TIDMVCP
RNS Number : 2226W
Victoria PLC
16 November 2010
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Tuesday, 16 November 2010
Embargoed: 7.00am
VICTORIA PLC
International manufacturer & distributor of carpets & floorcoverings,
supplying the mid to high end residential and contract markets in the UK and
overseas
Half-Year Results for the 26 weeks ended 2 October 2010
"New initiatives and products help Victoria increase revenue and profitability"
Financial highlights:
+----------------------------+-------------+------------+----------+
| | 26 weeks | 26 weeks | |
| | ended | ended | |
| | 2.10.10 | 3.10.09 | |
| | | | |
+----------------------------+-------------+------------+----------+
| Revenue | GBP33.31m | GBP30.17m | +10.4% |
+----------------------------+-------------+------------+----------+
| Group operating profit | GBP0.78m | GBP0.52m | +48.7% |
+----------------------------+-------------+------------+----------+
| Pre-tax profit | GBP0.56m | GBP0.20m | +177.7% |
+----------------------------+-------------+------------+----------+
| Earnings per share-basic | 5.17p | 1.86p | +178.0% |
+----------------------------+-------------+------------+----------+
| Interim dividend | 3.00p | 2.60p | +15.4% |
+----------------------------+-------------+------------+----------+
| |
| Balance Sheet remains strong with borrowings of GBP8.55m and net |
| gearing at 18.5%. |
+----------------------------+-------------+------------+----------+
Commercial highlights:
· Revenues in Australia, the UK and Canada increased despite overall market
declines
· Irish economic weakness further reduces revenues in this Division.
· Gross margin in Australia recovers significantly aided by better plant
utilisation and a strong Australian Dollar
· UK margins affected by substantial increases in raw material costs
· Carpet sales to the insurance replacement market now live and business
developing well in this new channel to market
· In the UK, a new generation of EASICARE(TM) synthetic pile carpets is
being launched in Q3
"The overall outlook for the Group is satisfactory, with the growth in Australia
helping offset some of the softer market conditions that remain in other
geographies.
"In the UK, strong new range introductions, particularly in the synthetic carpet
area, coupled with further progress expected in the insurance replacement
market, should help to mitigate any further market weakness, in what is the
generally more buoyant second half. Raw material cost increases have now been
passed on and this should help in restoring margin.
"In summary, whilst we remain cautious about the outlook for consumer spending,
the Group is well positioned to exploit some of the new initiatives that it is
developing in the floorcovering market and we remain confident of achieving the
expectations set for this financial year."
+-------------------------------------+----------------------------------+
| Enquiries: | |
+-------------------------------------+----------------------------------+
| Victoria PLC | Citigate Dewe Rogerson |
+-------------------------------------+----------------------------------+
| Alan Bullock, Group Managing | Fiona Tooley, Director |
| Director | |
+-------------------------------------+----------------------------------+
| Mobile: +44 (0) 7785 325701 | Mobile: +44 (0) 7785 703523 |
+-------------------------------------+----------------------------------+
| Ian Davies, Group Finance Director | Keith Gabriel, Senior Account |
| | Manager |
+-------------------------------------+----------------------------------+
| Mobile: +44 (0) 7770 638791 | Mobile+ 44(0) 7770 788624 |
+-------------------------------------+----------------------------------+
| Today: +44 (0) 20 7638 9571 (until | Today: +44 (0) 20 7638 9571 |
| 10.30 am) | |
+-------------------------------------+----------------------------------+
| Office: +44 (0) 1562 749300 | Office: +44 (0) 121 362 4035 |
| (Thereafter) | (Thereafter) |
+-------------------------------------+----------------------------------+
| www.victoriaplc.com |
+-------------------------------------+----------------------------------+
VICTORIA PLC
Half-Year Results for the 26 weeks ended 2 October 2010
OVERVIEW
I am pleased to report that whilst the economic and market conditions remained
challenging throughout the first half of the financial year, (which is also the
seasonally weaker of the two halves' trading), the Group has managed to increase
both revenue and profitability.
FINANCIAL SUMMARY
Group revenue increased by 10.4% in the first half from GBP30.17m to GBP33.31m
and, in constant currency terms, was ahead of the corresponding period last year
by 0.4%. Revenues increased in Australia, the UK and Canada but declined in
Ireland as the Irish economy contracted further.
Group operating profit improved substantially, up 48.7% from GBP0.52m to
GBP0.78m, whilst pre-tax profit increased significantly by 177.7% from GBP0.20m
to GBP0.56m, primarily driven by a strong performance in Australia. Pre-tax
profit was up by 59.9% on a constant currency basis.
