spend of £77.2 million, including the one-off investment in the new V4
ceramics line in Spain. Normalised capex investment is expected to be broadly
£60 million per year, reflecting the Group's ongoing focus on disciplined
capital allocation and operational efficiency.
Tightening credit insurance policies across the building products sector
impacted trading terms during the period, including for Victoria. In response,
the Group continued to implement targeted inventory rationalisation
initiatives aimed at improving working capital. This remains a key area of
focus, with structured internal incentives in place to support delivery of
defined improvement targets.
Victoria maintained a strong liquidity position at year-end, with total cash
and undrawn credit facilities exceeding £150 million. This provides the Group
with flexibility to manage market conditions while continuing to invest in
strategic initiatives.
Refinancing has been a significant focus for the Group in FY2025. The proposed
refinancing will provide a strong and flexible financing structure for the
business to implement it self-help led recovery plan and to continue
consolidating its position as a leader in the flooring industry as the
cycle-recovers. Further detail on refinancing considerations is provided
within the Financial Review section of this report.
CAPITAL ALLOCATION
The Board evaluates all investment decisions through the lens of maximising
medium-term free cash flow per share. This disciplined approach underpins the
Group's financial strategy, and allows investment where there is a clear
opportunity to enhance the long-term cash-generating capacity of the business.
Consistent with this philosophy, the Board has made two notable strategic
investments over the past decade. Firstly, in FY2019 to integrate the UK
manufacturing operations and develop the Alliance centralised logistics
platform, which required an exceptional investment of £20.9 million; and more
recently, exceptional expenditure of £28.9 million to support the integration
and optimisation of Balta, acquired in April 2022. In the case of the Balta
restructuring capex, it was offset by the sale of surplus real estate arising
from the reorganisation for £58 million. Both initiatives were significant
investments in both time and resources but have strengthened the Group as we
look towards the next cycle.
To provide shareholders with greater transparency, Table A presents a
seven-year breakdown of capital expenditure, distinguishing between growth and
maintenance spending. This historical context helps clarify the Group's
underlying maintenance capex requirements:
Table A
Capex FY19 FY20 FY21 FY22 FY23 FY24 FY25
£m £m £m £m £m** £m** £m
Maintenance 23.5 25.4 20.9 40.9 45.5 42.3 46.9
Expansionary / Reorganisational* 20.9 8.4 7.6 12.4 54.1 19.2 30.3
Total 44.4 33.8 28.5 53.3 99.6 61.5 77.2
Maintenance Capex as a percentage of revenue 4.1% 4.1% 3.2% 4.0% 3.1% 3.4% 4.2%
* Includes capital expenditure incurred as part of reorganisational and
synergy projects to drive higher productivity and lower operating costs.
**The step-up in FY23 is due to the Balta acquisition, which has both a
short-term impact from integration, plus an ongoing increase in quantum
(albeit not percentage) due to the increased size of the Group.
Table B summarises the exceptional expenditure items in FY2025.
Table B
Exceptional reorg costs (by area) Redundancy cash costs Legal & Asset removal / Provisions movement FY2025 FY2024
Professional cash costs relocation cash costs / other non-cash Total Total
£m £m £m £m £m £m
Balta re-organisation 4.0 3.8 - (3.0) 4.8 14.9
Ceramics re-organisation 0.8 0.4 1.5 2.7 5.4 0.1
UK Carpets re-organisation 0.8 0.5 2.4 0.2 3.9 -
Interfloor re-organisation 1.0 0.4 0.6 0.4 2.4 -
Cali integration 0.2 - 0.1 - 0.3 0.8
Total 6.8 5.1 4.6 0.3 16.8 15.8
The Board will prioritise allocation of the Group's free cash flow to
prudently optimise the Group's balance sheet together with maximising the
medium-term free cash flow per share. The Board acknowledges the significant
investment in time and resources required to deliver operational
differentiation and the right strategic structure of the Group. However, as a
listed company with a permanent equity base, we are better placed to make
these tough decisions than owners who may have a shorter-term horizon.
LEVERAGE
The Board recognises that the Group's current level of leverage is above what
we would consider optimal for the business over the long term. While the Group
retains strong liquidity - with more than £150 million of cash and available
facilities - reducing leverage is a clear priority for the Board.
This will be achieved by increasing the Group's earnings through the execution
of the internal initiatives outlined throughout this Report, which are
designed to materially lower the Group's cost base and improve manufacturing
productivity. The Group's federated structure provides flexibility to monetise
operating assets if desired and if better returns can be achieved by deploying
capital elsewhere in the group or by reducing leverage.
This commitment is demonstrated clearly by the recent disposal of Graniser,
and we are confident that this disciplined approach will deliver meaningful
progress on leverage while supporting the Group's long-term growth ambitions.
DIVIDENDS
It is the Board's view that there are significant opportunities to invest in
the business significantly ahead of its cost of capital and that the Group
will benefit from ongoing reduction in its leverage levels. Therefore, the
Company does not expect to pay dividends in the medium term.
OUTLOOK
After nearly three years of intense macroeconomic headwinds - marked by
elevated input costs and significantly suppressed demand - there are tentative
signs that the trading environment has stabilised, and in some geographies is
beginning to improve. However, the Board and management remain firmly focused
on factors within our control. Significant initiatives (outlined to
shareholders in the FY2025 Interim Report) were delivered by the end of FY2025
and underpin the expected significant uplift in earnings in FY2026.
Our near-term priority is to continue executing internal "self-help"
initiatives that drive margins, earnings and enhance cash generation, ensuring
the Group emerges stronger regardless of the pace or shape of macro recovery.
The board reconfirms its commitment to the £80m cumulative cost savings
targeted by the end of FY2027 set in the Q3 update. This implies a further
£50m of cost savings to be executed through FY2026 and FY2027, equivalent to
an incremental 4% of margin based on FY2025 revenue.
Acquisitions:
Acquisitions remain a central pillar of Victoria's growth strategy. We now
have a number of leading platforms within our portfolio, which are
increasingly integrated and makes us the natural consolidator within those
markets. The Board is rightly prioritising the substantial value that can be
unlocked from within existing operations, but continues to maintain dialogue
with potential acquisition targets. When market conditions align we will seek
to acquire businesses available at attractive valuations that offer clear
actionable synergies with our existing operations.
This disciplined approach - and buying near the bottom of the cycle - has the
potential to materially improve earnings per share and accelerate
de-leveraging.
Operations:
Notwithstanding the work that has been completed over the last 24 months,
there remains considerable scope to drive additional productivity gains across
the business, as outlined in this Report. Consequently, our immediate focus
remains on driving internal performance through a disciplined programme of
"self-help" initiatives. These actions - centred on cost efficiency, margin
enhancement, and working capital improvement - are grounded in execution, not
macro timing and therefore fully within our control and designed to deliver
tangible gains in earnings and cash flow regardless of the macroeconomic
backdrop.
Whilst we are very focused on improving financial performance, it is important
to also appreciate Victoria's key strengths: leading market positions, a
portfolio of upper mid-market and premium brands, a diversified and loyal
customer base, strong distribution capabilities in high value markets, a
differentiated service proposition, a cash generative and high returns
business model through the cycle.
CONCLUSION
Henry Ford famously said, "You can't build a reputation on what you're going
to do." The Board and management fully acknowledge this truth - and the
imperative it places on us to deliver. While this Report outlines a number of
initiatives underway to rebuild profitability, we are equally focused on
restoring Victoria's decade-long reputation as a creator of shareholder value,
following two challenging years. The conclusion of our refinancing will
provide a strong and flexible base to build from as we enter the next cycle.
Whilst recent cyclicality has impacted our performance, it is important, to
view recent performance in the context of the industry in which we operate.
The flooring market in Victoria's core regions - Europe and the US - is
substantial, with an estimated value of around USD 60 billion (GBP 51 billion)
and over the last 25 years, this market has delivered consistent volume growth
of approximately 2.6% per annum. This long-term trend has been severely
interrupted in recent years, yet both the underlying need for flooring
remains, along with a bias towards growth underpinned by structural factors
that remain firmly in place: an ageing housing stock requiring renovation,
growing household formation, persistent housing shortages, and consumers'
increasing focus on design and lifestyle. Therefore, as macroeconomic
conditions improve, volumes are expected to rebound toward their long-term
trajectory. That is the nature of cyclical industries: recovery follows
contraction. (And to remind shareholders of the potential: a 5% increase in
volume demand is expected to contribute approximately £25 million to
Victoria's earnings - and volumes are estimated to be down 20-25% on 2019
levels.)
