RNS Number:6671Y
Victoria PLC
20 June 2007
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Wednesday, 20 June 2007
Embargoed: 7.00am
Victoria PLC
Leading manufacturers of high quality carpets in the UK, Australia and Ireland
2007 Preliminary Results
Victoria continues to win market share whilst increasing margin and
profitability
Focus on products, style, quality and innovation coupled with
good service will continue to underpin growth
* Group Revenue increased 6% to #55.43 million
* Operating profit up 26% to #3.39 million
* Profit before tax increased by 37% to #2.76 million
* Adjusted Earnings per share (as per note 2) up 15% to 28.92p
* Proposed Dividend 12.50p, up 9%
* Net asset value per share increased by 4.3% to 417p
* Net cash increase of #2.66 million
* Good performance across most sectors against challenging economic
conditions
* Despite a decline in the overall market Victoria has taken market share
from its competitors
* New five-year service agreement with The John Lewis Partnership to
warehouse, cut and deliver JLP branded carpets to its UK stores
* New showroom facilities in Vancouver attracting the architect & design
community
"Despite the fact that the economic and trading conditions in our key markets
have remained tough and challenging the Group has made good progress on all
fronts."
"In the UK and Ireland we have produced a very strong performance when viewed
against the state of the trade in general whilst, in Australia we managed to win
market share once again against a difficult market and during a period of
consolidation of the industry's two largest players. Our associate in Canada has
had another very successful year."
"Our strategic approach is focused on growth, taking advantage of opportunities
to exploit and build on our leading market position"
"Although we are unlikely to see any real improvement in general overall market
conditions in the year ahead, the Board believe that Victoria has the structure,
products and people in place to achieve the Group's objectives for the year and
in particular to deliver an improved performance again within this new financial
year."
Enquiries:
Alan Bullock, Group Managing Director Fiona Tooley, Director
Ian Davies, Group Finance Director Keith Gabriel, Senior Account Manager
Victoria PLC Citigate Dewe Rogerson
Today: +44 (0) 207 638 9571 (until 11.30am) Today: +44 (0) 207 638 9571
Thereafter: +44 (0) 1562 749640 Thereafter: +44 (0) 121 455 8370
Mobile: +44 (0) 7785 325701 (AB) Mobile: +44 (0) 7785 703523 (FMT)
www.victoria.plc.uk
-2-
Victoria PLC
Preliminary Results for 52 weeks ended 31 March 2007
CHAIRMAN'S STATEMENT
Despite the fact that the economic and trading conditions in the key markets in
which our business operates have remained tough and indeed challenging, I
believe that the Group has made good progress on all fronts.
Revenues from the Group's activities amounted to #55.43 million, an increase of
6.0% on last year, whilst profit before tax increased by 37.3% to #2.76 million.
EARNINGS & DIVIDEND
Basic earnings per share increased by 24.1% from 23.30p to 28.92p and your Board
is recommending a dividend of 12.50p per share, an increase of 8.7% on last
year.
The dividend, which is subject to Shareholder approval at the Annual General
Meeting to be held on 24 July 2007, will be paid on 30 July 2007 to all members
on the Register at the close of business on 27 June 2007.
OPERATIONS
Whilst overall in the United Kingdom and Ireland demand from the residential
market has again remained subdued, we have produced a very strong performance
particularly when viewed against the state of the trade in general.
Revenues in the period increased by 7.0% from #29.65 million to #31.72 million.
Operating profits were up by 80.91% to #1.56 million from #0.87 million last
year and Profit before tax significantly improved by 130.7% from #0.53 million
to #1.22 million.
In Australia, the market has for the second year in succession remained
difficult. However, against a tough economic and trading environment, coupled
with the merger of the Industry's two largest carpet manufacturers, which
created both additional challenges and some opportunities, we again managed to
win market share.
Revenues from within the Australasian region improved from #22.64 million to
#23.71 million, a 4.7% increase. This was, however, at the expense of margin
with operating profits down slightly from #2.22 million to #2.08 million
(-6.29%), whilst Profit before tax was #1.81 million, 8.2% down on last year.
In Canada, our associate company, Colin Campbell & Sons, had another very
successful year with sales moving forward by 16.2% to C$9.12 million and profit
before tax up by 51.1% to C$0.59 million.
PROPERTY
A detailed planning application to develop the Company's former Sports Field
site in Kidderminster is close to being submitted to the Local Authority. The
past year has been spent in satisfying planning matters which are a requirement
if the detailed planning application is to succeed. The site will hopefully
become, subject to final planning approval, an indoor and outdoor Bowling Centre
of Excellence, a budget hotel and public house/restaurant. The net sale
proceeds, subject to capital gains tax, are likely to be around #1.00 million.
continued...