Group borrowings reduced to GBP8.55m from GBP9.47m at the same period last year.
Whilst borrowings were up on the year-end position of GBP7.14m, as the business
built stocks for the seasonally stronger second half, net gearing remains
relatively low at 18.5%. The Group continues to have significant headroom within
its banking facilities, given the relatively low capital expenditure
requirements in what is already a very well invested business.
HALF-YEAR DIVIDEND
The Board is pleased to declare an increase of 15.4% in half-year dividend from
2.60p to 3.00p per share, payable on 9 December 2010 to all shareholders on the
register as at 26 November 2010, with the ex-dividend date being 24 November
2010.
OPERATIONAL REVIEW
United Kingdom
Whilst the UK has technically come out of recession, the continuing economic
uncertainty, faltering housing market and planned public sector spending
cutbacks have all had a detrimental effect on consumer confidence and their
discretionary spending on deferrable 'big ticket' items, including carpet.
Overall, UK revenues increased by 1.6% from GBP11.10m to GBP11.27m when compared
to the corresponding period last year. Carpet sales were down in the period
under review by 1.6% and, whilst the inter-Group use of yarn from our spinning
mill was lower, external yarn sales outside the Group almost doubled.
Operating profit was affected by both the reduced volumes of carpets sold and
rapidly increasing raw material prices, which the company was unable to pass on
to customers during the first half. Consequently, a small operating loss was
incurred in the period reported on of GBP0.24m, compared to an operating profit
of GBP0.15m in the prior half-year. After interest charges, this resulted in a
pre-tax loss of GBP0.28m, compared to a pre-tax profit of GBP0.12m last
half-year.
In June 2010, Victoria Carpets' contract with Independent Inspections Limited to
supply carpet to the insurance replacement market went live and got off to a
pleasing start. Business is developing well in this new channel to market for
the Group and it is hoped that this will become an important part of the UK's
business offering going forward. The company also plans to enter into the
supply of synthetic pile carpets during the third quarter of this financial
year, introducing a new generation of EASICARE(TM) carpets made in Polypropylene
fibre to the residential carpet market. This major initiative should expand the
company's product offer into a wider market channel and enable it to capture
market share in an area not previously exploited.
Subsequent to the half-year end, it is encouraging to report that early in the
third quarter, the company managed to pass on the significant increases that
have been seen in wool prices to its customers. This should, along with other
measures and initiatives, help in improving the margins of the business and in
restoring profitability in the second half of the financial year.
Ireland
The state of the Irish economy and their banking crisis has been well reported.
Irish revenues in the first half fell by 25.9% from EUR1.89m to EUR1.40m and an
operating loss of EUR0.29m was recorded, compared to an operating loss of EUR0.32m
in the corresponding period last year.
During the first half, further restructuring of the business in Ireland has
taken place with a reduction in headcount and the company's telesales function
being pulled back into the Group's UK facilities. This brought about a
reduction in the losses incurred in H1, but further significant sales declines
caused by the state of the economy meant that the losses have continued. It is
planned to further reduce the cost base in Ireland by bringing the warehousing
of product back into the Group's UK facilities and servicing the market from
here.
The team in Ireland are working extremely hard in unprecedented market
conditions to maximise sales opportunities and investment in new products is
still continuing.
Australia
Although economic uncertainty and relatively soft market conditions prevailed
throughout the first half, our operations and the Australian economy in general
have recovered very well from the significant downturn experienced in the
previous year.
Consumer caution and intense price competition continue to be the predominant
characteristics of both the Australian and New Zealand markets and, whilst our
sales growth in local currency terms has been fairly modest, our margin and
profit performance have improved significantly over the corresponding period
last year. Much of the margin improvement is attributable to better capacity
utilisation of our two woollen spinning mills and the impact of the strong
Australian Dollar on raw material costs.
Revenue was up 2.2% from A$34.66m to A$35.42m, operating profit increased
significantly by 53.5% from A$1.85m to A$2.84m and profit before tax was up by
76.3% from A$1.48m to A$2.61m.
Cash generation remains strong and borrowings were further reduced during the
period.
The Australian market is still below the levels experienced prior to the
economic downturn but it has proved to be more robust than most. Residential
sales are improving but still not buoyant and there remains a significant
difference between the local State economies. After a relatively quiet first
half-year, the commercial contract market is now improving as many of the
projects that had been deferred are now underway again. Our entry into this
market segment with new tufted broadloom products and the launch of a range of
carpet tiles has been well received and the timing coincides with increased
activity in this market segment.
The New Zealand market, in which we have experienced strong growth, has not been
as resilient as Australia and both the residential and commercial contract
markets remain flat.
