RNS Number:1540I
Victoria PLC
21 November 2007
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Wednesday, 21 November 2007
Embargoed: 7.00am
Victoria PLC
Leading manufacturers of high quality carpets in the UK, Australia and Ireland
Interim Results
six months ended September 2007
2007 2006
Revenue #28.76m #27.03m +6.4%
Operating Profit #1.58m #1.29m +23.2%
Profit before Tax #1.25m #1.00m +24.8%
Earnings per Share 12.92p 10.69p +20.9%
Solid operating cash generation
The Group's geographic spread and customer profile helped to off-set economic
and market conditions in UK and Ireland. Australia delivered a very solid
performance and increased market share
Changes to the composition of NED's combined with experienced management team to
drive and develop future strategy
"The continued growth we envisage from both existing product brands, recently
introduced product styles and other initiatives will, we believe, enable us to
take full advantage of our market leading position and successfully deal with
whatever market conditions prevail.
"The Group remains optimistic that it will deliver an overall performance ahead
of last year and in-line with both the Management's and market expectations."
Bob Gilbert, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Alan Bullock, Group Managing Director Fiona Tooley, Director
Ian Davies, Group Finance Director Keith Gabriel, Senior Account Manager
Victoria PLC 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)
www.victoria.plc.uk
Victoria PLC
CHAIRMAN'S STATEMENT
Interim Results for the six months ended September 2007
I am pleased to be able to report that the Group has made a solid start to this
financial year, with the Group's geographical spread of business and customer
profile assisting us to off-set the challenging economic and market conditions
we have seen during the first half-year in both the UK and Ireland.
Financial Results Summary
Income Statement
Revenues from the Group's activities have grown by 6.4% in the half-year from
#27.0 million to #28.8 million. Operating profit has increased by 23.2% from
#1.29 million to #1.58 million. The Group has continued to demonstrate tight
operating and material cost control with a further improvement in operating
margin, on a like for like basis, from 4.8% to 5.5%
Net finance costs at #0.38 million (2006 #0.36 million) were broadly in-line
with the comparative period and remain well covered by operating profit. Profit
before tax was up 24.8% at #1.25 million compared to #1.00 million for the
corresponding period last year. Profit attributable to equity shareholders
increased 20.9% from #0.74 million to #0.90 million, with basic earnings per
share up from 10.69 pence to 12.92 pence.
Balance Sheet
The Group's net assets increased from #29.0 million at 31 March 2007 to #29.8
million at the end of the period. Inventory has increased by #1.42 million to
#17.2 million, in part reflecting increased levels of revenue, but also the
build up of product to support new ranges and the usually busy autumn period in
the UK and Ireland.
Cash Flows and Net Debt
Net cash inflow from operating activities was #1.99 million, an increase of
#0.44 million on the corresponding period last year. The net effect of the
increase in working capital, reflecting the growth in the business, was a cash
outflow of #0.37 million. Reported net debt has increased over the period by
#0.16 million from #9.69 million at 31 March 2007 to #9.85 million. The Group
continues to maintain a significant proportion of its borrowings in Australian
dollars and the effect of changes in exchange rates on overall foreign currency
borrowings, increased Group net debt by #0.19 million.
UK
Trading in the first four months of the period in the UK saw sales reasonably
ahead of the corresponding period last year, followed by a marked fall-off in
August & September. This left revenues up 1.1% in the half-year at #12.4
million. Successive base interest rate increases and the sub-prime mortgage
crisis conspired to sap consumer confidence for spending on the High Street. As
a result, operating profit in the UK was down by 23.2% to #262k with profit
before tax down to #135k.
During the first half-year, Victoria Carpets has continued to invest in
additional plant and new product ranges thus positioning itself well for the
second half of the financial year which traditionally has been the stronger
period.
Ireland
In Ireland, revenues were down by 13.7% from #3.03 million to #2.61 million with
sales declining in both the contract and residential carpet sectors. The rather
"lumpy" nature of contract sales corresponded with a particularly strong
first-half last year and accounted for the majority of this decline. Residential
carpet sales were slightly down with the General Election and a slower economy
negatively affecting consumer confidence.
