RNS Number:5726U
Victoria PLC
23 November 2000
Victoria P.L.C.
Interim Results
for the six months to 30 September 2000
Strategy of targeting independent retailers coupled with very strong product
portfolio reflected in the Group's first half performance
* Turnover increased to #18.5 million + 9%
* Operating profits #809,000 +21%
* Exceptional profit on property sale #2.16 million
* Profit before taxation and exceptional items #744,000 +54%
* Underlying Earnings per share 7.36p +64%
* Benefits from site consolidation now coming through
* Property disposal completed and special interim dividend of 15p paid
* #2.4m investment programme in Australia is proceeding to plan
"In the UK, we should see the full benefits flowing through from
consolidating our carpet manufacturing business onto one operational site, as
well as seeing the new products introduced in the first half year
contributing well to our business.
"In Australia, the last quarter of our year should see the additional
investment made in yarn spinning at Castlemaine feeding through.
"Overall, we see an uncertain six months ahead within the two principal
markets of the UK and Australia. However, against these uncertainties, we
believe that we are very well placed to exploit both of these markets to the
full and to continue to push ahead with the development of the
business." R.M. Gilbert, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Alan Bullock, Group Managing Director
Mark Lee, Group Finance Director Fiona Tooley
Victoria P.L.C. Citigate Dewe Rogerson
Today: 020 7 282 8000 (8.00am - 2.00pm) Today: 020 7282 8000
Thereafter: 01562 749300 Thereafter: 0121-631 2299
Mobile: 07785 325701 (Alan Bullock) Mobile: 07785 703523
Mobile: 07887 753206 (Mark Lee)
Victoria P.L.C.
Interim Results
for the six months to 30 September 2000
STATEMENT BY THE CHAIRMAN, R.M. GILBERT
RESULTS
In the six months to 30 September 2000, the Group is able to report a return
to growth in sales turnover and a continuing growth in both profits and
earnings.
Turnover, at #18.47 million, is 9.3% higher than the first half of last year,
due principally to the success of the Group's new products. Operating profits
are 20.6% higher, at #809,000 compared to #671,000 last year. An exceptional
profit of #2.16 million arose on the sale of property. Excluding exceptional
income, pre-tax profits increased to #744,000 (September 1999: #482,000) and
earnings per share increased by 64% to 7.36 pence (September 1999: 4.49
pence).
UNITED KINGDOM
In a home market which remained subdued, our strategy of targeting
independent retailers, coupled with a very strong product portfolio, enabled
us to capture further market share. Our sales to the Independent sector now
account for 60% of UK sales.
The success of our Tudor Twist range was recognised by the Industry which
voted the range the Best Tufted Product 2000.
Export business remained difficult where the strength of Sterling against the
Euro and strong price competition continue to be challenging. However,
against this backdrop, we did manage to increase our export sales turnover
significantly, although margins were not as good as we might have hoped for.
Westwood Yarns continued to perform well. Well targeted capital expenditure
in mid-1999 increased capacity at the plant and enabled us to produce 7% more
yarn in the first half of this year than in the comparable period last year.
The benefits of the consolidation of carpet manufacturing onto the single
site in Kidderminster have also started to come through. These, together with
increased turnover, have produced a result in UK manufacturing somewhat
better than market conditions might have suggested. As a result, overall
profits from the UK operations are substantially higher than in the first
half of last year.
AUSTRALIA
The strong trading in the second half of the previous financial year
continued into the first quarter of this year. The second quarter, as
anticipated, saw the negative impact of the new Goods and Services Tax and a
fall-off in sales during September when the country was preoccupied by the
Olympics.
Against this background, we produced a creditable performance in our carpet
manufacturing division at Dandenong, increasing sales by 8%, accompanied by
an increase in profitability.
At the yarn spinning division in Castlemaine, the investment programme to
increase spinning capacity by approximately 50% is proceeding to plan, with
all of the new equipment installed. Management at the plant has been
strengthened and recruitment, training and commissioning are now underway.
However during the period, the plant suffered some disruption, resulting in
lower than planned output and profitability.
Overall, the pre-tax profit of the Australian business is 14% lower than in
the corresponding period last year in Australian dollars, and 20% lower in
Sterling.
CANADA
The Canadian market in which our 50% associate, Colin Campbell & Sons,
operates remained active. In the six month period, Campbells contributed
#34,000 to Group profit before tax compared to #18,000 in the corresponding
period last year.
PROPERTY
The sale of the property at Green Street, Kidderminster was completed in the
period and gave rise to an exceptional profit of #2.16 million. The special
interim dividend of 15 pence per share was paid in July 2000 returning #1.04
million to shareholders.
PROSPECTS
The prospects in the UK are difficult to project. The level of housing
activity, both in new build and moves, appears to have fallen back from the
levels seen both last year and earlier this year and at the moment there is a
fair degree of uncertainty about the economy both in the UK and overseas.
The market, which had been subdued throughout the year up to October, has
seen the traditional improvement expected in the autumn, although this has
perhaps been later than normal in starting.
Similarly, our key export markets within the EC continue to suffer from a
weak currency, disadvantaging us and other UK manufacturers.