Despite difficult trading conditions, we have continued to improve residential
market share and have achieved further significant sales growth over the prior
year.
The strengthening value of the Australian Dollar has had a range of impacts on
the local operation as well as on the Group's overall result. Operationally, it
assists in dampening the effects of imported raw material cost increases,
although as a local manufacturer, it impacts our competitiveness against imports
and diminishes the value of our sales growth in New Zealand. From a Group point
of view, profit translation is enhanced.
Canada
Whilst the Canadian market remains subdued, revenues in the Group's Canadian
associate company were up by 3.9% from C$3.73m to C$3.88m in the first half.
Operating profit was C$0.12m, compared to an operating loss of C$0.11m in the
prior year.
The Canadian team have worked hard in difficult market conditions and there are
now some signs that the contract residential market might be starting to improve
in Vancouver.
Outlook
The overall outlook for the Group is satisfactory, with the growth in Australia
helping offset some of the softer market conditions that remain in other
geographies.
Trading in the UK remains uncertain given the planned cutbacks in UK Government
spending and the increase in VAT announced for January 2011. However, strong
new range introductions, particularly in the synthetic carpet area, coupled with
further progress expected in the insurance replacement market, should help to
mitigate any further market weakness, in what is the generally more buoyant
second half. Raw material cost increases have now been passed on and this
should help in restoring margin.
Recent trading in Ireland seems to have found a new level, although it may yet
be too early to say whether this is the bottom of the cycle. The Group's Irish
businesses have undergone significant restructuring since the start of the
recession and, whilst the loss has been reduced by measures already taken, they
have still not restored the businesses to profitability. With the measures now
in place and hopefully some stability in the market, albeit at significantly
lower levels than ever seen in the past, we are targeting an improved position
by the end of this financial year.
In Australia, the immediate short term outlook remains one of cautious optimism
and there are sufficient positives in the business, with new product releases
and a somewhat tentative improvement in the Australian carpet market, for the
Board to anticipate further modest growth in this region.
In summary, whilst we remain cautious about the outlook for consumer spending,
the Group is well positioned to exploit some of the new initiatives that it is
developing in the floorcovering market and we remain confident of achieving the
expectations set for this financial year.
Nikki Beckett
Chairman
Condensed Consolidated Income Statement
For the 26 weeks ended 2 October 2010 (unaudited)
+---------------------+---------+-------+----------+----------+----------+
| | | 26 Weeks | 26 | 52 weeks |
| | | | Weeks | |
+-------------------------------+-------+----------+----------+----------+
| | | Ended | Ended | Ended |
| | | 2 Oct | 3 Oct | 3 April |
| | | 2010 | 2009 | 2010 |
+-------------------------------+-------+----------+----------+----------+
| |Notes | GBP000 | GBP000 | GBP000 |
+-------------------------------+-------+----------+----------+----------+
| Continuing operations | | | | |
+-------------------------------+-------+----------+----------+----------+
| Revenue | 3 | 33,312 | 30,166 | 62,973 |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Cost of sales | | (23,613) | (21,728) | (45,107) |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Gross profit | | 9,699 | 8,438 | 17,866 |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Distribution costs | | (6,966) | (6,409) | (12,837) |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Administrative expenses | | (2,125) | (1,677) | (3,611) |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Other operating income | | 168 | 170 | 362 |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Operating profit | 3 | 776 | 522 | 1,780 |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Share of results of | | 24 | (61) | (127) |
| associated company | | | | |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Finance costs | | (239) | (259) | (565) |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Profit before tax | | 561 | 202 | 1,088 |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Taxation | 4 | (202) | (73) | (460) |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Profit for the period | | 359 | 129 | 628 |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Attributable to: | | | | |
+-------------------------------+-------+----------+----------+----------+
| Equity holders of the parent | | 359 | 129 | 628 |
+-------------------------------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| Earnings per share | basic | 5 | 5.17 | 1.86 | 9.04 |
| - pence | | | | | |
+---------------------+---------+-------+----------+----------+----------+
| | | | | |
+-------------------------------+-------+----------+----------+----------+
| | diluted | 5 | 4.50 | 1.62 | 7.87 |
+---------------------+---------+-------+----------+----------+----------+
Condensed Consolidated Statement of Comprehensive Income
For the 26 weeks ended 2 October 2010 (unaudited)
+------------------------------------+----------+---------+----------+
