Interim Results

Victoria PLC 21 November 2007 Issued by Citigate Dewe Rogerson Ltd, Birmingham Date: Wednesday, 21 November 2007 Embargoed: 7.00am Victoria PLC Leading manufacturers of high quality carpets in the UK, Australia and Ireland Interim Results six months ended September 2007 2007 2006 Revenue £28.76m £27.03m +6.4% Operating Profit £1.58m £1.29m +23.2% Profit before Tax £1.25m £1.00m +24.8% Earnings per Share 12.92p 10.69p +20.9% Solid operating cash generation The Group's geographic spread and customer profile helped to off-set economic and market conditions in UK and Ireland. Australia delivered a very solid performance and increased market share Changes to the composition of NED's combined with experienced management team to drive and develop future strategy 'The continued growth we envisage from both existing product brands, recently introduced product styles and other initiatives will, we believe, enable us to take full advantage of our market leading position and successfully deal with whatever market conditions prevail. 'The Group remains optimistic that it will deliver an overall performance ahead of last year and in-line with both the Management's and market expectations.' Bob Gilbert, Chairman FULL STATEMENT ATTACHED Enquiries: Alan Bullock, Group Managing Director Fiona Tooley, Director Ian Davies, Group Finance Director Keith Gabriel, Senior Account Manager Victoria PLC Citigate Dewe Rogerson Tel: +44 (0) 1562 749640 Tel: +44 (0) 121 455 8370 Mobile: +44 (0) 7785 325701 (AB) Mobile: +44 (0) 7785 703523 (FMT) www.victoria.plc.uk Victoria PLC CHAIRMAN'S STATEMENT Interim Results for the six months ended September 2007 I am pleased to be able to report that the Group has made a solid start to this financial year, with the Group's geographical spread of business and customer profile assisting us to off-set the challenging economic and market conditions we have seen during the first half-year in both the UK and Ireland. Financial Results Summary Income Statement Revenues from the Group's activities have grown by 6.4% in the half-year from £27.0 million to £28.8 million. Operating profit has increased by 23.2% from £1.29 million to £1.58 million. The Group has continued to demonstrate tight operating and material cost control with a further improvement in operating margin, on a like for like basis, from 4.8% to 5.5% Net finance costs at £0.38 million (2006 £0.36 million) were broadly in-line with the comparative period and remain well covered by operating profit. Profit before tax was up 24.8% at £1.25 million compared to £1.00 million for the corresponding period last year. Profit attributable to equity shareholders increased 20.9% from £0.74 million to £0.90 million, with basic earnings per share up from 10.69 pence to 12.92 pence. Balance Sheet The Group's net assets increased from £29.0 million at 31 March 2007 to £29.8 million at the end of the period. Inventory has increased by £1.42 million to £17.2 million, in part reflecting increased levels of revenue, but also the build up of product to support new ranges and the usually busy autumn period in the UK and Ireland. Cash Flows and Net Debt Net cash inflow from operating activities was £1.99 million, an increase of £0.44 million on the corresponding period last year. The net effect of the increase in working capital, reflecting the growth in the business, was a cash outflow of £0.37 million. Reported net debt has increased over the period by £0.16 million from £9.69 million at 31 March 2007 to £9.85 million. The Group continues to maintain a significant proportion of its borrowings in Australian dollars and the effect of changes in exchange rates on overall foreign currency borrowings, increased Group net debt by £0.19 million. UK Trading in the first four months of the period in the UK saw sales reasonably ahead of the corresponding period last year, followed by a marked fall-off in August & September. This left revenues up 1.1% in the half-year at £12.4 million. Successive base interest rate increases and the sub-prime mortgage crisis conspired to sap consumer confidence for spending on the High Street. As a result, operating profit in the UK was down by 23.2% to £262k with profit before tax down to £135k. During the first half-year, Victoria Carpets has continued to invest in additional plant and new product ranges thus positioning itself well for the second half of the financial year which traditionally has been the stronger period. Ireland In Ireland, revenues were down by 13.7% from £3.03 million to £2.61 million with sales declining in both the contract and residential carpet sectors. The rather 'lumpy' nature of contract sales corresponded with a particularly strong first-half last year and accounted for the majority of this decline. Residential carpet sales were slightly down with the General Election and a slower economy negatively affecting consumer confidence. The resultant effect was to see operating profit down from £204k to £118k and profits before tax down from £185k to £100k. Again in Ireland there was a heavy spend on new ranges and point-of-sale display units positioning the business well for the second half year. Australia In an otherwise buoyant Australian economy, only the commodity driven states of Western Australia and Queensland enjoyed strong growth in the housing sector. The major states of New South Wales and Victoria remained relatively flat with consumer demand dampened by interest rate increases. In this context, our Australian operation has delivered a very solid performance and has increased its market share. Revenues in Australia grew strongly from £11.7 million to £13.7 million, an increase of 17.1%. Pleasingly, new product introductions made last year also enabled us to grow our gross profit margin by 2.8%. Operating profit increased by £0.49 million, up by 53.2 % to £1.41 million and profit before tax increased by 61.1% from £0.79 million to £1.28 million. Canada Colin Campbell, our Canadian Associate Company, has continued to make excellent progress with revenues up 13.6% to C$ 4.87 million. Profits before tax increased 6.5% to C$427k from C$401k in the corresponding period last year. Directorate Changes As shareholders will be