RNS Number:9640D
Victoria PLC
19 November 2002
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Tuesday, 19 November 2002
Embargoed: 7.00am
Victoria P.L.C.
Interim Results for the six months to 28 September 2002
* Turnover #18.95m +15%
* Profit before tax #1.29m +125%
* Earnings per share 12.92p +123%
* Strong cash generation
* UK sales up 7.0% in difficult and challenging markets with sales to
Independent Retailers improving by 7.4%
* Exports to the hotel and leisure sector remain affected by 9/11
* Excellent performance in Australia with substantial increase in sales
and market share
* Investment continues in plant and new products across the Group
"The first six months of the year have undoubtedly been an extremely busy period
as we put in place the acquisitions of both Munster Carpets in the Republic of
Ireland and Pacific Textiles, in Australia, whilst remaining fully focused on
our day-to-day business.
"The results show a significant improvement in the Group's financial performance
in the six month period ended 28 September 2002, when compared with the first
six months of last year. Sales within the UK in the six months were up by 7.0%
in what many have considered to be a difficult and challenging market, and sales
in Australia were up by almost 40%.
"Overall, we are optimistic that we should continue to trade well through the
second half year and we are cautiously optimistic that the results for the full
year will show a return to the levels of profitability previously achieved."
Bob Gilbert, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Alan Bullock, Group Managing Director
Mark Lee, Group Finance Director Fiona Tooley
Victoria P.L.C. Citigate Dewe Rogerson
Today: 020 7282 8000 Today: 020 7282 8000
Thereafter: 01562 749300 Thereafter: 0121 455 8370
Mobile: 07785 325701 (AB) Mobile: 07785 703523
-2-
Victoria P.L.C.
Interim Results for the six months to 28 September 2002
STATEMENT BY THE CHAIRMAN, R M GILBERT
Introduction
I am pleased to report that the Group has made very good progress during the
past six months, with the earlier investments made in plant, products and
systems now all bearing fruit.
The first six months of the year have undoubtedly been an extremely busy period
as we put in place the acquisitions of both Munster Carpets in the Republic of
Ireland and Pacific Textiles, in Australia, whilst remaining fully focused on
our day-to-day business.
Results
The results show a significant improvement in the Group's financial performance
in the six month period ended 28 September 2002, when compared with the first
six months of last year. However, it should be borne in mind that last year's
interim results were affected by a heavy spend on launching new ranges.
Turnover at #18.95 million was 14.7% higher than the #16.53 million reported in
the comparable period last year. Operating profit increased by 92.7% to #1.42
million (2001: #0.74 million) and profit before tax by 125.4% to #1.29 million
(2001: #0.57 million). Earnings per share were 12.92p (September 2001: 5.78p),
an increase of 123.5%.
The strong cash generation of the business has funded #1.91 million of capital
expenditure during the period and has taken gearing to 17.3% at 28 September
2002. This is only slightly up from 13.3% at the year ended 30 March 2002 and
in fact down from the gearing level of 20.5% at September 2001.
United Kingdom
Sales within the UK in the six months were up by 7.0% in what many have
considered to be a difficult and challenging market with sales to our targeted
Independent Retail sector reassuringly up by 7.4%.
Exports out of the UK operation remained badly affected by the terrorist
atrocities of September 11th 2001, with still no sign of recovery in sales to
the international hotels & leisure sector during this period. Consequently,
Export sales were down by 40.6% which had the effect of reducing overall sales
from the UK operation in the first half year by 3.3%.
The loss of efficiency from running below capacity in the production areas
serving the export business has had a depressing effect on the profitability of
that part of our business. Nevertheless, the stronger UK sales and the
contribution from the John Lewis distribution service have more than outweighed
this to give an increase in overall profitability at Victoria Carpets.
September saw the first anniversary of this warehousing, cutting and
distribution operation for the John Lewis Partnership on their "Jonelle" branded
carpet ranges. This operation has proven to be a great benefit and success to
both parties.
During the period Victoria Carpets has continued to pursue its policy of
achieving organic growth through heavy investment in new ranges, patterning and
in-store displays. Additionally, the demise of several of our competitors has
allowed us to take advantage of the opportunity to place more in-store display
units in the retail sector. The cost of this has been borne in this period and
we believe the greater exposure of our products will bring long-term benefits.
continued...
