RNS Number : 9630H
Victoria PLC
12 November 2008
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Wednesday, 12 November 2008
Victoria PLC
("Victoria" or "the Group")
Leading manufacturers of high quality carpets in the UK, Australia and Ireland
Half-Year Results for the six months ended 27 September 2008
"solid performance in difficult economic conditions"
2008
2007
� Revenue �32.71m
�28.76m
- market share increased in both UK and Australia
� Group operating profit �1.64m
�1.58m
� Pre-tax profit �1.28m
�1.25m
� Earnings per share 13.02p
12.92p
� Interim dividend introduced 4.0p
-
� Group trades well within current banking facilities with sufficient capacity to cover both future capital expenditure and planned
working
capital requirements
"The Group's geographical spread and high quality product portfolio, coupled with prudent management, has given it the ability to be
able to continue to invest in areas which offer the best future growth potential. This has enabled the business to perform ahead of the
market in trading conditions which are now undoubtedly the worst we have seen in several decades.
"Given the high degree of uncertainty that now exists in all our markets, and coupled with the likelihood that they may yet deteriorate
still further, the Board anticipates that the results for the full year are likely to be significantly down on those achieved last year.
"This being said, we remain confident that we have a sound and solid business model to see out the down-turn and to build upon once
confidence returns to the markets and the global economies".
Alexander Anton, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Alan Bullock, Group Managing Director
Ian Davies, Group Finance Director Fiona Tooley, Director
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
www.victoria.plc.uk
Worcester Road, Kidderminster, Worcestershire DY10 1JR England
Telephone: 01562 749300 Fax: 01562 749649
Registered in England No. 282204
-2-
Victoria PLC
CHAIRMAN'S STATEMENT
OVERVIEW
The Group's geographical spread and high quality product portfolio, coupled with prudent management, has given it the ability to be able
to continue to invest in areas which offer the best future growth potential. This has enabled the business to perform ahead of the market in
trading conditions which are now undoubtedly the worst we have seen in several decades.
Against this backdrop, the first half of the current financial year has seen Victoria deliver a solid performance in difficult economic
conditions. However, as we are all aware, the global economy has continued to deteriorate over the last two months making future trading
difficult to predict.
FINANCIAL SUMMARY
Revenue from the Group's activities increased in the half-year by 13.8% from �28.76 million to �32.71 million. This improvement was
enhanced in Sterling terms by a strong average exchange rate in both the Australian Dollar and Euro in the first half. Sales revenue in the
UK was, however, flat, but were up in local currency terms by 9.7% in Australia and 11.5% in Ireland.
Group Operating profit increased by 3.5% from �1.58 million to �1.64 million, however, underlying Operating profits in the UK were down
by 44.7%, flat in Ireland and up in Australia by 5.6%.
Pre-tax profit increased 2.8% from �1.25 million to �1.28 million and earnings per share improved from 12.92p to 13.02p per share.
Group borrowings increased from �7.60 million at 29 March 2008 to �12.00 million at 27 September 2008. This is in-line with plan, and
reflects the tufted expansion investment programme in Australia and an increase in working capital to support its revenue growth. The Group
trades well within its current banking facilities, which provides sufficient capacity to cover both future capital expenditure and planned
working capital requirements.
As announced in June and confirmed in the 2008 Report & Accounts, the Group will introduce an Interim dividend commencing in the current
financial year. An Interim dividend of 4 pence per share will be paid on 18 December 2008 to all shareholders on the register as at 21
November 2008.
OPERATIONAL REVIEW
UNITED KINGDOM
After a promising start to the financial year, Victoria's UK sales declined markedly in August and September 2008. As a result, revenue
for the six months was flat at �12.44 million, compared to �12.43 million in the corresponding period last year. This, however, compares
favourably with many of the Group's UK competitors.
continued*
-3-
Operating profits reduced from �262k to �145k (-44.7%) which reflects the adverse impact of both material and overhead cost inflation,
resulting in the decline in Pre-tax profits down from �135k to �57k (-57.7%), in the period.
Despite challenging market conditions, particularly in the residential sector, Victoria has continued with its move into the contract
floorcovering market in the UK and is currently establishing a specialist contract flooring division. A promising start has already been
made in this venture, with the cost of this investment, in part, being reflected in the first half-year's results. The full benefits of this
investment have not yet been seen, but will be in the future as we utilise our skills to develop our market position in this complementary
market.
