TIDMVCP
RNS Number : 4971U
Victoria PLC
30 July 2015
30 July 2015
Victoria PLC
('Victoria', the 'Company', or the 'Group')
Preliminary Results
for the year ended 28 March 2015, Board Change and Notice of
AGM
Victoria PLC (AIM: VCP), a manufacturer, supplier and
distributor of design-led carpets and other floorcoverings, is
pleased to announce its preliminary results for the year ended 28
March 2015.
Financial and Operational Highlights
Year ended Year ended
28 March 29 March
2015 2014
Revenue GBP128.30m GBP71.39m
Operating profit before exceptional
items and intangible amortisation GBP8.88m GBP2.65m
Underlying profit before tax and
exceptional items (1) GBP7.46m GBP2.12m
Profit before tax and exceptional
items GBP6.97m GBP2.05m
Exceptional items GBP(9.92)m GBP0.23m
(Loss)/profit before tax GBP(2.95)m GBP2.28m
Net debt GBP36.28m GBP1.48m
(Loss)/earnings per share
Basic (38.15)p 24.52p
Basic adjusted (2) 45.50p 27.12p
1. Underlying profit before tax and exceptional items is before
the deduction of GBP0.49m in respect of non-cash charges relating
to: 1) intangible asset amortisation on recent acquisitions
and 2) The Business Growth Fund redemption premium interest
and share option charges not considered to form part of the
Group's underlying profit.
2. Basis of calculation is set out in Note 2.
-- Underlying pre-tax earnings has increased 251.9% to GBP7.46m (2014: GBP2.12m).
-- Successful integration of the acquired businesses in the year
- Abingdon Flooring group and Whitestone Weavers group. Both
acquisitions have been materially earnings-enhancing and
value-creating.
-- Exceptional items include a non-cash charge of GBP7.55m
relating to the Contract for Differences. The special dividend of
GBP2.92 per share in July 2014 permitted the termination of the
Contract for Differences between the Company and Camden Holdings
Limited, with the resulting obligation being settled in shares in
the Company rather than cash in July 2014 as described in the
Half-year report.
-- UK sales were up 181.1% with annualised like for like
increase of 1.5%; operating margin improvement from 6.1% to 6.6%
due to improved manufacturing efficiencies and continued focus on
reducing the overhead cost base.
-- Australia faced considerable economic headwinds from a
slowdown in mining and fall in commodity prices. Despite these
factors, Australia sales and operating profit remained flat even
after A$0.84m of additional occupancy costs from the sale and
leaseback initiatives in late FY14.
-- The Group obtained GBP10m unsecured long term capital from
the Business Growth Fund during the year. Post year end, the
Company restructured its existing facilities and entered into a new
multi-currency revolving facility with Barclays and HSBC; which
provides substantial headroom for future growth.
-- Free cash flow to be deployed towards acquisitions of other
high quality flooring manufacturers so the Board has decided that
no dividend will be payable for FY15.
-- Appointment of Whitman Howard as joint broker to assist with
communications with the investor community.
-- The outlook for the UK segment remains positive with scope
for further operational synergies in the year ahead. The UK market
is showing signs of growth, aided by a recovery in the residential
housing market.
-- In Australia, building construction and house renovations has
picked up significantly and together with continued strength in
house prices in the major markets of New South Wales and Victoria
States should provide a strong lead into FY16.
Geoff Wilding, Chairman of Victoria PLC commented:
"During 2015 Victoria's financial position continued to improve.
Our three recent acquisitions - Westex, Abingdon and Whitestone -
have been materially earnings-enhancing and value-creating for
shareholders. Operational synergies are already being achieved
across the businesses and we expect the acquisitions to deliver
additional operational efficiency improvements in future years.
"Our focus is on maximising the Group's return on capital
employed. Operational management - all of whom are shareholders -
are committed to carefully managing working capital to optimise
free cash-flow while growing earnings, through providing enhanced
products and services to customers. We believe this combined
approach should ensure Victoria experiences above-average sector
performance in the years ahead.
"There are good opportunities to continue to grow earnings in
the UK and abroad via further carefully scrutinised, high quality
acquisitions and organically via a committed sales focus and
operational synergies. This is what we intend to deliver for
shareholders in FY16.
"Finally, I would like to express my genuine appreciation for
the support, advice and commitment of Finance Director and Company
Secretary, Terry Danks, who retires at the end of July. I'm sorry
to see him go and wish him a long and enjoyable retirement."
- Ends -
For more information contact:
Victoria PLC
Geoff Wilding
Alexander Anton +44 (0) 207 440 7520
Cantor Fitzgerald Europe (Nominated Adviser
and Broker)
Rick Thompson, Phil Davies, David Foreman,
Michael Reynolds (Corporate Finance)
David Banks, Tessa Sillars (Corporate
Broking) +44 (0) 20 7894 7000
Whitman Howard Limited (Joint Broker)
Niall Devins, Ranald McGregor-Smith +44 (0) 20 7659 1234
MHP Communications (Financial PR)
Nick Denton +44 (0) 20 3128 8100
Chairman's Statement
In the run-up to the Sydney Olympics in 2000 the British Men's
Rowing Eight tested every proposal, every change, every decision
against one simple criterion: "Will it make the boat go faster?"
The outcome was a gold medal.
At Victoria we quite like that level of focus (and the result!)
and Victoria's management are encouraged to test every operational
change, every capex proposal, every decision they make against the
equally simple criteria: "Will it help us make more money?"
We won't always get it right but this benchmark helps us avoid
fuzzy, value-destroying thinking and ensures we never forget why we
are in business.
So I am pleased to advise shareholders that Victoria's financial
position continues to improve with underlying pre-tax earnings for
FY15 of GBP7.46m (as shown in the Operating and Financial Review).