The resultant effect was to see operating profit down from #204k to #118k and
profits before tax down from #185k to #100k.
Again in Ireland there was a heavy spend on new ranges and point-of-sale display
units positioning the business well for the second half year.
Australia
In an otherwise buoyant Australian economy, only the commodity driven states of
Western Australia and Queensland enjoyed strong growth in the housing sector.
The major states of New South Wales and Victoria remained relatively flat with
consumer demand dampened by interest rate increases.
In this context, our Australian operation has delivered a very solid performance
and has increased its market share. Revenues in Australia grew strongly from
#11.7 million to #13.7 million, an increase of 17.1%.
Pleasingly, new product introductions made last year also enabled us to grow our
gross profit margin by 2.8%. Operating profit increased by #0.49 million, up by
53.2 % to #1.41 million and profit before tax increased by 61.1% from #0.79
million to #1.28 million.
Canada
Colin Campbell, our Canadian Associate Company, has continued to make excellent
progress with revenues up 13.6% to C$ 4.87 million. Profits before tax increased
6.5% to C$427k from C$401k in the corresponding period last year.
Directorate Changes
As shareholders will be aware, the Company recently announced changes to the
composition of its Non-executive Director team.
This is the last report that I will make to shareholders in my capacity as a
Director and Non-executive Chairman of Victoria. After eleven enjoyable years in
the Chair, I have decided to step down and retire. At the same time, my fellow
Non-executive Director, Keith Ackroyd will also retire.
I take this opportunity to welcome Mr Aram Shishmanian and Ms Nikki Beckett to
the Board as Non-executive Directors. They joined the Company in October and
will work alongside the Executive team and my successor, Alexander Anton, who
will take up the Chair on 3 December 2007.
The timing of these changes clearly allows for an orderly transition by the
Company's current Non-executives to the new team whilst also dovetailing well
with the Group's strategic planning programme for the future.
I believe that when I retire from the Board at the end of the month, I leave the
Group in good health and with an experienced management team which, when
combined with the additional skills of the newly appointed Non-executive
Directors, will be capable of taking the business forward over the next few
years.
Current Trading Prospects
Our growth to date reflects a creditable performance for the Group, especially
as we continue to operate in a difficult period for UK retailers.
Whilst there continues to be a clear lack of visibility about the short to
medium term economic and market prospects in the UK and Ireland, we are
witnessing stronger market conditions in Australia and Canada.
The continued growth we envisage from both existing product brands, recently
introduced product styles and other initiatives will, we believe, enable us to
take full advantage of our market leading position and successfully deal with
whatever market conditions prevail.
The Group remains optimistic that it will deliver an overall performance ahead
of last year and in-line with both the Management's and market expectations.
Bob Gilbert
Chairman
21 November 2007
Victoria PLC
Consolidated Income Statement
For the half-year ended 29 September 2007 (unaudited)
Notes Half-year Half-year Year ended
ended ended 31 March 2007
29 September 30 September #'000
2007 2006
#'000 #'000
--------------------------------------------------------------------------------
Revenue 3 28,757 27,026 55,426
Cost of sales (20,208) (19,288) (39,003)
--------------------------------------------------------------------------------
Gross profit 8,549 7,738 16,423
Distribution costs (5,662) (5,459) (10,641)
Administrative expenses (1,644) (1,531) (3,097)
Other operating income 340 537 700
Exceptional items - - -
--------------------------------------------------------------------------------
Operating profit 3 1,583 1,285 3,385
Share of results of
associated company 45 78 104
Finance costs (379) (362) (727)
--------------------------------------------------------------------------------
Profit before tax 1,249 1,001 2,762
Taxation 4 (352) (259) (754)
--------------------------------------------------------------------------------
Profit for the period 897 742 2,008
--------------------------------------------------------------------------------
Attributable to:
Equity holders of the parent 897 742 2,008
--------------------------------------------------------------------------------
Earnings per share
From continuing operations
Basic 5 12.92p 10.69p 28.92p
--------------------------------------------------------------------------------
Diluted 12.92p 10.69p 28.92p
--------------------------------------------------------------------------------
Consolidated Statement of Recognised Income and Expense
For the half-year ended 29 September 2007 (unaudited)
Half-year Half-year Year
ended ended ended
29 September 2007 30 September 2006 31 March 2007