-3-
THE BOARD
During the year, we have seen several changes to the Board.
Firstly, Mark Lee the Group Finance Director left the Company in September 2006
to pursue a career within a larger organisation. On behalf of everyone involved
with Victoria, I would like to thank Mark for his efforts and commitment during
his eight-year tenure and wish him every possible success in his new career.
I would then like to welcome Ian Davies to the Board as our new Group Finance
Director. I am sure that Ian will make a significant contribution to the Board
and to the future development and growth of the Group.
Last, but not least, John Duncan retired from the Company on 30 April 2007
having spent 37 years with Victoria Carpets in the UK, 11 years of which he was
part of the Group Board. John has been a great servant to the Group throughout
his career and he will be greatly missed by both his colleagues and the trade in
general. On behalf of the Board and the Shareholders may I wish John and his
wife Margaret a very happy and long retirement. Above all, I would also like to
thank him for all he has done for the Company.
EMPLOYEES
The continued good performance of the Group and its sound prospects for the
future could not have been achieved without a committed and highly competent
team at all levels of the business. I take this opportunity to express my
personal thanks to everyone in the Group for the efforts they have put into
achieving yet another successful year.
PROSPECTS
Although we are unlikely to see any real improvement in general overall market
conditions in the year ahead, the Board believe that we have the structure,
products and people in place to achieve our objectives for the year and in
particular to deliver an improved performance again within this new financial
year.
Bob Gilbert
Chairman
20 June 2007
-4-
Victoria PLC
Preliminary Results for 52 weeks ended 31 March 2007
GROUP MANAGING DIRECTOR'S - OPERATING REVIEW
UNITED KINGDOM
The past twelve months in the UK have been extremely challenging with erratic
market conditions prevailing. The market in the first half of the financial year
was badly affected by the long, hot, dry spell of weather, which was hardly
conducive to consumers buying carpeting. The Autumn trading was then stronger,
only to see the effects of higher energy costs and interest rate increases
sapping consumer confidence after Christmas and through into the first quarter
of 2007.
Statistics have shown a 5% decline during the year in the market and yet despite
this backdrop, I am pleased to report that Victoria has performed well and has
continued to take market share from its competitors.
Carpet sales were up by 7.3% from #25.46 million to #27.32 million, primarily
driven by an extremely active programme of new range launches. As we stated at
the time of our interim results, there were nine new product introductions alone
in the first half of our financial year, which undoubtedly helped us out-perform
the market.
Carpet sales in the UK were up from #21.69 million to #23.28 million, reflecting
particularly strong growth to The John Lewis Partnership (+20.9%), who remain
our biggest customer. Sales to our core independent retail sector also saw good
growth (+7.9%) and, in fact, this sector remains key to our market strategy and
within these results represents 63% of our total UK sales.
Export sales also increased from #3.77 million to #4.04 million, a 7.2%
improvement over last year.
Operationally, Victoria Carpets has focused on maximising operational
efficiencies by making full use of the additional space created following the
planned closure of both the Axminster weaving and dyehouse in March 2005 and
April 2006 respectively.
I am pleased to report that despite significant increases in energy costs, we
have seen a 14.8% reduction in the kWh of electricity used over the past twelve
months as a direct result of investing in energy saving measures.
Victoria Carpets' spend on both new ranges and 'Point-of-Sale' (POS)
merchandising displays has again been kept at high levels throughout the year.
Our investment in keeping product ranges fashionable and current is, we believe,
keeping us ahead of our competitors and is in no small measure responsible for
us growing our business within what is reported to be a declining market.
continued...
-5-
Likewise, service remains a priority and at the forefront as we seek to
differentiate ourselves from the competition. Victoria has again been recognised
for its efforts in this area when, for the fifth year in succession, we won the
Greendale Flooring Award for 'Best Service Provider'. Greendale is perhaps the
UK's foremost independent retail buying group and their members are very
important to us. We were also delighted at the same time to be awarded 'Best
Product' by the same buying group for our recently re-coloured Tudor Twist
Collection which has proved to be a very successful range within our portfolio.
During the year, Victoria entered into a new five-year service agreement with
The John Lewis Partnership (JLP). Under this agreement, we warehouse, cut and
deliver all of JLP branded carpet ranges to their UK store network. As part of
this new service contract, Victoria has installed new IT Systems, which will
link all JLP stores on-line to our warehousing, thereby improving stock checking
and order processing. Victoria is rightly proud of its special relationship with
JLP and we believe that this extension to our service agreement underpins this
relationship.