In the meantime, our focus remains on what we can control: executing
cost-efficiency programmes, driving productivity, and gaining share in our
markets. The timing of the demand rebound may be uncertain, but with each
passing month we move closer to that inflection point - and we are positioning
the business to be ready to capitalise.
Geoffrey Wilding Philippe Hamers
Executive Chairman Chief Executive Officer
24 July 2025
Financial Review
HIGHLIGHTS
FY2025 saw the continuation of a challenging trading environment as end
markets continued to adapt to higher interest rates across our key
geographies. Victoria has used this period of cyclically lower demand to focus
on managing the things that it can control through targeted cost saving
initiatives across its businesses.
Volumes and revenue declined across the Group with UK & Europe Soft
Flooring being the most impacted. Underlying Revenue for the Group was 9% down
at £1,115.2m and Underlying EBITDA declined to £113.7m as lower volumes
adversely impacted operational leverage. The decline in volumes has been
partially offset by the ongoing cost saving initiatives implemented by each
division and the Group as a whole, and it is expected that FY2026 will benefit
from the full year impact of these improvements.
This Financial Review is structured into several sections, focused on the
detail within the financial statements which warrants further explanation or
granular analysis. Commentary on the underlying performance of the Group,
analysing the trends in underlying revenue and operating margins, and other
commercial activities in the year is provided in the Divisional Review section
of the Chairman & CEO Report. The Exceptional & Non-Underlying Items
section below provides an important, detailed report on all of the items that
bridge from the underlying results (for example, underlying operating profit
of £29.5 million) to the IFRS statutory performance of £225.4 million
operating loss and, ultimately, £239.6 million continuing loss after tax.
The final sections set out the cash flows of the Group on a basis consistent
with past years, and the year-end net debt position.
Underlying measures of performance are classified as 'Alternative Performance
Measures' and should be reviewed in conjunction with comparable IFRS figures.
It is important to note that these APMs may not be comparable to those
reported by other companies. Underlying results exclude significant costs
(such as significant legal, major restructuring and transaction items), they
should not be regarded as a complete picture of the Group's financial
performance, which is presented in its Total results. The exclusion of other
Adjusting Items may result in Adjusted Earnings being materially higher or
lower than Total Earnings. In particular, when significant impairments,
restructuring changes and legal costs are excluded, Adjusted Earnings will be
higher than Total Earnings.
A summary of the underlying and reported performance of the Group is set out
below.
2025 2024
Underlying Non- Reported Underlying Non- Reported
performance
underlying
numbers
performance
underlying
numbers
items
items
£m £m £m £m £m £m
Revenue 1,115.2 2.9 1,118.1 1,226.4 7.7 1,234.1
Gross profit / (loss) 361.0 (24.9) 336.1 414.2 (18.4) 395.8
Margin % 32.4% 33.8%
Amortisation of acquired intangibles - (31.5) (31.5) - (38.6) (38.6)
Other operating expenses (331.5) (198.5) (530.0) (341.2) (80.8) (422.0)
Operating profit / (loss) 29.5 (254.9) (225.4) 73.0 (137.8) (64.8)
Margin % 2.6% 6.0%
Add back depreciation & amortisation 84.3 85.9
Underlying EBITDA 113.7 158.9
Margin % 10.2% 13.0%
Preferred equity items - 1.0 1.0 - (5.4) (5.4)
Other finance costs (41.0) (1.4) (42.4) (41.9) (4.8) (46.7)
(Loss) / profit before tax (11.5) (255.3) (266.8) 31.1 (148.0) (116.9)
(Loss) / profit after tax (12.1) (227.5) (239.6) 32.2 (127.9) (95.7)
EPS basic (10.62p) (210.26p) 27.99p (83.15p)
EPS diluted (5.18p) (210.26p) 19.35p (83.15p)
The Group incurred £208.1 million of exceptional operating costs during the
year, primarily a non-cash cost resulting from the impairment of intangible
and tangible assets. In addition, the Group incurred £31.5 million of
amortisation of acquired intangibles (primarily customer relationships and
brand names) and other non-underlying items of £15.3 million (primarily the
accounting impact of non-cash share incentive plan charges and hyperinflation
accounting). The significant majority of these costs, £238.2m, are
non-cash, with only £16.7m being cash costs incurred by the business. Further
details are provided later in this Financial Review.
ACQUISITIONS AND DISPOSALS
On 18 November 2024, the Group completed the sale to dispose of B3 Ceramics
Danismanlik ("Graniser") following the significant negative impact of
geopolitical instability in several of its key markets. Graniser was a
specific business segment within the UK & Europe - Ceramic Tiles (Spain /
Turkey CGU). As a result, the operations of Graniser have been classified
as discontinued operations in accordance with IFRS 5. Total consideration
received was €36.8 million (£30.9m(1)) paid as €10.0 million (£8.4 m(1))
cash on completion, plus the assumption of €26.8 million (c. £22.5m(1)) of
net debt resulting in a net gain on sale after tax of £7.2m. All
obligations and liabilities associated with the discontinued operation have
been transferred to the buyer as part of the transaction. The business was
loss-making at the time of sale, resulting in a positive impact on Group
earnings, as well as providing a release of capital, and demonstrates the
board's ongoing focus on ROCE and disciplined capital allocation.
(1.) Converted to GBP at a rate of 1.19 GBP/EUR.
FINANCING
Debt financing and facilities
Currently the Group's senior debt comprises €489 million (c. £430m) of
notes with a fixed coupon of 3.625% and maturity of August 2026, and €250
million (c. £220m) of notes with a fixed coupon of 3.75% and maturity of
March 2028 along with a £150m Revolving Credit Facility which matures in
February 2026.
Other debt facilities in the Group represent small, local working capital
facilities at the subsidiary level, which are renewed or amended as
appropriate from time to time. The total outstanding amount drawn from these
facilities at the year-end was £96.5 million, as shown below in the Net Debt
section of this Financial Review.
Preferred equity
There have been no changes to the preferred equity arrangements in the year,
with a total in issue of £225 million (plus those issued for the 'Payment In
Kind' of the fixed coupon, whereby new preferred shares are issued as opposed
to cash payment, at the Group's option).
EXCEPTIONAL AND NON-UNDERLYING ITEMS
This section of the Financial Review runs through all of items classified as
exceptional or non-underlying in the financial statements. The nature of
these items is, in many cases, the same as the prior year as the financial
policy around these items has remained unchanged, for consistency.
The Group incurred £208.1 million of exceptional costs during the year
(FY2024: £93.0m). Exceptional items are one-offs that will not continue or
repeat in the future, for example the legal and due diligence costs for a
business acquisition, as whilst further such costs might arise if new
acquisitions are undertaken, they will not arise again on the same business
and would disappear if the Group adopted a purely organic strategy.
2025 2024
Exceptional items £'m £'m
Acquisition and disposal related costs (0.9) (1.0)
Reorganisation, re-financing and other costs (15.8) (19.4)
Gain on disposal of assets and investments 1.9 -
Loss on disposal of subsidiaries (6.9) -
Exceptional impairment charge (186.4) (72.6)
Total exceptional items (208.1) (93.0)
This total exceptional cost figure is made up of numerous components, both
income and costs. Description of the specific items is provided below:
· Acquisition and disposal related costs - these costs relate primarily
to advisory fees and legal services in relation to previous acquisitions.
· Reorganisation, refinancing and other costs - this consists of cost
in relation to small reorganisation projects across the business and in FY2025
includes £2.4m of costs incurred in relation to the refinancing of the group.
IFRS requires those costs to be expensed as incurred until the point when the
project is completed in which case they are capitalised and amortised over the
life of the financial instruments to which they relate.
