REG - Victoria PLC - Divestment of B3 Ceramics Danismanlik (“Graniser”)

VictoriaAnnouncement

19/11/2024 07:00

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RNS Number : 7690M  Victoria PLC  19 November 2024

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

Victoria PLC

('Victoria' or the 'Group')

 

Divestment of B3 Ceramics Danismanlik ("Graniser")

Leverage & Earnings enhancing

Continuity of tile supply

 

Victoria PLC, (LSE: VCP) the international designers, manufacturers and
distributors of innovative flooring, announces that it has sold Graniser, the
Group's ceramic tile manufacturer based in Izmir, Turkey.

 

Key terms and rationale for the Sale

 

 •    Total consideration paid by the buyer, Mr Hasan Akgün, was €36.8 million
      (£30.9m(1)) paid as to €10.0 million (£8.4 m(1)) cash on completion, plus
      the assumption of €26.8 million (c. £22.5m(1)) of net debt.

 •    A long-term supply agreement for the supply of Victoria Group-specific ceramic
      tiles at manufactured-cost pricing, which is expected to positively impact
      Victoria's earnings.

 •    Graniser has been negatively impacted by recent instability in several of its
      key markets, and for the 12 months ended 30 March 2024, Graniser generated
      audited underlying revenues of TL994.8 million (c. £30.1m(2)) and underlying
      EBITDA of TL13.4 million (c. £0.9m(2)). Net assets as per the Group's
      accounts was TL632.4 million (£13.7m(2)).

 •    Mr Akgün is the CEO of Duratiles, and a member of the highly respected Akgün
      family, who established Akgün Group in 1925. The Akgün Group operates in
      construction materials, automotive, insurance, logistics and oil sectors
      across Turkey and internationally. Whilst remaining family-owned, it is now
      one of the largest companies in Turkey with 5,000 employees and 17 factories.

 •    Victoria's original investment case for the acquisition of Graniser was the
      diversification of the Group's ceramic tiles manufacturing footprint into a
      lower energy, labour, and raw material price environment. With the long-term
      manufactured-cost supply agreement this thesis remains wholly intact with the
      sale of the business - but with the advantage of freeing up capital for
      deployment elsewhere in the balance sheet.

 

Philippe Hamers, Group Chief Executive of Victoria, commented:

"Having experienced a difficult demand environment recently, the sale of
Graniser to, and partnership with, Mr Akgün will provide Victoria's ceramic
tiles business continued access to cost-effective tiles whilst contributing
towards the deleveraging of the Group's balance sheet by reducing leverage by
approximately 0.5 times.

 

"For the avoidance of doubt, the sale of Graniser will have no impact on our
other Turkish businesses, which employ 900 people extruding synthetic fibre
for our soft flooring factories, and manufacturing rugs for export to Europe
and the United States, and remain an important part of the Group."

 

The person responsible for arranging the release of this announcement

on behalf of the Company is Brian Morgan, Chief Financial Officer.

 

Notes

(1)Converted to GBP at a rate of 1.19 GBP/EUR.

(2)Average GBP/TL conversion rate of 34.41

 

For more information contact:

 

 Victoria PLC                                                                   www.victoriaplc.com/investors-welcome

                                                                              (http://www.victoriaplc.com/investors-welcome)
 Geoff Wilding, Executive Chairman

                                                                              Via Walbrook PR
 Philippe Hamers, Group Chief Executive

 Brian Morgan, Chief Financial Officer

 Singer Capital Markets (Nominated Adviser and Joint Broker)                    +44 (0)20 7496 3095

 Rick Thompson, Phil Davies, James Fischer

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

 Ben Wright, Richard Bootle

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

 Paul McManus, Louis Ashe-Jepson,              +44 (0)7980 541 893 / +44 (0)7747 515 393 /

 Alice Woodings                                +44 (0)7407 804 654

 Edelman Smithfield (Refinancing Project)

 Alex Simmons                                  +44 (0)7970 174 353

 

 

About Victoria PLC (www.victoriaplc.com (http://www.victoriaplc.com) )

 

Established in 1895 and listed since 1963 and on AIM since 2013 (VCP.L),
Victoria PLC, is an international manufacturer and distributor of innovative
flooring products. The Company, which is headquartered in Worcester, UK,
designs, manufactures and distributes a range of carpet, flooring underlay,
ceramic tiles, LVT (luxury vinyl tile), artificial grass and flooring
accessories.

 

Victoria has operations in the UK, Spain, Italy, Belgium, the
Netherlands, Germany, Turkey, the USA, and Australia and employs
approximately 6,300 people across more than 30 sites. Victoria is Europe's
largest carpet manufacturer and the second largest in Australia, as well as
the largest manufacturer of underlay in both regions.

 

The Company's strategy is designed to create value for its shareholders and is
focused on consistently increasing earnings and cash flow per share via
acquisitions and sustainable organic growth.

 

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