RNS Number : 9537W
Victoria PLC
18 June 2008
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Wednesday, 18 June 2008
Embargoed: 7.00am
Victoria PLC
a successful and well established international manufacturer and distributor
of carpets and floorcoverings
Preliminary Results for the 52 weeks ended 29 March 2008
Another Year of Solid Growth
* Group revenue increased 11.3% to �61.7m (an increase of over 25.0% in the past three years)
* Profit before tax up 27.0% to �3.5m
* Earnings per share (adjusted) up 26.3% to 36.5p
*
Proposed final dividend of 14p per share, increase of 12.0%
* Proposal to start paying interim dividends
* Net borrowings reduced by �2.1m
* Carpet sales within the UK were up 6.8% at �24.9m, in a market which was estimated, by management, to be down by around 5%, whilst
operating profits were up 9.8% to �1.3m
* Australian operation has again enjoyed another year of excellent growth with revenues up 20.1% to �28.5m and operating profit up
46.5% to �3.0m
"The difficulty of the current markets is real and is the backdrop against which we have developed our growth plans. We have strong
products, unrivalled knowledge and expertise, and a passion for customer service that means we are as well placed as any to deliver growing
returns to our Shareholders."
Alexander Anton, Chairman
"The Board believes that the Group has an advantage within the sectors in which it is positioned. The businesses have a strong and
experienced management team who are focused on winning market share. The businesses have a current and fashionable product offering which is
sold through higher margin distribution channels and have a highly efficient manufacturing operation. These factors should enable the UK and
Irish operations to deliver a superior business performance than our competitors and to continue to gain market share.
"The Australian operation again has a well proven and strong management team and they are operating within an attractive and growing
sector in which they already have a track record of winning market share. The major investment in new "state-of-the-art" Tufting machines,
which will be installed from June through to October 2008, will further add to our ability to service our customers in Australia and New
Zealand in the second half of our financial year and to underpin the Group's performance."
Alan Bullock, Group Managing Director
Ian Davies, Group Finance Director
FULL STATEMENT ATTACHED
Enquiries:
Alan Bullock, Group Managing Director
Ian Davies, Group Finance Director Keith Gabriel, Senior Account Manager
Victoria PLC Citigate Dewe Rogerson
Today: +44 (0) 207 638 9571 Today: +44 (0) 207 638 9571
(until 11.30am)
Thereafter: +44 (0) 1562 749640 Thereafter: +44 (0) 121 455 8370
Mobile: +44 (0) 7785 325701 (AB) Mobile: +44 (0) 7770 788624
www.victoria.plc.uk
-2-
Victoria PLC
Preliminary Results for 52 weeks ended 29 March 2008
CHAIRMAN'S STATEMENT
Progress of the Group and Board Structure
With all the gloom and doom around, I am delighted to be able to declare a much improved result for the year ended 29 March 2008.
Revenue for the Group was up by 11.3% on 2007 at �61.7m and profit before tax rose 27.0% to �3.51m. Improvements were achieved across all of
the sectors, winning market share in our core markets in the UK and Australia. My congratulations and gratitude go to the management team
and all employees in achieving this great result.
The last year has witnessed the successful transformation of the Group Board. The arrival of Ian Davies as Finance Director has greatly
benefited the Group and evidence of his skills and influence can be seen in the enclosed accounts. Improved cash flow, return on operating
assets and the implementation of more rigorous financial budgeting and reporting procedures have prepared the Group for future growth.
The Board has been strengthened with the arrival of Nikki Beckett and Aram Shishmanian as Non-Executive Directors. Their wide experience
and skills, coupled with their dynamism, are making a significant contribution to the Group Board.
My thanks to Bob Gilbert and Keith Ackroyd for their considerable commitment to the Board over the last twelve years. Bob's arrival as
Chairman in 1996 provided the Company with much needed stability at that time and the steady progress made since then is a testament to his
influence. Keith has been a much valued colleague in his capacity of Senior Non-Executive Director, providing sound advice at all times.
I became Chairman on 4 December 2007 and am honoured to have been offered the role. I am respectful of the Group's heritage and in
particular of its entrepreneurial spirit, commitment to the Company's continual focus on creating sustainable Shareholder value and forging
leadership positions in its markets.