aware, the Company recently announced changes to the composition of its Non-executive Director team. This is the last report that I will make to shareholders in my capacity as a Director and Non-executive Chairman of Victoria. After eleven enjoyable years in the Chair, I have decided to step down and retire. At the same time, my fellow Non-executive Director, Keith Ackroyd will also retire. I take this opportunity to welcome Mr Aram Shishmanian and Ms Nikki Beckett to the Board as Non-executive Directors. They joined the Company in October and will work alongside the Executive team and my successor, Alexander Anton, who will take up the Chair on 3 December 2007. The timing of these changes clearly allows for an orderly transition by the Company's current Non-executives to the new team whilst also dovetailing well with the Group's strategic planning programme for the future. I believe that when I retire from the Board at the end of the month, I leave the Group in good health and with an experienced management team which, when combined with the additional skills of the newly appointed Non-executive Directors, will be capable of taking the business forward over the next few years. Current Trading Prospects Our growth to date reflects a creditable performance for the Group, especially as we continue to operate in a difficult period for UK retailers. Whilst there continues to be a clear lack of visibility about the short to medium term economic and market prospects in the UK and Ireland, we are witnessing stronger market conditions in Australia and Canada. The continued growth we envisage from both existing product brands, recently introduced product styles and other initiatives will, we believe, enable us to take full advantage of our market leading position and successfully deal with whatever market conditions prevail. The Group remains optimistic that it will deliver an overall performance ahead of last year and in-line with both the Management's and market expectations. Bob Gilbert Chairman 21 November 2007 Victoria PLC Consolidated Income Statement For the half-year ended 29 September 2007 (unaudited) Notes Half-year Half-year Year ended ended ended 31 March 2007 29 September 30 September £'000 2007 2006 £'000 £'000 -------------------------------------------------------------------------------- Revenue 3 28,757 27,026 55,426 Cost of sales (20,208) (19,288) (39,003) -------------------------------------------------------------------------------- Gross profit 8,549 7,738 16,423 Distribution costs (5,662) (5,459) (10,641) Administrative expenses (1,644) (1,531) (3,097) Other operating income 340 537 700 Exceptional items - - - -------------------------------------------------------------------------------- Operating profit 3 1,583 1,285 3,385 Share of results of associated company 45 78 104 Finance costs (379) (362) (727) -------------------------------------------------------------------------------- Profit before tax 1,249 1,001 2,762 Taxation 4 (352) (259) (754) -------------------------------------------------------------------------------- Profit for the period 897 742 2,008 -------------------------------------------------------------------------------- Attributable to: Equity holders of the parent 897 742 2,008 -------------------------------------------------------------------------------- Earnings per share From continuing operations Basic 5 12.92p 10.69p 28.92p -------------------------------------------------------------------------------- Diluted 12.92p 10.69p 28.92p -------------------------------------------------------------------------------- Consolidated Statement of Recognised Income and Expense For the half-year ended 29 September 2007 (unaudited) Half-year Half-year Year ended ended ended 29 September 2007 30 September 2006 31 March 2007 £'000 £'000 £'000 -------------------------------------------------------------------------------- Exchange differences on translation of foreign operations 819 (402) (33) -------------------------------------------------------------------------------- Net income/(loss) recognised directly in equity 819 (402) (33) Profit for the period 897 742 2,008 -------------------------------------------------------------------------------- Total recognised income and expense for the period 1,716 340 1,975 -------------------------------------------------------------------------------- Attributable to: Equity holders of the parent 1,716 340 1,975 -------------------------------------------------------------------------------- Victoria PLC Consolidated Balance Sheet As at 29 September 2007 (unaudited) 29 September 2007 30 September 2006 31 March 2007 £'000 £'000 £'000 -------------------------------------------------------------------------------- Non-current assets Intangible assets 486 504 491 Property, plant and equipment 24,354 23,275 23,846 Investment property 180 180 180 Investment in associated company 565 507 469 Deferred tax asset 1,016 646 983 -------------------------------------------------------------------------------- Total non-current assets 26,601 25,112 25,969 -------------------------------------------------------------------------------- Current assets Inventories 17,160 15,406 15,740 Trade and other receivables 10,132 11,182 9,603 Financial asset 11 - 10 Cash at bank and in hand 823 633 644 -------------------------------------------------------------------------------- Total current assets 28,126 27,221 25,997 -------------------------------------------------------------------------------- Total assets 54,727 52,333 51,966 -------------------------------------------------------------------------------- Current liabilities Trade and other payables 9,437 8,849 8,234 Current tax liabilities 1,051 977 998 Financial liabilities 6,426 7,264 5,261 -------------------------------------------------------------------------------- Total current liabilities 16,914 17,090 14,493 -------------------------------------------------------------------------------- Non-current liabilities Trade and other payables 1,502 976 1,209 Financial liabilities 4,246 5,154 5,072 Deferred tax liabilities 2,234 1,764 2,209 -------------------------------------------------------------------------------- Total non-current