REG - Victoria PLC - Full Year Trading Update

VictoriaAnnouncement

12/04/2022 07:00

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RNS Number : 0326I  Victoria PLC  12 April 2022

12 April 2022

For Immediate Release

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,' the 'Company,' or the 'Group')

 

Full Year Trading Update

 

Results Ahead of Market Expectations

 

Victoria PLC, (LSE: VCP) the international designers, manufacturers and
distributors of innovative flooring, is pleased to confirm that the Group's
revenues and underlying profits are expected to be ahead of consensus market
expectations for the financial year ended 2 April 2022. The Group now
expects, subject to finalisation of the accounts and audit, revenues to be in
excess of £970 million (FY21: £662.3m), underlying EBITDA in excess of £155
million (FY21: £127.4m), and underlying EBIT in excess of £100 million
(FY21: £79.8m).

 

Outlook

 

·    Demand strong. Heading into the new financial year, demand for the
Group's products remains robust across our markets, with consistent demand
from consumers driving our retailer channels. Furthermore, the Group is also
witnessing a strong resurgence in commercial demand (hospitality, offices,
leisure, home construction), which is additive to consumer demand.

 

·    Inflation managed. As with all industries, inflation is
self-evidently an important feature of the current operating environment, but
Victoria continues to have the ability to increase selling prices quickly (and
is doing so) to mitigate the impact of inflationary pressures on profits. The
Group remains competitively very well placed in its markets to defend its
position or capitalise on opportunities where gaps appear.

 

·    Supply chain secure. Shareholders may recall that Victoria invested
heavily in raw materials and continuity of operations last year to ensure
production schedules and normal product availability were maintained, despite
the global supply chain disruptions. This established Victoria as a reliable
partner to our customers, when many alternative suppliers had extended
delivery periods (or even no delivery at all), and this reputational
enhancement has led to continued market share gains. Management believes that
the Group's reliability will continue to drive long-term organic growth.

 

As the Group's raw material supply continues to stabilise, and as Victoria's
management gain confidence this is sustainable, the Group intends to return to
normalised quantities of raw materials, thereby releasing additional cash for
further growth investment.

 

·    Acquisitions. Acquisitions remain an integral part of Victoria's
growth strategy and the Board believes that the Group's uniquely proactive
methodology of identifying and executing on opportunities will continue to
deliver value-creating acquisitions. Despite Victoria's significant growth in
recent years, its share of the flooring market remains less than 2% in Europe
and less than 10% in the UK, which leaves very substantial opportunities in
what remains a highly fragmented industry.

 

Share Buybacks & Capital Allocation

 

In recent weeks Victoria's share price has, the Board believes, completely
decoupled from the Group's economic reality. As noted above, ongoing demand
for product remains strong and the Group continues to have the ability to
successfully increase prices to mitigate inflation. Consequently, the Board
decided to deploy a proportion of excess cash to take advantage of the
opportunity to make market purchases of its own shares at levels it believes
are materially below the intrinsic value of the Group, thereby serving
Victoria's mission to create wealth for shareholders.

 

Victoria has become a permanent home of choice for flooring businesses in
Europe and the US, and the Group's potential pipeline of accretive
acquisitions continues to be compelling. As such the recent opportunistic
share repurchases are therefore not the start of a formal and regular
programme to return capital to shareholders as we continue to see significant
short and medium-term organic and acquisitive investment opportunities,
notwithstanding current world events.

 

 

Executive Chairman Geoff Wilding said, "There are operating challenges every
year and FY2023 will be no different. However, we have invested carefully over
the last nine years and Victoria is in a strong position to meet those
challenges and capitalise upon them. As a result, the Board expects EBITDA to
be in excess of £200 million over the coming year."

 

( )

(1) Applying a GBP:EUR exchange rate of 1.18

 

 

The person responsible for arranging the release of this announcement on
behalf of the Company is Michael Scott, Group Finance Director

 For more information contact:

Victoria PLC                                                   +44 (0) 1562 749 610

 Geoff Wilding, Executive Chairman

 Philippe Hamers, Group Chief Executive

 Michael Scott, Group Finance Director

 Singer Capital Markets (Nominated Adviser and Joint Broker)    +44 (0) 207 496 3095

 Rick Thompson, Phil Davies, Alex Bond

 Berenberg (Joint Broker)                                       +44 (0) 203 207 7800

 Ben Wright, Richard Bootle

                                                                +44 (0) 207 418 8900

 Peel Hunt (Joint Broker)

 Adrian Trimmings, Andrew Clark                                 +44 (0) 20 7466 5000

 Buchanan Communications (Financial PR)

 Charles Ryland, Chris Lane, Tilly Abraham

 

About Victoria

 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 Group, which is headquartered in Kidderminster, UK,
 designs, manufactures and distributes a range of carpet, flooring underlay,
 ceramic tiles, LVT (luxury vinyl tile), artificial grass and flooring
 accessories.

 Victoria has operations in the UK, Spain, Italy, Belgium, the Netherlands,
 Turkey, the United States and Australia and employs approximately 4,500 people
 across 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 Group'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. (Further information about
 Victoria can be found on its website, www.victoriaplc.com.)

 

 About Victoria

 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 Group, which is headquartered in Kidderminster, UK,
 designs, manufactures and distributes a range of carpet, flooring underlay,
 ceramic tiles, LVT (luxury vinyl tile), artificial grass and flooring
 accessories.

 Victoria has operations in the UK, Spain, Italy, Belgium, the Netherlands,
 Turkey, the United States and Australia and employs approximately 4,500 people
 across 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 Group'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. (Further information about
 Victoria can be found on its website, www.victoriaplc.com.)

 

 

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