Outlook and Alignment of Employees' to Shareholders' Interests
The Board has developed plans for the next three years which are designed to deliver growing returns to its shareholders. These plans
will be delivered in partnership with the executives and staff and will require significant commitment from them. In recognition of this, we
intend to adopt a scheme to allow all employees to benefit from the Group's future success.
Within the Notice of Annual General Meeting, we are requesting that Shareholders approve the implementation of a Long Term Incentive
Plan for the senior Executives. Working with Deloitte, the Remuneration Committee has devised a scheme which provides the appropriate
alignment with Shareholder interests and will create the energy and incentive that is needed to achieve the growth plans.
We think it is important that all employees have the opportunity to align with Shareholders and we are proposing to introduce an
employee share save scheme later in the year. I trust you will support the Board in these recommendations.
continued*
-3-
Outlook
We are committed to our three year plan, as outlined in the business review, which commences this year and is designed to deliver
continued growth in existing markets and expansion of our product offering. All divisions have performed ahead of last year. I would,
however, particularly like to draw your attention to the outstanding performance of the Australian division. The Australian revenues grew by
12.5% in 2008, in local currency, and our three year plan shows continued strong growth in Australasia, with the Group intending to
significantly increase expenditure in plant and equipment.
The Company has commenced a strategic review and I look forward to updating Shareholders on its progress in the future.
I started my comments by referring to the difficulty of the current markets and the consequential doom and gloom. The difficulty is real
and is the backdrop against which we have developed our growth plans. We have strong products, unrivalled knowledge and expertise, and a
passion for customer service that means we are as well placed as any to deliver growing returns to our Shareholders.
Dividend
The Board recommends the payment of a final dividend of 14p per share, an increase of 12.0% over 2007 (12.5p), which is payable on
Monday, 28 July 2008, to all Shareholders on the Register at 27 June 2008 (ex dividend date being Wednesday, 25 June 2008).
In addition, the Board is pleased to propose that in future an interim dividend will be paid in December of each year. The increase in
dividend and proposal to pay interim dividends is a reflection of our solid financial performance this year and our continued confidence in
the Group's businesses.
Alexander Anton
Chairman
18 June 2008
-4-
Victoria PLC
Preliminary Results for 52 weeks ended 29 March 2008
BUSINESS REVIEW
Group Activities
Victoria PLC is a successful and well-established manufacturer and distributor of carpets and floorcoverings to the mid to high end
product markets in which it chooses to operate.
Manufacturing high quality, design-led products, whether produced internally in modern vertically integrated facilities in both the UK
and Australia or outsourced using "best of class" products of differentiation to exploit the Victoria "brand", we seek a market leading
position in the geographic areas in which we operate.
Strategy and Objectives
Strategy
Victoria has followed a consistent strategy over many years enabling it to build a robust business. The Group's strategic approach is
focused on growth, taking advantage of opportunities to exploit and build upon our market leading position.
The Group's strategy for achieving this growth is based upon:
* Focusing the Group's activities in the industry sector it knows and trying to develop market leading positions in chosen business
segments.
* Manufacturing and delivering design-led innovative products to the Group's customers.
* Providing outstanding levels of customer service, including achieving the highest delivery and quality standards.
* Achieving best in class manufacturing standards.
Objectives
Victoria is committed to providing long-term Shareholder value in the form of steadily growing earnings per share.
Key performance indicators
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 requirements and return on operating assets.
continued*
-5-
KPIs 2008 2007
Operating margin 6.8% 6.1%
Return on operating assets 10.6% 9.0%
Earnings per share (basic) 36.5p 28.9p
Results for 2008 Financial Year
The performance of each regional division in 2008, in terms of revenue, operating profit and operating margin growth is given in the
table below:
Segmental performance Revenue Operating profit Operating margin
2008�000 2007�000 2008�000 2007�000 2008% 2007%
UK 27,149 25,524 1,335 1,216 4.9 4.8
Ireland 6,075 6,196 387 348 6.4 5.6
Australia 28,477 23,706 3,051 2,082 10.7 8.8
Central costs - - (579) (261) - -
Group total 61,701 55,426 4,194 3,385 6.8 6.1
Associated Company Revenue Operating profit* Operating margin
2008 2007 2008 2007 2008 2007
C$000 C$000 C$000 C$000 % %
Canada 10,154 9,117 877 717 8.6 7.9
* Associated company operating profit is before interest, tax, related party management charges and one-off items.
