Full Year Trading Update

RNS Number : 0326I

Victoria PLC

12 April 2022

 

12 April 2022

For Immediate Release

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. .

Victoria PLC

('Victoria,' the 'Company,' or the 'Group')

Full Year Trading Update

Results Ahead of Market Expectations

Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, is pleased to confirm that the Group's revenues and underlying profits are expected to be ahead of consensus market expectations for the financial year ended 2 April 2022.   The Group now expects, subject to finalisation of the accounts and audit, revenues to be in excess of £970 million (FY21: £662.3m), underlying EBITDA in excess of £155 million (FY21: £127.4m), and underlying EBIT in excess of £100 million (FY21: £79.8m).

Outlook

· Demand strong. Heading into the new financial year, demand for the Group's products remains robust across our markets, with consistent demand from consumers driving our retailer channels. Furthermore, the Group is also witnessing a strong resurgence in commercial demand (hospitality, offices, leisure, home construction), which is additive to consumer demand.

· Inflation managed. As with all industries, inflation is self-evidently an important feature of the current operating environment, but Victoria continues to have the ability to increase selling prices quickly (and is doing so) to mitigate the impact of inflationary pressures on profits. The Group remains competitively very well placed in its markets to defend its position or capitalise on opportunities where gaps appear.

· Supply chain secure. Shareholders may recall that Victoria invested heavily in raw materials and continuity of operations last year to ensure production schedules and normal product availability were maintained, despite the global supply chain disruptions. This established Victoria as a reliable partner to our customers, when many alternative suppliers had extended delivery periods (or even no delivery at all), and this reputational enhancement has led to continued market share gains. Management believes that the Group's reliability will continue to drive long-term organic growth.

As the Group's raw material supply continues to stabilise, and as Victoria's management gain confidence this is sustainable, the Group intends to return to normalised quantities of raw materials, thereby releasing additional cash for further growth investment.

· Acquisitions. Acquisitions remain an integral part of Victoria's growth strategy and the Board believes that the Group's uniquely proactive methodology of identifying and executing on opportunities will continue to deliver value-creating acquisitions. Despite Victoria's significant growth in recent years, its share of the flooring market remains less than 2% in Europe and less than 10% in the UK, which leaves very substantial opportunities in what remains a highly fragmented industry.

Share Buybacks & Capital Allocation

In recent weeks Victoria's share price has, the Board believes, completely decoupled from the Group's economic reality. As noted above, ongoing demand for product remains strong and the Group continues to have the ability to successfully increase prices to mitigate inflation. Consequently, the Board decided to deploy a proportion of excess cash to take advantage of the opportunity to make market purchases of its own shares at levels it believes are materially below the intrinsic value of the Group, thereby serving Victoria's mission to create wealth for shareholders.

Victoria has become a permanent home of choice for flooring businesses in Europe and the US, and the Group's potential pipeline of accretive acquisitions continues to be compelling. As such the recent opportunistic share repurchases are therefore not the start of a formal and regular programme to return capital to shareholders as we continue to see significant short and medium-term organic and acquisitive investment opportunities, notwithstanding current world events.

Executive Chairman Geoff Wilding said, " There are operating challenges every year and FY2023 will be no different. However, we have invested carefully over the last nine years and Victoria is in a strong position to meet those challenges and capitalise upon them. As a result, the Board expects EBITDA to be in excess of £200 million over the coming year."

¹ Applying a GBP:EUR exchange rate of 1.18

The person responsible for arranging the release of this announcement on behalf of the Company is Michael Scott, Group Finance Director

For more information contact: Victoria PLC Geoff Wilding, Executive Chairman Philippe Hamers, Group Chief Executive Michael Scott, Group Finance Director [phone] Singer Capital Markets (Nominated Adviser and Joint Broker) Rick Thompson, Phil Davies, Alex Bond [phone] Berenberg (Joint Broker) Ben Wright, Richard Bootle Peel Hunt (Joint Broker) Adrian Trimmings, Andrew Clark Buchanan Communications (Financial PR) Charles Ryland, Chris Lane, Tilly Abraham [phone] [phone] [phone] 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, Turkey, the United States and Australia and employs approximately 4,500 people across 30 sites. Victoria is Europe'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 and cash flow per share via acquisitions and sustainable organic growth. (Further information about Victoria can be found on its website, www.victoriaplc.com.)

 

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