The Group will however record an after-tax loss of GBP4.52m due
primarily to the accounting impact of the Contract for Differences
following the payment of the GBP2.92 per share special dividend in
July 2014. The charge for the Contract for Differences was flagged
in the half-year report and had no impact on cash or the Group's
underlying earnings. Other key numbers are:
-- Group revenues grew by 79.7% (84.1% in constant currency
terms) from GBP71.39m to GBP128.30m
-- Group EBITDA before exceptional items increased from GBP5.14m to GBP11.88m
-- Group operating profit before exceptional items and
intangible amortisation increased from GBP2.65m to GBP8.88m
-- After exceptional items, the Group recorded a loss after tax
of GBP4.52m, compared with GBP1.61m profit after tax in the prior
year
-- Net debt as at year end was GBP36.28m (2014: GBP1.48m). Debt
to EBITDA for covenant purposes was less than two times at year
end.
I do not intend to review the last 12 months in particular
detail. What we do is simple: we purchase raw materials, skilled
people make it into carpet, and then we sell it and distribute it.
There is nothing complicated in our business or our financial
structure but we do focus on maximising the Group's return on
capital employed. Operational management - all of whom are
shareholders - are committed to growing earnings and carefully
managing their working capital to optimise free cash-flow. I feel
truly privileged to be working with such a talented and motivated
team. It makes my job extraordinarily simple. I do my best to keep
out of their way and let them get on with working their magic. This
approach seems to be working with the Group delivering record
underlying profits.
Their excellent work has generated capital we have been able to
usefully deploy by acquiring two superb businesses during FY15:
Abingdon Flooring group and the Whitestone Weavers group. Both
these acquisitions have been materially earnings-enhancing and
value-creating for shareholders.
Yet that is not the whole story. By focussing on acquiring only
the best businesses, Victoria has also gained the services of some
of the most talented managers in the sector. This is important.
Although it is a core part of our operating philosophy for
Victoria's businesses to continue operating autonomously, the
managers do work together and by doing so their collective skills -
and those of their staff - are developing operational synergies:
ways to grow earnings, while providing enhanced products and
services to customers. This, we believe, will continue to ensure
Victoria experiences above-average sector performance.
The Group obtained GBP10m unsecured long term capital from the
Business Growth Fund during the year. Since the year end we have
also successfully arranged new banking facilities, which replaced
the pre-existing bank debt. Given our intention to continue to grow
the Group through acquisitions, these new multi-currency revolving
facilities, provided by Victoria's existing Group bankers, Barclays
and HSBC, provide substantial headroom for future growth. This is
helpful as over the last couple of years I have visited literally
dozens of flooring manufacturers and know there is a lot of
opportunity to continue to grow Victoria.
To assist our communication with shareholders and the wider
investor community, I'm pleased to announce the appointment of
Whitman Howard as joint broker to Victoria.
In summary, while one always wishes more had been accomplished,
I am pleased with progress to date. Yet the opportunity in front of
us remains large with further potential to grow earnings in the UK
and abroad via carefully scrutinised acquisitions and organically
via a committed sales focus. This is what we intend to deliver for
shareholders in FY16.
Dividend
One of the fabulous things about carpet manufacturers - and the
thing that motivated legendary investor, Warren Buffet, to buy US
carpet maker, Shaw Industries - is the cash they can generate. The
equipment is relatively cheap to buy and lasts a long time. The
time between manufacturing a roll of carpet and being paid for it
is relatively short. Raw materials can also be bought on attractive
payment terms. These characteristics are evidenced by Victoria's
operational cash-flow exceeding its EBITDA for each of the last two
years.
So, in the medium term, we expect Victoria to be capable of
paying an attractive dividend. However in the short term, as
mentioned earlier in this statement, it is the Board's view that we
will create the most wealth for shareholders by deploying the free
cash-flow generated by the existing businesses within the Group
towards acquiring other high quality flooring manufacturers.
Therefore we have resolved not to pay a final dividend for
FY15.
Terry Danks Retirement
Finally, I would like to express my genuine appreciation for the
support, advice and commitment of Finance Director and Company
Secretary, Terry Danks, who retires at the end of July.
Terry first joined Victoria Carpets (the manufacturing
subsidiary) as Chief Accountant in 1985. His first responsibility
was to replace the quill pens and abacuses in use at Victoria with
an IT-based accounting and operating system and has led the
inevitable continual changes ever since. He was appointed the
Finance Director of Victoria Carpets in 1989 and his subsequent
involvement in the acquisitions of Westwood Yarns (1989), Munster
Carpets (2002) & Navan Carpets (2003) has proven to be useful
as Victoria PLC embarked upon its acquisition strategy in 2013.
Terry's enthusiastic embrace of the change in direction at
Victoria following the board changes in October 2012 has made my
job immeasurably easier. He already had plans in place to retire at
the time of my appointment but allowed me to change his mind and
agreed to stay for 12 months, which I managed to drag out to nearly
three years. During this period he was appointed to the PLC board
and has materially contributed to the growth in the value of
Victoria PLC. I'm sorry to see him go and wish him a long and
enjoyable retirement.
Given our plans for growth, the Board is being especially
selective in deciding upon a replacement and, while this process
continues, have established an interim arrangement to ensure the
smooth running of the finance function.
Operating and Financial Review
Operational Review
United Kingdom
The UK operating segment achieved sales growth of 181.1% from
GBP33.05m to GBP92.91m, principally through the acquisitions of the
Abingdon Flooring group and Whitestone Weavers group during the
period, and the first full year effect of Westex which was acquired
in the fourth quarter of the prior year. Having said that, it is
important to note that underlying UK performance, also improved as
illustrated in the table below. This sets out reported revenue and
operating profit together with the annualised revenue and operating
profit to demonstrate the underlying performance had the acquired
companies been part of the Group throughout the 2015 and 2014
financial periods.