#'000 #'000 #'000
--------------------------------------------------------------------------------
Exchange differences
on translation of
foreign operations 819 (402) (33)
--------------------------------------------------------------------------------
Net income/(loss)
recognised directly in
equity 819 (402) (33)
Profit for the period 897 742 2,008
--------------------------------------------------------------------------------
Total recognised
income and expense for
the period 1,716 340 1,975
--------------------------------------------------------------------------------
Attributable to:
Equity holders of the parent 1,716 340 1,975
--------------------------------------------------------------------------------
Victoria PLC
Consolidated Balance Sheet
As at 29 September 2007 (unaudited)
29 September 2007 30 September 2006 31 March 2007
#'000 #'000 #'000
--------------------------------------------------------------------------------
Non-current assets
Intangible assets 486 504 491
Property, plant and
equipment 24,354 23,275 23,846
Investment property 180 180 180
Investment in
associated company 565 507 469
Deferred tax asset 1,016 646 983
--------------------------------------------------------------------------------
Total non-current
assets 26,601 25,112 25,969
--------------------------------------------------------------------------------
Current assets
Inventories 17,160 15,406 15,740
Trade and other
receivables 10,132 11,182 9,603
Financial asset 11 - 10
Cash at bank and in
hand 823 633 644
--------------------------------------------------------------------------------
Total current assets 28,126 27,221 25,997
--------------------------------------------------------------------------------
Total assets 54,727 52,333 51,966
--------------------------------------------------------------------------------
Current liabilities
Trade and other
payables 9,437 8,849 8,234
Current tax
liabilities 1,051 977 998
Financial liabilities 6,426 7,264 5,261
--------------------------------------------------------------------------------
Total current
liabilities 16,914 17,090 14,493
--------------------------------------------------------------------------------
Non-current liabilities
Trade and other
payables 1,502 976 1,209
Financial liabilities 4,246 5,154 5,072
Deferred tax
liabilities 2,234 1,764 2,209
--------------------------------------------------------------------------------
Total non-current liabilities 7,982 7,894 8,490
--------------------------------------------------------------------------------
Total liabilities 24,896 24,984 22,983
--------------------------------------------------------------------------------
Net assets 29,831 27,349 28,983
--------------------------------------------------------------------------------
Equity
Issued share capital 1,736 1,736 1,736
Share premium 829 829 829
Retained earnings 27,266 24,784 26,418
--------------------------------------------------------------------------------
Total equity 29,831 27,349 28,983
--------------------------------------------------------------------------------
Victoria PLC
Consolidated Cash Flow Statement
For the half-year ended 29 September 2007 (unaudited)
Notes Half-year Half-year Year
ended ended ended
29 September 30 September 31 March
2007 2006 2007
#'000 #'000 #'000
-------------------------------------------------------------------------------
Net cash inflow
from operating
activities 6a 1,993 1,552 5,061
-------------------------------------------------------------------------------
Investing activities
Dividends received
from associates - - 32
Purchases of
property, plant and
equipment (1,106) (527) (1,959)
Proceeds of
disposals of
property, plant and 10 19 74
equipment
-------------------------------------------------------------------------------
Net cash used in
investing
activities (1,096) (508) (1,853)
-------------------------------------------------------------------------------
Financing activities
(Decrease)/increase
in long-term loans (682) 663 347
Receipts from
financing of assets 40 339 870
Payment of finance
leases/HP
liabilities (397) (564) (963)
Dividends paid (868) (799) (799)
-------------------------------------------------------------------------------
Net cash (used
in)/from investing
activities (1,907) (361) (545)
-------------------------------------------------------------------------------
Net (decrease)/increase
in cash and cash
equivalents (1,010) 683 2,663
Cash and cash
equivalents at
beginning of period (3,693) (6,363) (6,363)
Effect of foreign
exchange rate
changes 21 13 7
-------------------------------------------------------------------------------
Cash and cash
equivalents at end
of period 6b (4,682) (5,667) (3,693)
-------------------------------------------------------------------------------
Victoria PLC
Notes to the Interim Financial Statements
For the half-year ended 29 September 2007 (uanudited)
1 General Information
These condensed consolidated financial statements for the six months ended 29
September 2007 have not been audited or reviewed by the Auditors. They were
approved by the Board of Directors on 20 November 2007.