Looking ahead to the current financial year: Victoria has placed an order for an
additional 1/8th gauge tufting machine which is needed to meet demand. Victoria
has again an active programme of new product introductions planned for the first
half of 2007, which should enable us to continue to grow the business despite
market conditions which are unlikely to show any real improvement in the
short-term.
Westwood Yarns, the Group's UK spinner, has enjoyed a reasonably busy year with
the bulk of its yarn capacity being utilised in-house at Victoria Carpets. A new
white blending line has been installed during the year, which is now enabling us
to manufacture the very light white and beige shades of carpets that are so
popular with today's consumer, with less risk of contamination from either
foreign coloured fibres or vegetable matter.
We have also placed a contract with a specialist machinery manufacturer which
will enable Westwood Yarns to manufacture plied yarns for the first time. The
new equipment will be installed during summer 2007 and we expect it to be
operational in the second half of this new financial year.
This enhancement at Westwood's plant will see overall yarn capacity increased by
around 10%. More importantly, it will enable them to supply Victoria with some
of the premium value yarns that it currently has to outsource from the market,
whilst also providing security of supply, further operational efficiencies and
cost savings.
AUSTRALIA
During the past year, the State economies of Queensland and Western Australia
have maintained a degree of buoyancy whilst the more populous States of Victoria
& New South Wales have experienced little or no growth at all.
New building starts have continued at a low level throughout the year, whilst
spending on consumer durables such as carpets remained weak.
Against this backdrop and in a year of contrasting halves, our Australian
operation recovered well from a weak first-half which saw net profits down by
almost 24% to record a net profit of A$4.50 million for the full year, just 4%
down on the previous year's reported profits of A$4.70 million. This was a
robust performance in a tough market and which was in-line with our budget
expectations.
continued...
-6-
Sales for the year were up by 9% from A$53.73 million to A$58.52 million. This,
in a market which showed no real growth at all but which was assisted by the
extremely positive reaction to both our new wool and synthetic ranges made on a
new state-of-the-art level cut loop (LCL) tufting machine installed at Dandenong
in late 2006.
We have been particularly pleased with the general market reaction to our
increased range of synthetic products which we have added to our product
offering during the year. Although we will still be remaining focused on the
wool and wool-rich products, which are our core business, we will look to
continue to develop our synthetic ranges.
The acquisition by Godfrey Hirst of its major competitor Feltex in October 2006
and the subsequent rationalisation of these two major Australian/New Zealand
carpet manufacturers has, as we anticipated, caused some market disruption. It
has also presented us with additional sales opportunities as well as allowing us
to identify and attract to our Australian operation some extremely talented key
personnel from these leading players, which has substantially bolstered our
Sales & Marketing team.
Today, Victoria is now the number two producer of residential carpet in
Australia and, despite somewhat indifferent market conditions, our Australian
business continues to take market share from the competition.
Our exports to New Zealand and Pacific Rim countries, particularly North
America, increased strongly by 18% in the year despite the continuing strength
of the Australian Dollar.
The strength of the Australian currency, however, does have some implications
for the level of imported products being brought into the local market,
particularly in view of the reduced import protection now afforded to Australian
manufacturers.
Operationally, we have had a busy year in Australia.
Carpet production levels at our Dandenong factory reached an all-time record in
the year, up by 13% on the previous record levels achieved last year. As well as
adding to the tufting plant's capacity and flexibility with the installation of
a new LCL tufter, the main item of investment in plant and equipment during the
year was the installation of a completely new finishing oven at the Dandenong
plant. This major project was executed and successfully completed in the summer
shut-down without any disruption to sales. The backing line has afforded us
improved productivity through increased line speeds, greater energy efficiency
and higher quality of finished carpet.
Our two Spinning Mills at Bendigo and Castlemaine, both in the State of Victoria
, operated below full capacity in the first half of the year and, whilst they
were better utilised during the second half, they still had some under utilised
capacity. The performance of both Mills during the year was satisfactory and
they contributed well to the overall performance of the Australian operation.
In accordance with the terms of our 2002 Purchase Agreement, when we acquired
the Pacific Textiles Spinning Mill in Bendigo, we exercised the option to
acquire the freehold of the land at the option price previously agreed of A$1.70
million. This brought total capital expenditure made in Australia during the
course of the year to A$3.90 million.
continued...
-7-
We believe that our Australian business is well positioned to improve on its
solid performance achieved last year. Our continued investment in plant, new
product development and quality people places us in a particularly strong
position to deal with the competition we experience within this marketplace from
Australian and New Zealand manufacturers, as well as from growing imports.