Reported Reported Growth Annualised Annualised Growth
2015 2014 2015 2014
------------------ --------- --------- ------- ----------- ----------- -------
GBP'm GBP'm GBP'm GBP'm
UK Revenue 92.91 33.05 181.1% 158.12 155.86 1.5%
UK Operating
profit 8.43 1.58 434.4% 10.36 9.48 9.3%
Operating margin 9.1% 4.8% 6.6% 6.1%
------------------ --------- --------- ------- ----------- ----------- -------
On an annualised basis, operating margins have increased from
6.1% to 6.6%, which, together with a 1.5% increase in revenue,
delivered a 9.3% growth in UK operating profit. This can be
attributed to a combination of improved manufacturing efficiencies
and an ongoing focus on reducing the overhead cost base. Further
operational synergies have been achieved in the latter stages of
the financial year as a result of the acquisitions, which are
anticipated to deliver additional operational efficiency
improvements in future years.
As a result of the above, the UK recorded a profit before tax
and exceptional items of GBP8.28m (2014: GBP1.57m).
Australia
Revenues in Australia were flat due to considerable economic
headwinds from the significant slowdown in mining and fall in
commodity prices. The subsequent significant depreciation of the
Australian Dollar against the US Dollar materially increased the
cost of raw materials, placing margins under considerable
pressure.
Despite these factors, the business maintained its operating
profit even after bearing the A$843,000 full year impact of
occupancy costs resulting from the sale and leaseback initiatives
in late FY14.
2015 2014 Growth
A$m A$m
------------------ -------- -------- -------
Revenue 65.64 65.40 0.4%
Operating profit 2.88 2.88 0.0%
Operating margin 4.4% 4.4%
------------------ -------- -------- -------
The business focus on productivity improvements, cost management
and stronger supplier relationships combined with sale price
increases to deliver an operating profit in line with the previous
year despite the challenges and implications noted above.
Further operational improvements at the Bendigo spinning mill
continued to build on prior year advances.
Outlook
UK
The outlook for the Group's UK segment remains positive. As
mentioned above, there is scope for further operational synergies
to be realised in the year ahead.
The UK carpet market appears to be growing and in the process of
recovery from the depths of the recession. The wider economic
environment in Europe presents some possible threats to this,
firstly through potential economic shocks and secondly through the
strength of Sterling against the Euro aiding continental imports.
Despite this, the UK carpet market is showing signs of growth,
aided by a recovery in the residential housing market.
Australia
Building construction and house renovations activity has picked
up significantly and together with continued strength in housing
prices in the major markets of New South Wales and Victoria States
should provide a strong lead into FY16. The weakening Australian
Dollar against key global currencies due to weaker commodity demand
and prices will see an increase in raw material costs for local
producers and importers alike. It is likely that regulatory efforts
to cool the housing market will slow the market next year but
overall the outlook for the short to medium term is positive.
Financial Review
The Group's financial performance for the year ended 28 March
2015 is summarised as follows:
2015 2014 %
GBPm GBPm Change
---------------------------------------------- --------- -------- ---------
Revenue 128.30 71.39 79.7%
Underlying operating profit 8.88 2.65 235.0%
Underlying finance costs (1.42) (0.53) 167.2%
---------------------------------------------- --------- -------- ---------
Underlying profit before tax and exceptional
items 7.46 2.12 251.9%
Intangible amortisation (0.27) (0.07) 285.7%
Business Growth Fund redemption premium
interest (0.16) ------ n.a
Business Growth Fund share option charge (0.06) ------ n.a
---------------------------------------------- --------- -------- ---------
Reported profit before tax and exceptional
items 6.97 2.05 239.9%
Exceptional items (9.92) 0.23 -4394.4%
(Loss)/profit before tax from continuing
operations (2.95) 2.28 -229.5%
Tax (1.57) (0.67) 133.8%
(Loss)/profit after tax from continuing
operations (4.52) 1.61 -381.2%
Reported profit before tax and exceptional items of GBP6.97m is
after charging GBP0.49m for the non-cash items listed in the table
which are not considered to form part of the Group's underlying
profitability. Underlying profit before tax of GBP7.46m is
therefore presented to highlight the Group's underlying
profitability in the period.
Exceptional Items
The exceptional items for the year ended 28 March 2015 are
summarised below:
2015 2014
GBPm GBPm
--------------------------------------------- -------- ---------
Contract for Differences (7.55) (1.63)
Acquisition costs (0.40) (0.66)
Deferred consideration (1.97) ------
Profit on sale of properties ------ 3.30
Restructuring of Australia's spinning mills ------ (0.78)
(9.92) 0.23
--------------------------------------------- -------- ---------
The Contract for Differences between the Company and Camden
Holdings Limited was terminated in the year and resulted in the
issue of 7,087,730 new shares on 29 July 2014 to Camden Holdings
Limited. Camden Holdings Limited is owned by the Camden Trust of
which Geoff Wilding, Executive Chairman, is the settlor and a
discretionary beneficiary. The value of the contract on termination
was GBP9.0m, of which GBP1.6m was accounted for in the prior year.
The exceptional charge in the year also includes GBP0.15m of
related professional fees. Apart from the professional fees
incurred, this is a non-cash item.
Acquisition costs in the period relate to professional fees
associated with the acquisitions of the Abingdon Flooring group in
September 2014 and the Whitestone Weavers group in January
2015.
Deferred consideration in respect to acquisitions is measured
under IFRS 3, initially at fair value discounted for the time value
of money. Subsequently, deferred consideration is re-measured at
each half year and year end to unwind the time value of money and
for changes to the earn-out value arising from actual and forecast
business performance. Such adjustments, which are non-cash items,
are reflected in the income statement within administrative
costs.