| | 26 Weeks | 26 | 52 weeks |
| | | Weeks | |
+------------------------------------+----------+---------+----------+
| | Ended | Ended | Ended |
| | 2 Oct | 3 Oct | 3 April |
| | 2010 | 2009 | 2010 |
+------------------------------------+----------+---------+----------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+----------+---------+----------+
| Exchange differences on | 401 | 2,360 | 4,509 |
| translation of foreign | | | |
| operations | | | |
+------------------------------------+----------+---------+----------+
| Deferred tax on share option | ---- | ---- | 11 |
| scheme | | | |
+------------------------------------+----------+---------+----------+
| | 401 | 2,360 | 4,520 |
| Other comprehensive income for the | | | |
| period | | | |
+------------------------------------+----------+---------+----------+
| | 359 | 129 | 628 |
| Profit for the period | | | |
+------------------------------------+----------+---------+----------+
| | 760 | 2,489 | 5,148 |
| Total comprehensive income for the | | | |
| period | | | |
+------------------------------------+----------+---------+----------+
| | 760 | 2,489 | 5,148 |
| Attributable to Equity holders of | | | |
| the parent | | | |
+------------------------------------+----------+---------+----------+
Condensed Consolidated Balance Sheet
As at 2 October 2010 (unaudited)
+------------------------------------+----------+---------+----------+
| | As at | As at | As at |
| | 2 Oct | 3 Oct | 3 April |
| | 2010 | 2009 | 2010 |
+------------------------------------+ + + +
| | | | |
+------------------------------------+----------+---------+----------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Non-current assets | | | |
+------------------------------------+----------+---------+----------+
| Goodwill | 65 | 65 | 65 |
+------------------------------------+----------+---------+----------+
| Intangible assets | 404 | 451 | 422 |
+------------------------------------+----------+---------+----------+
| Property, plant and equipment | 26,598 | 27,190 | 27,459 |
+------------------------------------+----------+---------+----------+
| Investment property | 180 | 180 | 180 |
+------------------------------------+----------+---------+----------+
| Investment in associated company | 512 | 529 | 510 |
+------------------------------------+----------+---------+----------+
| Deferred tax asset | 1,429 | 1,133 | 1,530 |
+------------------------------------+----------+---------+----------+
| Total non-current assets | 29,188 | 29,548 | 30,166 |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Current assets | | | |
+------------------------------------+----------+---------+----------+
| Inventories | 23,863 | 19,444 | 20,686 |
+------------------------------------+----------+---------+----------+
| Trade and other receivables | 12,187 | 11,501 | 10,244 |
+------------------------------------+----------+---------+----------+
| Cash at bank and in hand | 1,032 | 687 | 906 |
+------------------------------------+----------+---------+----------+
| Total current assets | 37,082 | 31,632 | 31,836 |
+------------------------------------+----------+---------+----------+
| Total assets | 66,270 | 61,180 | 62,002 |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Current liabilities | | | |
+------------------------------------+----------+---------+----------+
| Trade and other payables | 12,693 | 10,319 | 10,411 |
+------------------------------------+----------+---------+----------+
| Current tax liabilities | 966 | 809 | 1,153 |
+------------------------------------+----------+---------+----------+
| Financial liabilities | 7,177 | 6,572 | 5,145 |
+------------------------------------+----------+---------+----------+
| Total current liabilities | 20,836 | 17,700 | 16,709 |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Non-current liabilities | | | |
+------------------------------------+----------+---------+----------+
| Trade and other payables | 2,755 | 2,414 | 2,374 |
+------------------------------------+----------+---------+----------+
| Other financial liabilities | 2,439 | 3,593 | 2,952 |
+------------------------------------+----------+---------+----------+
| Deferred tax liabilities | 2,600 | 2,696 | 2,712 |
+------------------------------------+----------+---------+----------+
| Total non-current liabilities | 7,794 | 8,703 | 8,038 |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Total liabilities | 28,630 | 26,403 | 24,747 |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Net assets | 37,640 | 34,777 | 37,255 |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Equity | | | |
+------------------------------------+----------+---------+----------+
| | | | |
+------------------------------------+----------+---------+----------+
| Issued share capital | 1,736 | 1,736 | 1,736 |
+------------------------------------+----------+---------+----------+
| Share premium | 829 | 829 | 829 |
+------------------------------------+----------+---------+----------+
| Retained earnings | 35,075 | 32,212 | 34,690 |
+------------------------------------+----------+---------+----------+
| Total equity | 37,640 | 34,777 | 37,255 |
+------------------------------------+----------+---------+----------+
Condensed Consolidated Statement of Changes in Equity
For the 26 weeks ended 2 October 2010 (unaudited)
+---------------------------------+---------+---------+----------+--------+
| | Share | Share | Retained | Total |
+---------------------------------+---------+---------+----------+--------+