Whilst we are optimistic that we will this year once again out-perform the
market, it is likely that there will be no positive assistance from the economy
in general, which remains flat and may continue to be so until after Federal
elections are completed later this year.
IRELAND
Our Irish businesses are focused primarily on distribution to two different
segments of the floor coverings market. Munster Carpets markets and sells mainly
through the design & specification route targeting the commercial contract
market. Navan Carpets on the other hand is marketing and selling principally to
the residential market through the independent retailers, as well as to the
hotel industry.
As is often the case, these markets run at different paces and are dependent on
the economic cycle, and this has certainly been the case in the year currently
under review.
Over the past year, the Irish economy in general has been relatively robust,
with a strong growth in GDP of around 6% per annum. This growth has flowed well
into the commercial contract market for floor coverings and I am pleased to
report that Munster Carpets has exploited these market conditions well. Their
sales were up by 21% in volume, 31% in value and the margins on these sales were
very pleasing too, with net profits advancing by 48%.
From a residential floor covering perspective, the pattern of trade in both the
Irish and UK markets has been somewhat similar with the long hot summer of 2006
badly affecting footfall through the retail shops. Despite the poor start to the
year, the Autumn trading season picked up well and, for the year as a whole,
sales were up by 8%. The margins were, however, affected by the discontinuation
of some ranges being cleared to make way for new product introductions.
Overall, our combined Irish businesses produced a creditable performance with
revenues up by 15.3% and profit before tax up by 13.7%.
The maturing Special Savings Incentive Accounts (SSIAs), a Government supported
tax-efficient savings scheme may give a boost to consumer confidence later in
2007. Irrespective of whether or not this does flow through into additional
floor covering sales in the forthcoming year, our Irish businesses still have
fairly good prospects for organic growth with the strong programme of new
product introductions planned for launch in the coming year. This should
underpin both sales revenues and profits in the year ahead.
CANADA
Colin Campbell, our Canadian associate company, has enjoyed another very
successful year as their business continues to go from strength to strength.
The Western Canadian economy in which Campbell's mainly operate has been buoyant
for a while now and its strength has been underpinned by both its wealth of
natural resources and the Winter Olympics, which are to be held in British
Columbia in 2010.
continued...
-8-
Campbell's prime business is as a decorative supply house, 'trade-only showroom'
supplying high quality floor coverings to interior designers and architects who
are dealing with both high-end residential and leading commercial clients. I am
pleased to report that this part of the business has continued to perform well
and during the second half of the year under review, Campbell's added an
exclusive range of designer furniture to their product offering, which
represents the first step to providing a wider product assortment of home
furnishings. The business will of course continue to focus on broadloom,
wall-to-wall carpeting, as well as area rugs for which the business has perhaps
been better known. But we are confident that by adding other decorative items,
such as furniture, we can further expand sales through the architects and
designers who, in addition to specifying floor covering, also buy other items of
furnishings.
In September 2006, Campbell's opened innovative contemporary showrooms in the
Vancouver waterfront area. Taking a disused fish packer's warehouse, a leading
Vancouver architect has created a fashionable and chic showroom which has
rapidly become a destination venue for British Columbia's designers and
architects looking for great floor coverings. These showrooms, as well as
offering increased floor space for merchandising, have proved highly attractive
to the design community, our core customer.
In addition to the decorative supply business, Campbell's has been pioneering
sales through the internet portal called 'Nature's Carpets'.
Nature's Carpets are totally non-toxic and biodegradable carpets suitable for
people who may be allergic to certain chemicals or off-gases. These products are
made using natural un-dyed wools with no chemical treatment and are tufted into
natural jute and backed with natural latex. They are totally 'green' being made
from renewable resources.
Given the growing demand and very positive results achieved through internet
sales of this form of carpeting, Campbell's will now be rolling out an extended
sales and marketing programme across the United States and Canada using a
dedicated sales team as well as continuing with the web-based programme which
will attract increased sales for this niche product offering.
Overall, Campbell's sales increased during the period by 16.2% from Can$7.85
million to Can$9.12 million, whilst profit before tax was up from Can$0.39
million to Can$0.59 million (+51.1%). Net margin on sales rose from 4.9% to
6.4%. Victoria's associated share of profits in the year were Can$0.30 million
up from Can$0.20 million last year.
The outlook for our Canadian business remains promising. With the stronger
product offering planned, we are confident of seeing continuing growth within
this business.
Alan Bullock
Group Managing Director
20 June 2007
-9-
Victoria PLC
Preliminary Results for 52 weeks ended 31 March 2007
FINANCIAL REVIEW
HEADLINE RESULTS
Profit before tax increased by 37.3% to #2.76 million, compared to #2.01 million
for 2006. Revenue rose by 6% from #52.29 million to #55.43 million.