Taxation
The tax charge in the year was GBP1.57m against a reported
pre-tax loss of GBP2.95m, giving an effective tax rate of negative
53.2%. This is distorted by the GBP9.92m charge for exceptional
items in the period, all of which have been treated as
non-deductible for tax. The underlying effective tax rate measured
against profit before tax and exceptional items of GBP6.97m is
22.5%.
The Group's tax rate is above the prevailing UK standard rate of
21% impacted by a number of factors including a higher standard
rate of 30% in Australia and expenses that are not deductible in
determining taxable profit.
Cash Flow and Debt
2015 2014
GBPm GBPm
------------------------------------------------ ---------- -------
Operating profit from continuing operations
and before exceptional items 8.61 2.58
Depreciation and non-cash items 3.20 2.55
Foreign exchange (0.03) 0.06
Movement in working capital 0.86 4.32
Operating cash flow (before exceptional
items) 12.64 9.51
-------------------------------------------------- ---------- -------
EBITDA * 11.88 5.14
Operating cash flow conversion % (against
EBITDA*) 106.4% 185.1%
* Earnings before interest, tax, depreciation,
amortisation and exceptional items.
The Group achieved strong operating cash flows in the period
(before exceptional items), with cash generation exceeding EBITDA
(before exceptional items). The cash impact of exceptional items in
the year was GBP0.55m, resulting in operating cash flows after
exceptional items of GBP12.09m.
Working capital was reduced by GBP0.86m in the period and
remains a key area of focus. Inventory management is the key
contributor to the working capital improvement, with underlying
inventory levels reducing year on year by GBP1.42m after adjusting
for the opening inventory balances on the acquisitions during the
year.
2015 2014
GBPm GBPm
------------------------------------------- ------------- ------------
Operating cash flow (before exceptional
items) 12.64 9.51
--------------------------------------------- ------------- ------------
Interest paid (1.42) (0.53)
Corporation tax paid (2.11) (0.40)
Capital Expenditure (1.39) (0.53)
Free cash flow (before exceptional items) 7.72 8.05
--------------------------------------------- ------------- ------------
Proceeds on disposal of property, plant
and equipment 0.82 11.70
Acquisitions (15.01) (12.84)
Dividends paid (20.69) (0.56)
Issue of share capital 1.54 ------
Deferred earn-out payments (1.00) ------
Restructuring of Australia's spinning
mills ------ (0.78)
Dividends and sale proceeds from Colin
Campbell ------ 0.50
Other items (0.06) (0.04)
Net cash flow (26.68) 6.03
--------------------------------------------- ------------- ------------
Opening net debt (1.48) (7.51)
Opening debt balances from acquisitions (8.12) ------
Closing net debt (36.28) (1.48)
--------------------------------------------- ------------- ------------
Interest, corporation tax and capital expenditure have all
increased year on year reflecting the expansion of the Group in the
second half of the year with the completion of two
acquisitions.
The net cash outflow from acquisitions in the period of
GBP15.01m relates to the acquisitions of the Whitestone Weavers
group and the Abingdon Flooring group and comprises the initial
cash consideration and cash equivalents acquired of GBP14.61m and
related professional fees of GBP0.40m.
The acquisitions were funded using facilities provided by the
Company's long-standing bankers, Barclays Bank, and from a
newly-signed fully-subordinated GBP10m 2022 unsecured loan note
facility provided by the Business Growth Fund.
The Company made a special dividend payment of GBP2.92 per share
in July 2014 resulting in a cash outflow of GBP20.69m.
Net debt levels increased by GBP34.80m during the financial year
to GBP36.28m (2014: GBP1.48m).
Future funding
In April 2015 the Company entered into a new multi-currency
revolving credit facility with its existing Group bankers, Barclays
and HSBC, which has replaced existing facilities. The agreement
also includes an Accordion facility option to further increase
available credit which provides substantial headroom for future
growth.
The new facility is subject to various financial covenants
measured against Group results and all lending covenants have been
satisfied to date.
The current facilities across the Group provide sufficient
capacity in Australian Dollars, Sterling and Euros to cover all
anticipated capital expenditure and working capital requirements in
the year ahead.
Key performance indicators (KPI's)
The KPI's monitored by the Group Board are set out in the table
below for the year ended 28 March 2015.
2015 2014 2013
--------------------------------------------- ---------- ------- ----------
Sales growth (constant currency) 84.1% 6.8% -7.9%
Operating margin (pre exceptional items) 6.7% 3.6% -0.6%
Return on operating assets (pre exceptional
items) 15.3% 7.1% -0.9%
Earnings/(loss) per share (basic adjusted) 44.3p 27.1p -11.0p
0.3
Net debt to EBITDA* 1.8 times times 3.3 times
9.7
Interest cover (against EBITDA*) 7.2 times times 4.8 times
---------------------------------------------- ---------- ------- ----------
* Earnings before interest, tax, depreciation, amortisation and
exceptional items.
Principal risks and uncertainties
The principal risks facing the business are set out as
follows:
Competition
The Group companies operate in mature and highly competitive
markets, resulting in pressure on pricing and margins. Management
regularly review competitor activity to devise strategies to
protect the Group's position as far as possible.
Global economic conditions
The operating and financial performance of the Group is
influenced by economic conditions in the geographic areas it
operates, particularly the UK, Eurozone, Australia and the USA. The
Group remains focussed on driving operational efficiency
improvements, cost reductions and ongoing product development to
adapt to the current market and economic conditions.
Key input prices
Material adverse changes in certain raw material prices, in
particular wool prices, could affect the Group's profitability.
These prices are closely monitored and forward contracts placed to
help manage shorter term volatility.