· Exceptional impairment charge - Exceptional impairment charge in the
'UK & Europe - Soft flooring (Rugs)' CGU, where the estimated recoverable
amount of the CGU was below the carrying value of assets by £87 million due
to the weak demand environment. As no goodwill attaches to this CGU, the
impairment charge was applied against intangible fixed assets (£40.4m) and
tangible fixed assets (£46.6m). Further weaker demand in the European
ceramics industry has resulted in an impairment in the 'UK & Europe -
Ceramic Tiles (Spain)' CGU where the carrying value of assets exceeded the
recoverable amount of the CGU by £80 million. As no goodwill attaches to this
CGU, the impairment charge was applied against intangible fixed assets
(£50.3m) and tangible fixed assets (£29.7m). Exceptional impairment charge
in the 'UK & Europe - Ceramic Tiles (Italy)' CGU, where the estimated
recoverable amount of the CGU was below the carrying value of assets by £14.6
million due to the weak demand environment and the goodwill has been fully
impaired. In FY2024 goodwill of £24.7m in the UK & Europe - Ceramics
(Spain & Turkey) CGU was impaired as a result of reduced production in
Spain and the division continued its programme to integrate and optimise
production. Separately, weaker demand in the US impacting Cali Bamboo resulted
in an impairment of £42.5 million.
· Sale and lease back - the Group entered a sale and lease back
transaction in September 2024 at one of the Belgium facilities. The
contribution received was £30.4m (from sale of 90% of the shares received)
and the remaining 10% of shares held at year end within Other investments
valued at £3.2m. This resulted in a gain of £17.4m. Of which £15.1m has
been recognised against the Right-of-use asset and £2.3m gain recognised as
non-underlying with the income statement.
· The other prior year items are described in more detail in Note 2.
Non-underlying items are items that do continue or repeat, but which are
deemed not to fairly represent the underlying business. Typically, they are
non-cash in nature and / or will only continue for a finite period of time.
2025 2024
Non-underlying operating items £'m £'m
Acquisition-related performance plans (0.4) (6.7)
Non-cash share incentive plan charge (3.5) (2.7)
Amortisation of acquired intangibles (excluding hyperinflation) (31.5) (38.6)
Unwind of fair value uplift to acquisition opening inventory - (0.6)
Depreciation of fair value uplift to acquisition property, plant and machinery (5.7)
(5.0)
Hyperinflation depreciation adjustment (5.8) (4.3)
Hyperinflation monetary gain/(loss) 12.8 23.2
Other hyperinflation adjustments (excluding depreciation and monetary gain) (12.7)
(10.1)
(46.8) (44.8)
Non-underlying items in the year:
· Acquisition-related performance plan charge - this represents the
accrual of contingent earn-out liabilities on historical acquisitions where
those earn-outs are linked to the ongoing employment of the seller(s). This
amount has significantly decreased versus the prior year as earn-outs on
historical acquisitions have expired.
· Non-cash share incentive plan charge - the charge under IFRS 2
relating to the pre-determined fair value of existing senior management share
incentive schemes. This charge is non-cash as these schemes cannot be
settled in cash.
· Amortisation of acquired intangibles - the amortisation over a finite
period of time of the fair value attributed to, primarily, brands and customer
relationships on all historical acquisitions under IFRS. It is important to
note that these charges are non-cash items and that the associated intangible
assets do not need to be replaced on the balance sheet once fully
written-down. Therefore, this cost will ultimately disappear from the Group
income statement.
· Depreciation of fair value uplift to acquisition property - under
IFRS the opening balance sheet of each acquisition is fair valued and this has
resulted in an increase in the value of certain property assets when they were
acquired. The higher valuation results in higher depreciation which is not
representative of the underlying performance of the acquired business and the
increase in depreciation is classed as exceptional.
As described below there were a number of adjustments made to the income
statement in relation to hyperinflation. The hyperinflation adjustments
represent the impact of restating the non-monetary items on the Turkish
entities balance sheet based on the change in the general price index between
the acquisition date and the reporting date, as well as the indexation of the
income statement, with the gain/loss on the monetary position being included
within the income statement.
Adjustment in respect of hyperinflation
During FY2023 inflation in Turkey, where Victoria has a plant used to produce
rugs for Balta Rugs (UK & Europe - Soft Flooring), passed the threshold of
inflation exceeding 100% over a three-year cumulative period in March 2022.
Under IAS29 this is one of the key indicators for hyperinflation accounting
needing to be adopted. This resulted in the revaluation of the 2 April 2022
opening balance sheet for these businesses as well as indexing of the numbers
of all subsequent financial years. We have treated these adjustments as
non-underlying to ensure comparability of results year on year.
The impact of hyperinflation on the income statement is as follows:
2025 2024
Hyperinflation adjustment summary £'m £'m
Revenue 2.9 7.7
Cost of sales (19.4) (20.5)
Operating costs 10.8 21.6
EBIT (5.6) 8.8
EBITDA 0.1 13.0
Finance costs 0.4 (0.6)
Profit/(loss) before tax (5.2) 8.3
Deferred tax (1.3) (3.2)
Profit/(loss) for the period from continuing operations (6.5) 5.0
Other comprehensive income - CTA 29.1 8.5
In FY25 the Turkish Lira depreciated lower than the CPI in Turkey which has
led to a comparatively bigger Gross Domestic Product variance than the Turkish
Lira variance. This has impacted the comparative restatement of OCI figures to
current purchasing power. There has also been an increase in intercompany
revenue from FY24.
Further details of exceptional and non-underlying operating items are provided
in Note 2.
In addition to the above operating items, there were a number of
non-underlying financial items in the year.
2025 2024
Non-underlying financial costs £'m £'m
Finance items related to preferred equity 1.0 (5.4)
Acquisition related items 1.5 1.5
Gain on bond repurchase - 2.0
Fair value adjustment to notes redemption option / amortisation inception 1.2 1.2
derivative
Mark to market adjustments and gains on foreign exchange forward contracts 0.5 (0.2)
Translation difference on foreign currency loans (5.0) (8.6)
Other financial expenses (hyperinflation) 0.4 (0.6)
Defined benefit pension (law change) - (0.1)
Other non-underlying (2.9) (6.3)
(0.4) (10.2)
These items are described below:
· Finance items related to preferred equity - the preferred equity
issued in November 2020 and further in January 2022 is treated under IFRS 9 as
a financial liability with a number of associated embedded derivatives.
There are a number of resulting financial items taken to the income statement
in each period, including the cost of the underlying host contract and the
income or expense related to the fair-valuation of the warrants and embedded
derivatives. However, the preferred equity is legally structured as equity
and is also equity-like in nature - it is contractually subordinated, never
has to be serviced in cash, and contains no default or acceleration rights -
hence the resultant finance costs or income are treated as non-underlying.
2025 2024
Finance items related to preferred equity £m £m
Amortised cost of host instrument (8.4) (19.0)
Fair value movement on associated equity warrants 9.4 13.6
Fair value movement on embedded redemption option - -
Total 1.0 (5.4)
· Fair value adjustment to notes redemption option - attached to the
senior notes is an early repayment option which, on inception, was recognised
as an embedded derivative asset at a fair value of £4.3m. This asset is
revalued at each reporting date, with the movement taken through the P&L.
The value of the senior debt liabilities recognised were increased by a
corresponding amount at initial recognition, which then reduces to par at
maturity using an effective interest rate method. A credit of £1.2m was
recognised in the period (2024: £1.2m), with a £nil fair value of the
derivative asset at both period ends.
· Mark to market adjustments on foreign exchange forward contracts -
across the group we analyse our upcoming currency requirements (for raw
material purchases) and offset the exchange rate risk via a fixed, diminishing
profile of forward contracts out to 12 months. This non-cash cost represents
the mark-to-market movement in the value of these contracts as exchange rates
fluctuate.
· Translation difference on foreign currency loans - this represents
the impact of exchange rate movements in the translation of non-Sterling
denominated debt into the Group accounts. The key items in this regard are
the Euro-denominated €489 million 2026 corporate bonds, and €250 million
2028 corporate bonds.
· Other financial expense (hyperinflation) - restated finance costs
within Turkish entities based on the change in the general price index between
the date when the finance costs were initially recorded and the reporting
date.
· Defined benefit pension - defined benefit pension change due to
restructuring in the prior period.
Further details of non-underlying finance items are provided in Note 3.
OPERATING PROFIT AND PBT
The table below summarises the underlying and reported profit of the Group,
further to the commentary above on underlying performance and non-underlying
items.