IRELAND
The Group's Irish businesses have made a strong start to the first half of the financial year. Sales revenue grew by 11.5% from EUR3.84
million to EUR4.28 million. Operating profits increased by 1.2% from EUR174k to EUR176k, with Operating margin down from 4.5% to 4.1%.
Pre-tax profits were up from EUR147k to EUR163k, an increase of 11.2% over the same period last year.
The Republic of Ireland is now officially in recession and we are watching the market carefully. The business has, however, continued to
invest in both new product ranges and point of sale display materials and we are also hopeful that we will benefit from the move into the
wider contract flooring market.
AUSTRALIA
The business saw strong sales growth in the first half-year with sales up by 9.7% from A$32.70 million to A$35.88 million. Operating
profit advanced by 5.6% from A$ 3.37 million to A$3.56 million, with Operating margin down slightly from 10.3% to 9.9%. Pre-tax profits were
up from A$3.04 million to A$3.18 million, an increase of 4.6%. In Sterling terms these increases were aided by a relatively strong average
Australian Dollar exchange rate which meant that revenues were up by 23.1%, whilst Operating profits increased by 18.4% and Pre-tax profits
by 17.3% upon consolidation into Sterling.
The Group's investment of A$8.5 million in additional tufting capacity in Australia announced earlier this year is progressing well. Two
of the planned four new machines are already installed and operational, with the remaining two tufting machines now in the process of being
commissioned. The planned benefits of this investment through increased sales and profitability may, in the short-term, be impacted by the
now weakening economy.
CANADA
Sales in Colin Campbell, our Associate Canadian business, were up by 3.4% to C$5.04 million in the half-year. Pre-tax profit reduced
from C$252k to C$41k. Profitability was affected in the period by the charge in the financial accounts relating to sampling and warehousing
costs involved in the roll out of our "Nature's Carpets�" product offering into the United States. We are excited at the growth prospects
afforded by this new environmental and eco-friendly range of floorcoverings, but the short-term expectations have to be tempered by the
current state of the housing market in the United States.
continued*
-4-
PERSONNEL
As previously notified to the market Aram Shishmanian stands down from the Board as a Non-executive director with effect from today to
take up his role as CEO of the World Gold Council. We thank Aram for his contribution to the Board over the last year and wish him well in
his new challenge. Nikki Beckett has now been appointed to the role of senior Non-executive director, as well as Chairman of the Audit and
Remuneration Committees. The Board is currently engaged in a recruitment process and envisages having a new Non-executive director in place
by the end of the current financial year.
As well as recognising Aram's contribution to the Board, it is also important to acknowledge the role played by the management and
employees in the success of the Company. It is their continued commitment and loyalty that will make the difference as we all work together
in developing the further potential of our business for both these challenging times and in future years.
OUTLOOK
Since the end of the first half-year we have witnessed unprecedented turmoil around the globe and the impact of this has severely
affected consumer and business confidence in all of the markets in which we trade. The trading environment continues to be extremely
difficult.
With the UK and Ireland both having entered into recession, the housing market likely to weaken still further and unemployment to rise,
it may be at least 18 months before we see a return to more normal trading conditions.
Towards the end of the first half-year our Australian operation also began to witness a hardening in its markets and within the last
month it has seen a significant slowdown in the Australian economy.
At this time, the market lacks any clear visibility as to whether this is a short-term downturn or a longer term trend. Furthermore,
there is also a degree of uncertainty about the direction of the Australian Dollar / Sterling exchange rate and its possible impact on the
consolidation of profits into the Group's result at the year-end.
Given the high degree of uncertainty that now exists in all our markets, and coupled with the likelihood that they may yet deteriorate
still further, the Board anticipates that the results for the full year are likely to be significantly down on those achieved last year.
This being said, we remain confident that we have a sound and solid business model to see out the down-turn and to build upon once
confidence returns to the markets and the global economies.
