RNS Number:5520M
Victoria PLC
23 November 2006
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Thursday, 23 November 2006
Embargoed: 7.00am
Victoria P.L.C.
Manufacturers of Carpet and Carpet Yarns
Interim Results
6 months ended 30 September 2006
2006 2005
Revenue #27.03m #26.02
Net Profit #1.00m #0.98m
EPS 10.69p 10.07p
Free Cash Flow #1.04m
Net Assets per share #3.94
Renewed 5-year distribution contract with The John Lewis Partnership
Creditable performance from UK & Irish business reflecting improvement in
revenues and profits
Innovative and contemporary value for money products help to improve overall UK
market share whilst Australian position maintained in a changing market
landscape
"Despite an extremely challenging first six months, we have adapted relatively
well to both the economic environment and to the market conditions prevailing in
each of our core market areas.
"The Group will continue to remain focused on developing exciting new products
that meet the ever-changing customer needs and that complement modern interior
styling.
"Whilst early indications are that the Autumn trading season has started well
and we have been encouraged by trading levels to date, the remainder of our
financial year will likely remain challenging.
"The benefits of product innovation, a focus on customer service and a drive for
business improvement should flow through into a better second half performance."
Bob Gilbert, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Alan Bullock, Group Managing Director Fiona Tooley / Katie Dale
Victoria P.L.C. Citigate Dewe Rogerson
Tel: +44 (0)1562 749640 Tel: +44 (0)121 455 8370
Mobile: +44 (0)7785 325701 (AB) Mobile: +44 (0)7785 703523 (FMT)
This announcement, together with other information on Victoria P.L.C. may be
found at: www.victoria.plc.uk.
-2-
Interim Results
6 months ended 30 September 2006
CHAIRMAN'S STATEMENT
INTRODUCTION
Despite an extremely challenging first six months, I am pleased to report that
we have adapted relatively well to both the economic environment and to the
market conditions prevailing in each of our core market areas.
FINANCIALS
Group revenue at #27.03 million, is up by 3.87% in the period compared to last
year. Overall, Operating profit of #1.29 million was marginally down from #1.35
million, whilst Net profit was up by 2.67% to #1.00 million from #0.98 million
in 2005.
EBITDA in the period being reported was #2.50 million and the Earnings per share
increased 6.16% from 10.07 pence to 10.69 pence per share.
UNITED KINGDOM & IRELAND
Despite the retail sector in the UK and Ireland remaining tough and the long hot
summer which was hardly conducive to improving the sales of floor coverings; our
sales were up by a creditable 6.97% on a like-for-like basis in the 26 weeks
trading period to the end of September 2006.
Revenue increased from #14.32 million to #15.32 million whilst Operating profit
was up 54.39% from #0.35 million to #0.54 million and Profit before tax by
116.50% from #0.17 million to #0.36 million.
We are always conscious of an ever-changing consumer environment and have
concentrated our efforts on continuing to introduce innovative, contemporary and
value for money products. This focus has enabled us to grow our share of a UK
market that has been flat at best by 9.6% in volume and 7.10% in value terms. In
Ireland too, sales were 23.44% higher in volume and 16.50% in value, with
Munster Carpets in particular exploiting a stronger contract market. Whilst the
Irish residential market continued to mirror the tough UK market, Navan Carpets
also managed to achieve a moderate growth in performance.
During the period, Victoria signed a new five year contract with The John Lewis
Partnership to continue to warehouse, cut, wrap and distribute all of JLP's
own-label and stocked carpet ranges throughout their stores in the UK. Victoria
is rightly proud of its long association with the Partnership and to share in
the success they continue to enjoy on the High Street.
The patterning and point of sale display material that Victoria continues to
place in the market in both the UK and Ireland should further increase our brand
recognition and drive sales through existing and newly established sales
channels.
AUSTRALIA
The general economic conditions, weaker consumer spending and a stagnant housing
market in Australia, combined with the demise of the second largest Australian
manufacturer, Feltex Carpets, have presented us with an interesting challenge in
the first six months of this financial year.
Our clear strategy during the past 18 months or so in this changing market
landscape has been to maintain market share and to position ourselves as well as
possible for the more stable market conditions which we hope will now prevail as
a result of the likely acquisition of the assets of Feltex by the manufacturer
Godfrey Hirst.
continued...
-3-
Victoria is now the second largest player in the Australian carpet market and we
are very well placed to exploit that position in what we hope will be calmer and
better times in the market.