The Group made further progress towards its objectives of increasing market share in its chosen markets and improving operating margins.
Total Group revenue was up 11.3% on 2007 to �61.70m. Revenue growth, combined with continued focus on gross margin and overhead costs,
enabled operating profit before interest and tax to increase by �0.81m to �4.19m, with operating margin improving by 0.7% to 6.8%.
Return on Operating Assets
A key measure of the effective use of resources for the Group is Return on Operating Assets (ROA). ROA demonstrates the effectiveness of
our managers in utilising the assets of the business to deliver profits to provide a return for our Shareholders. ROA is calculated as the
operating profit including share of associated company (2008: �4.27m) divided by the operating assets (2008: �40.2m) employed in the
business and is expressed as a percentage.
For this financial year, the Group targeted a ROA of 10%. The Group met this target achieving a ROA of 10.6%, which represented an
increase of 1.6% on the 2007 figure of 9.0%. This improvement was primarily due to the continued focus on working capital management,
investment in capacity, expanding plant and equipment and the increase in operating margins in all geographic segments.
Divisional Review
Victoria is organised through four regional divisions. Each region has an operational managing director who is responsible for meeting
the targets set for each division.
continued*
-6-
United Kingdom
In the prevailing market conditions, which could at best be described as very challenging, the UK division of the Group performed well.
Revenues were up by 6.4% from �25.52m to �27.15m, with operating profits up 9.8% from �1.22m to �1.34m.
Carpet sales within the UK were up from �23.28m to �24.86m, an increase of 6.8%, in a market which was estimated by management to be
down by around 5%. This continues to illustrate Victoria's ability to gain market share from the competition, based on a strong product
offering and consistently high levels of service.
New product introductions during the year all performed well, with products such as Celtic Heathers, Natural Companions and Rustic
Jewels all proving a particular hit with consumers.
Sales to the targeted independent retail sector saw continued growth (+13.4%) and remain part of the core future strategy.
Export sales, including inter-Group sales to Ireland, were weaker in the year, falling from �4.04m to �3.51m, in part due to the
strength of Sterling against the US dollar and, in part, through market conditions.
Operationally, Victoria has continued to remain focused on exploiting the advantages it has with its modern operational plant in both
its carpet manufacturing division and yarn spinning facility.
Considerable work has taken place during the year on improving the runnability of the yarns used in our Tufted carpet operation which
have enabled the unit cost of carpets produced to be reduced.
In the second half of 2007, the company installed two-fold yarn twisting facilities at its UK spinning mill which has allowed greater
flexibility and increased yarn capacity for use in the UK group.
As part of its new strategic initiative, Victoria has decided to expand its sales into the contract carpet market in the UK. Hitherto,
Victoria has focused its sales efforts almost entirely on the residential carpet market, with less than 5% of its products being sold to the
contract market via its established retail and contractor customers. Plans are now well advanced in recruiting a small but dedicated
contract sales team to target the architect/designer specified route to the contract market. This is a sizeable market segment which often
operates on a different economic cycle to the residential market and may, in due course, offer Victoria additional growth potential.
As well as utilising existing manufacturing capacity at Victoria's UK plants, the Group has also signed an initial three year exclusive
distribution agreement with Mannington Mills Inc., a specialist American carpet tile and resilient flooring manufacturer, to market their
tiles in the UK, the Republic of Ireland and France.
continued*
-7-
Ireland
The Irish businesses enjoyed mixed fortunes during the year as the Irish economy slowed.
The housing market in Ireland also stalled in 2007, making the market conditions within which we had to operate tougher than we had seen
for some years.
Against this backdrop, whilst the overall revenues were marginally down by 1.9% from �6.20m to �6.08m, operating profits were up from
�348k to �387k (+11.2%). Operating margin was up from 5.6% to 6.4%.
Navan Carpets, the Group's Irish business operating primarily in the residential carpet market, battled hard to win market share in
challenging conditions, with revenues up 1% in the year. The widening of Navan's product offering and point-of-sale display units into the
retailers undoubtedly helped the company offset the worst of the market conditions.
Conversely, Munster Carpets, who focus on the contract carpet market, had a tougher year with revenues down by 17.4% on the previous
year. Whilst there can always be an element of spikiness in the flow of contract sales, the result from Munster was slightly disappointing.
