Interim Results

Victoria PLC 23 November 2000 Victoria P.L.C. Interim Results for the six months to 30 September 2000 Strategy of targeting independent retailers coupled with very strong product portfolio reflected in the Group's first half performance * Turnover increased to £18.5 million + 9% * Operating profits £809,000 +21% * Exceptional profit on property sale £2.16 million * Profit before taxation and exceptional items £744,000 +54% * Underlying Earnings per share 7.36p +64% * Benefits from site consolidation now coming through * Property disposal completed and special interim dividend of 15p paid * £2.4m investment programme in Australia is proceeding to plan 'In the UK, we should see the full benefits flowing through from consolidating our carpet manufacturing business onto one operational site, as well as seeing the new products introduced in the first half year contributing well to our business. 'In Australia, the last quarter of our year should see the additional investment made in yarn spinning at Castlemaine feeding through. 'Overall, we see an uncertain six months ahead within the two principal markets of the UK and Australia. However, against these uncertainties, we believe that we are very well placed to exploit both of these markets to the full and to continue to push ahead with the development of the business.' 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 7 282 8000 (8.00am - 2.00pm) Today: 020 7282 8000 Thereafter: 01562 749300 Thereafter: 0121-631 2299 Mobile: 07785 325701 (Alan Bullock) Mobile: 07785 703523 Mobile: 07887 753206 (Mark Lee) Victoria P.L.C. Interim Results for the six months to 30 September 2000 STATEMENT BY THE CHAIRMAN, R.M. GILBERT RESULTS In the six months to 30 September 2000, the Group is able to report a return to growth in sales turnover and a continuing growth in both profits and earnings. Turnover, at £18.47 million, is 9.3% higher than the first half of last year, due principally to the success of the Group's new products. Operating profits are 20.6% higher, at £809,000 compared to £671,000 last year. An exceptional profit of £2.16 million arose on the sale of property. Excluding exceptional income, pre-tax profits increased to £744,000 (September 1999: £482,000) and earnings per share increased by 64% to 7.36 pence (September 1999: 4.49 pence). UNITED KINGDOM In a home market which remained subdued, our strategy of targeting independent retailers, coupled with a very strong product portfolio, enabled us to capture further market share. Our sales to the Independent sector now account for 60% of UK sales. The success of our Tudor Twist range was recognised by the Industry which voted the range the Best Tufted Product 2000. Export business remained difficult where the strength of Sterling against the Euro and strong price competition continue to be challenging. However, against this backdrop, we did manage to increase our export sales turnover significantly, although margins were not as good as we might have hoped for. Westwood Yarns continued to perform well. Well targeted capital expenditure in mid-1999 increased capacity at the plant and enabled us to produce 7% more yarn in the first half of this year than in the comparable period last year. The benefits of the consolidation of carpet manufacturing onto the single site in Kidderminster have also started to come through. These, together with increased turnover, have produced a result in UK manufacturing somewhat better than market conditions might have suggested. As a result, overall profits from the UK operations are substantially higher than in the first half of last year. AUSTRALIA The strong trading in the second half of the previous financial year continued into the first quarter of this year. The second quarter, as anticipated, saw the negative impact of the new Goods and Services Tax and a fall-off in sales during September when the country was preoccupied by the Olympics. Against this background, we produced a creditable performance in our carpet manufacturing division at Dandenong, increasing sales by 8%, accompanied by an increase in profitability. At the yarn spinning division in Castlemaine, the investment programme to increase spinning capacity by approximately 50% is proceeding to plan, with all of the new equipment installed. Management at the plant has been strengthened and recruitment, training and commissioning are now underway. However during the period, the plant suffered some disruption, resulting in lower than planned output and profitability. Overall, the pre-tax profit of the Australian business is 14% lower than in the corresponding period last year in Australian dollars, and 20% lower in Sterling. CANADA The Canadian market in which our 50% associate, Colin Campbell & Sons, operates remained active. In the six month period, Campbells contributed £34,000 to Group profit before tax compared to £18,000 in the corresponding period last year. PROPERTY The sale of the property at Green Street, Kidderminster was completed in the period and gave rise to an exceptional profit of £2.16 million. The special interim dividend of 15 pence per share was paid in July 2000 returning £1.04 million to shareholders. PROSPECTS The prospects in the UK are difficult to project. The level of housing activity, both in new build and moves, appears to have fallen back from the levels seen both last year and earlier this year and at the moment there is a fair degree of uncertainty about the