In the UK, we should see the full benefits flowing through from consolidating
our carpet manufacturing business onto one operational site, as well as
seeing the new products introduced in the first half year contributing well
to our business.
The Australian market has not yet picked up after the dips caused by the July
imposition of the Goods and Services Tax and the disruption of the Olympics.
A reduced level of construction activity is also forecast for 2001, which may
affect the demand for carpets.
In Australia, the last quarter of our year should see the additional
investment made in yarn spinning at Castlemaine feeding through.
Overall, we see an uncertain six months ahead within the two principal
markets of the UK and Australia. However, against these uncertainties, we
believe that we are very well placed to exploit both of these markets to the
full and to continue to push ahead with the development of the business.
Victoria P.L.C.
Interim Results for the six months to 30 September 2000
GROUP PROFIT AND LOSS ACCOUNT
Six months to Six months to Year to
30 September 2000 2 October 1999 1 April 2000
Unaudited Unaudited Audited
Note #'000 #'000 #'000
Turnover 18,471 16,901 35,610
Cost of sales 13,352 12,188 25,145
Gross profit 5,119 4,713 10,465
Distribution costs 3,228 3,084 5,975
Administration costs 1,139 1,086 2,397
Other operating income 57 128 329
Operating profit 809 671 2,422
Exceptional items 2,164 142 363
Interest payable 98 204 355
Share of profits of 33 15 41
associated undertaking
Profit on ordinary 2,908 624 2,471
activities before
taxation
Taxation on profits on 236 217 793
ordinary activities
Profit for the period 2,672 407 1,678
Dividends 1,046 - 377
Retained earnings 1,626 407 1,301
Earnings per share
- basic 2 38.68p 5.94p 24.46p
- diluted 38.50p 5.90p 24.25p
- excluding 7.36p 4.49p 20.54p
exceptional items
Dividends per 15.0p - 5.50p
share 3
Victoria P.L.C.
Interim Results for the six months to 30 September 2000
CONSOLIDATED BALANCE SHEET
30 September 2000 2 October 1999 1 April 2000
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets
Tangible assets 16,165 13,762 14,749
Investment in 244 212 230
associated undertaking
16,409 13,974 14,979
Current assets
Stock 8,216 8,849 9,320
Debtors 6,446 6,066 7,291
Cash 330 229 263
14,992 15,144 16,874
Less: current
liabilities
Creditors due within 8,307 8,973 10,586
one year
Net current assets 6,685 6,171 6,288
Total assets less 23,094 20,145 21,267
current liabilities
Less: Creditors due 2,698 1,965 2,355
after one year
Provision for 810 691 789
liabilities and charges
Net assets 19,586 17,489 18,123
Capital and reserves
(equity)
Share capital 1,736 1,715 1,715
Share premium account 829 749 749
Revaluation reserve 2,043 3,006 2,705
Profit and loss account 14,978 12,019 12,954
Total shareholders' 19,586 17,489 18,123
funds
Victoria P.L.C.
Interim Results for the six months to 30 September 2000
CONSOLIDATED CASH FLOW STATEMENT
Six months to Six months to Year to
30 September 3 October 1999 1 April 2000
2000
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating profit 809 671 2,422
Depreciation charges 632 556 1,155
Profit on sale of fixed - (61) (26)
assets
Decrease/(Increase) in 1,964 466 (1,083)
working capital
Exchange rate difference (165) 4 (122)
on consolidation
Net cash inflow/(outflow) 3,240 1,636 2,346
from operating activities
Returns on investment and
servicing of finance
Dividend received from 13 - -
Associate
Interest paid (43) (100) (235)
Hire purchase interest (56) (104) (120)
(86) (204) (355)
Taxation
UK corporation tax (paid) (104) - (384)
Overseas tax paid (249) - (9)
(353) - (393)
Capital expenditure and
financial investment
Payments to acquire (2,978) (1,939) (4,054)
tangible fixed assets
Receipts from sales of 15 67 116
tangible fixed assets
Return of capital in - 19 19
associated undertaking
Receipts from exceptional 2,914 142 631
items
(49) (1,711) (3,288)
Equity dividends paid (1,423) (309) (309)
Financing
Issue of share capital 101 - -
Debt due within one year
Repayment of secured loans - 99 -
Increase in long term (539) 457 489
loans
Capital element of hire (240) (259) (470)
purchase payments
Receipts from financing 1,376 273 1,045
of assets
698 570 1,064
Increase / (decrease) in 2,027 (18) (935)
cash
Victoria P.L.C.
Interim Results for the six months to 30 September 2000
NOTES
1. Basis of preparation
The results for the year ended 1 April 2000 are extracts from the Group
report and accounts as filed with the Registrar of Companies. These were
audited and reported upon without qualification under section 235 of the
Companies Act 1985.
2. Earnings per share
The earnings per share for the year to 1 April 2000 and the 6 month
period to 2 October 1999 are based on 6,860,556 ordinary shares in issue
throughout those periods. The earnings per share for the 6 month period to 30
September 2000 are based on a weighted average of 6,910,265 shares in issue
during the period.
3. Dividends
A special interim dividend of 15 pence per share was paid in July 2000. No
further interim dividend is proposed.
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