Geoffrey Wilding
Executive Chairman
Consolidated Income Statement
For the 52 weeks ended 28 March 2015
52 weeks 52 weeks
ended ended
28 March 29 March
2015 2014
Notes GBP000 GBP000
----------------------------------- --------- --------- ------ ---------- ----------
Continuing operations
Revenue 1 128,304 71,386
Cost of sales (86,695) (50,544)
Gross profit 41,609 20,842
Distribution costs (22,423) (13,804)
Administrative expenses (including exceptional
items and intangible amortisation) (20,928) (7,914)
Other operating
income 432 3,688
Operating (loss)/profit (1,310) 2,812
Comprising:
Operating profit before exceptional
items 1 8,880 2,651
Intangible amortisation (270) (70)
Exceptional items 3 (9,920) 231
----------------------------------------------------------- ------ ---------- ----------
.
Finance costs (1,643) (531)
Comprising:
----------------------------------- --------- --------- ------ ---------- ----------
Interest charges (1,419) (531)
Business Growth Fund redemption premium interest
and share option charge (224) ------
------------------------------------------------------------------- ---------- ----------
(Loss)/profit before
tax 1 (2,953) 2,281
Taxation (1,571) (672)
(Loss)/profit for the period from continuing
operations (4,524) 1,609
Profit for the period from discontinued
operations 1 ------ 116
(Loss)/profit for
the period (4,524) 1,725
------------------------------------ ------------------- ------ ---------- ----------
(Loss)/earnings
per share - pence basic 2 (38.15) 24.52
diluted 2 (38.15) 24.52
(Loss)/earnings per share from continuing
operations - pence basic 2 (38.15) 22.87
diluted 2 (38.15) 22.87
------------------------------------------------------- ------ ---------- ----------
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 28 March 2015
52 weeks 52 weeks
ended ended
28 March 29 March
2015 2014
GBP000 GBP000
Exchange differences on translation
of foreign operations (756) (5,078)
------------------------------------------------------- ---------- ----------
Amounts which may be subsequently reclassified
to profit or loss (756) (5,078)
(Loss)/profit for the period (4,524) 1,725
------------------------------------------------------- ----------
Total comprehensive loss for
the period (5,280) (3,353)
------------------------------------------------------ ---------- ----------
Consolidated and Company Balance Sheets
As at 28 March 2015
Group Company
28 March 29 March 28 March 29 March
2015 2014 2015 2014
GBP000 GBP000 GBP000 GBP000
--------------------------------------- --------- --------- --------- ---------
Non-current assets
Goodwill 6,481 2,735 ------ ------
Intangible assets 8,858 4,953 ------ ------
Property, plant and equipment 22,489 18,681 ------ ------
Investment property 180 180 180 180
Investment in subsidiary undertakings ------ ------ 38,180 27,126
Deferred tax asset 1,903 1,441 708 285
-----------------------------------------
Total non-current assets 39,911 27,990 39,068 27,591
----------------------------------------- --------- --------- --------- ---------
Current assets
Inventories 40,956 21,203 ------ ------
Trade and other receivables 30,953 13,964 24,427 16,177
Cash at bank and in hand 2,392 15,192 ------ 13,151
Assets held for sale ------ 547 ------ ------
Total current assets 74,301 50,906 24,427 29,328
-----------------------------------------
Total assets 114,212 78,896 63,495 56,919
----------------------------------------- --------- --------- --------- ---------
Current liabilities
Trade and other payables 39,066 17,496 4,995 3,128
Current tax liabilities 2,014 1,162 ------ ------
Other financial liabilities 18,408 5,406 16,206 5,267
-----------------------------------------
Total current liabilities 59,488 24,064 21,201 8,395
----------------------------------------- --------- --------- --------- ---------
Non-current liabilities
Trade and other payables 12,260 7,716 6,757 6,804
Other financial liabilities 20,264 11,267 19,876 9,733
Deferred tax liabilities 2,370 1,210 ------ ------
Total non-current liabilities 34,894 20,193 26,633 16,537
----------------------------------------- --------- --------- --------- ---------
Total liabilities 94,382 44,257 47,834 24,932
----------------------------------------- --------- --------- --------- ---------
Net assets 19,830 34,639 15,661 31,987
----------------------------------------- --------- --------- --------- ---------
Equity
Share capital 3,639 1,772 3,639 1,772
Share premium 10,144 909 10,144 909
Retained earnings 5,987 31,958 1,818 29,306
Share-based payment reserve 60 ------ 60 ------
Total equity 19,830 34,639 15,661 31,987
----------------------------------------- --------- --------- --------- ---------
Consolidated Statement of Changes in Equity
For the 52 weeks ended 28 March 2015
Share Share Retained Share-based Total
capital premium earnings payment equity
reserve
GBP000 GBP000 GBP000 GBP000 GBP000
At 30 March 2014 1,772 909 31,958 ---- 34,639
Loss for the period ---- ---- (4,524) ---- (4,524)
Other comprehensive loss for
the period ---- ---- (756) ---- (756)
----------------------------------------- -------- -------- --------- ------------ ---------
1,772 909 26,678 ---- 29,359
Transactions with owners:
Dividends paid ---- ---- (20,691) ---- (20,691)
Issue of share capital 1,867 9,235 ---- ---- 11,102
Movement in share-based payment
reserve ---- ---- ---- 60 60
At 28 March 2015 3,639 10,144 5,987 60 19,830
---------------------------------------- -------- -------- --------- ------------ ---------
At 31 March 2013 1,758 829 35,724 162 38,473
Profit for the period ---- ---- 1,725 ---- 1,725
Other comprehensive loss for the
period ---- ---- (5,078) ---- (5,078)
------------------------------------------ -------- -------- --------- ------------ ---------
1,758 829 32,371 162 35,120
Transactions with owners:
Dividends paid ---- ---- (563) ---- (563)
Movement in share based payment
reserve ---- ---- ---- (12) (12)