economy both in the UK and overseas. The market, which had been subdued throughout the year up to October, has seen the traditional improvement expected in the autumn, although this has perhaps been later than normal in starting. Similarly, our key export markets within the EC continue to suffer from a weak currency, disadvantaging us and other UK manufacturers. In the UK, we should see the full benefits flowing through from consolidating our carpet manufacturing business onto one operational site, as well as seeing the new products introduced in the first half year contributing well to our business. The Australian market has not yet picked up after the dips caused by the July imposition of the Goods and Services Tax and the disruption of the Olympics. A reduced level of construction activity is also forecast for 2001, which may affect the demand for carpets. In Australia, the last quarter of our year should see the additional investment made in yarn spinning at Castlemaine feeding through. Overall, we see an uncertain six months ahead within the two principal markets of the UK and Australia. However, against these uncertainties, we believe that we are very well placed to exploit both of these markets to the full and to continue to push ahead with the development of the business. Victoria P.L.C. Interim Results for the six months to 30 September 2000 GROUP PROFIT AND LOSS ACCOUNT Six months to Six months to Year to 30 September 2000 2 October 1999 1 April 2000 Unaudited Unaudited Audited Note £'000 £'000 £'000 Turnover 18,471 16,901 35,610 Cost of sales 13,352 12,188 25,145 Gross profit 5,119 4,713 10,465 Distribution costs 3,228 3,084 5,975 Administration costs 1,139 1,086 2,397 Other operating income 57 128 329 Operating profit 809 671 2,422 Exceptional items 2,164 142 363 Interest payable 98 204 355 Share of profits of 33 15 41 associated undertaking Profit on ordinary 2,908 624 2,471 activities before taxation Taxation on profits on 236 217 793 ordinary activities Profit for the period 2,672 407 1,678 Dividends 1,046 - 377 Retained earnings 1,626 407 1,301 Earnings per share - basic 2 38.68p 5.94p 24.46p - diluted 38.50p 5.90p 24.25p - excluding 7.36p 4.49p 20.54p exceptional items Dividends per 15.0p - 5.50p share 3 Victoria P.L.C. Interim Results for the six months to 30 September 2000 CONSOLIDATED BALANCE SHEET 30 September 2000 2 October 1999 1 April 2000 Unaudited Unaudited Audited £'000 £'000 £'000 Fixed assets Tangible assets 16,165 13,762 14,749 Investment in 244 212 230 associated undertaking 16,409 13,974 14,979 Current assets Stock 8,216 8,849 9,320 Debtors 6,446 6,066 7,291 Cash 330 229 263 14,992 15,144 16,874 Less: current liabilities Creditors due within 8,307 8,973 10,586 one year Net current assets 6,685 6,171 6,288 Total assets less 23,094 20,145 21,267 current liabilities Less: Creditors due 2,698 1,965 2,355 after one year Provision for 810 691 789 liabilities and charges Net assets 19,586 17,489 18,123 Capital and reserves (equity) Share capital 1,736 1,715 1,715 Share premium account 829 749 749 Revaluation reserve 2,043 3,006 2,705 Profit and loss account 14,978 12,019 12,954 Total shareholders' 19,586 17,489 18,123 funds Victoria P.L.C. Interim Results for the six months to 30 September 2000 CONSOLIDATED CASH FLOW STATEMENT Six months to Six months to Year to 30 September 3 October 1999 1 April 2000 2000 Unaudited Unaudited Audited £'000 £'000 £'000 Operating profit 809 671 2,422 Depreciation charges 632 556 1,155 Profit on sale of fixed - (61) (26) assets Decrease/(Increase) in 1,964 466 (1,083) working capital Exchange rate difference (165) 4 (122) on consolidation Net cash inflow/(outflow) 3,240 1,636 2,346 from operating activities Returns on investment and servicing of finance Dividend received from 13 - - Associate Interest paid (43) (100) (235) Hire purchase interest (56) (104) (120) (86) (204) (355) Taxation UK corporation tax (paid) (104) - (384) Overseas tax paid (249) - (9) (353) - (393) Capital expenditure and financial investment Payments to acquire (2,978) (1,939) (4,054) tangible fixed assets Receipts from sales of 15 67 116 tangible fixed assets Return of capital in - 19 19 associated undertaking Receipts from exceptional 2,914 142 631 items (49) (1,711) (3,288) Equity dividends paid (1,423) (309) (309) Financing Issue of share capital 101 - - Debt due within one year Repayment of secured loans - 99 - Increase in long term (539) 457 489 loans Capital element of hire (240) (259) (470) purchase payments Receipts from financing 1,376 273 1,045 of assets 698 570 1,064 Increase / (decrease) in 2,027 (18) (935) cash Victoria P.L.C. Interim Results for the six months to 30 September 2000 NOTES 1. Basis of preparation The results for the year ended 1 April 2000 are extracts from the Group report and accounts as filed with the Registrar of Companies. These were audited and reported upon without qualification under section 235 of the Companies Act 1985. 2. Earnings per share The earnings per share for the year to 1 April 2000 and the 6 month period to 2 October 1999 are based on 6,860,556 ordinary shares in issue throughout those periods. The earnings per share for the 6 month period to 30 September 2000 are based on a weighted average of 6,910,265 shares in issue during the period. 3. Dividends A special interim dividend of 15 pence per share was paid in July 2000. No further interim dividend is proposed.

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