Our Sales revenue in dollar terms was up by 3.20% to A$28.76 million, although
it was similar to the comparable period last year in Sterling terms due to a
weaker Australian Dollar exchange rate (A$2.3822 in 2005 v A$2.4565 in 2006).
Operating profit was down from #1.21 million to #0.92 million (-23.53%)
reflecting, as we have already highlighted, the aggressive pricing competition
seen in the market place together with the higher patterning spend we have made
to position ourselves with the innovative new products necessary to further
build our market share. As a result, Profit before tax was affected, down from
#1.08 million to #0.79 million.
CANADA
Our Canadian Associate, Colin Campbell continues to perform well and their sales
were up 8.14% from C$3.97 million to C$4.29 million in the period under review.
Campbells contributed #78,000 to Group profits in the six months compared to
#45,000 in the corresponding period last year.
PROPERTY
The task of disposing of the Group's former Sports field in Kidderminster is
progressing well, with a detailed Planning Application submission to the Local
Authorities planned for early 2007 for a hotel, public house / restaurant and
indoor / outdoor bowling club development.
PROSPECTS
The Group will continue to remain focused on developing exciting new products
that meet the ever-changing customer needs and that complement modern interior
styling. This, coupled with a passion for customer service will increasingly
enable us to set ourselves apart from our competitors and continue to increase
market share.
Whilst early indications are that the Autumn trading season has started well and
we have been encouraged by trading levels to date, the remainder of our
financial year will likely remain challenging.
However, it is our belief that, with the new products already launched and
further new and innovative products still to come to market, we will continue to
make progress.
The benefits of product innovation, a focus on customer service and a drive for
business improvement should flow through into a better second half performance.
R. M. Gilbert
Chairman
-4-
Victoria P.L.C.
Consolidated Income Statement
For the half-year ended 30 September 2006 (unaudited)
Notes Half-year Half-year Year
ended ended ended
30 September 1 October 1 April
2006 2005 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Continuing operations
Revenue 3 27,026 26,019 52,288
Cost of sales (19,288) (18,619) (37,566)
-----------------------------------
Gross profit 7,738 7,400 14,722
Distribution costs (5,459) (5,123) (9,770)
Administrative expenses (1,531) (1,492) (3,007)
Restructuring costs - - (188)
Other operating income 537 563 921
-----------------------------------
Operating profit 3 1,285 1,348 2,678
Share of results of
associated Company 78 45 73
Finance costs (362) (418) (740)
-----------------------------------
Profit before tax 1,001 975 2,011
Tax 4 (259) (276) (393)
-----------------------------------
Profit for the period
from continuing
operations 742 699 1,618
Discontinued operations
Profit/(loss) for the period from - - -
discontinued operations
-----------------------------------
Profit for the period 742 699 1,618
===================================
Attributable to:
Equity holders of the
parent 742 699 1,618
===================================
Earnings per share
From continuing operations
Basic 5 10.69p 10.07p 23.30p
===================================
Diluted 5 10.69p 10.07p 23.30p
===================================
From continuing and discontinued
operations
Basic 5 10.69p 10.07p 23.30p
===================================
Diluted 5 10.69p 10.07p 23.30p
===================================
-5-
Victoria P.L.C.
Consolidated Statement of Recognised Income and Expense
For the half-year ended 30 September 2006 (unaudited)
Half-year Half-year Year
ended ended ended
30 September 1 October 1 April
2006 2005 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Exchange differences on
translation of foreign
operations (402) 704 83
-------------------------------------------
Net (loss)/income
recognised directly in
equity (402) 704 83
Profit for the period 742 699 1,618
-------------------------------------------
Total recognised income
and expense for the period 340 1,403 1,701
===========================================
Attributable to:
Equity holders of the
parent 340 1,403 1,701
===========================================
-6-
Victoria P.L.C.