-3-
The installation of the new backing line is proceeding well with commissioning
planned towards the end of this financial year. From the spring of 2003 onwards
we are looking forward to further enhancing sales of our carpet ranges with this
new and revolutionary style of backing that is lighter in weight, easier to fit
and environmentally friendly. This will also allow us to offer a greater
variety of widths up to 5 metres wide.
Westwood Yarns has continued to operate at or near to capacity during the past
six months, achieving an increase of just over 5% in production volume. Further
recent additions to plant will increase this capacity in the later part of this
financial year.
Westwoods continues to contribute well to the Group performance.
Australia
The Australian economy has been buoyant throughout the past six months. We have
been able to exploit this to the full whilst also benefiting significantly from
the heavy spend made in 16 new product ranges last year, which has undoubtedly
improved our market share.
Sales in Australia were up by almost 40%, restricted only by our inability to
service demand as a result of yarn supply limitations. With our Castlemaine
spinning mill running at full capacity over the period, we have had to depend on
outside yarn supplies, mainly from New Zealand.
We had planned a further expansion programme at Castlemaine to overcome the yarn
supply challenges but the opportunity to acquire Pacific Textiles of Bendigo
presented itself and, as announced on 24 October 2002, we have acquired that
business. This will not only give us a significant increase in yarn availability
immediately, but will also allow us to better control quality and to take
advantage of "just-in-time" practices by co-ordination of both of our Australian
spinning mills.
I am also pleased to inform you that our Australian subsidiary has recently been
recognised by one of Australia's major retail buying groups, Carpet Choice, as
the "Supplier of The Year", with our Victorian State Territory Manager also
being voted as the best sales manager.
Canada
Sales in the first half of the year in our 50% associate company, Colin Campbell
& Sons, have been slightly higher than last year. However, the cost of opening
additional sales offices in Toronto and Montreal has led to a short-term
reduction in profitability.
Prospects
The Australian market is still performing well for us, and although we are
heading for their quieter summer months, and there are some signs of activity
slowing at a retail level, we are optimistic that we should continue to prosper.
The additional yarn capacity available from Pacific Textiles will ensure we
satisfy sales demand and aid in developing new product styles to keep us at the
forefront of the market.
In the UK, the investments made earlier in 2002 in new products are now standing
us in good stead. The traditionally better autumn selling season has started
well for us, although we hear from others in the trade that business is still
difficult. Residentially, we are very well placed to fully exploit the market.
The one area of concern remains our Export Sales where the hospitality sector is
still depressed.
The acquisition of Munster Carpets, announced on 3 October 2002, will provide
Victoria Carpets with a very strong brand and position in the Irish contract
market, as well as the opportunity to develop the commercial contract market in
the UK and Export Markets.
continued...
-4-
The integration of Munster's plant into our Kidderminster site is proceeding
well and on schedule and will also offer greater utilisation of production
facilities such as dyeing. The acquisition has been well received by both
Munster and Victoria's customers and there should be positive benefits flowing
from this operation in the first quarter of 2003 calendar year.
Overall, we are optimistic that we should continue to trade well through the
second half year and we are cautiously optimistic that the results for the full
year will show a return to the levels of profitability previously achieved.
-5-
Victoria P.L.C.
Group Profit & Loss Account
six months to 28 September 2002
Note Six months to Six months to Year to
28 September 2002 29 September 2001 30 March 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Turnover 18,948 16,526 35,000
Cost of sales 13,211 11,667 24,517
Gross profit 5,737 4,859 10,483
Distribution costs 3,374 3,315 6,824
Administrative costs 1,218 1,139 2,467
Other operating income 277 333 665
Operating profit 1,422 738 1,857
Interest payable 123 185 337
Share of (losses)/profits of associated (5) 21 43
undertaking
Profit on ordinary activities before taxation 1,294 574 1,563
Taxation on profits on ordinary activities 397 173 441
Profit for the period 897 401 1,122
Dividends - - 486
Retained earnings 897 401 636
Earnings per share
- basic 2 12.92p 5.78p 16.16p
- diluted 12.92p 5.78p 16.16p
Dividends per share 3 - - 7.00p
-6-
Victoria P.L.C.
