VCP Victoria Plc

RNS Number:4063I
Victoria PLC
09 February 2005


Issued By Citigate Dewe Rogerson, Birmingham
Date: Wednesday, 9 February 2005
                                                               Embargoed: 2.00pm


                                VICTORIA P.L.C.
                   Proposed withdrawal from Axminster weaving


As outlined in our announcements dated 6 September and 24 November 2004, the
Group has for some time experienced market and operational difficulties in its
Axminster manufacturing operation which accounts for 5% of the Group's turnover.
As a result, the future viability of this traditional method of weaving carpets
has been carefully monitored and kept under review by the Board.

We have focused substantial management time and effort, all of which has been
significantly disproportionate to the size of this business in order to try to
restore the fortunes of our Axminster manufacturing which has been part of
Victoria's UK activities for 50 years.

Whilst our Axminster department has contributed towards overheads, it has
remained unprofitable and, despite our best efforts to improve productivity and
to eliminate losses, it has not yet reached break-even. In the year ended March
2004, the Axminster operation had sales of approximately #2.73 million, and
contributed a pre-tax loss of #0.74 million. In the first six months of the
current financial year, Axminster sales totalled #1.68 million with pre-tax
losses of #0.62 million.

Although losses from the Axminster business have been reduced over the last 4
months, the Directors believe that the market for this type of traditionally
woven carpet will not return to historic levels, mainly as a result of a change
in consumer taste, and margins will come under increasing pressure from
manufacturers based within much lower cost economies.

Against this background and subject to the normal regulatory employment and
consultation procedures, the Directors of Victoria P.L.C are proposing to
withdraw from the manufacture of Axminster carpet in the UK. This may result in
the loss of up to 85 jobs at Victoria Carpets Limited in Kidderminster,
Worcestershire.

It is with regret that through this proposed action, the Group is likely to lose
many of the loyal, dedicated and long-serving employees associated with
Axminster production and sales. However, it is crucial, with the ever increasing
demands of the industry and the consumer, that the Group remains fully focused
on its core and profitable Tufted and specialist Wilton weaving businesses which
represents 95% of the Group's overall trading.



continued...

                                      -2-


It is estimated that the proposed Axminster department closure would give rise
to an exceptional cost of some #1.2 million in the year ending 31 March 2005.
However, the Board believes that the elimination of losses and the release of
funds from this activity would have a major positive impact on the Group's
future.

Victoria P.L.C. will continue to focus and build upon its core Tufted business
and its specialist Wilton weaving and remain at the forefront of the UK and
Australian carpet industries through its 655 skilled employees in the Group's
state-of-the-art spinning and tufting plants where we manufacture an excellent
range of products for both the retail and contract markets, backed by high
levels of quality and service.

Group Trading
Trading in the second half of this financial year has continued to remain tough
in the UK. However, balanced by a good contribution still expected from
Australia, the Group's profits and dividend for the year ending March 2005,
before the exceptional closure costs, are expected to be in line with market
expectations.




Enquiries:

Alan Bullock, Group Managing Director
Mark Lee, Group Finance Director               Fiona Tooley, Director
Victoria P.L.C.                                Citigate Dewe Rogerson
Telephone: 01562 749300                        Telephone: 0121 455 8370
Mobile: 07785 325701 (AB)                      Mobile: 07785 703523 (FMT)
www.victoria.plc.uk
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