Consolidated Balance Sheet
For the half-year ended 30 September 2006 (unaudited)
30 September 1 October 1 April
2006 2005 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Non-current assets
Intangible assets 504 532 527
Property, plant and equipment 23,275 24,321 24,172
Investment property 180 180 180
Interests in associates 507 431 440
Deferred tax assets 646 638 659
------------------------------------------
Total non-current assets 25,112 26,102 25,978
------------------------------------------
Current assets
Inventories 15,406 16,362 16,110
Trade and other receivables 11,182 9,870 10,215
Cash and cash equivalents 633 772 234
------------------------------------------
Total current assets 27,221 27,004 26,559
------------------------------------------
Total assets 52,333 53,106 52,537
==========================================
Current liabilities
Trade and other payables 8,849 9,017 8,505
Current tax liabilities 977 732 961
Finance liabilities 7,264 7,094 7,551
------------------------------------------
Total current liabilities 17,090 16,843 17,017
------------------------------------------
Non-current liabilities
Trade and other payables 976 1,211 1,090
Financial liabilities 5,154 5,539 4,849
Deferred tax liabilities 1,764 2,000 1,774
------------------------------------------
Total non-current liabilities 7,894 8,750 7,713
------------------------------------------
Total liabilities 24,984 25,593 24,730
==========================================
Net assets 27,349 27,513 27,807
==========================================
Equity
Issued share capital 1,736 1,736 1,736
Share premium account 829 829 829
Retained earnings 24,784 24,948 25,242
------------------------------------------
Equity attributable to
equity holders of the parent 27,349 27,513 27,807
------------------------------------------
Total equity 27,349 27,513 27,807
==========================================
-7-
Victoria P.L.C.
Consolidated Cash Flow Statement
For the half-year ended 30 September 2006 (unaudited)
Notes Half-year Half-year Year
ended ended ended
30 September 1 October 1 April
2006 2005 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Net cash from operating
activities 6a) 1,552 1,763 2,957
---------------------------------------
Investing activities
Dividends received from
associates - - 23
Purchases of property,
plant and equipment (527) (1,130) (2,773)
Proceeds on disposal of
property, plant and
equipment 19 398 435
---------------------------------------
Net cash used in
investing activities (508) (732) (2,315)
---------------------------------------
Financing activities
Increase / (decrease)
in long-term loans 663 727 (73)
Receipts from financing
of assets 339 60 639
Payment of finance lease and HP
liabilities (564) (644) (934)
Dividends paid (799) (799) (799)
---------------------------------------
Net cash from/(used in)
financing activities (361) (656) (1,167)
---------------------------------------
Net increase/(decrease)
in cash and cash
equivalents 683 375 (525)
Cash and cash
equivalents at
beginning of period (6,363) (5,827) (5,827)
Effect of foreign
exchange rate changes 13 (11) (11)
---------------------------------------
Cash and cash
equivalents at end of
period 6b) (5,667) (5,463) (6,363)
=======================================
-8-
Notes to the Interim Financial Statements
For the half-year ended 30 September 2006 (unaudited)
1. General information
The information for the year ended 1 April 2006 does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985. A copy of the
statutory accounts for that year has been delivered to the Registrar of
Companies. The Auditors' report on those accounts was unqualified.
These interim financial statements, which were approved by the Board of
Directors on 22 November 2006, have been prepared in accordance with IAS 34.
They have not been audited or reviewed by the Auditors.
2. Accounting policies
The Company issued an announcement on 11 November 2005 entitled "Adoption of
International Financial Reporting Standards (IFRS), Restatement of Financial
Information". This document can be viewed on the Company's website
www.victoria.plc.uk.
The document includes a description of the significant accounting polices to be
adopted under IFRS. These interim financial statements have been prepared using
those accounting policies and methods of computation.
3. Business segments
For management purposes, the Group is organised into three operating divisions
according to the geographical areas where they are managed. These divisions are
the basis on which the Group reports its primary segment information. The three
divisions are UK & Ireland, Australia and the Canadian Associate.
Segment information for revenue, operating profit and a reconciliation to entity
net profit is presented below.
Half-year ended 30 September 2006 Half-year ended 1 October 2005
Revenue Operating Finance Profit Revenue Operating Finance Profit
#'000 profit charges before #'000 profit charges before
#'000 #'000 tax #'000 #'000 tax
#'000 #'000
----------------------------------------------------------------------------------------------------
UK & Ireland 15,320 545 (177) 368 14,322 353 (183) 170
Australia 11,706 923 (131) 792 11,697 1,207 (129) 1,078
Canada - - - 78 - - - 45
----------------------------------------- ----------------------------------------
Sub total 27,026 1,468 (308) 1,238 26,019 1,560 (312) 1,293
Central - (183) (54) (237) - (212) (106) (318)
costs
----------------------------------------- ----------------------------------------
Total
continuing
operations 27,026 1,285 (362) 1,001 26,019 1,348 (418) 975
============================== ================================
Tax (259) (276)
------ ------
Profit after
tax from
continuing
activities 742 699
Profit for the period from discontinued - -
operations ------ ------
Profit after
tax and
discontinued
operations 742 699
====== ======
continued...