| | capital | premium | earnings | equity |
+---------------------------------+---------+---------+----------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| At 5 April 2009 | 1,736 | 829 | 30,001 | 32,566 |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| Total comprehensive income for | ---- | ---- | 2,489 | 2,489 |
| the period | | | | |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| Dividends paid | ---- | ---- | (278) | (278) |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| At 3 October 2009 | 1,736 | 829 | 32,212 | 34,777 |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| At 5 April 2009 | 1,736 | 829 | 30,001 | 32,566 |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| Total comprehensive income for | ---- | ---- | 5,148 | 5,148 |
| the period | | | | |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| Dividends paid | ---- | ---- | (459) | (459) |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| At 3 April 2010 | 1,736 | 829 | 34,690 | 37,255 |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| At 4 April 2010 | 1,736 | 829 | 34,690 | 37,255 |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| Total comprehensive income for | ---- | ---- | 760 | 760 |
| the period | | | | |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| Dividends paid | ---- | ---- | (375) | (375) |
+---------------------------------+---------+---------+----------+--------+
| | | | | |
+---------------------------------+---------+---------+----------+--------+
| At 2 October 2010 | 1,736 | 829 | 35,075 | 37,640 |
+---------------------------------+---------+---------+----------+--------+
Condensed Consolidated Statement of Cash Flows
For the 26 weeks ended 2 October 2010 (unaudited)
+----------------------------------+-------+----------+---------+----------+
| | | 26 Weeks | 26 | 52 weeks |
| | | | Weeks | |
+----------------------------------+-------+----------+---------+----------+
| | | Ended | Ended | Ended |
| | | 2 Oct | 3 Oct | 3 April |
| | | 2010 | 2009 | 2010 |
+----------------------------------+-------+----------+---------+----------+
| |Notes | GBP000 | GBP000 | GBP000 |
+----------------------------------+-------+----------+---------+----------+
| | | | | |
+----------------------------------+-------+----------+---------+----------+
| Net cash (outflow)/ inflow from | 7a | (714) | 3,251 | 6,629 |
| operating activities | | | | |
+----------------------------------+-------+----------+---------+----------+
| | | | | |
+----------------------------------+-------+----------+---------+----------+
| Investing activities | | | | |
+----------------------------------+-------+----------+---------+----------+
| Purchases of property, plant and | | (294) | (195) | (384) |
| equipment | | | | |
+----------------------------------+-------+----------+---------+----------+
| Proceeds of disposals of | | 1 | 5 | 39 |
| property, plant | | | | |
| and equipment | | | | |
+----------------------------------+-------+----------+---------+----------+
| Net cash used in investing | | (293) | (190) | (345) |
| activities | | | | |
+----------------------------------+-------+----------+---------+----------+
| | | | | |
+----------------------------------+-------+----------+---------+----------+
| Financing activities | | | | |
+----------------------------------+-------+----------+---------+----------+
| Decrease in long term loans | | (307) | (2,726) | (4,971) |
+----------------------------------+-------+----------+---------+----------+
| Receipts from financing of | | ---- | ---- | 125 |
| assets | | | | |
+----------------------------------+-------+----------+---------+----------+
| Payment of finance leases/HP | | (325) | (270) | (722) |
| liabilities | | | | |
+----------------------------------+-------+----------+---------+----------+
| Dividends paid | | (375) | (278) | (459) |
+----------------------------------+-------+----------+---------+----------+
| Net cash used in financing | | (1,007) | (3,274) | (6,027) |
| activities | | | | |
+----------------------------------+-------+----------+---------+----------+
| | | | | |
+----------------------------------+-------+----------+---------+----------+
| Net (decrease)/ increase in cash | | (2,014) | (213) | 257 |
| and cash equivalents | | | | |
+----------------------------------+-------+----------+---------+----------+
| | | | | |
+----------------------------------+-------+----------+---------+----------+
| Cash and cash equivalents at | | (3,474) | (3,785) | (3,785) |
| beginning | | | | |
| of period | | | | |
+----------------------------------+-------+----------+---------+----------+
| | | | | |
+----------------------------------+-------+----------+---------+----------+
| Effect of foreign exchange rate | | 20 | 29 | 54 |
| changes | | | | |
+----------------------------------+-------+----------+---------+----------+
| | | | | |
+----------------------------------+-------+----------+---------+----------+
| Cash and cash equivalents at end | 7b | (5,468) | (3,969) | (3,474) |
| of period | | | | |
+----------------------------------+-------+----------+---------+----------+
Notes to the Condensed Half-Year Financial Statements
For the 26 weeks ended 2 October 2010 (unaudited)
1General information
These condensed consolidated financial statements for the 26 weeks ended 2
October 2010 have not been audited or reviewed by the Auditors. They were
approved by the Board of Directors on 16 November 2010.