Operating profit and PBT 2025 2024
£'m £'m
Underlying operating profit 29.5 73.0
Reported operating loss (225.4) (64.8)
Underlying (loss) / profit before tax (11.5) 31.1
Reported loss before tax (266.8) (116.9)
Reported operating loss (earnings before interest and taxation) of £225.4
million (FY2024: £64.8 million). After removing the exceptional and
non-underlying items described above, underlying operating profit was £29.5
million (FY2024: £73.0m).
Reported loss before tax increased to £266.8 million (FY2024: £116.9m).
After removing the exceptional and non-underlying items described above,
underlying loss before tax was £11.5million (FY2024: Profit of £31.1m).
TAXATION
The reported tax credit on continuing operations in the year of £27.2 million
(FY2024: £21.2m) was distorted by the impact of the exceptional and
non-underlying costs, which contributed to a tax credit of £25.1 million. On
an underlying basis and removing the effect of prior year items, the tax
credit for the year was £3.0 million (FY2024 charge: £6.9m against an
adjusted loss before tax of £11.5 million (FY2024: Profit of £31.1m). This
results in an underlying effective current year tax rate of 26.2% (FY2024:
22.2%).
EARNINGS PER SHARE
The Group delivered a basic loss per share of 210.26p (FY2024: 83.15p) due to
exceptional costs in relation to restructuring, amortisation of acquired
intangibles, and impairment recognised on intangible and tangible assets.
Adjusted earnings per share (before non-underlying and exceptional items) on a
fully-diluted basis was (5.18)p (FY2024: 19.35p). The decrease in EPS is
driven by the greater dilutive impact of the preference shares and reduced
earnings.
Basic and diluted earnings / (loss) per share 2025 2024
Reported basic loss per share (210.26p) (83.15p)
Diluted adjusted (loss) / earnings per share (5.18p) 19.35p
OPERATING CASH FLOW
Cash flow from operating activities before interest, tax and exceptional items
was £45.1 million which represents a conversion of 56% of underlying EBITDA
(pre-IFRS 16).
Operating and free cash flow 2025 2024
£'m £'m
Underlying operating profit 29.5 73.0
Add back: underlying depreciation & amortisation 84.2 86.0
Underlying EBITDA 113.7 159.0
Payments under right-of-use lease obligations (including interest) (39.6) (34.8)
Non-cash items (3.7) (3.5)
Movement in working capital (25.3) (11.4)
Operating cash flow before interest, tax and capex 45.1 109.3
% conversion against underlying operating profit 153% 150%
% conversion against underlying EBITDA (pre-IFRS 16) 56% 85%
Interest paid (32.7) (29.7)
Corporation tax paid (1.7) (2.3)
Capital expenditure - replacement / maintenance (46.9) (42.3)
Free cash flow before exceptional items (36.2) 35.0
% conversion against underlying operating profit (123)% 48%
% conversion against underlying EBITDA (pre-IFRS 16) (45)% 27%
Pre-exceptional free cash flow of the Group - after interest, tax and net
replacement capex - was an outflow of £36.2 million having been impacted by
lower earnings and an investment in working capital.
The underlying movement in working capital was an outflow of £25.3 million.
This was driven by a reduction in creditors in the second half of the year as
production was managed to the lower volume levels that the market was
experiencing and was partly offset by a cash inflow from debtors as a more
disciplined approach was taken to credit terms and collections.
A full reported statement of cash flows, including exceptional and
non-underlying items, is provided in the Consolidated Statement of Cash Flows.
NET DEBT
As at 29 March 2025, the Group's net debt position (excluding preferred
equity) was £897.9 million (30 March 2024: £840.0m). The Group invested
£56.4 million in organic growth / synergy initiatives which was more than
offset by disposals of non-core property and assets. Acquisition-related
expenditure (primarily representing payment of deferred and contingent
consideration) was £12.0 million.
The Group's year end net leverage ratio (excluding preferred equity) was 7.9x
(FY2024: 5.3x). The leverage increase is primarily driven by the reduced
earnings in the year.
Free cash flow to movement in net debt 2025 2024
£'m £'m
Free cash flow before exceptional items (see above) (36.2) 35.0
Exceptional reorganisation cash cost (26.1) (31.1)
Capital expenditure - expansionary / reorganisation (30.3) (19.2)
Proceeds from fixed asset and subsidiary disposals 58.9 19.3
M&A expenditure including deferred / contingent consideration and related (13.3) (15.9)
fees
Buy back of ordinary shares (1.1) (3.2)
Non-cash right-of-use liability movements (26.1) (0.1)
Translation differences on foreign currency cash and loans and other non-cash 16.3 17.8
movements within debt
Total movement in net debt (57.9) 2.6
Opening net debt (840.0) (842.6)
Net debt before preferred equity (897.9) (840.0)
Net debt 2025 2024
£'m £'m
Net cash and cash equivalents 56.6 72.8
Super senior RCF(1) (44.2) (10.3)
Senior secured notes(1) (624.0) (633.9)
Bank loans and other facilities (50.7) (62.4)
Obligations under right-of-use leases (189.8) (167.8)
Factoring and receivables financing facilities (45.8) (38.4)
Net debt before preferred equity (897.9) (840.0)
Net leverage ratio (net debt / EBITDA) 7.9x 5.3x
Preferred equity, associated warrants and embedded derivatives (285.6) (286.6)
Statutory net debt (net of prepaid finance costs) (1,183.5) (1,126.6)
(1) Inclusive of accrued interest, issue premium (where applicable) and net of
prepaid finance costs
ACCOUNTING STANDARDS
The financial statements have been prepared in accordance with UK-adopted
international accounting standards. There have been no changes to
international accounting standards this year that have a material impact on
the Group's results. No forthcoming new international accounting standards are
expected to have a material impact on the financial statements of the Group.
GOING CONCERN
The consolidated financial statements for the Group and Parent Company have
been prepared on a going concern basis.
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the Chairman
and CEO Review.
As of 29 March 2025, the Group had circa £45m outstanding under its existing
Super Senior RCF (the "SSRCF") which matures in February 2026, circa €490m
of 3.625% Senior Secured Notes due in August 2026 (the "2026 Notes") and
€250m of 3.75% Senior Secured Notes due in March 2028 (the "2028 Notes").
The Company will launch a series of public consent solicitations and a public
exchange offer to holders of its 2026 Notes to exchange their existing 2026
Notes into a new tranche of notes (the "New Notes"), to mature four years
following the date of the proposed transaction (the "2026 Notes transaction").
The New Notes will be junior to the new Super Senior Credit Facility, but
senior to all other parts of the capital structure including the existing 2026
Notes and 2028 Notes. Prior to the launch of the public consent solicitations
and exchange offer, the Company has agreed private exchanges and transaction
support agreements with holders of more than 90% of the 2026 Notes, who
represent greater than 50% of all Senior Secured Notes outstanding, to support
the proposed transaction.
The New Notes will include an interest coupon of 9.875%, settled in cash on a
half-yearly basis. At the election of the Company, for the first twelve
months following issuance the coupon can be reduced to 1.000% of cash pay and
8.875% via Payment In Kind (PIK), with the PIK'd coupon being added to the
principal at the end of each six-month period, paid through the issuance of
additional New Notes.
The New Notes will have a significantly higher coupon than the 2026 Notes. In
addition, the Company has offered to exchange the 2026 Notes at par, with
additional fees available for noteholders who participate in the consent
solicitation, subject to certain terms and conditions.
The Board believes the exchange offer is therefore attractive to existing
noteholders. As a result, the Company expects to receive a high level of
support from noteholders for the offer, and expects closing to occur in August
2025.
Simultaneous with the closing of the exchange offer, the Company will enter
into, as previously announced, an agreement to refinance the existing SSRCF
with a new Super Senior Credit Facility (the "SSCF"), due January 2030, with a
springing maturity six months prior to the maturity date of the New Notes.
The existing SSRCF is on an entirely revolving basis and contains a springing
leverage covenant (a covenant which is triggered if leverage is above a
certain level), whereas the new facility agreement will comprise a combination
of term loan and committed RCF, and does not contain any maintenance or
springing covenants. The absence of such covenants, along with the debt
incurrence covenants within the indenture for the New Notes, allow for greater
flexibility for the Company and therefore an improvement in liquidity
available under the new SSCF.