The additional opportunity that Mannington products and programmes offer to Munster Carpets, coupled with the development of further
Victoria Carpets generated contract products, should help to see a restoration of progress in Munster's fortunes in the forthcoming year.
Australia
The Australian economy, which is currently commodity driven, has proven to be fairly robust and has, in the main, so far escaped the
fall-out from the economic downturn being seen in other economies. GDP growth during the year has been around 3.9% and whilst interest rates
have risen to 7.25% and a general election has taken place, the economy has held strong.
Against this backdrop, our Australian operation has again enjoyed another year of excellent growth in both revenues and profitability.
Revenues were up by 20.1% from �23.71m to �28.48m, with operating profit up 46.5% from �2.08m to �3.05m. Operating margins were almost
2% higher at 10.7%, helped by the benefits of operational gearing on higher volumes.
Innovative product development, including an increased use of synthetic yarns and, in particular, solution dyed nylon, and the strength
of the company's relationship with retail buying groups, has enabled it to increase market share in both Australia and New Zealand.
The Australian company has also managed to capitalise well on the benefits of recent capital expenditure at both its yarn spinning mills
in Castlemaine and Bendigo and its carpet manufacturing operations in Dandenong.
In March 2008, the move to consolidate the company's finished goods warehousing was completed using a third party logistics company.
This move will enable the company to provide improved customer services and will facilitate the expansion of the Tufted manufacturing
operation at Dandenong.
continued*
-8-
In January 2008, the Group Board agreed a major capital expenditure programme at the Dandenong carpet manufacturing plant. A spend of
A$8.5m (�3.9m at year end exchange rates) was approved to both increase the tufting capacity but, above all, to introduce several new
"state-of-the-art" advanced design Tufters. The new equipment will not only allow the business to meet customer demand for our current
products but will also allow it to introduce new product styles to grow our share of both the residential and commercial contract markets.
The investment will be funded by facilities already secured from the company's Australian bankers and whilst it will increase borrowings
significantly in the short term, the business in Australia is strongly cash flow generative and the forecast sales growth will fairly
quickly pay-down the debt to more normal levels.
Victoria is now the second largest manufacturer in the Australian carpet market, with well-established customer relationships and a
strong management team. The Board believes the company can continue to capitalise on the dislocation caused by the industry consolidations
we have already seen and new market opportunities that may present themselves.
Canada
The Western Canadian economy in which our Canadian Associate Company, Colin Campbell, operates, has so far been less difficult than that
seen in many parts of North America.
Campbell's business continued to prosper during the year under review with revenues up from C$9.12m to C$10.15m, an increase of 11.4%.
Underlying operating profits (see table) were increased from C$717k to C$877k, up 22.3% with an operating margin of 8.6%, up from 7.9%
last year.
Underlying operating profit
2008C$*000 2007C$*000
Associated Company
Profit from operations per financial statements 514 412
Interest 13 5
Related party management charges 350 300
Underlying operating profit 877 717
Campbells continued to prosper with the supply of high quality wool carpeting to the burgeoning high-rise contract residential market in
Vancouver and has supplied the Shangri-La and Harbour Green developments, two of the city's most prestigious apartment buildings completed
in recent years.
Looking to the forthcoming year, whilst there are perhaps the first signs of a slowdown in the contract residential market, there is
still scope to grow our business through Nature's Carpet� and the decorative showroom channels to market.
continued*
-9-
Product Design and Development
Eco-friendly Products
Early in 2008 (Q4 of the financial year 2008), Campbells started in earnest its move into the American market with Nature's Carpet�, an
ultra-low toxicity and biodegradable floorcovering. This product meets the high standards demanded by both the environmental movement and by
individuals with high sensitivity to chemical toxins.
The package of products were extended from purely Tufted carpet to include traditionally woven Wiltons, carpet tiles and a wool
underlay. Stocks are now positioned in the States to service the market and a sales team is out prospecting for sales. Initial reaction to
the new point-of-sales display and programme has been very positive. The Group remains committed to designing eco-friendly sustainable home
products that don't sacrifice style.
Design Capabilities
Victoria recognises the need to be a leader in the industry in offering products which are "leading edge" in their style, design and
colour. In Australia, Victoria utilises the very latest pattern trialling equipment and in the UK it has recently expanded its capabilities
with both software and personnel to develop products for its planned move into the contract market.