The information for the 52 weeks ended 3 April 2010 does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. 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.
2Basis of preparation and accounting policies
These condensed consolidated financial statements should be read in conjunction
with the Group's financial statements for the 52 weeks ended 3 April 2010, 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 45 to 52 of
the Group's audited financial statements for the 52 weeks ended 3 April 2010,
except for the following accounting standards and interpretations which are
effective for the Group from 4 April 2010:
IFRS 3 (revised) Business Combinations continues to apply the acquisition method
to business combinations, but with some significant changes. For example, all
payments to purchase a business are to be recorded at fair value at the
acquisition date, with some contingent payments subsequently re-measured at fair
value through profit or loss; goodwill and non-controlling interests may be
calculated on a gross or net basis; and all transaction costs, which under
previous practice were treated as part of the cost of a business combination,
are to be expensed.
IAS 27, Consolidated and Separate Financial Statements, requires the effects of
all transactions with non-controlling interests where there is no change in
control to be recorded in equity. Such transactions will no longer result in
goodwill or gains and losses.
IFRIC 16, Hedges of a Net Investment in a Foreign Operation, clarifies which
currency exposures qualify for hedge accounting; which entity within a group can
hold the hedging instrument; and how to determine the amounts to be reclassified
from equity to profit or loss for both the hedging instrument and the hedged
item when an investment in a foreign operation is disposed of.
IFRIC 17, Distributions of Non-cash Assets to Owners, clarifies how an entity
should measure distributions of assets, other than cash, when it pays dividends
to its owners.
None of these revised and amended standards and interpretations are expected to
have a material impact on the Group's net cash flows, financial position, total
comprehensive income or earnings per share.
Having reviewed the Group's projections, and taking account of reasonable
possible changes in trading performance, the Directors believe they have
reasonable grounds for stating that the Group has adequate resources to continue
in operational existence for the foreseeable future.
The Directors are of the view that the Group is well placed to manage its
business risks despite the current challenging economic and market conditions.
Accordingly, the Directors continue to adopt the going concern basis in
preparing the financial statements of the Group.
3Segmental 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 | For the 26 weeks |
| | ended 2 October 2010 | ended 3 October 2009 |
+-------------+-----------------------------------------+-----------------------------------------+
| | Revenue | Operating | Finance | Profit/ | Revenue | Operating | Finance | Profit/ |
| | | profit/ | costs | (loss) | | profit/ | costs | (loss) |
| | | (loss) | | before | | (loss) | | before |
| | | | | tax* | | | | tax* |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| UK | 11,274 | (239) | (43) | (282) | 11,100 | 153 | (37) | 116 |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| Ireland | 1,192 | (245) | (7) | (252) | 1,671 | (284) | (4) | (288) |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| Australia | 20,846 | 1,669 | (135) | 1,534 | 17,395 | 928 | (185) | 743 |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| | 33,312 | 1,185 | (185) | 1,000 | 30,166 | 797 | (226) | 571 |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| Share of | ---- | ---- | ---- | 24 | ---- | ---- | ---- | (61) |
| results of | | | | | | | | |
| associate | | | | | | | | |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| Central | ---- | (409) | (54) | (463) | ---- | (275) | (33) | (308) |
| costs | | | | | | | | |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| Total | 33,312 | 776 | (239) | 561 | 30,166 | 522 | (259) | 202 |
| continuing | | | | | | | | |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| operations | | | | | | | | |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| Tax | | | | (202) | | | | (73) |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| Profit | | | | | | | | |
| after tax | | | | | | | | |
| from | | | | | | | | |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
| continuing | | | | 359 | | | | 129 |
| activities | | | | | | | | |
+-------------+---------+-----------+---------+---------+---------+-----------+---------+---------+
* The share of results of the associated company is shown net of tax as required
by IAS1.
Intersegment sales between the Group's subsidiaries were immaterial in the
current and comparative periods.