Transfer of share-based payment
reserve to retained earnings ---- ---- 150 (150) ----
Issue of share capital in connection
with exercise of share options under
LTIP plan 14 80 ---- ---- 94
At 29 March 2014 1,772 909 31,958 ---- 34,639
------------------------------------------- -------- -------- --------- ------------ ---------
Company Statement of Changes in Equity
For the 52 weeks ended 28 March 2015
Share Share Retained Share-based Total
capital premium earnings payment equity
reserve
GBP000 GBP000 GBP000 GBP000 GBP000
At 30 March 2014 1,772 909 29,306 ------ 31,987
Loss for the period ------ ------ (6,797) ------ (6,797)
------------------------------------------ -------- -------- --------- ------------ ---------
1,772 909 22,509 ------ 25,190
Transactions with owners:
Dividends paid ------ ------ (20,691) ------ (20,691)
Issue of share capital 1,867 9,235 ------ ------ 11,102
Movement in share based payment
reserve ------ ------ ------ 60 60
At 28 March 2015 3,639 10,144 1,818 60 15,661
------------------------------------------ -------- -------- --------- ------------ ---------
At 31 March 2013 1,758 829 4,669 103 7,359
Profit for the period ------ ------ 25,097 ------ 25,097
------------------------------------------ -------- -------- --------- ------------ ---------
1,758 829 29,766 103 32,456
Transactions with owners:
Dividends paid ------ ------ (563) ------ (563)
Transfer of share based payment
reserve to retained earnings ------ ------ 103 (103) ------
Issue of share capital in connection
with exercise of share options
under LTIP plan 14 80 ------ ------ 94
At 29 March 2014 1,772 909 29,306 ------ 31,987
------------------------------------------ -------- -------- --------- ------------ ---------
Consolidated and Company Statements of Cash Flows
For the 52 weeks ended 28 March 2015
Group Company
52 weeks 52 weeks 52 weeks 52 weeks
ended ended ended Ended
28 March 29 March 28 March 29 March
2015 2014 2015 2014
Notes
GBP000 GBP000 GBP000 GBP000
-------------------------------------------- ------ ---------- ---------- ---------- ----------
Net cash inflow/(outflow) from operating
activities 5 8,557 7,093 (6,430) 13,263
----------------------------------------------- ------ ---------- ---------- ---------- ----------
Investing activities
Purchases of property, plant and equipment (1,391) (531) ----- ----
Proceeds from disposal of Colin Campbell
& Sons Limited ---- 324 ----- 324
Dividend received from Colin Campbell
& Sons Limited ---- 179 ----- 179
Proceeds on disposal of property,
plant and equipment 816 11,696 ----- 5,600
Deferred earn-out payments (1,000) ---- (1,000) ----
Acquisition of subsidiaries (14,616) (12,176) (7,655) (16,000)
Net cash used in investing activities (16,191) (508) (8,655) (9,897)
----------------------------------------------- ------ ---------- ---------- ---------- ----------
Financing activities
Increase in long term loans 8,596 10,488 16,832 9,233
Issue of share capital 1,543 94 1,543 94
Repayment of obligations under finance
leases/HP (241) (14) ----- -----
Dividends paid (20,691) (563) (20,691) (563)
Net cash (used)/generated in financing
activities (10,793) 10,005 (2,316) 8,764
----------------------------------------------- ------ ---------- ---------- ---------- ----------
Net (decrease)/increase in cash and
cash equivalents (18,427) 16,590 (17,401) 12,130
Cash and cash equivalents at beginning
of period 6 9,925 (6,475) 7,884 (4,246)
Effect of foreign exchange rate
changes ---- (190) ----- -----
Cash and cash equivalents at end of
period 6 (8,502) 9,925 (9,517) 7,884
----------------------------------------------- ------ ---------- ---------- ---------- ----------
Notes to the Accounts
1 Segmental information
The Group is organised into two operating divisions, the sale of
floorcovering products in the UK and Australia.
Geographical segment information for revenue, operating profit
and a reconciliation to entity net profit is presented below.
Income For the 52 weeks ended For the 52 weeks ended 29
statement 28 March 2015 March 2014
Segmental Exceptional Profit Segmental Exceptional Profit
operating operating Finance before operating operating Finance before
Revenue profit items costs tax* Revenue profit items costs tax*
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- ---------- ------------ -------- --------- -------- ---------- ------------ -------- --------
UK 92,911 8,427 - (150) 8,277 33,047 1,577 - (9) 1,568
Australia 35,393 1,552 - (155) 1,397 38,339 1,686 1,824 (138) 3,372
---------------- ------------ -------- --------- ------------ -------- --------
128,304 9,979 - (305) 9,674 71,386 3,263 1,824 (147) 4,940
Unallocated
central
expenses (1,369) (9,920) (1,338) (12,627) (682) (1,593) (384) (2,659)
---------------- -------- ---------- ------------ -------- --------- -------- ---------- ------------ -------- --------
Total
continuing
operations 128,304 8,610 (9,920) (1,643) (2,953) 71,386 2,581 231 (531) 2,281
Tax (1,571) (672)
---------------- -------- ---------- ------------ -------- --------- -------- ---------- ------------ -------- --------
(Loss)/profit
after tax from
continuing
activities (4,524) 1,609
---------------- -------- ---------- ------------ -------- --------- -------- ---------- ------------ -------- --------
Profit from discontinued
operations* 5 111 116
(Loss)/profit
for the period 128,304 8,610 (9,920) (1,643) (4,524) 71,386 2,586 342 (531) 1,725
---------------- -------- ---------- ------------ -------- --------- -------- ---------- ------------ -------- --------
* Prior year profit from discontinued operations relates to the
Canadian operation Colin Campbell & Sons Limited, which was
sold on 28 March 2014. The result is shown net of tax.
Intersegment sales between the UK and Australia were immaterial
in the current and comparative periods.
Management information is reviewed on a segmental basis to
profit before tax.