The information for the year ended 31 March 2007 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.
2 Accounting Policies
These condensed consolidated financial statements should be read in conjunction
with the Group's financial statements for the year ended 31 March 2007, which
were prepared in accordance with IFRSs as adopted by the European Union.
The accounting policies and basis of consolidation of these condensed financial
statements are consistent with those applied and set out on pages 40 to 44 of
the Group's audited financial statements for the year ended 31 March 2007.
In the current financial year, the Group will adopt International Financial
Reporting Standard 7 "Financial Instruments: Disclosures" (IFRS 7) for the first
time. As IFRS 7 is a disclosure standard, there is no impact of that change in
accounting policy on the half-yearly financial statements. Full detail of the
change will be disclosed in our annual report for the year ending March 2008.
3 Business Segments
For management purposes, the Group is organised into four 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 four
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 29 September 2007 Half-year ended 30 September 2006
Revenue Operating Finance Profit Revenue Operating Finance Profit
#'000 profit costs before #'000 profit costs before
#'000 #'000 tax #'000 #'000 tax
#'000 #'000
--------------------------------------------------------------------------------------------------
UK 12,432 262 (127) 135 12,293 341 (158) 183
Ireland 2,611 118 (18) 100 3,027 204 (19) 185
Australia 13,714 1,414 (138) 1,276 11,706 923 (131) 792
Canada - - - 45 - - - 78
--------------------------------------------------------------------------------------------------
Subtotal 28,757 1,794 (283) 1,556 27,026 1,468 (308) 1,238
Central costs - (211) (96) (307) - (183) (54) (237)
--------------------------------------------------------------------------------------------------
Total
continuing
operations 28,757 1,583 (379) 1,249 27,026 1,285 (362) 1,001
--------------------------------------------------- ------------------------------
Tax (352) (259)
--------------------- ------ ------
Profit after
tax from
continuing
operations 897 742
Profit for the period
from discontinued
operations - -
--------------------- ------ ------
Profit after
tax and
discontinued 897 742
operations
--------------------- ------ ------
4 Tax Charge
Half-year Half-year
ended ended
29 September 2007 30 September 2006
#'000 #'000
--------------------------------------------------------------------------------
Current tax:
UK corporation tax (52) (13)
Overseas taxation charge 404 272
--------------------------------------------------------------------------------
352 259
Deferred tax:
Current year - -
--------------------------------------------------------------------------------
Total 352 259
--------------------------------------------------------------------------------
Corporation tax for the interim period is charged at 28.2% (2006: 28.1%),
representing the best estimate of the weighted average annual corporation tax
rate expected for the full financial year.