The new facility is fully committed and will be available to be drawn, subject
to satisfaction of customary conditions precedent and the refinancing of the
2026 Notes.
As a result of the 2026 Notes transaction and the refinancing of the SSRCF not
having completed at the time of the approval of the annual report and
accounts, there is a material uncertainty relating to events or conditions
that may cast significant doubt on the Group and Parent Company's ability to
continue as a going concern. However, the Directors believe that the proposed
transaction represents an appropriate and achievable plan to address the
Group's funding requirements, although the successful completion of the
proposed transaction cannot be guaranteed.
Going concern assessment
The Group's cash position, net of overdrafts, as at 29 March 2025 was £56.6m
(2024: £72.8m), and it maintains significant additional liquidity through
local financing lines and its existing and proposed new SSCF. The Group
expects to generate positive operating cash flows in the forecast period to 31
July 2026.
In assessing the Group as a going concern, a cashflow forecast through to 31
July 2026 was modelled, representing a twelve-month period of assessment
in-line with market practice, with the base case aligned with our budget and
medium-term strategic plan, consistent with the model used in the testing of
impairment. In all scenarios modelled, no future hypothetical, acquisitions
were included in the assumed cashflows, due to there being no certainty over
any acquisitions outside of those already completed to date. The capital
structure factored into the going concern assessment is based on the
successful completion of both the 2026 Notes transaction and the replacement
of the SSRCF as the Directors are confident that the transactions will
complete successfully.
To take into account the current uncertainty in consumer demand, a downside
scenario was modelled, assuming a significant drop in EBITDA as a result of
lower volumes versus the base forecast to ensure that even in a downside
scenario, sufficient liquidity was maintained through the forecast period.
This downside scenario did not result in a change in our view that the
business remains a going concern.
A reverse stress-test scenario was modelled, purely for the purposes of
sensitising earnings such that liquidity is fully absorbed within the
twelve-month period of assessment. The required adjustment is a circa 85%
reduction to the projected EBITDA, and circa 100% reduction in operating
cashflows during the forecast period. This scenario assumes that all
facilities which mature during the period are repaid in full and not replaced,
while certain facilities which have no fixed maturity are assumed not to be
revoked. Substantial mitigating actions, which would be taken in such a
scenario, have not been modelled in this extreme scenario. The Group does not
consider the reverse stress-test a plausible scenario.
Having considered the work undertaken as described above, and in light of the
expectation of a successful exchange offer completing, the Directors are of
the view that the Group is well placed to manage its business risks.
Accordingly, the Directors continue to adopt the going concern basis in
preparing the Annual Report and Accounts.
Alec Pratt
Chief Financial Officer
24 July 2025
Consolidated Income Statement
For the 52 weeks ended 29 March 2025
52 weeks ended 29 March 2025 52 weeks ended 30 March 2024 (restated)*
Underlying Non- Reported Underlying Non- Reported
performance
underlying
numbers
performance
underlying
numbers
items
items
Notes £m £m £m £m £m £m
Revenue 1 1,115.2 2.9 1,118.1 1,226.4 7.7 1,234.1
Cost of sales (754.2) (27.8) (782.0) (812.2) (26.1) (838.3)
Gross profit 361.0 (24.9) 336.1 414.2 (18.4) 395.8
Distribution and administrative expenses (337.7) (230.1) (567.8) (345.9) (119.5) (465.4)
Other operating income 6.2 0.1 6.3 4.7 0.1 4.8
Operating profit / (loss) 29.5 (254.9) (225.4) 73.0 (137.8) (64.8)
Comprising:
Operating profit before non-underlying and exceptional items 29.5 - 29.5 73.0 - 73.0
Amortisation of acquired intangibles 2 - (31.5) (31.5) - (38.6) (38.6)
Other non-underlying items 2 - (15.3) (15.3) - (6.2) (6.2)
Exceptional impairment charge 2 - (186.4) (186.4) - (72.6) (72.6)
Other exceptional items 2 - (21.7) (21.7) - (20.4) (20.4)
Finance costs 3 (41.0) (0.4) (41.4) (41.9) (10.2) (52.1)
Comprising:
Interest on loans and notes (30.7) - (30.7) (32.3) - (32.3)
Amortisation of prepaid finance costs for bank loans (2.2) - (2.2) (2.7) - (2.7)
Unwinding of discount on right-of-use lease liabilities (7.9) - (7.9) (6.8) - (6.8)
Preferred equity items 3 - 1.0 1.0 - (5.4) (5.4)
Other finance items 3 (0.2) (1.4) (1.6) (0.1) (4.8) (4.9)
(Loss) / profit before tax (11.5) (255.3) (266.8) 31.1 (148.0) (116.9)
Taxation (charge) / credit (0.6) 27.8 27.2 1.1 20.1 21.2
(Loss) / profit from continuing operations for the period (12.1) (227.5) (239.6) 32.2 (127.9) (95.7)
Discontinued operations
Loss from discontinued operations for the period (6.3) (18.5) (24.8) (0.4) (11.9) (12.3)
Total (loss) / profit for the period (18.4) (246.0) (264.4) 31.8 (139.8) (108.0)
Loss per share from continuing operations - pence basic 4 (210.26) (83.15)
diluted 4 (210.26) (83.15)
Loss per share from total operations - pence basic 4 (232.02) (93.85)
diluted 4 (232.02) (93.85)
* See Note 7 for further details regarding discontinued operations
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 29 March 2025
52 weeks ended 52 weeks ended
29 March 2025
30 March 2024
£m £m
Loss for the period (264.4) (108.0)
Other comprehensive income / (expense)
Items that will not be reclassified to profit or loss:
Actuarial gain / (loss) on defined benefit pension scheme 0.5 (1.9)
Items that will not be reclassified to profit or loss 0.5 (1.9)
Items that may be reclassified subsequently to profit or loss:
Hyperinflation foreign exchange adjustments 34.6 (9.0)
Retranslation of overseas subsidiaries (15.4) (21.8)
Subsidiary disposal - reclassification of translation reserves (8.6) -
Items that may be reclassified subsequently to profit or loss 10.6 (30.8)
Other comprehensive income / (expense) 11.1 (32.7)
Total comprehensive expense for the period attributable to the owners of the (253.3) (140.7)
parent
Total comprehensive expense for the period attributable to the owners of the
parent arises from:
Continuing operations (235.5) (119.1)
Discontinued operations (17.8) (21.6)
(253.3) (140.7)
Consolidated Balance Sheet
As at 29 March 2025
29 March 2025 30 March 2024
£m £m
Non-current assets
Goodwill 88.9 102.6
Intangible assets other than goodwill 111.5 250.7
Property, plant and equipment 344.4 447.8
Right-of-use lease assets 162.6 157.2
Investment property 0.2 0.2
Other investments 3.2 -
Deferred tax assets 8.9 7.9
Total non-current assets 719.7 966.4
Current assets
Inventories 303.7 326.1
Trade and other receivables 226.9 238.1
Current tax assets 2.1 4.1
Cash and cash equivalents 77.6 94.8
Total current assets 610.3 663.1
Total assets 1,330.0 1,629.5
Current liabilities
Trade and other current payables (272.7) (320.3)
Current tax liabilities (6.2) (4.7)
Obligations under right-of-use leases - current (30.0) (31.2)
Other financial liabilities (135.4) (94.3)
Provisions (7.1) (12.1)
Total current liabilities (451.4) (462.6)
Non-current liabilities
Trade and other non-current payables (8.1) (7.2)
Obligations under right-of-use leases - non-current (159.9) (136.5)
Other non-current financial liabilities (650.2) (672.7)
Preferred equity (282.5) (274.2)
Preferred equity - contractually-linked warrants (3.1) (12.4)
Deferred tax liabilities (24.3) (56.7)
Retirement benefit obligations (4.0) (8.4)
Provisions (19.6) (21.0)
Total non-current liabilities (1,151.7) (1,189.1)
Total liabilities (1,603.1) (1,651.7)
Net liabilities (273.1) (22.2)
Equity
Share capital 6.3 6.3
Retained earnings (292.2) (27.4)
Foreign exchange reserve (38.4) (20.8)
Hyperinflation foreign exchange reserve 35.7 7.5
Other reserves 15.5 12.2
Total equity (273.1) (22.2)
Consolidated Statement of Changes in Equity
For the 52 weeks ended 29 March 2025
Share Retained Foreign exchange reserve Hyper-inflation foreign exchange reserve Other Total
capital
earnings
reserves
equity
£m £m £m £m £m £m
At 1 April 2023 6.3 85.7 1.0 16.5 9.5 119.0
Loss for the period to 30 March 2024 - (108.0) - - - (108.0)