Future Outlook
The Group is committed to its three year plan to deliver sustainable growth in its existing markets, which it commenced in April 2008.
The Group plans to leverage its brand and operational capabilities more effectively by entering the UK and overseas contract
floorcovering markets for the first time.
In Australia the significant investment in additional plant and equipment will enable the company to continue in exploiting the growth
potential offered in both the residential and commercial contract sectors in its local markets.
United Kingdom and Ireland
In both the United Kingdom and Ireland, the very difficult general economic climate in which the Group operates is well documented in
the media.
With the slowdown in both countries' economic growth and the fallout in the housing markets, we anticipate an extension of the extremely
challenging economic and market conditions already seen in 2007 and 2008 to date. It is unlikely that consumer sentiment and spend will
return to more normal levels in the forthcoming financial year.
External commercial pressures from both UK and continental European competitors will remain intense as the size of the market most
likely shrinks.
The Board believes that the Group has an advantage within the sectors in which it is positioned. The businesses have a strong and
experienced management team who are focused on winning market share. The businesses have a current and fashionable product offering which is
sold through higher margin distribution channels and have a highly efficient manufacturing operation. These factors should enable the UK and
Irish operations to deliver a superior business performance than our competitors and to continue to gain market share.
continued*
-10-
Australia
In Australia, the overall economic picture looks to be more optimistic and, whilst inflation is increasing and interest rates may
increase further, the outlook is relatively good.
The Australian operation again has a well proven and strong management team and they are operating within an attractive and growing
sector in which they already have a track record of winning market share. The major investment in new "state-of-the-art" Tufting machines,
which will be installed from June through to October 2008, will further add to our ability to service our customers in Australia and New
Zealand in the second half of our financial year and to underpin the Group's performance.
Canada
Whilst the Canadian Associate Company remains a relatively small part of the overall Group, it expects to continue to grow in the year
ahead.
Corporate Responsibility
Corporate responsibility is a key part of the Group's strategy and is integral to the business. The Board believes that conducting
business in an ethical and responsible way enables it to build and maintain successful relationships with its customers and suppliers, as
well as allowing us to attract and retain the right people within our organisation.
The Group's policies and activities on environmental matters, employees and social and community issues are set out in the 'Corporate
Social Responsibility Report' in the full Report & Accounts.
FINANCIAL REVIEW
Revenue, Gross Margin and Operating Profit
The combined revenues of the subsidiaries, as reported for the year was �61.70m compared with �55.43m in 2007, with growth achieved, in
local currency, in the UK (6.4%) and Australia (12.5%) but a decline in Ireland of 5.6%. Excluding the impact of currency, the increase in
Group revenue was �4.24m (7.6%).
The overall gross margin for the Group was 29.7%, marginally up on last year's gross margin of 29.6%. Group operating profit for the
year was �4.19m, 23.9% ahead of last year (2007: �3.39m). Underlying operating profit rose in the UK by 9.8%, in Ireland by 7.2% and in
Australia by 37.2%. Underlying operating profit before related party management charges in our associated company, Colin Campbell, increased
by 22.3%.
Central operating costs were up by �0.31m on 2007 operating costs of �0.26m. (2007 operating costs were down �0.15m on 2006 costs
principally due to remuneration savings.) Central costs included nonrecurring costs in respect of recruitment, relocation expenses, website
development and property costs. Central costs also included the full year's remuneration for the Group Finance Director, who joined in March
2007, and the remuneration of the retiring and new Non-Executive Directors.
Revenue and underlying operating profit are discussed in more detail on a divisional basis in 'Results for 2008 financial year' above.
Interest
Interest costs rose slightly to �0.76m (2007: �0.73m). The increase in base rates in the period was mitigated by lower borrowing.
Interest was covered 5.5 times by operating profit (2007: 4.6 times).
continued*
-11-
Profit Before Taxation
Group profit before taxation for the year increased by 27.0% to �3.51m (2007: �2.76m).
Taxation
Taxation was �0.97m for the year, �0.21m above last year reflecting the higher profit achieved. The effective rate of tax on profit for
the year was 27.7%, an increase of 0.4% on 2007 (27.3%).
Earnings per Share
Basic earnings per share grew by 26.3% to 36.54p (2007: 28.92p).
The rise in the effective rate of tax impacted the growth in earnings per share.