5 Earnings and Earnings per Share
The calculation of the basic and diluted earnings per share is based on the
following data:
Number of Shares Half-year Half-year
ended ended
29 September 30 September
2007 2006
-------------------------------------------------------------------------------
Weighted average number of ordinary
shares for the purposes of basic earnings
per share 6,943,556 6,943,556
Effect of dilutive potential ordinary shares:
Share options - -
-------------------------------------------------------------------------------
Weighted average number of ordinary
shares for the purposes of diluted earnings
per share 6,943,556 6,943,556
-------------------------------------------------------------------------------
Half-year ended Half-year ended
29 September 2007 30 September 2006
Earnings EPS Earnings EPS
#'000 pence #'000 pence
--------------------------------------------------------------------------------
Profit for the period from continuing
operations 897 12.92 742 10.69
Profit for the period from
discontinued operations - - - -
--------------------------------------------------------------------------------
Profit for the period from continuing
and discontinued operations 897 12.92 742 10.69
--------------------------------------------------------------------------------
Earnings per share
- basic continuing 12.92 10.69
- basic discontinued - -
--------------------------------------------------------------------------------
- basic 12.92 10.69
--------------------------------------------------------------------------------
- diluted 12.92 10.69
--------------------------------------------------------------------------------
The effect of dilutive shares on the earnings for the purposes of diluted
earnings per share is #nil (2006: #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
29 September 30 September 31 March
2007 2006 2007
#'000 #'000 #'000
--------------------------------------------------------------------------------
Operating profit from
continuing operations 1,583 1,285 3,385
Discontinued operations profit
before tax - - -
Adjustments for:
- Depreciation of
property, plant and
equipment 1,169 1,121 2,226
- Amortisation of
intangible assets 13 14 27
- (Profit)/loss on
disposal of property,
plant and equipment (2) (5) 8
- Exchange rate
difference on
consolidation 362 (197) (18)
- Business reorganisation costs - - -
--------------------------------------------------------------------------------
Operating cash flows
before movements in
working capital 3,125 2,218 5,628
(Increase)/decrease in
working capital (370) (59) 801
--------------------------------------------------------------------------------
Cash generated from
operations 2,755 2,159 6,429
Interest paid (379) (390) (792)
Income taxes
(paid)/received (383) (217) (576)
--------------------------------------------------------------------------------
Net cash from
operating activities 1,993 1,552 5,061
--------------------------------------------------------------------------------
b) Analysis of net debt
At Cash flow Other Exchange At
31 March #'000 non-cash movement 29 September
2007 2007
#'000 movement #'000 #'000
#'000
------------------------------------------------------------------------------------
Cash 644 146 - 33 823
Overdrafts (4,337) (1,156) - (12) (5,505)
------------------------------------------------------------------------------------
Increase/(decrease) in cash
in period (3,693) (1,010) - 21 (4,682)
Secured commercial
bills
Payable more
than one year (2,883) 542 - (157) (2,498)
Finance leases
Payable less
than one year (924) 397 (375) (19) (921)
Payable more
than one year (1,985) (40) 375 (29) (1,678)
Bank loans
Payable less than one
year - - - - -
Payable more
than one year (204) 140 - (6) (70)
Decrease in
net debt in
period - 1,039 - - -
------------------------------------------------------------------------------------
Total (9,689) 29 - (189) (9,849)
------------------------------------------------------------------------------------
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
29 September 2007 30 September 2006 31 March 2007
------------------------------------------------------------------------------
Australia - average
rate 2.3845 2.4565 2.4687
Australia - period end 2.3023 2.5031 2.4279
Euro - average rate 1.4710 1.4577 1.4717
Euro - period end 1.4326 1.4746 1.4735
Canadian dollar -
average rate 2.1296 2.0676 2.1540
Canadian dollar -
period end 2.0246 2.0840 2.2627
8 Related Party Transactions
During the period, the Group had transactions with its associate comprising
sales of goods to the value of #197k (2006: #307k) and provision of services
worth #41k (2006: nil). At 29 September 2007 the Group was owed #243k (2006:
#317k). All goods and services were provided at market rates.
9 Risks and Uncertainties
The Board continuously assesses and monitors the key risks of the business. The
key risks that could affect the Group's medium term performance and the factors
which mitigate these risks have not changed from those set out on page 29 of the
Group's 2007 Annual Report, a copy of which is available on the Group's website
- www.victoria.plc.uk. The Chairman's Statement includes consideration of
uncertainties affecting the Group in the remaining six months of the year.
10 Information Rights
Under section 146 of the Companies Act 2006, registered shareholders of fully
listed companies are able to nominate the underlying beneficial owners of their
shares to receive information rights from 1 October 2007. Companies are required
to fulfil these requests from 1 January 2008.
Please note that beneficial owners of shares nominated by the registered holders
of those shares are required to direct all communications to the registered
holder of their shares rather than to the Company's registrar, Capita
Registrars, or the Company directly.
11 Statement of Directors' Responsibilities
The Directors confirm that to the best of their knowledge the condensed set of
financial statements has been prepared in accordance with IAS 34, "Interim
financial reporting" as adopted by the European Union, and includes a fair
review of the information required by Disclosure and Transparency Rules 4.2.7
and 4.2.8 of the United Kingdom's Financial Services Authority.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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