Balance Sheet As at 28 March As at 29 March
2015 2014
Segment Segment Segment Segment
assets liabilities assets liabilities
GBP000 GBP000 GBP000 GBP000
--------------------- ---------- ------------ ---------- ------------
UK 93,527 65,407 55,877 24,739
Australia 19,797 7,939 22,000 11,022
Assets held
for sale ---- ---- 547 ----
Unallocated central
assets/liabilities 888 21,036 472 8,496
----------------------- ---------- ------------ ---------- ------------
114,212 94,382 78,896 44,257
--------------------- ---------- ------------ ---------- ------------
Assets held for sale relates to the Castlemaine spinning mill in
Australia which was sold in May 2014.
52 weeks 52 weeks
ended ended
28 March 29 March
Other segmental information 2015 2014
GBP000 GBP000
------------------------------- ---------- ----------
Depreciation and amortisation
UK 1,928 904
Australia 1,345 1,650
---------------------------------- ----------
3,273 2,554
------------------------------- ---------- ----------
No other significant non-cash expenses were deducted in
measuring segment results.
52 weeks 52 weeks
ended ended
28 March 29 March
2015 2014
GBP000 GBP000
--------------------- ---------- ----------
Capital expenditure
UK 1,049 304
Australia 342 227
------------------------ ---------- ----------
1,391 531
--------------------- ---------- ----------
2 (Loss)/earnings per share
The calculation of the basic, adjusted and diluted (loss)/earnings
per share is based on the following data:
Basic Adjusted Basic Adjusted
2015 2015 2014 2014
GBP000 GBP000 GBP000 GBP000
---------------------------------------- -------- --------- ------- ---------
(Loss)/profit attributable to ordinary
equity holders of the parent entity (4,524) (4,524) 1,725 1,725
Exceptional items
(net of tax effect):
Contract for Differences ---- 7,554 ---- 1,631
Acquisition
costs ---- 398 ---- 633
Deferred consideration ---- 1,968 ---- ----
Profit on sale of Australia properties ---- ---- ---- (1,823)
Profit on sale of
UK property ---- ---- ---- (693)
Restructuring of Australia's spinning
mills ---- ---- ---- 546
Profit on sale of investment
in Colin Campbell & Sons
Limited ---- ---- ---- (111)
Earnings for the purpose of basic
and adjusted earnings per share (4,524) 5,396 1,725 1,908
Weighted average number of shares:
2015 2014
Number Number
of of
shares shares
('000) ('000)
----------------------------------------------------- -------- ------------
Weighted average number of ordinary shares for the
purposes of basic and adjusted (loss)/earnings per
share 11,859 7,036
Effect of dilutive potential ordinary shares:
Business Growth Fund share options 120 ----
----------------------------------------------------------- -------- ------------
Weighted average number of ordinary shares for the
purposes of diluted (loss)/earnings per share 11,979 7,036
----------------------------------------------------------- -------- ------------
The potential dilutive effect of the share options has been calculated
in accordance with IAS 33 using the average share price over the
period the options have been in existence.
The Group's (loss)/earnings per share are as follows:
2015 2014
Pence Pence
----------------------------------------------------- --------
Basic adjusted 45.50 27.12
Diluted adjusted 45.05 27.12
Basic (38.15) 24.52
Diluted (38.15) 24.52
-------------------------------------------------------- -------- ------------
3 Exceptional Items from continuing operations
52 weeks 52 weeks
ended ended
28 March 29 March
2015 2014
GBP000 GBP000
---------------------------------------------- -------------------- -------------
(a) Contract for Differences (7,554) (1,631)
(b) Acquisition
costs (398) (655)
(c) Deferred consideration (1,968) ------
(d) Profit on sale of properties ------ 3,297
(e) Restructuring of Australia
spinning mills ------ (780)
(9,920) 231
---------------------------------------------- -------------------- -------------
All exceptional items are classified within administrative expenses
(except where noted).
(a) Relates to the Contract for Differences between the Company and
Camden Holdings Limited. The contract was terminated on 28 July 2014
and resulted in the issue of 7,087,730 new shares on 29 July 2014
to Camden Holdings Limited, a company wholly owned by The Camden Trust
of which Mr Wilding, Executive Chairman, is the settlor and a discretionary
beneficiary. The value of the contract on termination was GBP9.0m,
of which GBP1.6m was accounted for in the prior year. The exceptional
charge in the period also includes GBP0.15m of related professional
fees.
(b) Relate to professional fees in connection with the two acquisitions
completed during the year.
(c) Deferred consideration in respect to acquisitions is measured
under IFRS 3, initially at fair value discounted for the time value
of money. Subsequently, deferred consideration is re-measured at each
half-year and year end to unwind the time value of money and for changes
to the earn-out value arising from actual and forecast business performance.
Such adjustments are non-cash items.
(d) Relates to the profit from the sale and leaseback of Australia's
carpet manufacturing facility and spinning mill in Bendigo, and the
profit from the sale and leaseback of the carpet manufacturing facility
in Kidderminster, UK. This profit is included as part of other operating
income.
(e) Relate to costs associated with the "right-sizing" and reorganising
the two spinning mills to meet reduced volume requirements as a result
of declining demand for woollen yarns.