The number of shares in issue remained constant during the year and there remain no options or other dilutive arrangement during the
financial year.
Dividends
The Board is recommending a final dividend of 14.0p per share this year, compared to 12.5p in 2007. This represents a 12.0% increase
(2007: 8.7%) and the current aim is to deliver continued dividend growth.
Capital Expenditure
Property, plant and equipment net book value increased by �1.02m to �24.87m (2007: �23.85m).
The Group has continued to invest in its facilities and equipment during the year and spend on property, plant and equipment was up on
the previous year at �2.10m at average rates (2007: �1.96m). Plant and machinery represented the majority of the expenditure with additions
of �1.77m (2007: �1.00m) at average exchange rates. This is in line with expectations, as plant has been acquired to expand capacity and
capability in both carpet manufacturing and yarn spinning.
Disposals for the year totalled �0.25m (2007: �0.79m). Currency movements accounted for a net increase to property, plant and equipment
of �1.30m (2007: �0.02m).
Net Assets
The Group's net asset value at the financial year end increased by 12.4% (2007: 4.2%) to �32.56m (2007: �28.98m). Non-current assets
increased by �1.26m to �27.23m (2007: �25.97m) with the principal movement being in plant and machinery (see 'Capital expenditure' above).
In current assets the main movement was in inventory which increased by �2.42m to �18.16m (2007: �15.74m). Currency movements accounted
for �1.07m of this increase. Underlying inventory (inventory at constant exchange rates) rose in the UK by 6.8%, in Ireland by 10.2% and in
Australia by 10.3%.
The reduction in net debt is discussed in more detail below (see 'Cash flow and net debt' below).
continued*
-12-
Cash Flow and Net Debt
The net cash inflow was �1.06m (2007: �2.66m), reducing our cash and cash equivalent borrowings to �2.63m (2006: �3.69m).
Net cash used in investing activity was �1.99m (2007: �1.85m) which was primarily in additions to property, plant and machinery and this
is discussed in more detail above (see 'Capital expenditure').
Financing activity saw a net outflow of cash of �2.38m (2007: �0.54m). The principal movement was a �1.39m outflow of cash reflecting a
reduction in our long-term financing (2007: �0.34m inflow from increased long-term financing). Dividends paid were up �0.07m at �0.87m
(2007: �0.80m).
In the year net debt reduced by �2.09m to �7.60m (2007: �9.69m).
Hedging
The Group uses derivative financial instruments to manage our interest rate exposure in the UK. The Group currently has one swap
covering �2m, with a maturity date in July 2009. The Group's policy is to continue to consider utilising such instruments subject to an
appraisal of cost and interest rate risk.
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 relatively high
proportion of its borrowings in Australian dollars which acts as a natural hedge against the investment exposure.
Future Funding
The gearing of the Group is significantly lower at 23.4%, at the balance sheet date, in comparison to 2007 at 33.4%.
The facilities in Australia were increased in January 2008, by the granting of a new A$6.39m multi-option facility which can be drawn by
commercial bills or lease. This, together with existing facilities, will provide sufficient debt capacity to cover anticipated increased
capital expenditure in Australia this year. In addition, our current facilities in the UK and Ireland provide capacity in Sterling and Euros
sufficient to cover both capital expenditure and expected working capital requirements.
Changes in accounting policies
There have been no changes in the accounting policies of the Group and its subsidiaries this year.