Earnings per share (as per note 2) were 28.92p, up 24.1% (2006: 23.30p) with
adjusted earnings per share also at 28.92p, showing an increase of 14.8% on the
prior year (2006: 25.20p).
REVENUE AND OPERATING PROFIT
UK AND IRELAND
Revenue was up 7% from #29.64 million to #31.72 million. The business in the UK
operated in a market that did not demonstrate any significant growth. Against
this background, the business continued to focus on tight operating and material
cost control. Combined with the operational gearing effect of higher revenues,
this enabled operating margin to increase from 2.9% to 4.9%.
Operating profit for the UK and Ireland increased by 80.8% to #1.56 million
(2006: #0.87 million).
AUSTRALIA
Revenue rose by 8.9% to A$58.52 million compared to A$53.73 million for 2006.
The market conditions in Australia remained subdued but the increased profile of
synthetic carpet has supported growth. Price competition amongst carpet
suppliers has continued to be a feature of the marketplace and our operating
margin declined from 9.8% to 8.8%. Operating profit has fallen by 2.5% from
A$5.27 million to A$5.14 million.
Further investments have been made in our equipment and facilities. This
continues to attract grants under the Australian government's Strategic
Investment Programme, which accounted for A$0.4 million of operating profit in
comparison with A$0.51 million last year.
SHARE OF PROFITS OF ASSOCIATED COMPANY
There was also an increased contribution from our associated company, Colin
Campbell and Sons, which is 50% owned by the Group. Revenues increased by 16.2%
from Can$7.84 million to Can$9.12 million, accompanied by an improvement in
operating margins. Our share of the pre tax profit increased by Can$0.10 million
to Can$0.30 million.
INTEREST
Interest costs remained in-line with the previous year at #0.73 million. The
increase in base rates in the period was mitigated by lower borrowings and the
movement in the fair value of financial instruments. Interest was covered 4.6
times by operating profit (2006: 3.9 times).
continued...
-10-
PROFIT BEFORE TAXATION
Profit before taxation for the year was #2.76 million (2006: #2.01 million).
TAXATION
The effective rate of tax on profit for the year was 27.3%. This is higher than
2006 (19.5%) which had benefited from extra reliefs in Australia that had
reduced the deferred tax provision for the realisation of property values
through sale. Without these extra reliefs, the effective rate in 2006 would have
been approximately 27%.
EARNINGS PER SHARE
Basic earnings per share grew by 24.1% to 28.92p (2006: 23.30p). The growth in
earnings per share, however, was impacted by the rise in the effective rate of
tax.
Adjusted earnings per share is also 28.92p, compared to 25.20p, excluding
restructuring costs in 2006. The number of shares in issue remained constant
during the year and there remain no options or other dilutive arrangement.
DIVIDENDS
We are recommending a final dividend of 12.50p per share this year, compared to
11.50p in 2006. This represents an 8.7% increase and our aim will be to deliver
continued dividend growth in future years.
NET ASSETS
Our net asset value at the financial year end increased by 4.2% to #28.98
million (2006: #27.81 million). The main movement in the balance sheet was
financial liabilities which reduced by #2.06 million from #12.40 million to
#10.33 million.
CASH FLOW AND NET DEBT
Our net cash inflow was #2.66 million, reducing our cash and cash equivalent
borrowings to #3.69 million (2006: #6.36 million). This compares with a net cash
outflow in 2006 of #0.52 million.
We have continued to invest in our facilities and equipment during the year and
our capital expenditure totalled #1.96 million (2006: #2.77 million). Spend on
plant and machinery is down #1.84 million on previous years, in-line with
expectations, as key equipment replacement programmes have been completed.
During the year, we acquired the freehold to the property at Bendigo in
Australia, which we had leased since acquisition of the business at that
location, for #0.75 million.
HEDGING
The Group uses derivative financial instruments to manage our interest rate
exposure in the UK. The Group has two swaps covering #3.00 million, with
maturity dates in July 2007 and July 2009. Our policy is to continue to utilise
such instruments as deemed appropriate.
The Group reviews its currency exposure relating to trading operations involving
the export sale of goods or import of raw materials or capital equipment. The
Group may utilise forward currency contracts to manage any currency exposures
where it is considered that currency movements may be volatile and the amounts
involved significant.
The principal exposure of the Group relates to the investment in its Australian
subsidiary. The Group maintains a significant proportion of its borrowings in
Australian dollars which helps to provide a natural hedge against the investment
exposure.
continued...
