TIDMVCP
RNS Number : 5058F
Victoria PLC
29 October 2018
For Immediate Release 29 October 2018
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Victoria PLC
('Victoria' or the 'Group')
Trading update for the six months ended 29 September 2018
Victoria PLC (LSE: VCP) the international designers,
manufacturers and distributors of innovative floor coverings
confirms that for the six months ended 29 September 2018, the Group
has continued to grow sales in a challenging market and Group
like-for-like ("LFL") revenue growth(1) has continued to exceed 3%
compared with the equivalent period during the prior year.
The Group is realising the benefits of the growth and
diversification of the business over the past few years, which have
positioned us for success when market conditions and sales
performance have varied between different geographies and product
categories.
The UK & Europe segment has achieved strong LFL revenue
growth:
In soft flooring, which excludes ceramic tiles, we have taken
advantage of market conditions, the competitive landscape, and the
productivity benefits of the reorganisation of our UK factory
footprint last year, to aggressively target growth in market share.
In doing so we have maintained the strategy set out in our last
annual report; focusing our product mix on competitive products,
lowering average selling prices, and driving sales volume. As a
result, sales have grown organically in excess of 5%.
In hard flooring, we are pleased with the performance of our
three acquisitions in the European ceramic tile market in the last
twelve months. Of particular note has been the customer uptake of
the new porcelain products at Serra since production commenced in
June, and the synergies that we have identified between Keraben and
Saloni, our most recent acquisition in August, which are
progressing well and we expect to be fully delivered by the
year-end. The sector has seen an increase in pricing pressure since
the start of the financial year which, combined with the planned,
but significant, one-off disruption from the installation of a new
porcelain line at our Italian factory, has had a marginal impact on
overall sales growth and margins.
The Australia segment, which represents c.18% of pro-forma Group
sales, has experienced slower performance in the year-to-date, with
a circa 4% decline in sales against what was a very strong
comparative period, with the business previously benefitting from
an exceptionally buoyant local housing market over the past two
years. The Board expects that the benefits from current initiatives
to expand our luxury vinyl tile (LVT) business will be evident
during the second half of the year.
Overall, as previously stated, the Board firmly believes that it
should capitalise on the strength of the Group by driving sales and
market share at this time, although this comes with a short-term
investment in operating margin. Based on year-to-date performance
and taking into account seasonality, this is impacting the Group's
overall margin by approximately 1 - 1.5 percentage points versus
consensus market forecasts, although margins are still expected to
significantly exceed the prior year due to organic growth and
product mix effects from previous acquisitions. The Board believes
that seeking to increase market share is the correct strategy for
the Group at this time as, even with current market conditions, the
Group's year-to-date revenues are on track to exceed consensus
market forecasts, and the Group plans to recover the margin
investment in stages over the next twelve months.
As we move into the peak trading season for the Group's
businesses, the senior management team remains focused on driving
sales, supported by a compelling and competitive product and
service offering to our customers. In addition, we continue to see
a large number of high-quality acquisition targets, in order to
deliver longer-term growth in shareholder value.
(1) LFL revenue growth adjusted to remove the impact of
acquisitions, translational currency differences and other
exceptional items.
- Ends -
For more information contact:
Victoria PLC
Geoff Wilding, Executive Chairman
Philippe Hamers, Group Chief Executive
Michael Scott, Group Finance Director +44 (0) 1562 749 300
Cantor Fitzgerald Europe (Nominated Adviser
and Joint Broker)
Rick Thompson, Phil Davies, Will Goode
(Corporate Finance)
Caspar Shand Kydd, Andrew Keith (Equity
Sales) +44 (0) 20 7894 7000
Berenberg (Joint Broker)
Ben Wright, Mark Whitmore, Laure Fine (Corporate
Broking)
Buchanan Communications (Financial PR)
Charles Ryland, Maddie Seacombe, Tilly +44 (0) 203 207 7800
Abraham +44 (0) 20 7466 5000
About Victoria
Established in 1895 and listed since 1963 and on AIM since 2013
(VCP.L), Victoria PLC, is an international manufacturer and
distributor of innovative flooring products. The Group, which is
headquartered in Kidderminster, UK, designs, manufactures and
distributes a range of carpet, flooring underlay, ceramic tiles,
LVT (luxury vinyl tile), artificial grass and flooring accessories.
Victoria has operations in the UK, Spain, Italy, Belgium, the
Netherlands and Australia and employs approximately 3,000 people
across more than 20 sites. Victoria is the UK's largest carpet
manufacturer and the second largest in Australia, as well as the
largest manufacturer of underlay in both regions.
The Group's strategy is designed to create value for its
shareholders and is focused on consistently increasing earnings per
share via acquisitions and sustainable organic growth.
The Group's trading subsidiaries, as set out segmentally,
include:
UK & Europe: A. & A. Carpets Ltd, Abingdon Flooring Ltd, Alliance
Distribution Ltd, Avalon B.V, Ceramica Saloni, S.A.U,
Ceramiche Serra S.p.A., Distinctive Flooring Ltd,
Ezi Floor Ltd, Grass Inc. B.V, Interfloor Ltd, Keraben
Grupo S.A., Millennium Weavers N.V, Sanicova, S.L.U,
Victoria Carpets Ltd, View Logistics Ltd, Westex
(Carpets) Ltd,
Australia: Primary Flooring Pty Ltd, Quest Flooring Pty Ltd,
The Victoria Carpet Co. Pty Ltd
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END
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