Alexander Anton
Chairman
12 November 2008
-5-
Victoria PLC
Consolidated Income Statement
For the 26 weeks ended 27 September 2008 (unaudited)
26 Weeks 26 Weeks 52 weeks
ended ended ended
27 Sept 2008 29 Sept 2007 29 March 2008
Notes �000 �000 �000
3 32,713 28,757 61,701
Revenue
(22,978) (20,208) (43,392)
Cost of sales
9,735 8,549 18,309
Gross Profit
(6,423) (5,662) (11,186)
Distribution costs
(2,078) (1,644) (3,757)
Administrative expenses
405 340 828
Other operating income
3 1,639 1,583 4,194
Operating Profit
8 45 78
Share of results of associated company
(363) (379) (763)
Finance costs
1,284 1,249 3,509
Profit before tax
4 (380) (352) (972)
Taxation
904 897 2,537
Profit for the period
Attributable to:
Equity holders of the parent 904 897 2,537
pence basic 5 13.02 12.92 36.54
Earnings per share -
diluted 5 13.02 12.92 36.54
Consolidated Statement of Recognised Income & Expense
For the 26 weeks ended 27 September 2008 (unaudited)
26 Weeks 26 Weeks 52 weeks
ended ended ended
27 Sept 2008 29 Sept 2007 29 March 2008
�000 �000 �000
(401) 819 1,911
Exchange differences on
translation of foreign operations
Net (loss)/income recognised (401) 819 1,911
directly in equity
Profit for the period 904 897 2,537
Total recognised income for the 503 1,716 4,448
period
Attributable to
Equity holders of the parent 503 1,716 4,448
-6-
Victoria PLC
Consolidated Balance Sheet
As at 27 September 2008 (unaudited)
27 Sept 2008 29 Sept 2007 29 March 2008
�000 �000 �000
Non-current assets
Intangible assets 498 486 512
Property, plant and equipment 24,756 24,354 24,866
Investment property 180 180 180
Investment in associated company 579 565 541
Deferred tax asset 1,107 1,016 1,129
Total non-current assets 27,120 26,601 27,228
Current assets
Inventories 20,051 17,160 18,162
Trade and other receivables 13,533 10,132 9,521
Other financial asset 2 11 -
Cash at bank and in hand 282 823 1,260
Total current assets 33,868 28,126 28,943
Total assets 60,988 54,727 56,171
Current liabilities
Trade and other payables 11,889 9,437 9,651
Current tax liabilities 1,053 1,051 1,365
Financial liabilities 5,498 6,426 4,635
Total current liabilities 18,440 16,914 15,651
Non-current liabilities
Trade and other payables 1,430 1,502 1,474
Other financial liabilities 6,792 4,246 4,235
Deferred tax liabilities 2,233 2,234 2,248
Total non-current liabilities 10,455 7,982 7,957
Total liabilities 28,895 24,896 23,608
Net assets 32,093 29,831 32,563
Equity
Issued share capital 1,736 1,736 1,736
Share premium 829 829 829
Retained earnings 29,528 27,266 29,998
Total equity 32,093 29,831 32,563
-7-
Victoria PLC
Consolidated Cash Flow Statement
For the 26 weeks ended 27 September 2008 (unaudited)
26 Weeks 26 Weeks 52 weeks
ended ended ended
27 Sept 2008 29 Sept 2007 29 March 2008
Notes �000 �000 �000
7a (2,094) 1,993 5,427
Net cash (outflow)/inflow from
operating activities
Investing activities
Dividends received from - - 54
associate
Purchases of property, plant (1,429) (1,106) (2,102)
and equipment
Proceeds of disposals of 46 10 62
property, plant and equipment
Net cash used in investing (1,383) (1,096) (1,986)
activities
Financing activities
Increase / (decrease) in long 2,926 (682) (1,392)
term loans
Receipts from financing of 31 40 832
assets
Payment of finance leases/HP (387) (397) (953)
liabilities
Dividends paid (972) (868) (868)
Net cash from/(used in) 1,598 (1,907) (2,381)
financing activities
Net (decrease)/increase in (1,879) (1,010) 1,060
cash and cash
equivalents
Cash and cash equivalents at (2,629) (3,693) (3,693)
beginning of period
Effect of foreign exchange (30) 21 4
rate changes
Cash and cash equivalents at 7b (4,538) (4,682) (2,629)
end of period
-8-
Victoria PLC
Notes to the Half Year Financial Statements
For the 26 weeks ended 27 September 2008 (unaudited)
1 General information
These condensed consolidated financial statements for the six months ended 27 September 2008 have not been audited or reviewed by the
Auditors. They were approved by the Board of directors on 11 November 2008.
The information for the year ended 29 March 2008 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
29 March 2008, 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 44 to 48 of the Group's audited financial statements for the year ended 29 March 2008.
3 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 and 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.