4 Tax
+---------------------------------------------+-------------+------------+
| | 26 Weeks | 26 Weeks |
+---------------------------------------------+-------------+------------+
| | Ended | Ended |
| | 2 Oct 2010 | 3 Oct 2009 |
+---------------------------------------------+-------------+------------+
| | GBP000 | GBP000 |
+---------------------------------------------+-------------+------------+
| Current tax | | |
+---------------------------------------------+-------------+------------+
| - Current year UK | ---- | (54) |
+---------------------------------------------+-------------+------------+
| - Current year overseas | 403 | 127 |
+---------------------------------------------+-------------+------------+
| - Prior years | ---- | ---- |
+---------------------------------------------+-------------+------------+
| | 403 | 73 |
+---------------------------------------------+-------------+------------+
| Deferred Tax | ---- | ---- |
+---------------------------------------------+-------------+------------+
| - Current year movement | (160) | ---- |
+---------------------------------------------+-------------+------------+
| - Effect of rate change in the UK | (41) | ---- |
+---------------------------------------------+-------------+------------+
| | (201) | ---- |
+---------------------------------------------+-------------+------------+
| Total | 202 | 73 |
+---------------------------------------------+-------------+------------+
Corporation tax for the half year is charged at 36.0% (2009: 36.0%),
representing the best estimate of the weighted average annual corporation tax
rate expected for the full financial year. The high effective tax rate is
primarily due to the relatively low tax rate in Ireland at 12.5%, and due to
Ireland reporting a loss in the period the deferred tax credit is only available
at 12.5%.
5Earnings 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 | 26 |
| | Weeks | Weeks |
+-----------------------------------------------------+---------+---------+
| | Ended | Ended |
| | 2 Oct | 3 Oct |
| | 2010 | 2009 |
+-----------------------------------------------------+---------+---------+
| Earnings (GBP000) basic and diluted | | |
+-----------------------------------------------------+---------+---------+
| Profit attributable to ordinary equity holders of | 359 | 129 |
| the parent entity | | |
+-----------------------------------------------------+---------+---------+
| Weighted average number of ordinary shares ('000) | 6,944 | 6,944 |
| for the purposes | | |
| of basic and adjusted earnings per share | | |
+-----------------------------------------------------+---------+---------+
| Effect of dilutive potential ordinary shares: | | |
+-----------------------------------------------------+---------+---------+
| Long-Term Incentive Plan ('000) | 1,034 | 1,034 |
+-----------------------------------------------------+---------+---------+
| Weighted average number of ordinary shares ('000) | 7,978 | 7,978 |
| for the purposes | | |
| of diluted earnings per share | | |
+-----------------------------------------------------+---------+---------+
| | | |
+-----------------------------------------------------+---------+---------+
| | | |
+-----------------------------------------------------+---------+---------+
| The Group's earnings per share are as follows: | | |
+-----------------------------------------------------+---------+---------+
| Basic and adjusted | 5.17 | 1.86 |
+-----------------------------------------------------+---------+---------+
| Diluted and diluted adjusted | 4.50 | 1.62 |
+-----------------------------------------------------+---------+---------+
| | | |
+-----------------------------------------------------+---------+---------+
6Dividends
+----------------------------------------------------+----------+---------+
| | 26 Weeks | 26 |
| | | Weeks |
+----------------------------------------------------+----------+---------+
| | Ended | Ended |
| | 2 Oct | 3 Oct |
| | 2010 | 2009 |
+----------------------------------------------------+----------+---------+
| | GBP000 | GBP000 |
+----------------------------------------------------+----------+---------+
| Amounts recognised as distributions to equity | | |
| holders in the period: | | |
+----------------------------------------------------+----------+---------+
| Final dividend for the year ended 3 April 2010 | | |
| paid during the year | | |
+----------------------------------------------------+----------+---------+
| 5.4p per share (2009: 4.0p) | 375 | 278 |
+----------------------------------------------------+----------+---------+
| Interim dividend declared for the year to 2 April | | |
| 2011 | | |
+----------------------------------------------------+----------+---------+
| 3.0p per share (2009: 2.6p) | 208 | 181 |
+----------------------------------------------------+----------+---------+
7Notes to the cash flow statement
a) Reconciliation of operating profit to net cash (outflow)/ inflow from
operating activities
+---------------------------------------+----------+----------+----------+
| | 26 Weeks | 26 Weeks | 52 weeks |
+---------------------------------------+----------+----------+----------+
| | Ended | Ended | Ended |
| | 2 Oct | 3 Oct | 3 April |
| | 2010 | 2009 | 2010 |
+---------------------------------------+----------+----------+----------+
| | GBP000 | GBP000 | GBP000 |
+---------------------------------------+----------+----------+----------+
| Operating profit from continuing | 776 | 522 | 1,780 |