-9-
4. Tax charge
Half-year Half-year
ended ended
30 September 2006 1 October 2005
#'000 #'000
--------------------------------------------------------------------------------
Current tax:
UK corporation tax (13) (66)
Foreign tax 272 335
----------------------------------
259 269
Deferred tax:
Current year - 7
----------------------------------
259 276
==================================
Continuing operations 259 276
Discontinued operations - -
----------------------------------
259 276
==================================
Corporation tax for the interim period is charged at 28.1% (2005: 29.7%),
representing the best estimate of the weighted average annual corporation tax
rate expected for the full financial year.
5. Earnings per share
The calculation of the basis and diluted earnings per share is based on the
following data:
Number of shares
Half-year Half-year
ended ended
30 September 1 October
2006 2005
--------------------------------------------------------------------------------
Weighted average number of ordinary
shares for the 6,943,556 6,943,556
purposes of basic earnings per share
Effect of dilutive potential ordinary shares:
Share options - -
=============================
Weighted average number of ordinary
shares for the 6,943,556 6,943,556
purposes of diluted earnings per share
=============================
continued...
-10-
Earnings and earnings per share
Half-year ended Half-year ended
30 September 2006 1 October 2005
Earnings EPS Earnings EPS
#'000 pence #'000 pence
--------------------------------------------------------------------------------
Profit for the period from continuing
operations 742 10.69 699 10.07
Profit for the period from discontinued - - - -
operations
-------------------------------------
Profit for the period from continuing 742 10.69 699 10.07
and discontinued operations
=====================================
Earnings per share
- basic continuing 10.69 10.07
- basic discontinued - -
-------- --------
- basic 10.69 10.07
======== ========
- diluted 10.69 10.07
======== ========
The effect of dilutive shares on the earnings for the purposes of diluted
earnings per share is #nil (2005: #nil).
The denominators used for all basic, diluted and adjusted earnings per share are
as detailed in the "Number of shares" table above.
6. Notes to the cash flow statement
a) Reconciliation of operating profit to net cash from operating activities
Half-year Half-year Year
ended ended ended
30 September 1 October 1 April
2006 2005 2006
#'000 #'000 #'000
--------------------------------------------------------------------------------
Operating profit from
continuing operations 1,285 1,348 2,678
Discontinued operations profit - - -
before tax
Adjustments for:
- Depreciation of
property, plant and equipment 1,121 1,118 2,293
- Amortisation of
intangible assets 14 13 27
- (Profit) / loss on
disposal of property, plant (5) (39) (55)
and equipment
- Exchange rate difference
on consolidation (197) 296 36
- Business reorganisation
costs - - 188
----------------------------------------
Operating cash flows
before movements in
working capital 2,218 2,736 5,167
Increase in working
capital (59) (424) (1,093)
----------------------------------------
Cash generated from operations 2,159 2,312 4,074
Interest paid (390) (418) (740)
Income taxes
(paid)/received (217) (131) (377)
----------------------------------------
Net cash from operating
activities 1,552 1,763 2,957
========================================
continued...
-11-
b) Analysis of net debt
At At
1 April Cash Non-cash Exchange 30 September
2006 flow Items Movement 2006
#'000 #'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
Cash 234 393 - 6 633
Overdrafts (6,597) 290 - 7 (6,300)
-----------------------------------------------------
Cash and cash
equivalents (6,363) 683 - 13 (5,667)
Secured commercial
bills
Payable more
than one year (2,261) (799) - 64 (2,996)
Finance leases and hire
purchase agreements
Payable less
than one year (899) 564 (611) 8 (938)
Payable more
than one year (2,100) (339) 611 9 (1,819)
Bank loans
Payable more
than one year (488) 135 - 14 (339)
-----------------------------------------------------
Total (12,111) 244 - 108 (11,759)
=====================================================
7. Exchange rates
The results of overseas subsidiaries and associated undertakings have been
translated into Sterling at the average exchange rates prevailing during the
periods. The balance sheets are translated at the exchange rates prevailing at
the period ends:
Half-year Half-year Year
ended ended ended
30 September 2006 1 October 2005 1 April 2006
--------------------------------------------------------------------------------
Australia - average rate 2.4565 2.3822 2.3730
Australia - period end 2.5031 2.3167 2.4326
Euro - average rate 1.4577 1.4666 1.4623
Euro - period end 1.4746 1.4673 1.4333
Canadian dollar - average rate 2.0676 2.2146 2.1276
Canadian dollar - period end 2.0840 2.0532 2.0235
This information is provided by RNS
The company news service from the London Stock Exchange
END
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