For the 26 weeks ended For the 26 weeks ended
27 September 2008 29 September 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
12,443 145 (88) 57 12,432 262 (127) 135
UK
Ireland 3,386 139 (10) 129 2,611 118 (18) 100
Australia 16,884 1,674 (177) 1,497 13,714 1,414 (138) 1,276
32,713 1,958 (275) 1,683 28,757 1,794 (283) 1,511
Share of results of - - - 8 - - - 45
associate
Central costs - (319) (88) (407) - (211) (96) (307)
Total continuing operations 32,713 1,639 (363) 1,284 28,757 1,583 (379) 1,249
Tax (380) (352)
Profit after tax from 904 897
continuing activities
* 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.
continued*
-9-
4 Tax
26 Weeks 26 Weeks
ended ended
27 Sept 2008 29 Sept 2007
�000 �000
Current tax
- Current year UK (95) (52)
- Current year overseas 475 404
- Prior years - -
380 352
Deferred Tax - -
Total 380 352
Corporation tax for the half year is charged at 29.6% (2007: 28.2%), representing the best estimate of the weighted average annual
corporation tax rate expected for the full financial year.
5 Earnings per share
The calculation of earnings per ordinary equity share in the parent entity is based on the following earnings and number of shares:
26 Weeks 26 Weeks
ended ended
27 Sept 2008 29 Sept 2007
Earnings (�000) basic and diluted
Profit attributable to ordinary equity holders of 904 897
the parent entity
6,944 6,944
Number of shares (thousands) - In issue
throughout the period
Earnings per share (basic and undiluted) in pence 13.02 12.92
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.
6 Dividends
26 Weeks 26 Weeks
ended ended
27 Sept 2008 29 Sept 2007
�000 �000
Amounts recognised as distributions to equity
holders in the period:
Final dividend for the year ended 29 March 2008
paid during the year
14 pence per share (2007: 12.5 pence) 972 868
Interim dividend declared for the year to 28
March 2009
4.0 pence per share (2007: nil) 278 -
continued*
-10-
7 Notes to the cash flow statement
a) Reconciliation of operating profit to net cash inflow/(outflow) from operating activities
26 Weeks 26 Weeks 52 weeks
ended ended ended
27 Sept 2008 29 Sept 2007 29 March 2008
�000 �000 �000
1,639 1,583 4,194
Operating profit from continuing
operations
Adjustments for:
- Depreciation charges 1,179 1,169 2,299
- Amortisation of intangible 15 13 28
assets
- (Profit)/loss on disposal of (9) (2) 15
property, plant and
equipment
- Exchange rate difference on (144) 362 976
consolidation
Operating cash flows before 2,680 3,125 7,512
movements in working
capital
(Increase) in working capital (3,800) (370) (500)
Cash generated from operations (1,120) 2,755 7,012
Interest paid (374) (379) (743)
Income taxes paid (600) (383) (842)
Net cash (outflow)/inflow from (2,094) 1,993 5,427
operating activities
b) Analysis of net debt
At Cash Other Exchange At
29 March 2008 flow non-cash movement 27 Sept 2008
changes
�000 �000 �000 �000 �000
1,260 (948) - (30) 282
Cash
Bank loans payable less than (3,889) (931) - - (4,820)
one
year and overdrafts
Cash and cash equivalents (2,629) (1,879) - (30) (4,538)
Secured commercial bills
- Payable more than one year (2,078) (2,926) - 51 (4,953)
Finance leases and hire
purchase
agreements
- Payable less than one year
(737) 387 (332) 5 (677)
- Payable more than one year (2,157) (31) 332 16 (1,840)
Net debt (7,601) (4,449) - 42 (12,008)
continued*
-11-
8 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:
26 Weeks 26 Weeks 52 weeks
ended ended ended
27 Sept 2008 29 Sept 2007 29 March 2008
2.1252 2.3845 2.3115
Australia (A$) - average rate
Australia (A$) - period end 2.2216 2.3023 2.1657
Ireland (EUR) - average rate 1.2643 1.4710 1.4170
Ireland (EUR) - period end 1.2619 1.4326 1.2623
Canada (C$) - average rate 1.9836 2.1296 2.0734
Canada (C$) - period end 1.9080 2.0246 2.0251
9 Related party transactions
During the period, the Group had transactions with its associate comprising sales of goods to the value of �384k (2007: �197k) and
provision of services worth �44k (2007: �41k). At 27 September 2008 the Group was owed �332k (2007: �243k). All goods and services were
provided at market rates.
10 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 17 of the Group's 2008 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.
11 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.
12 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 4.2.9 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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