-11-
FUTURE FUNDING
The gearing of the Group is now significantly lower than in 2006 and our current
facilities will provide sufficient debt capacity in 2007. The strong cash
generation is providing capacity for future investments. Capacity exists in
Sterling, Euros and Australian dollars to cover anticipated capital expenditure
and working capital requirements.
KEY PERFORMANCE INDICATORS (KPIS)
As part of the detailed budgeting process, each subsidiary is required to
establish targets across a range of financial and non-financial indicators. At
the monthly Board meetings, the Managing Director is required to present a
review on progress against these targets. The non-financial KPIs may differ in
each subsidiary but are focused on delivering high levels of customer
satisfaction, introducing new products and services which meet the needs of our
customers, ensuring operational effectiveness and attracting, retaining and
developing key employees.
The financial KPIs reviewed and reported by all subsidiaries, focus on profit
growth, profitability improvement, inventory management, levels of debt, cash
generation, future levels of borrowing requirement and return on capital
employed.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in accounting policies this year.
Ian Davies
Group Finance Director
20 June 2007
-12-
Victoria PLC
CONSOLIDATED INCOME STATEMENT
for the 52 weeks ended 31 March 2007
Notes 52 weeks ended 52 weeks ended
31 March 2007 1 April 2006
#'000 #'000
--------------------------------------------------------------------------------
Revenue 1 55,426 52,288
Cost of sales (39,003) (37,566)
--------------------------------------------------------------------------------
Gross profit 16,423 14,722
Distribution costs (10,641) (9,770)
Administrative expenses (3,097) (3,007)
Other operating income 700 921
Restructuring costs - (188)
--------------------------------------------------------------------------------
Operating profit 1 3,385 2,678
Share of results of associated company 104 73
Finance costs 1 (727) (740)
--------------------------------------------------------------------------------
Profit before tax 1 2,762 2,011
Taxation 1 (754) (393)
--------------------------------------------------------------------------------
Profit for the period 2,008 1,618
Attributable to equity holders of
the parent 2,008 1,618
--------------------------------------------------------------------------------
Earnings per share - pence Basic 2 28.92 23.30
Diluted 2 28.92 23.30
--------------------------------------------------------------------------------
-13-
Victoria PLC
CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE
for the 52 weeks ended 31 March 2007
52 weeks ended 52 weeks ended
31 March 2007 1 April 2006
#'000 #'000
-------------------------------------------------------------------------------
Exchange differences on translation of
foreign operations (33) 83
-------------------------------------------------------------------------------
Net income/(loss) recognised directly in
equity (33) 83
Profit for the period 2,008 1,618
-------------------------------------------------------------------------------
Total recognised income and expense for the
period 1,975 1,618
-------------------------------------------------------------------------------
Attributable to
Equity holders of the parent 1,975 1,618
-------------------------------------------------------------------------------
-14-
Victoria PLC
BALANCE SHEETS
for the 52 weeks ended 31 March 2007
Group Company
31 March 2007 1 April 2006 31 March 2007 1 April 2006
#'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
Net-current assets
Intangible
assets 491 527 - -
Property, plant
and equipment 23,846 24,172 5,312 5,373
Investment
property 180 180 180 180
Investment in
subsidiary
undertakings - - 3,321 3,321
Investment in
associated
company 469 440 56 56
Deferred tax
asset 983 659 3 13
--------------------------------------------------------------------------------
Total
non-current
assets 25,969 25,978 8,872 8,943
--------------------------------------------------------------------------------
Current assets
Inventories 15,740 16,110 - -
Trade and other
receivables 9,603 10,215 4,505 4,074
Financial asset 10 - 10 -
Cash at bank and
in hand 644 234 - -
--------------------------------------------------------------------------------
Total current
assets 25,997 26,559 4,515 4,074
--------------------------------------------------------------------------------
Total assets 51,966 52,537 13,387 13,017
--------------------------------------------------------------------------------
Current liabilities
Trade and other
payables 8,234 8,505 61 130
Current tax
liabilities 998 961 - -
Financial
liabilities 5,261 7,551 2,782 2,645
--------------------------------------------------------------------------------
Total current
liabilities 14,493 17,017 2,843 2,775
--------------------------------------------------------------------------------
Non-current
liabilities
Trade and other
payables 1,209 1,090 - -
Financial
liabilities 5,072 4,849 - -
Deferred tax
liabilities 2,209 1,774 695 682
--------------------------------------------------------------------------------
Total
non-current
liabilities 8,490 7,713 695 682
--------------------------------------------------------------------------------
Total
liabilities 22,983 24,730 3,538 3,457
--------------------------------------------------------------------------------