Alan Bullock
Group Managing Director
18 June 2008
Ian Davies
Group Finance Director
18 June 2008
-13-
Victoria PLC
CONSOLIDATED INCOME STATEMENT
for the 52 weeks ended 29 March 2008
52 weeks ended 52 weeks ended
29 March 2008 31 March 2007
Notes �000 �000
Revenue 1 61,701 55,426
Cost of sales (43,392) (39,003)
18,309 16,423
Gross Profit
Distribution costs (11,186) (10,641)
Administrative expenses (3,757) (3,097)
Other operating income 828 700
1 4,194 3,385
Operating Profit
Share of results of Associated Company 78 104
Finance costs (763) (727)
1 3,509 2,762
Profit before tax
Taxation (972) (754)
2,537 2,008
Profit for the period
Attributable to:
2,537 2,008
Equity holders of the parent
Earnings per share - pence basic 2 36.54 28.92
diluted 2 36.54 28.92
-14-
Victoria PLC
CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE
for the 52 weeks ended 29 March 2008
52 weeks ended 52 weeks ended
29 March 2008 31 March 2007
�000 �000
Exchange differences on translation of 1,911 (33)
foreign operations
1,911 (33)
Net income/(loss) recognised directly in
equity
2,537 2,008
Profit for the period
4,448 1,975
Total recognised income for the period
Attributable to
4,448 1,975
Equity holders of the parent
-15-
Victoria PLC
BALANCE SHEETS
as at 29 March 2008
Group Company
29 March 2008 31 March 2007 29 March 2008 31 March 2007
�000 �000 �000 �000
Non-current assets
Intangible assets 512 491 - -
Property, plant and equipment 24,866 23,846 5,283 5,312
Investment property 180 180 180 180
Investment in subsidiary - - 3,321 3,321
undertakings
Investment in Associated 541 469 56 56
Company
Deferred tax asset 1,129 983 - 3
Total non-current assets 27,228 25,969 8,840 8,872
Current assets
Inventories 18,162 15,740 - -
Trade and other receivables 9,521 9,603 5,198 4,505
Other financial assets - 10 - 10
Cash at bank and in hand 1,260 644 - -
Total current assets 28,943 25,997 5,198 4,515
Total assets 56,171 51,966 14,038 13,387
Current liabilities
Trade and other payables 9,651 8,234 119 61
Current tax liabilities 1,365 998 - -
Other financial liabilities 4,635 5,261 3,672 2,782
Total current liabilities 15,651 14,493 3,791 2,843
Non-current liabilities
Trade and other payables 1,474 1,209 - -
Other financial liabilities 4,235 5,072 - -
Deferred tax liabilities 2,248 2,209 656 695
Total non-current liabilities 7,957 8,490 656 695
Total liabilities 23,608 22,983 4,447 3,538
Net assets 32,563 28,983 9,591 9,849
Equity
Issued share capital 1,736 1,736 1,736 1,736
Share premium 829 829 829 829
Retained earnings 29,998 26,418 7,026 7,284
Total equity 32,563 28,983 9,591 9,849
-16-
Victoria PLC
CASH FLOW STATEMENTS
for the 52 weeks ended 29 March 2008
Group Company
52 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended
29 March 31 March 29 March 31 March
2008 2007 2008 2007
Notes �000 �000 �000 �000
Net cash inflow from operating 4 5,427 5,061 (30) 574
activities
Investing activities
Dividends received from 54 32 54 32
associates
Purchases of property, plant (2,102) (1,959) (37) -
and equipment
Proceeds of disposals of 62 74 - -
property,
plant and equipment
Net cash used in investing (1,986) (1,853) 17 32
activities
Financing activities
(Decrease)/increase in long (1,392) 347 - -
term loans
Receipts from financing of 832 870 - -
assets
Payment of finance leases/HP (953) (963) - -
liabilities
Dividends paid (868) (799) (868) (799)
Net cash used in financing (2,381) (545) (868) (799)
activities
Net increase/(decrease) in 1,060 2,663 (881) (193)
cash and
cash equivalents
Cash and cash equivalents at (3,693) (6,363) (2,782) (2,589)
beginning of period
Effect of foreign exchange 4 7 - -
rate changes
Cash and cash equivalents at 5 (2,629) (3,693) (3,663) (2,782)
end
of period
-17-
Victoria PLC
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. Segmental Information
For management purposes, the Group is organised into four operating divisions according to the geographical areas where they are
managed. These divisions form the basis on which the Group reports its primary segment information, plus the Canadian associate. The three
segments are UK, Ireland, Australia, to which is added the Canadian associate.
Geographical segment information for revenue, operating profit and a reconciliation to entity net profit is presented below.
Income statement For the 52 weeks ended 29 March 2008 For the 52 weeks ended 31 March 2007
Revenue Operating Finance Profit Revenue Operating Finance Profit
Profit Costs Before Profit Costs Before
Tax* Tax*
�000 �000 �000 �000 �000 �000 �000 �000
UK 27,149 1,335 (240) 1,095 25,524 1,216 (302) 914
Ireland 6,075 387 (36) 351 6,196 348 (44) 304
Australia 28,477 3,051 (266) 2,785 23,706 2,082 (271) 1,811
61,701 4,773 (542) 4,231 55,426 3,646 (617) 3,029
Share of results of associate 78 104
Central costs (579) (221) (800) (261) (110) (371)
Total continuing operations 61,701 4,194 (763) 3,509 55,426 3,385 (727) 2,762
Tax (972) (754)
Profit after tax from
continuing activities 2,537 2,008
* The share of profits of the Associated Company is shown net of tax as required by IAS1.
