Final Results

Victoria PLC 20 June 2001 Victoria P.L.C. Preliminary Results year to 31 March 2001 Wednesday, 20 June 2001 9.45am : Analysts' Presentation 11.30am : Press Briefing @ Citigate Dewe Rogerson 26 Finsbury Square London EC2A 1DS Issued by Citigate Dewe Rogerson Ltd, Birmingham Date: Wednesday, 20 June 2001 Embargoed: 7.00am Victoria P.L.C. Preliminary Results for the year ended 31 March 2001 Against backdrop of challenging market conditions, both in the UK & Australia, the Group has continued to make progress * Profit before tax £2.2 million + 5% * Net profit £4.367 million after exceptional items of £2.164m + 77% * Earnings per share 21.75p + 6% * Final dividend 6.5p + 18% * UK profits increased significantly in a difficult market * Creditable performance in Australia despite difficult trading environment and one-off events * Significant investments completed in Castlemaine increasing capacity by 50% * Westwood Yarns contributed well to the Group's performance 'Currently, the market conditions in Australia remain difficult but with the strong leadership, innovative products, and the benefit of considerable capital expenditure in our facilities at Castlemaine, we are well placed to cope with these market conditions. 'In the UK, too, despite the economic uncertainty, we will continue to pursue the organic growth strategy with which we have been so successful over recent years. Our existing product portfolio is strong and further new introductions are planned in the first half of the year. These developments should reinforce our position as a leading supplier of premium branded floor coverings to both the residential and commercial markets. 'I believe that the Group is well-placed to maintain its performance in the current year.' R M Gilbert, Chairman FULL STATEMENT ATTACHED Enquiries: Alan Bullock, Group Managing Director Mark Lee, Group Finance Director Fiona Tooley Victoria P.L.C. Citigate Dewe Rogerson Today: 020 7282 8000 (8.00am - 12.00noon) Today: 020 7282 8000 Thereafter: 01562 749300 Thereafter: 0121 455 8370 Mobile: 07785 325701 (Alan Bullock) Mobile: 07785 703523 Mobile: 07887 753206 (Mark Lee) -2- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2001 STATEMENT BY THE CHAIRMAN, R M GILBERT Introduction Against the backdrop of challenging market conditions, both in the UK and in Australia, I am pleased to report continued progress by the Group. Results The Group turnover at £35.3 million, has on the face of it showed little movement on last year, but this figure has been affected by a difference in the exchange rate used at our year-end in converting our Australian division's results compared with last year. Profit before tax and exceptional items was up by 4.5% to £2.203 million and earnings per share are up 5.9% to 21.75 pence per share excluding exceptional items. The net profit before tax was up by 77% to £4.367 million after exceptional items of £2.164 million, representing the profit generated on the sale of our Green Street premises. Whilst all parts of the Group performed well, we enjoyed a particularly pleasing result in the UK where profits increased significantly in a difficult market as a result of benefits derived from the rationalisation of our production facilities in Kidderminster and capital expenditure at Westwood's facilities at Holmfirth. After an excellent start to the year in Australia, the introduction of GST (the equivalent of VAT) and the impact of the Olympic Games took their toll on trading. Since then, challenging market conditions have prevailed. Dividend The Board is pleased to be able to continue with its policy of providing a progressive dividend, and is recommending a final dividend of 6.5 pence per share, which represents an 18% increase. This follows the special interim dividend of 15 pence per share paid during the year. Subject to approval at the Annual General Meeting on 19 July 2001, the final dividend will be paid on 23 July 2001 to shareholders on the register at the close of business on 29 June 2001. Prospects Currently, the market conditions in Australia remain difficult but with the strong leadership, innovative products, and the benefit of considerable capital expenditure in our facilities at Castlemaine, we are well placed to cope with these market conditions. In the UK, too, despite the economic uncertainty, we will continue to pursue the organic growth strategy with which we have been so successful over recent years. Our existing product portfolio is strong and further new introductions are planned in the first half of the year. These developments should reinforce our position as a leading supplier of premium branded floor coverings to both the residential and commercial markets. continued... -3- I believe that the Group is well-placed to maintain its performance in the current year. Finally, I would like to express my sincere thanks to our workforce, whose support, quality ethic and ongoing culture for continuous improvement have played a significant part in the Group's success. R M Gilbert Chairman 20 June 2001 -4- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2001 OPERATING REVIEW BY THE GROUP MANAGING DIRECTOR, ALAN BULLOCK United Kingdom As has already been reported by others in the Industry, the market for floor coverings in the UK has remained challenging throughout the year. However, against this back-drop, our UK operation has traded well, delivering another year's improved performance. On a turnover up by 3.4% from £23.8 million to £24.7 million, gross profit was lifted by 2.17% and the gross profit margin is maintained at 30%. Net profit before tax and exceptional income was increased by 27.5%. CARPET MANUFACTURE The first year of this new Millennium saw our carpet manufacturing operation producing carpet for the full year out of our modern, consolidated plant at Worcester Road, Kidderminster. A combination of operational efficiencies, 'hands-on management' and the benefit of recent investments have all now started to flow through to our bottom line. Today we are making more carpet of higher quality with fewer people than at any time in the past. During the year, we have continued to invest in new plant and equipment to maintain our position at the forefront of the market. These investments included a further high-speed tufter and, since the year-end, we have installed the very latest high-speed, computer controlled Graphics tufter, which will enable us to expand our offering of patterned tufted carpet. CARPET SALES Despite market conditions in the UK claimed to be flat, Victoria Carpets' strong product portfolio and emphasis on targeted marketing has once more enabled us to further strengthen our position in the market place. Overall, our carpet turnover was up by 6.24% in the year with operating profits up 44% and net profit before tax up by 48%. Sales in the UK remain focused on the Independent Retail Sector where we have once more expanded our market share. Sales to this sector now account for 61% of UK sales compared to 53% in the previous year. We believe that our continued emphasis on new products of differentiation and quality, and consistently high levels of service to our customers will allow us to meet whatever challenges the market presents us with. continued... -5- Victoria Carpets has a particularly active programme of new product launches in the UK in the first half of our next financial year, with five new ranges scheduled for introduction. Only one of these products is a replacement range and the others are therefore all expected to bring incremental turnover and profit. The elapsed time it takes to sample new products, however, means that the benefits of these ranges will not be felt until the second half of the financial year. Victoria Carpets continues to be active in its support of The Carpet Foundation and has registered all of its products under The Carpet Foundation's new Quality Assurance Scheme. Export sales performance in the year has been strong, despite the continuing strength of Sterling. Sales overseas were up by 10.44% at £4.45m compared to the previous year with sales to the EU accounting for 78% of our exports. Victoria Carpets has over the years successfully created a strong reputation for the production and supply of 'bespoke' contract carpeting, particularly for the hotel industry and its export list of customers reads like a 'Who's Who' of 5 Star/Deluxe category hotels. Three of the five new product introductions planned for the first-half of the new financial year are export/contract orientated giving us confidence that exports should continue to prosper. YARN MANUFACTURE Westwood Yarns, as always, has contributed well to the Group performance. We have, however, during the year seen an increased demand for heat-set yarns, which we feel will be an on-going trend. Our current imbalance of set to un-set yarn has prevented us from maximising our capacity utilisation this year and we have therefore embarked on a programme to expand our existing heat-setting capacity. Additional heat-setting capacity and the building work necessary to accommodate this equipment will be completed by late June 2001 allowing us the complete flexibility of Superba heat-setting our full spinning capacity when required. Australia Our Australian division has experienced a more difficult trading period than we have seen in recent years. A combination of 'one-off' events coupled with a general economic down-turn in Australia have conspired to check the strong advances we have been seeing 'down-under' over recent years. In July 2000, the Government introduced a 10% Goods & Services Tax (GST) and in September 2000, the Sydney Olympics further damaged sales. Since July 2000 the Australian economy has also gone into recession, which has brought about a significant decline in the value of the Australian Dollar. The sum result of these circumstances saw our sales flat in Australia, at just 0.3% higher in A$ terms, but down by 9.42% in Sterling terms when consolidated into our accounts at the exchange rate of A$2.91 compared to A$2.63 in the previous year. Turnover in the year was £10.66 million against £11.77 million the previous year. continued... -6- Sales in the first quarter (Pre-GST) were up 24% on the corresponding period in the previous year as the economy remained strong and customers purchased in advance of the introduction of GST. In the second quarter (Post-GST) sales dipped, as we had forecast, and were down by 5% compared to the previous year. In the third quarter, the economy started to slow further and the Sydney Olympics also depressed consumer sales as the country became engrossed in the Games for almost the whole month of September. This third quarter was down by 10% compared to the previous year. The fourth quarter saw a further deepening of the down-turn during what is generally a weaker period of trading covering the Christmas/New Year, summer 'down-under', holiday season. Sales were down by 7% compared to the same quarter the year before. Against this back-drop we believe that we have produced a creditable result. At our Castlemaine yarn spinning plant we completed a significant investment to increase our yarn spinning capacity by around 50% at a cost of A$6.6 million (£2.4 million). Some initial start-up problems and disruptions to the existing plant resulted in a lower than planned output and profitability. The plant is, however, now fully operational and delivering increased volumes of high quality yarn and producing expected levels of profitability. The Board would like to acknowledge the excellent contribution that our new Spinning Mill Manager, Tony Breslin, has made since joining the company in October 2000. Our Castlemaine spinning mill is now one of the most modern dry woollen spinning mills in the Southern Hemisphere and the A$13.7million investment we have put into the mill since we purchased it in 1993 will continue to deliver an excellent return to the Group. CANADA Our Associate Company, Colin Campbell & Sons, saw a slowing of its market during the second half of 2000 as the Canadian economy reacted to the slowdown in the USA. However, despite this, Campbell's turnover and net profit in the year was almost identical to the previous year. Campbell's contribution to our Group profit was up from £41,328 to £43,253, a 4.66% improvement in the year. Alan Bullock Group Managing Director 20 June 2001 -7- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2001 FINANCIAL REVIEW BY THE GROUP FINANCE DIRECTOR, MARK LEE Results for the year The slight reduction in Group consolidated turnover is due mainly to the weakening of the Australian dollar and belies the continuing progress of the operating businesses. Sales from the UK carpet business were 6.24% higher than 2000. UK sales as a whole, were 3.44% higher than 2000 as outside sales of carpet yarn from Westwood Yarns were replaced by an increase in sales within the Group. Sales from our Australian business were 0.34% higher in local currency than in 2000, but, with the sharp decline in the Australian dollar exchange rate, from 2.63 last year to 2.91 this year, the Australian element of Group turnover was reduced by 9.4% when shown in Sterling. Operating profits, at £2.37 million, were slightly lower than last year's level of £2.42 million due to the effect the Australian currency and the factors reported in the Operating Review. Exceptional income The sale of the Green Street property in Kidderminster was completed in April 2000 when the remainder of the £3.0 million sale proceeds were received. The profit on disposal of £2.16 million is brought into the year's accounts as an exceptional item. Interest The interest charge for the year was £0.21 million, a significant reduction from £0.35 million in 2000. The interest charge was covered over 11 times by operating profits. Profits Profit before tax and exceptional items of £2.203 million was 4.5% higher than in 2000 reflecting the reduced interest charge and the increased profitability achieved by the UK operations. Taxation The tax charge on profits, excluding the exceptional income, was £0.70 million, representing an effective rate of 31.6%. An additional provision of £ 0.16 million was made for deferred tax on the exceptional income. Earnings per share Earnings were 50.66 pence per share including the exceptional income. Underlying earnings of 21.75 pence per share showed a 5.9% increase on the previous year. Dividend During the year £1.04 million was returned to shareholders by way of a special interim dividend of 15 pence per share. continued... -8- The proposed final dividend of 6.5 pence per share is an increase of 18% on the final dividend paid in respect of the previous year. At this level, the dividend remains covered 3.3 times by underlying earnings. Cash flow Operating cash flow remained strong at £3.9 million. Cash flow also benefited from the remaining £2.9 million net proceeds received from the Green Street property, out of which was paid the special dividend of £1.04 million mentioned above. Capital expenditure totalled £3.57 million, including approximately £2.4 million at the Castlemaine Yarn mill where the additional production plant was installed