Net assets 28,983 27,807 9,849 9,560
--------------------------------------------------------------------------------
Equity
Issued share
capital 1,736 1,736 1,736 1,736
Share premium 829 829 829 829
Retained
earnings 26,418 25,242 7,284 6,995
--------------------------------------------------------------------------------
Total equity 28,983 27,807 9,849 9,560
--------------------------------------------------------------------------------
-15-
Victoria PLC
CASH FLOW STATEMENTS
for the 52 weeks ended 31 March 2007
Group Company
52 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended
31 March 1 April 31 March 1 April
2007 2006 2007 2006
#'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
Net cash inflow
from operating
activities 5,061 2,957 574 407
--------------------------------------------------------------------------------
Investing activities
Dividends
received from
associates 32 23 32 23
Purchases of intangible fixed - - - -
assets
Purchase of
property, plant
and equipment (1,959) (2,773) - -
Proceeds of
disposals of
property, plant 74 435 - 10
and equipment
--------------------------------------------------------------------------------
Net cash used in
investing
activities (1,853) (2,315) 32 33
--------------------------------------------------------------------------------
Financing activities
(Decrease)/incre
ase in long-term
loans 347 (73) - -
Receipts from
financing of
assets 870 639 - -
Payment of
finance
leases/HP
liabilities (963) (934) - -
Dividends paid (799) (799) (799) (799)
--------------------------------------------------------------------------------
Net cash (used
in)/from
investing (545) (1,167) (799) (799)
activities
--------------------------------------------------------------------------------
Net
(decrease)/incre
ase in cash and 2,663 (525) (193) (358)
cash equivalents
Cash and cash
equivalents at
beginning (6,363) (5,827) (2,590) (2,232)
of period
Effect of
foreign exchange
rate changes 7 (11) - -
--------------------------------------------------------------------------------
Cash and cash
equivalents at
end of (3,693) (6,363) (2,783) (2,590)
period
--------------------------------------------------------------------------------
-16-
Victoria PLC
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1 Segmental Information
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.
Geographical segment information for revenue, operating profit and a
reconciliation to entity net profit is presented below.
Income 52 weeks ended 31 March 2007 52 weeks ended 1 April 2006
Statement
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 & 31,720 1,564 (346) 1,218 29,647 865# (337) 528
Ireland
Australia 23,706 2,082 (271) 1,811 22,641 2,222 (250) 1,972
------------------------------------------------------------------------------------------------
55,426 3,646 (617) 3,029 52,288 3,087 (587) 2,500
Share of
results
Of - - - 104 - - - 73
associate
Central - (261) (110) (371) - (409) (153) (562)
costs
------------------------------------------------------------------------------------------------
Total
continuing
Operations 55,426 3,385 (727) 2,762 52,288 2,678 (740) 2,011
---------------------------------------------- ------------------------------------
Tax (754) (393)
------- ------
Profit after
tax from 2,008 1,618
continuing
activities ------- ------
* The share of profits of the associated company is shown net of tax as required
by IAS1.
# Operating profit from the UK and Ireland operations is stated after a #188,000
charge for business reorganisation costs (closure of Kidderminster dyehouse).
Intersegment sales between the UK and Ireland and Australia were immaterial in
the current and comparative periods.
Balance Sheet As at 31 march 2007 As at 1 April 2006
Segment Segment Segment Segment
Assets Liabilities Assets Liabilities
#'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
UK & Ireland 28,239 9,901 30,058 12,675
Australia 22,994 9,544 21,652 8,598
Canada 469 - 440 -
Unallocated central
assets/liabilities 264 3,538 387 3,457
--------------------------------------------------------------------------------
51,966 22,983 52,537 24,730
--------------------------------------------------------------------------------
The investment in associated company is held directly by the parent entity and
does not relate specifically to either geographic segment.
continued...
-17-
Other Segmental Information 52 weeks 52 weeks
ended ended
31 March 2007 1 April 2006
#'000 #'000
---------------------------------------------------------------------------------
Depreciation and Amortisation
UK and Ireland 1,024 1,139
Australia 1,229 1,181
Unallocated central - -
--------------------------------------------------------------------------------
2,253 2,320
--------------------------------------------------------------------------------
No other significant non-cash expenses were deducted in measuring segment
results.
Capital Expenditure
UK and Ireland 379 1,298
Australia 1,580 1,475
Unallocated central - -
--------------------------------------------------------------------------------
1,959 2,773
--------------------------------------------------------------------------------
Business Segments:
No secondary segmental information is reported as the Directors consider that
substantially all of the Group's operations relate to a single activity, that of
the manufacture and sale of carpets.