Intersegment sales between the UK and Ireland and Australia were immaterial in the current and comparative periods.
Balance Sheet As at 29 March 2008 As at 31 March 2007
Segment Segment Segment Segment
assets liabilities assets liabilities
�000 �000 �000 �000
UK 25,724 7,266 25,990 8,444
Ireland 2,480 1,199 2,249 1,457
Australia 27,135 10,824 22,994 9,544
Investment in Associated Company 541 - 469 -
Unallocated central 291 4,319 264 3,538
assets/liabilities
56,171 23,608 51,966 22,983
The investment in Associated Company is held directly by the parent entity and does not relate specifically to any geographic segment.
continued*
-18-
Other segmental information 52 weeks 52 weeks
ended ended
29 March 2008 31 March 2007
�000 �000
Depreciation and amortisation
UK 1,012 985
Ireland 31 39
Australia 1,277 1,229
Unallocated central 7 -
2,327 2,253
No other significant non-cash expenses were deducted in measuring segment results.
Capital expenditure
UK 904 377
Ireland 1 2
Australia 1,160 1,580
Unallocated central 37 -
2,102 1,959
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:
2008 2007
Earnings (�000) basic and diluted
Profit attributable to ordinary equity holders of the parent 2,537 2,008
entity
Number of shares (thousands)
- In issue throughout the period 6,944 6,944
Earnings per share (basic and undiluted) in pence 36.54 28.92
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.
continued*
-19-
3. Rates of Exchange
The results of overseas subsidiary 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:
2008 2007
Average Year end Average Year end
Australia - A$ 2.3115 2.1657 2.4687 2.4279
Ireland - EUR 1.4170 1.2623 1.4717 1.4735
Canada - Can$ 2.0734 2.0251 2.1540 2.2627
4. Notes to the Cash Flow Statement
Reconciliation of operating profit to net cash inflow from operating activities
Group Company
2008 2007 2008 2007
�000 �000 �000 �000
Operating profit from continuing operations 4,194 3,385 741 1,215
Adjustments for:
- Depreciation charges 2,299 2,226 66 61
- Amortisation of intangible assets 28 27 - -
- Loss on disposal of property, plant and 15 8 - -
equipment
- Exchange rate difference on consolidation 976 (18) - -
Operating cash flows before movements in working 7,512 5,628 807 1,276
capital
(Increase)/decrease in working capital (500) 801 (634) (526)
Cash generated by operations 7,012 6,429 173 750
Interest paid (743) (792) (203) (176)
Income taxes paid (842) (576) - -
Net cash inflow from operating activities 5,427 5,061 (30) 574
5. Analysis of Net Debt
At Cash Other Exchange At
31 flow non- movement 29
March cash March
2007 chang 2008
es
�000 �000 �000 �000 �000
Cash 644 544 - 72 1,260
Bank loans payable less than one (4,337) 516 - (68) (3,889)
year and overdrafts
Cash and cash equivalents (3,693) 1,060 - 4 (2,629)
Secured commercial bills
- Payable less than one year - - - - -
- Payable more than one year (2,883) 1,154 - (349) (2,078)
Finance leases and hire purchase
agreements
- Payable less than one year (924) 953 (724) (42) (737)
- Payable more than one year (1,985) (832) 724 (64) (2,157)
Bank loans payable more than one (204) 238 - (34) -
year
Net debt (9,689) 2,573 - (485) (7,601)
The Group's policy on Derivatives and Other Financial Instruments is set out in the Report & Accounts.
continued*
-20-
6. The results have been extracted from the audited financial statements of the Group for the 52 weeks ended 29 March 2008. 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 52 weeks ended 31
March 2007, which incorporated an unqualified auditor's report, have been filed with the Registrar of Companies.
The auditors report on these accounts did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
7. The Report & Accounts will be posted to Shareholders by 26 June 2008. 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 2.30pm on Thursday, 24 July 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FDLLFVQBFBBQ
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