six months to 28 September 2002
Statement of Total Recognised Gains and Losses
Six months to Six months to Year to
28 September 2002 29 September 2001 30 March 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Profit after taxation 897 401 1,122
Currency translation differences on (535) (144) 590
foreign currency net investments
Total gains relating to the period 362 257 1,712
Total gains recognised since last annual report 362 257 1,712
Note of Historical Cost Profits and Losses
Six months to Six months to Year to
28 September 2002 29 September 2001 30 March 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Reported profit on ordinary activities before
taxation 1,294 574 1,563
Historical cost profit on ordinary activities
before taxation 1,294 574 1,563
Historical cost profit for the period retained
after taxation and dividends 897 401 636
-7-
Victoria P.L.C.
Consolidated Balance Sheet
six months to 28 September 2002
28 September 2002 29 September 2001 30 March 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets
Tangible assets 17,134 16,208 16,430
Investments in associated undertaking 274 269 287
17,408 16,477 16,717
Current assets
Stock 8,696 8,180 8,008
Debtors 7,205 6,074 6,294
Cash 237 270 307
16,138 14,524 14,609
Less: current liabilities
Creditors due within one year 8,703 7,529 7,004
Net current assets 7,435 6,995 7,605
Total assets less current liabilities 24,843 23,472 24,322
Less: Creditors due after one year 2,707 2,691 2,490
Provisions for liabilities and charges 881 956 1,038
Net assets 21,155 19,825 20,764
Capital and reserves (equity)
Share capital 1,736 1,736 1,736
Share premium account 829 829 829
Revaluation reserve 2,006 1,980 2,061
Profit and loss account 16,584 15,280 16,168
Total shareholders' funds 21,155 19,825 20,794
-8-
Victoria P.L.C.
Consolidated Cash Flow Statement
six months to 28 September 2002
Note Six months to Six months to Year to
28 September 2002 29 September 2001 30 March 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Net cash inflow from operating activities 4 1,708 2,342 4,783
Returns on investment and servicing of
finance
Dividend received from Associate 8 - -
Interest paid (50) (85) (147)
Hire purchase interest (73) (100) (190)
(115) (185) (337)
Taxation
UK corporation tax paid (90) (189) (397)
Overseas tax paid (129) (74) (209)
(219) (263) (606)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (1,914) (1,265) (1,633)
Receipts from sales of tangible fixed assets 14 25 35
(1,900) (1,240) (1,598)
Equity dividends paid (486) (451) (451)
Financing
Debt due within one year
(Repayment of)/increase in secured loans - (201) (225)
Increase in/(repayment of) long-term loans 87 84 (280)
Capital element of finance lease and hire
purchase payments (420) (466) (705)
Receipts from financing of assets 533 9 54
200 (574) (1,156)
Increase/(decrease) in cash (812) (371) 635
-9-
Victoria P.L.C.
Notes to the Interim Statement
1. Basis of preparation
The results for the year ended 30 March 2002 are extracts from the Group report
and accounts as filed with the Registrar of Companies. These were audited and
reported upon without qualification under Section 235 of the Companies Act 1985.
2. Earnings per share
The earnings per share for the six month period to 28 September 2002 are based
on 6,943,556 shares in issue throughout the period. The same number of shares
were in issue throughout the six months ended 29 September 2001 and the year
ended 30 March 2002.
3. Dividends
No interim dividend is proposed (September 2001: nil; March 2002: 7.0 pence).
4. Reconciliation of operating profit to net cash inflow from operating
activities
Six months to Six months to Year to
28 September 2002 29 September 2001 30 March 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating profit 1,422 738 2,373
Depreciation charges 754 707 1,287
Loss/(profit) on sale of fixed assets (1) (6) 6
Decrease/(increase) in working (238) 973 659
capital
Exchange rate difference on (229) (70) (409)
consolidation
Net cash inflow from operating 1,708 2,342 4,783
activities
5. Exchange rates
The results of the Australia subsidiary have been translated at an exchange rate
of A$2.8703 to #1 being the rate prevailing at 28 September 2002 (September
2001: A$2.9781; March 2002: A$2.6682).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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