and commissioned during the year. After payment of dividends, interest and tax, net cash flow of £1.13 million was used to reduce borrowings. Balance sheet Net assets increased in the year to £19.6 million (2000: £18.1 million). Net debt at the year end was £4.33 million (2000: £5.46 million). Gearing fell from 30% at the start of the year to 22% at the year-end. Mark Lee Group Finance Director 20 June 2001 -9- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS GROUP PROFIT & LOSS ACCOUNT 52 weeks 52 weeks ended ended 31 March 1 April 2001 2000 Note £000 £000 Turnover 1 35,320 35,610 Cost of sales 25,166 25,145 Gross profit 10,154 10,465 Distribution costs 5,727 5,975 Administrative expenses 2,258 2,397 Other operating income 204 329 Operating profit 2,373 2,422 Exceptional income 2 2,164 363 Interest payable and similar 213 355 charges Share of profits of associated 43 41 undertaking Profit on ordinary activities 4,367 2,471 before taxation Taxation 858 793 Profit after taxation 3,509 1,678 Dividends paid and proposed 1,498 377 Retained profit 2,011 1,301 Earnings per share - basic 50.66p 24.46p Earnings per share - diluted 50.55p 24.25p Earnings per share - excluding 21.75p 20.54p exceptional items -10- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS STATEMENT OF TOTAL RECOGNISED GAINS & LOSSES 2001 2000 £000 £000 Profit after taxation 3,509 1,678 Currency translation differences on foreign currency net investments (667) (251) Total gains relating to the year 2,842 1,427 Total gains recognised since last annual report 2,842 1,427 NOTE OF HISTORICAL COST PROFITS AND LOSSES 2001 2000 £000 £000 Reported profit on ordinary activities before 4,367 2,471 taxation Realisation of property revaluation gains of 633 269 previous years Historical cost profit on ordinary activities before taxation 5,000 2,740 Historical cost profit for the year retained after taxation and dividends 2,644 1,570 -11- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS GROUP BALANCE SHEET 31 March 2001 1 April 2000 £000 £000 Fixed assets Tangible assets 15,805 14,749 Investments 252 230 16,057 14,979 Current assets Stock 8,791 9,320 Debtors 6,293 7,291 Cash at bank and in hand 51 263 15,135 16,874 Less: Current liabilities Creditors - amounts falling due within one year 7,792 10,586 Net current assets 7,343 6,288 Total assets less current liabilities 23,400 21,267 Less: Creditors - amounts falling due after more than one year 2,821 2,355 Provisions for liabilities and charges - deferred taxation 1,011 789 Net assets 19,568 18,123 Capital and reserves (equity) Share capital 1,736 1,715 Share premium 829 749 Revaluation reserve 1,996 2,705 Profit and loss account 15,007 12,954 Total shareholders' funds 19,568 18,123 -12- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS GROUP CASH FLOW STATEMENT 52 weeks ended 52 weeks ended 31 March 2001 1 April 2000 £000 £000 £000 £000 Net cash inflow from operating activities 3,916 2,346 Dividends received from associated undertaking 13 - Returns on investment and servicing of finance Interest paid (81) (235) Interest element of finance lease and hire purchase (132) (120) payments (213) (355) Taxation UK Corporation Tax paid (451) (384) Overseas tax paid (367) (9) (818) (393) Capital expenditure and financial investment Payments to acquire tangible (3,568) (4,054) fixed assets Receipts from sales of tangible fixed assets 37 116 Redemption of shares in associated undertaking - 19 Receipts from exceptional items 2,914 631 (617) (3,288) 2,281 (1,690) Equity dividends paid (1,423) (309) 858 (1,999) Financing Issue of share capital 101 - Increase in secured loans 206 - (Decrease)/increase in long (134) 489 term loans Capital element of finance lease and hire purchase (425) (470) payments Receipts from financing of 1,344 1,045 assets 991 1,064 Increase/(decrease) in cash 1,950 (935) -13- VICTORIA PLC PRELIMINARY ANNOUNCEMENT OF RESULTS NOTES TO THE ACCOUNTS 1 Analysis of Group turnover and profit The turnover, contribution to profit and net assets are geographically spread as follows: 52 weeks ended 31 March 52 weeks ended 1 April 2001 2000 Profit on Profit on Ordinary Net ordinary Net Turnover Activities assets Turnover activities assets £000 £000 £000 £000 £000 £000 United Kingdom 24,659 3,721 12,856 23,839 1,584 11,038 Australia 10,661 603 6,460 11,771 846 6,855 Canada - 43 252 - 41 230 35,320 4,367 19,568 35,610 2,471 18,123 The Group's turnover and profits were derived from continuing operations during the current and previous years. No operations have been acquired during these two years. 2 Exceptional income Exceptional income arising during the year to 31 March 2001 was as follows: Profit before Taxation Profit tax after tax £000 £000 £000 Profit on disposal of 2,164 162 2,002 Green Street property The tax charge on the exceptional income represents a provision for deferred taxation, which may become payable if the proceeds of the property disposals are not fully re-invested within 10 years.

Companies

Victoria (VCP)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today