4 Rates of exchange
The results of overseas subsidiaries 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:
2015 2014
Year
Average Year end Average end
------------- -------- --------- -------- -------
Australia -
A$ 1.8547 1.9184 1.7057 1.7988
----------------- -------- --------- -------- -------
5 Reconciliation of operating (loss)/profit to net cash
inflow/(outflow) from operating activities
Group Company
2015 2014 2015 2014
GBP000 GBP000 GBP000 GBP000
--------------------------------------------- -------- -------- -------- ---------
Operating (loss)/profit from continuing
operations (1,310) 2,812 (5,902) 24,163
Adjustments for:
- Depreciation charges 3,003 2,484 ---- 60
- Amortisation of intangible assets 270 70 ---- ----
- Fair value charge for Contract
for Differences 7,397 1,605 7,397 1,605
- Deferred consideration revaluation 1,968 ---- 1,301 ----
- Profit on disposal of property, plant
and equipment (69) (3,324) ---- (693)
- Exchange rate difference on consolidation (27) 55 ---- ----
------------------------------------------------ -------- -------- -------- ---------
Operating cash flows before movements in
working capital 11,232 3,702 2,796 25,135
Decrease/(increase) in working
capital 857 4,317 (8,112) (11,488)
----------------------------------------------- -------- -------- -------- ---------
Cash generated/ (used) by operations 12,089 8,019 (5,316) 13,647
Interest paid (1,419) (531) (1,114) (384)
Income taxes paid (2,113) (395) ---- ----
------------------------------------------------- -------- -------- --------
Net cash inflow/(outflow) from operating
activities 8,557 7,093 (6,430) 13,263
------------------------------------------------ -------- -------- -------- ---------
6 Analysis of net debt
At Other At
29 March Cash non-cash Exchange 28 March
2014 flow Acquisitions changes movement 2015
GBP000 GBP000 GBP'000 GBP000 GBP000 GBP000
----------------------------- ---------- --------- --------------- ---------- ---------- ----------
Cash 15,192 (12,800) ---- ---- ---- 2,392
Bank overdraft (5,267) (5,627) ---- ---- ---- (10,894)
-------------------------------- ---------- --------- --------------- ---------- ---------- ----------
Cash and cash equivalents (9,925) (18,427) ---- ---- ---- (8,502)
Finance leases and hire
purchase agreements
- Payable less than one
year (139) 241 (773) (164) 10 (825)
- Payable more than one
year (279) ---- (290) 164 17 (388)
Bank loans
- Bank loans payable less
than one year ---- 369 (7,058) ---- ---- (6,689)
- Bank loans payable more
than one year (10,988) 1,198 ---- ---- 78 (9,712)
Other loans payable more
than one year ---- (10,164) ---- ---- ---- (10,164)
--------------------------------
Net debt (1,481) (26,783) (8,121) ---- 105 (36,280)
-------------------------------- ---------- --------- --------------- ---------- ---------- ----------
7. Acquisition of subsidiaries
(a) Abingdon Flooring Limited and its wholly owned
subsidiaries
On 30 September 2014, the Group acquired the entire issued share
capital of Abingdon Flooring Limited and its wholly owned
subsidiaries, Alliance Distribution Limited and Distinctive
Flooring Limited ('Abingdon Flooring group'). The principal
activity of the Abingdon Flooring group is the manufacture and sale
of carpets, carpet tiles and hard flooring across the UK. The
business operates from facilities in South Wales, Kidderminster and
Yorkshire, employing a workforce of more than 500 people. The
acquisition is expected to be accretive to the underlying earnings
per share of the Company.
The Group results for the year ended 28 March 2015 included
GBP38.4m of revenue and GBP2.4m profit before tax from the Abingdon
Flooring group.
If the acquisition of Abingdon Flooring Group had been completed
on the first day of the financial year, Group revenues for the
period would have been GBP36.45m higher and Group profit before tax
would have been GBP0.61m higher.
(b) Whitestone Weavers group
On 14 January 2015, the Group acquired the Whitestone Weavers
group of companies, comprising Whitestone Weavers Limited, Carpet
Line Direct Limited, Gaskell Mackay Carpets Limited, View Logistics
Limited and Thomas Witter Carpets Limited. The principal activity
of the Whitestone Weavers Group is the design, sale and
distribution of carpets across the UK. The business operates from
facilities in Hartlepool, employing a workforce of more than 100
people. The acquisition is expected to be accretive to the
underlying earnings per share of the Company.
The Group results for the year ended 28 March 2015 included
GBP7.9m of revenue and GBP0.7m profit before tax from the
Whitestone Weavers Group.
If the acquisition of the Whitestone Weavers Group had been
completed on the first day of the financial year, Group revenues
for the period would have been GBP28.56m higher and Group profit
before tax would have been GBP1.12m higher.
8. Post Balance Sheet Events
New bank facilities
The Company has agreed a new multi-currency facility with its
existing Group bankers, Barclays and HSBC, which has replaced
existing facilities and provides substantial headroom for future
growth.
9. The results have been extracted from the audited financial
statements of the Group for the 52 weeks ended 28 March 2015. The
results do not constitute statutory accounts within the meaning of
Section 434 of the Companies Act 2006. Whilst the financial
information included in this announcement has been computed in
accordance with the principles of International Financial Reporting
Standards ("IFRS") as adopted by the EU, IFRIC interpretations and
Companies Act 2006 that applies to companies reporting under IFRS,
this announcement does not itself contain sufficient information to
comply with IFRS. The Group will publish full financial statements
that comply with IFRS. The audited financial statements incorporate
an unqualified audit report. The Auditor's report on these accounts
did not draw attention to any matters by way of emphasis and did
not contain statements under S498(2) or (3) Companies Act 2006.
Statutory accounts for the 52 weeks ended 29 March 2014, which
incorporated an unqualified auditor's report, have been filed with
the Registrar of Companies. The Auditor's report on these accounts
did not draw attention to any matters by way of emphasis and did
not contain statements under S498(2) or (3) Companies Act 2006. The
accounting policies applied are consistent with those described in
the Annual Report & Accounts for the 52 weeks ended 29 March
2014.
9. The Annual Report & Accounts will be posted to
shareholders in due course. Further copies will be available from
the Company's Registered Office: Worcester Road, Kidderminster,
Worcestershire, DY10 1JR or via the website:
www.victoriaplc.com.
10. The Annual General Meeting is being held at the offices of
Brown Rudnick LLP, at Clifford Street, London, WS1 2LQ, at 2.00pm
on Friday, 25 September 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DKLFLEDFXBBL
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