Other comprehensive expense for the period - (1.9) - - - (1.9)
Retranslation of overseas subsidiaries - - (21.8) (9.0) - (30.8)
Total comprehensive loss - (109.9) (21.8) (9.0) - (140.7)
Buy back of ordinary shares - (3.2) - - - (3.2)
Share-based payment charge - - - - 2.7 2.7
Transactions with owners - (3.2) - - 2.7 (0.5)
At 30 March 2024 6.3 (27.4) (20.8) 7.5 12.2 (22.2)
Loss for the period to 29 March 2025 - (264.2) - - - (264.2)
Other comprehensive expense for the period - 0.5 - - - 0.5
Retranslation of overseas subsidiaries - - (15.4) 34.6 - 19.2
Subsidiary disposal - reclassification of translation reserves - - (2.2) (6.4) - (8.6)
Total comprehensive loss - (263.7) (17.6) 28.2 - (253.1)
Buy back of ordinary shares - (1.1) - - - (1.1)
Share-based payment charge - - - - 3.3 3.3
Transactions with owners - (1.1) - - 3.3 2.2
At 29 March 2025 6.3 (292.2) (38.4) 35.7 15.5 (273.1)
Consolidated Statement of Cash Flows
For the 52 weeks ended 29 March 2025
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Cash flows from operating activities
Operating loss (225.4) (64.8)
Adjustments for:
Depreciation and amortisation of IT software 95.7 95.5
Amortisation of acquired intangibles 31.6 38.5
Hyperinflation impact (0.2) (13.2)
Acquisition-related performance plan charge 0.4 6.7
Acquisition-related performance plan payment (6.8) (10.8)
Amortisation of government grants (1.9) (0.9)
(Profit) / loss on disposal of investments, property, plant and equipment and 3.9 (2.1)
acquired intangibles
Impairment charges 186.4 72.5
Share incentive plan charge 3.5 2.7
Defined benefit pension (0.5) 0.1
Net cash flow from operating activities before movements in working capital, 86.7 124.2
tax and interest payments
Change in inventories (5.1) 14.1
Change in trade and other receivables 1.6 22.8
Change in trade and other payables (21.8) (48.3)
Change in provisions (10.3) (11.7)
Cash generated by continuing operations before tax and interest payments 51.1 101.1
Interest paid on loans and notes (32.7) (29.7)
Interest relating to right-of-use lease assets (8.2) (6.6)
Income taxes paid (1.7) (2.3)
Net cash inflow from continuing operating activities 8.5 62.5
Net cash flow from discontinued operations (10.7) (8.2)
Investing activities
Purchases of property, plant and equipment (74.9) (57.8)
Purchases of intangible assets (2.3) (4.0)
Repayments of subsidiary loans - -
Proceeds on disposal of property, plant and equipment 7.3 28.5
Deferred consideration and earn-out payments (4.3) (4.1)
Proceeds on disposal of real estate via sale and leaseback 30.4 -
Proceeds on disposal of business, net of cash 3.3 -
Acquisition of subsidiaries net of cash acquired (1.3) -
Cash flow from other investing activities 1.1 -
Net cash used in continuing investing activities (40.7) (37.4)
Investing activities cash flow from discontinued operations 8.7 (0.7)
Financing activities
Proceeds from debt 89.2 36.7
Repayment of debt (48.5) (33.4)
Buy back of ordinary shares (1.1) (3.2)
Payments under right-of-use lease obligations (31.4) (28.2)
Cash flow from other financing activities 1.5 (9.9)
Net cash generated / (used) in continuing financing activities 9.7 (38.0)
Financing activities cash flow from discontinued operations 7.2 21.0
Net decrease in cash and cash equivalents (17.3) (0.8)
Cash and cash equivalents at beginning of period 87.2 90.4
Effect of foreign exchange rate changes (1.6) (2.4)
Cash and cash equivalents at end of period 68.3 87.2
Comprising:
Cash and cash equivalents 77.6 94.8
Bank overdrafts (9.3) (7.6)
68.3 87.2
NOTES
1. Segmental
information
The Group is organised into four operating segments: soft flooring products in
UK & Europe; ceramic tiles in UK & Europe; flooring products in
Australia; and flooring products in North America. The Executive Board (which
is collectively the Chief Operating Decision Maker) regularly reviews
financial information for each of these operating segments in order to assess
their performance and make decisions around strategy and resource allocation
at this level.
The UK & Europe Soft Flooring segment comprises legal entities primarily
in the UK, Republic of Ireland, the Netherlands and Belgium (including
manufacturing entities in Turkey and a distribution entity in North America),
whose operations involve the manufacture and distribution of carpets, rugs,
flooring underlay, artificial grass, LVT, and associated accessories. The UK
& Europe Ceramic Tiles segment comprises legal entities primarily in
Spain, Italy, UK and France, whose operations involve the manufacture and
distribution of wall and floor ceramic tiles. The Australia segment comprises
legal entities in Australia, whose operations involve the manufacture and
distribution of carpets, flooring underlay and LVT. The North America segment
comprises legal entities in the USA, whose operations involve the distribution
of hard flooring, LVT and ceramic tiles.
Whilst additional information has been provided in the operational review on
sub-segment activities, discrete financial information on these activities is
not regularly reported to the CODM for assessing performance or allocating
resources.
No operating segments have been aggregated into reportable segments.
Both underlying operating profit and reported operating profit are reported to
the Executive Board on a segmental basis.
Transactions between the reportable segments are made on an arm length's
basis. The reportable segments exclude the results of non revenue generating
holding companies, including Victoria PLC. These entities' results have been
included as unallocated central expenses in the tables
below.
52 weeks ended 29 March 2025
UK & UK & Australia North Unallocated Total
Europe
Europe
America
central
Soft Flooring
Ceramic Tiles
expenses
£m £m £m £m £m £m
Income statement
Revenue 584.2 280.2 103.7 150.0 - 1,118.1
Underlying operating profit / (loss) 18.9 7.7 8.6 2.1 (7.8) 29.5
Non-underlying operating items (21.7) (15.6) (1.6) (4.4) (3.5) (46.8)
Exceptional operating items (92.4) (105.8) (0.2) (0.8) (8.9) (208.1)
Operating (loss) / profit (95.2) (113.7) 6.8 (3.1) (20.2) (225.4)
Underlying net finance costs (41.0)
Non-underlying finance costs (0.4)
Loss before tax (266.8)
Tax credit 27.2
Loss after tax from continuing operations (239.6)
Loss from discontinued operations (24.8)
Loss for the period (264.4)
52 weeks ended 30 March 2024
UK & UK & Australia North Unallocated Total
Europe
Europe
America
central
Soft Flooring
Ceramic Tiles
expenses
£m £m £m £m £m £m
Income statement
Revenue 643.9 320.8 106.1 163.3 - 1,234.1
Underlying operating profit / (loss) 34.6 31.3 8.7 6.8 (8.4) 73.0
Non-underlying operating items (12.0) (22.3) (1.6) (5.6) (3.4) (44.9)
Exceptional operating items (16.5) (30.3) - (43.3) (2.8) (92.9)
Operating profit / (loss) 6.1 (21.3) 7.1 (42.1) (14.6) (64.8)
Underlying net finance costs (41.9)
Non-underlying finance costs (10.2)
Loss before tax (116.9)
Tax credit 21.2
Loss after tax from continuing operations (95.7)
Loss from discontinued operations (12.3)
Loss for the period (108.0)
2. Exceptional and non-underlying items
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Exceptional items
(a) Acquisition and disposal related costs (0.9) (1.0)
(b) Reorganisation, re-financing and other costs (15.8) (19.4)
(c) Gain on disposal of assets and investments 1.9 -
(d) Loss on disposal of subsidiaries (6.9) -
(e) Exceptional impairment charge (186.4) (72.6)
(208.1) (93.0)
Non-underlying operating items
(f) Acquisition-related performance plans (0.4) (6.7)
(g) Non-cash share incentive plan charge (3.5) (2.7)
(h) Amortisation of acquired intangibles (excluding hyperinflation) (31.5) (38.6)
(i) Unwind of fair value uplift to acquisition opening inventory - (0.6)
(j) Depreciation of fair value uplift to acquisition property, plant and (5.7) (5.0)
machinery
(k) Hyperinflation depreciation adjustment (5.8) (4.3)
(l) Hyperinflation monetary gain / (loss) 12.8 23.2
(m) Other hyperinflation adjustments (excluding depreciation and monetary (12.7) (10.1)
gain)
(46.8) (44.8)
Total (254.9) (137.8)
Representing functional categorisation of:
Revenue (see notes k,l,m) 2.9 7.7
Cost of sales (see notes j,k,l,m) (27.8) (26.1)
Distribution and administrative expenses (230.1) (119.5)
Other operating income (see notes k,l,m) 0.1 0.1
(254.9) (137.8)
(a) One-off third-party professional fees in connection with prospecting and
completing specific acquisitions and disposals during the period.