2 Earnings per Share
The calculation of earnings per ordinary equity share in the parent entity is
based on the following earnings and number of shares:
2007 2006
#'000 #'000
--------------------------------------------------------------------------------
Earnings (#'000) basic and diluted
Profit attributable to ordinary equity holders of the parent 2,008 1,618
entity
--------------------------------------------------------------------------------
Number of shares (thousands) - in issue throughout the
period 6,944 6,944
--------------------------------------------------------------------------------
Earnings per share (basic and undiluted) in pence 28.92p 23.30p
--------------------------------------------------------------------------------
No arrangements existed during the period or the comparative period that might
require the issue of shares and hence the diluted earnings per share are the
same as the basic earnings per share.
The calculation of the following non-statutory item used in the Chairman's
Statement and Financial Review is set out below:
Adjusted earnings 2007 2006
#'000 #'000
-------------------------------------------------------------------------------
Profit from continuing operations attributable to Ordinary
equity holders of the parent Entity 2,008 1,618
Restructuring costs (net of 30% tax) - 132
-------------------------------------------------------------------------------
2,008 1,750
-------------------------------------------------------------------------------
Adjusted earnings per share 28.92p 25.20p
-------------------------------------------------------------------------------
continued...
-18-
3 Rates of Exchange
2007 2006
Average Year end Average Year end
-------------------------------------------------------------------------------
Australia 2.4687 2.4279 2.3730 2.4326
Euro 1.4717 1.4735 1.4623 1.4333
Canada 2.1540 2.2627 2.1276 2.0235
4 Notes to the Cash Flow Statement
Reconciliation of operating profit to net cash from operating activities
Group Company
2007 2006 2007 2006
#'000 #'000 #'000 #'000
-------------------------------------------------------------------------------
Operating profit from continuing operations 3,385 2,678 1,215 1,092
Adjustments for:
- Depreciation of property, plant and
equipment 2,226 2,293 61 61
- Business reorganisation costs - 188 - -
- Amortisation of intangible assets 27 27 - -
- (Profit)/loss on disposal of property, plant
and equipment 8 (55) - -
- Exchange rate difference on consolidation (18) 36 - -
-------------------------------------------------------------------------------
Operating cash flows before movements in
working capital 5,628 5,167 1,276 1,153
Increase/(decrease) in working capital 801 (1,093) (526) (592)
--------------------------------------------------------------------------------
Cash generated by operations 6,429 4,074 750 561
Interest paid (792) (740) (176) (153)
Income taxes (paid)/received (576) (377) - (1)
--------------------------------------------------------------------------------
Net cash from operating activities 5,061 2,957 574 407
--------------------------------------------------------------------------------
5 Analysis of Net Debt
At 1 April Cash Other Exchange At
2006 flow non-cash Movement 31 March 2007
changes
#'000 #'000 #'000 #'000 #'000
---------------------------------------------------------------------------------
Cash 234 410 - - 644
Bank loans payable
less (6,597) 2,253 - 7 (4,337)
than one
year and overdrafts
---------------------------------------------------------------------------------
Cash and cash
equivalents (6,363) 2,663 - 7 (3,693)
Secured commercial
bills
Payable less than one - - - - -
year
Payable more than one
year (2,261) (618) - (4) (2,883)
Finance leases and hire purchase
agreements
Payable less than one
year (899) 963 (986) (2) (924)
Payable more than one
year (2,100) (870) 986 (1) (1,985)
Bank loans payable
more (488) 271 - (13) (204)
than one
year
--------------------------------------------------------------------------------
Net debt (12,111) 2,409 - 13 (9,689)
--------------------------------------------------------------------------------
6 The results have been extracted from the audited financial statements of the
Group for the year ended 31 March 2007. Whilst the financial information
included in this preliminary announcement has been computed in accordance with
International Financial Reporting Standards (IFRSs), this announcement does not
itself contain sufficient information to comply with IFRSs. The Company will
publish full financial statements that comply with IFRSs. These audited
financial statements incorporate an unqualified audit report. The results do not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985. Statutory accounts for the year ended 1 April 2006, which incorporated
an unqualified auditor's report, have been filed with the Registrar of
Companies.
7 The Report & Accounts will be posted to shareholders by 25 June 2007. Further
copies will be available from the Company's Registered Office: Worcester Road,
Kidderminster, Worcestershire, DY10 1HL or via the website: www.victoria.plc.uk.
8 The Annual General Meeting is being held at the Registered Office of the
Company, as above, at 2:30 pm on Tuesday, 24 July 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BKLLFDQBFBBZ
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