| operations | | | |
+---------------------------------------+----------+----------+----------+
| Adjustments for: | | | |
+---------------------------------------+----------+----------+----------+
| - Depreciation charges | 1,407 | 1,306 | 2,720 |
+---------------------------------------+----------+----------+----------+
| - Amortisation of intangible assets | 12 | 16 | 33 |
+---------------------------------------+----------+----------+----------+
| - (Profit)/ loss on disposal of | | 2 | (10) |
| property, plant | (1) | | |
| and equipment | | | |
| - Exchange rate difference on | | | |
| consolidation | | | |
+ +----------+----------+----------+
| | 52 | 1,226 | 219 |
+---------------------------------------+---------------------------------------+----------+----------+
| Operating cash flows before movements | 2,246 | 3,072 | 4,742 |
| in working capital | | | |
+---------------------------------------+----------+----------+----------+
| (Increase)/ decrease in working | (2,257) | 488 | 2,852 |
| capital | | | |
+---------------------------------------+----------+----------+----------+
| Cash generated from operations | (11) | 3,560 | 7,594 |
+---------------------------------------+----------+----------+----------+
| Interest paid | (253) | (289) | (549) |
+---------------------------------------+----------+----------+----------+
| Income taxes paid | (450) | (20) | (416) |
+---------------------------------------+----------+----------+----------+
| Net cash (outflow)/ inflow from | (714) | 3,251 | 6,629 |
| operating activities | | | |
+---------------------------------------+----------+----------+----------+
b) Analysis of net debt
+--------------------------+--------------------------+---------+----------+----------+---------+
| | At | Cash | Other | Exchange | At |
| | 3 | flow | non-cash | movement | 2 |
| | April | | changes | | October |
| | 2010 | | | | 2010 |
+--------------------------+--------------------------+---------+----------+----------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+--------------------------+---------+----------+----------+---------+
| Cash | 906 | 109 | ---- | 17 | 1,032 |
+--------------------------+--------------------------+---------+----------+----------+---------+
| Bank overdrafts | (4,380) | (2,123) | ---- | 3 | (6,500) |
+--------------------------+--------------------------+---------+----------+----------+---------+
| Cash and cash | (3,474) | (2,014) | ---- | 20 | (5,468) |
| equivalents | | | | | |
+--------------------------+--------------------------+---------+----------+----------+---------+
| Secured commercial bills | | | | | |
| - Payable more than one | | | | | |
| year | | | | | |
+ +--------------------------+---------+----------+----------+---------+
| | (1,808) | 307 | ---- | (33) | (1,534) |
+--------------------------+--------------------------+---------+----------+----------+---------+
| Finance leases and hire | | | | | |
| purchase | | | | | |
| agreements | | | | | |
+--------------------------+--------------------------+---------+----------+----------+---------+
| - Payable less than one | (714) | 325 | (242) | (8) | (639) |
| year | | | | | |
+--------------------------+--------------------------+---------+----------+----------+---------+
| - Payable more than one | (1,144) | ---- | 242 | (3) | (905) |
| year | | | | | |
+--------------------------+--------------------------+---------+----------+----------+---------+
| Net debt | (7,140) | (1,382) | ---- | (24) | (8,546) |
+--------------------------+--------------------------+---------+----------+----------+---------+
8Rates of exchange
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:
+----------------------------------------+----------+---------+---------+
| | 26 Weeks | 26 | 52 |
| | | Weeks | weeks |
+----------------------------------------+----------+---------+---------+
| | Ended | Ended | Ended |
| | 2 Oct | 3 Oct | 3 April |
| | 2010 | 2009 | 2010 |
+----------------------------------------+----------+---------+---------+
| Australia (A$) - average rate | 1.6992 | 1.9927 | 1.8881 |
+----------------------------------------+----------+---------+---------+
| Australia (A$) - period end | 1.6298 | 1.8339 | 1.6596 |
+----------------------------------------+----------+---------+---------+
| Ireland (EUR) - average rate | 1.1753 | 1.1318 | 1.1280 |
+----------------------------------------+----------+---------+---------+
| Ireland (EUR) - period end | 1.1502 | 1.0883 | 1.1289 |
+----------------------------------------+----------+---------+---------+
| Canada (C$) - average rate | 1.5860 | 1.7912 | 1.7396 |
+----------------------------------------+----------+---------+---------+
| Canada (C$) - period end | 1.6184 | 1.7199 | 1.5420 |
+----------------------------------------+----------+---------+---------+
9Related party transactions
During the period, the Group had transactions with its associate, comprising
sales of goods to the value of GBP127k (2009: GBP104k) and provision of services
worth GBPnil (2009: GBP49k). At 2 October 2010, the Group was owed GBP240k
(2009: GBP144k). 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 20 of the
Group's 2010 Annual Report, a copy of which is available on the Group's website
- www.victoriaplc.com. 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 4.2.7R,
4.2.8R and 4.2.9R 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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