(b) Various reorganisation and integration projects around the Group. Also some
costs linked to re-financing.
(c) Largely represents a gain relating to the sale and leaseback of a property in
Belgium, whereby under IFRS 16, the majority of the gain on the disposal has
been presented within the carrying value of the right-of-use asset.
(d) Non-cash charge relating to the respective loss on disposal of Hanover
Flooring during the period.
(e) Exceptional impairment charge in the 'UK & Europe - Soft flooring (Rugs)'
CGU, where the estimated recoverable amount of the CGU was below the carrying
value of assets by £87 million due to the weak demand environment. As no
goodwill attaches to this CGU, the impairment charge was applied against
intangible fixed assets (£40.5m) and tangible fixed assets (£46.5m). Further
weaker demand in the European ceramics industry has resulted in an impairment
in the 'UK & Europe - Ceramic Tiles (Spain)' CGU where the carrying value
of assets exceeded the recoverable amount of the CGU by £80 million. As no
goodwill attaches to this CGU, the impairment charge was applied against
intangible fixed assets (£50.3m) and tangible fixed assets (£29.7m).
Exceptional impairment charge in the 'UK & Europe - Ceramic Tiles (Italy)'
CGU, where the estimated recoverable amount of the CGU was below the carrying
value of assets by £14.6 million due to the weak demand environment and the
goodwill has been fully impaired. Prior year exceptional goodwill impairment
charge, reduced production in Spain, as a result of the integration programme
within the ceramics division has resulted in a further impairment of £24.7
million being taken in the UK & Europe - Ceramics (Spain & Turkey)
CGU, along with weaker demand in the US impacting Cali Bamboo resulting in an
impairment of £42.5 million. The current period also includes a £4.8m
impairment of a right-of-use building which is mostly unoccupied.
(f) Charge relating to the accrual of expected liability under acquisition-related
performance plans.
(g) Non-cash, IFRS2 share-based payment charge in relation to the long-term
management incentive plans.
(h) Amortisation of intangible assets, primarily brands and customer
relationships, recognised on consolidation as a result of business
combinations.
(i) One-off cost of sales charge reflecting the IFRS 3 fair value adjustment on
inventory acquired on new business acquisitions, given this is not
representative of the underlying performance of those businesses.
(j) Cost of sales depreciation charge reflecting the IFRS 3 fair value adjustment
on buildings and plant and machinery acquired on new business acquisitions,
given this is not representative of the underlying performance of those
businesses.
(k,l,m) Impact of hyperinflation indexation in the period. The hyperinflation impact
in the period on revenue was £2.9m (2024: £7.7m income), cost of sales was
£19.4m charge (2024: £20.5m (charge)) and admin expenses was £10.8m income
(FY24: £21.6m income ).
3. Finance costs
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
£m £m
Non-underlying finance items
(a) Finance items related to preferred equity 1.0 (5.4)
(b) Unwinding of present value of deferred and contingent earn-out liabilities (0.2) (0.5)
(c) Fair value adjustment to deferred consideration and contingent earnout 1.7 2.0
Acquisitions related 1.5 1.5
(d) Gain on bond repurchase - 2.0
(e) Fair value adjustment to notes redemption option / amortisation inception 1.2 1.2
derivative
(f) Mark to market adjustments and gains on foreign exchange forward contracts 0.5 (0.2)
(g) Translation difference on foreign currency loans and cash (5.0) (8.6)
(h) Hyperinflation - finance portion 0.4 (0.6)
(i) Defined benefit pension - (0.1)
Other non-underlying (2.9) (6.3)
(0.4) (10.2)
(a) The net impact of items relating to preferred equity issued to Koch Equity
Development during the current and prior periods.
(b) Current period non-cash costs relating to the unwind of present value
discounts applied to deferred consideration and contingent earn-outs on
historical business acquisitions. Deferred consideration is measured at
amortised cost, while contingent consideration is measured under IFRS 9 / 13
at fair value. Both are discounted for the time value of money.
(c) Fair value reduction to contingent liability resulting in a change to the
expected earnout due, resulting in a credit.
(d) The Company generated a gain on bonds repurchased in the prior year as the
purchase price was lower than the carrying amount. This happened as market
interest rates had risen since the bonds were issued, reducing their market
value.
(e) Attached to the senior notes is an early repayment option which, on inception,
was recognised as an embedded derivative asset at a fair value of £4.3m. The
value of the senior debt liabilities recognised were increased by a
corresponding amount at initial recognition, which then reduces to par at
maturity using an effective interest rate method.
(f) Non-cash fair value adjustments on foreign exchange forward contracts.
(g) Net impact of exchange rate movements on third party and intercompany loans.
(h) Other finance cost/income impact of hyperinflation.
(i) Defined benefit pension change due to restructuring in the prior period
related.
See Financial Review for further details of these items.
4. Earnings per share
The calculation of the basic, adjusted and diluted earnings / (loss) per share
is based on the following data:
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
Basic Adjusted Basic Adjusted
£m £m £m £m
Loss attributable to ordinary equity holders of the parent entity (239.6) (239.6) (95.7) (95.7)
Exceptional and non-underlying items:
Exceptional items - 208.1 - 93.0
Non-underlying items - 47.2 - 55.0
Tax effect on adjusted items where applicable - (27.8) - (20.1)
(Loss) / earnings for the purpose of basic and adjusted earnings per share (239.6) (12.1) (95.7) 32.2
from continuing operations
Loss attributable to ordinary equity holders of the parent entity from (24.8) (6.3) (12.3) (0.4)
discontinued operations
(Loss) / earnings for the purpose of basic and adjusted earnings per share (264.4) (18.4) (108.0) 31.8
Weighted average number of shares
52 weeks ended 52 weeks ended
29 March 2025 30 March 2024
Number Number
of shares
of shares
(000's) (000's)
Weighted average number of shares for the purpose of basic and adjusted 113,954 115,046
earnings per share
Effect of dilutive potential ordinary shares:
Share options and warrants 1,350 1,621
Weighted average number of ordinary shares for the purposes of diluted 115,304 116,667
earnings per share
Preferred equity and contractually-linked warrants 118,394 49,771
Weighted average number of ordinary shares for the purposes of diluted 233,698 166,438
adjusted earnings per share
The potential dilutive effect of the share options has been calculated in
accordance with IAS 33 using the average share price in the period.
The Group's earnings / (loss) per share are as follows:
52 weeks ended 29 March 2025 52 weeks ended 30 March 2024
Pence Pence
Earnings / loss per share from continuing operations
Basic loss per share (210.26) (83.15)
Diluted loss per share (210.26) (83.15)
Basic adjusted (loss) / earnings per share (10.62) 27.99
Diluted adjusted (loss) / earnings per share (5.18) 19.35
Loss per share from discontinued operations
Basic loss per share (21.76) (10.70)
Diluted loss per share (21.76) (10.70)
Earnings / loss per share
Basic loss per share (232.02) (93.85)
Diluted loss per share (232.02) (93.85)
Basic adjusted (loss) / earnings per share (16.15) 27.66
Diluted adjusted (loss) / earnings per share (7.87) 19.12
Diluted earnings per share for the period is not adjusted for the impact of
the potential future conversion of preferred equity due to this instrument
having an anti-dilutive effect, whereby the positive impact of adding back the
associated financial costs to earnings outweighs the dilutive impact of
conversion/exercise. Diluted adjusted earnings per share does take into
account the impact of this instrument as shown in the table above setting out
the weighted average number of shares. Due to the loss incurred in the year,
in calculating the diluted loss per share, the share options, warrants and
preferred equity are considered to be non-dilutive.
5. Rates of exchange
2025 2024
Average Year end Average Year end
Australia - AUD 1.9629 2.0545 1.9134 1.9369
Europe - EUR 1.1906 1.1903 1.1594 1.1690
United States - USD 1.2792 1.2946 1.2577 1.2626
Turkey - TRY 44.0275 49.1910 34.4101 40.8163
6. Net Debt
Analysis of net debt
Reconciliation of movements in the Group's net debt position:
Group At Cash flow Non-cash movement Exchange movement At
on inception
31 March 2024
of leasing contract Other non-cash changes 29 March 2025
expenditure
Disposals Acquisitions
£m £m £m £m £m £m
Cash and cash equivalents 94.8 (14.6) - (1.7) 0.8 - (1.7) 77.6
Bank overdraft (7.5) (1.8) - - - - 0.1 (9.3)
Net cash and cash equivalents 87.2 (16.5) - (1.7) 0.8 - (1.6) 68.3
Bank overdraft (14.4) 2.7 - - - - - (11.7)
Senior secured debt (gross of prepaid finance costs):
- due in less than one year - - - - - - - -
- due in more than one year (639.6) - - - - 1.4 11.3 (627.0)
Bank loans and other facilities (gross of prepaid finance costs):
- Other bank loans and facilities due in less than one year (72.4) (51.4) - 20.0 (0.7) (11.9) 1.2 (115.0)
- Other bank loans and facilities due in more than one year (38.8) - - - - 12.0 0.7 (26.2)
Net debt (678.0) (65.1) - 18.3 0.1 1.5 11.5 (711.6)
Obligations under right-of-use leases:
- due in less than one year (31.2) 39.8 (46.1) 1.4 - 5.4 0.7 (30.0)
- due in more than one year (136.5) - - - - (25.0) 1.6 (159.9)
Preferred equity (gross of prepaid finance costs) (286.6) - - - - 1.0 - (285.6)
Prepaid finance costs in relation to senior debt:
- due in less than one year - 0.2 - - - 0.4 - 0.6
- due in more than one year 5.7 - - - (2.6) - 3.0
Financing liabilities (1,213.8) (8.8) (46.1) 21.5 (0.7) (19.3) 15.5 (1,251.8)
Net debt including right-of-use lease liabilities, issue premia, preferred (1,126.6) (25.2) (46.1) 19.8 0.1 (19.3) 13.9 (1,183.5)
equity and prepaid finance costs
7. Discontinued operations and subsidiary disposals
Discontinued operations
On 28 September 2024, the Group committed to a plan to dispose of B3 Ceramics
Danismanlik ("Graniser") following the negative impact of instability in
several of its key markets. Graniser is a specific business segment within the
UK & Europe - Ceramic Tiles (Spain / Turkey CGU).
The sale of the Graniser discontinued operation completed on 18 November 2024;
the buyer was Mr Hasan Akgün. Total consideration paid by Mr Hasan Akgün was
€10.0 million (£8.3m) cash on completion.
As a result, the operations of Graniser have been classified as discontinued
operations in accordance with IFRS 5. The results of the discontinued
operations are summarised below:
52 weeks ended 29 March 2025*
Underlying Non- Reported
performance
underlying
numbers
items
Income statement - Graniser £m £m £m
Revenue 16.1 0.8 16.9
Cost of sales (16.5) (3.2) (19.7)
Gross profit (0.4) (2.4) (2.8)
Distribution and administrative expenses (2.7) (21.0) (23.7)
Operating loss (3.1) (23.4) (26.5)
Finance costs (4.8) (2.5) (7.3)
loss before tax (7.9) (25.9) (33.8)
Taxation credit 1.6 0.2 1.8
Loss after tax (6.3) (25.7) (32.0)
Gain on disposal of subsidiaries - 7.2 7.2
Loss from discontinued operations for the period (6.3) (18.5) (24.8)
52 weeks ended 30 March 2024
Underlying Non- Reported
performance
underlying
numbers
items
Income statement - Graniser £m £m £m
Revenue 30.5 8.8 39.3
Cost of sales (27.4) (17.0) (44.4)
Gross profit 3.1 (8.2) (5.1)
Distribution and administrative expenses (2.7) 20.6 17.9
Other operating income 0.1 - 0.1
Operating profit 0.5 12.4 12.9
Finance costs (4.8) (22.2) (27.0)
loss before tax (4.3) (9.8) (14.1)
Taxation credit / (charge) 3.6 (1.9) 1.7
Loss after tax (0.7) (11.7) (12.4)
Loss from discontinued operations for the period (0.7) (11.7) (12.4)
* The Graniser group results in the 52 weeks ended 29 March 2025 are only
included here up to the 18 November 2024 - their date of disposal.
Details of the sale of the discontinued operations
£m
Total disposal consideration, net of cash held 7.9
Carrying amount of net assets sold (9.3)
Loss on sale before income tax and reclassification of foreign currency (1.4)
translation reserve
Reclassification of foreign currency translation reserve 8.6
Income tax expense on gain -
Gain on sale after income tax 7.2
Assets and liabilities of discontinued operations
The carrying amount of assets and liabilities as at the date of sale were as
follows:
18 November 2024
£m
Intangible assets other than goodwill 4.3
Property, plant and equipment 9.7
Right-of-use lease assets 2.6
Inventories 17.5
Trade and other receivables 11.4
Total assets 45.5
Trade and other current payables (10.1)
Obligations under right-of-use leases - current (0.7)
Other financial liabilities (20.0)
Trade and other non-current payables (0.1)
Obligations under right-of-use leases - non-current (1.8)
Retirement benefit obligations (3.5)
Total liabilities (36.2)
Total net assets 9.3
7. Post Balance Sheet Event
Balta restructuring
Balta announced on June 12 2025 that, due to ongoing demand and cost pressures
on its rug business, the continuation of large-scale woven rug production at
Belgian locations has become financially unviable.
As a result, Balta intends to cease yarn production and the weaving and
finishing of woven rugs at its sites in Sint-Eloois-Vijve and
Sint-Baafs-Vijve.
The proposed restructuring is expected to result in the phased redundancy of
467 blue-collar and 62 white-collar employees over the next eighteen months,
with select operations transferring to existing facilities in Turkey.
Lamination and finishing of tufted rugs will continue in Belgium, along with
most administrative support functions. Additionally, the Sint-Baafs-Vijve
facility will continue to function as a central distribution hub within
Europe.
8. Basis of Preparation
This results announcement for the period ended 29 March 2025 was approved by
the Board on 24 July 2025. Whilst the financial information included in this
statement is derived from the Annual Report & Accounts for the period
ended 29 March 2025 (including the comparatives for the period ended 30 March
2024), it does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006.
The Annual Report & Accounts for the period ended 29 March 2025 (including
the comparatives for the period ended 30 March 2024) were also approved and
authorised for issue by the Board of Directors on 24 July 2025. The auditor
has reported on those accounts; its report was (i) unmodified; and (ii) did
not contain a statement under section 498 (2) or (3) of the Companies Act
2006. The auditor's report on those accounts includes a section setting out
that there is a material uncertainty relating to events or conditions that may
cast significant doubt on the Group and Parent Company's ability to continue
as a going concern. Notwithstanding this material uncertainty, the Directors
consider it remains appropriate to continue to adopt the going concern basis
in the preparation of the financial statements.
The Annual Report & Accounts for the period ended 29 March 2025 will be
delivered to the registrar of companies and posted to shareholders in due
course. Further copies will be available from the Company's Registered Office:
Worcester Six Business Park, Worcester, Worcestershire, WR4 0AN or via the
website: www.victoriaplc.com
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