liabilities 7,982 7,894 8,490 -------------------------------------------------------------------------------- Total liabilities 24,896 24,984 22,983 -------------------------------------------------------------------------------- Net assets 29,831 27,349 28,983 -------------------------------------------------------------------------------- Equity Issued share capital 1,736 1,736 1,736 Share premium 829 829 829 Retained earnings 27,266 24,784 26,418 -------------------------------------------------------------------------------- Total equity 29,831 27,349 28,983 -------------------------------------------------------------------------------- Victoria PLC Consolidated Cash Flow Statement For the half-year ended 29 September 2007 (unaudited) Notes Half-year Half-year Year ended ended ended 29 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 ------------------------------------------------------------------------------- Net cash inflow from operating activities 6a 1,993 1,552 5,061 ------------------------------------------------------------------------------- Investing activities Dividends received from associates - - 32 Purchases of property, plant and equipment (1,106) (527) (1,959) Proceeds of disposals of property, plant and 10 19 74 equipment ------------------------------------------------------------------------------- Net cash used in investing activities (1,096) (508) (1,853) ------------------------------------------------------------------------------- Financing activities (Decrease)/increase in long-term loans (682) 663 347 Receipts from financing of assets 40 339 870 Payment of finance leases/HP liabilities (397) (564) (963) Dividends paid (868) (799) (799) ------------------------------------------------------------------------------- Net cash (used in)/from investing activities (1,907) (361) (545) ------------------------------------------------------------------------------- Net (decrease)/increase in cash and cash equivalents (1,010) 683 2,663 Cash and cash equivalents at beginning of period (3,693) (6,363) (6,363) Effect of foreign exchange rate changes 21 13 7 ------------------------------------------------------------------------------- Cash and cash equivalents at end of period 6b (4,682) (5,667) (3,693) ------------------------------------------------------------------------------- Victoria PLC Notes to the Interim Financial Statements For the half-year ended 29 September 2007 (uanudited) 1 General Information These condensed consolidated financial statements for the six months ended 29 September 2007 have not been audited or reviewed by the Auditors. They were approved by the Board of Directors on 20 November 2007. The information for the year ended 31 March 2007 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The Auditors' report on those accounts was unqualified. 2 Accounting Policies These condensed consolidated financial statements should be read in conjunction with the Group's financial statements for the year ended 31 March 2007, which were prepared in accordance with IFRSs as adopted by the European Union. The accounting policies and basis of consolidation of these condensed financial statements are consistent with those applied and set out on pages 40 to 44 of the Group's audited financial statements for the year ended 31 March 2007. In the current financial year, the Group will adopt International Financial Reporting Standard 7 'Financial Instruments: Disclosures' (IFRS 7) for the first time. As IFRS 7 is a disclosure standard, there is no impact of that change in accounting policy on the half-yearly financial statements. Full detail of the change will be disclosed in our annual report for the year ending March 2008. 3 Business Segments For management purposes, the Group is organised into four operating divisions according to the geographical areas where they are managed. These divisions are the basis on which the Group reports its primary segment information. The four divisions are UK, Ireland, Australia and the Canadian Associate. Segment information for revenue, operating profit and a reconciliation to entity net profit is presented below. Half-year ended 29 September 2007 Half-year ended 30 September 2006 Revenue Operating Finance Profit Revenue Operating Finance Profit £'000 profit costs before £'000 profit costs before £'000 £'000 tax £'000 £'000 tax £'000 £'000 -------------------------------------------------------------------------------------------------- UK 12,432 262 (127) 135 12,293 341 (158) 183 Ireland 2,611 118 (18) 100 3,027 204 (19) 185 Australia 13,714 1,414 (138) 1,276 11,706 923 (131) 792 Canada - - - 45 - - - 78 -------------------------------------------------------------------------------------------------- Subtotal 28,757 1,794 (283) 1,556 27,026 1,468 (308) 1,238 Central costs - (211) (96) (307) - (183) (54) (237) -------------------------------------------------------------------------------------------------- Total continuing operations 28,757 1,583 (379) 1,249 27,026 1,285 (362) 1,001 --------------------------------------------------- ------------------------------ Tax (352) (259) --------------------- ------ ------ Profit after tax from continuing operations 897 742 Profit for the period from discontinued operations - - --------------------- ------ ------ Profit after tax and discontinued 897 742 operations --------------------- ------ ------ 4 Tax Charge Half-year Half-year ended ended 29 September 2007 30 September 2006 £'000 £'000 -------------------------------------------------------------------------------- Current tax: UK corporation tax (52) (13) Overseas taxation charge 404 272 -------------------------------------------------------------------------------- 352 259 Deferred tax: Current year - - -------------------------------------------------------------------------------- Total 352 259 -------------------------------------------------------------------------------- Corporation tax for the interim period is charged at 28.2% (2006: 28.1%), representing the best estimate of the weighted average annual corporation tax rate expected for the full financial year. 5 Earnings and Earnings per Share The calculation of the basic and diluted earnings per share is based on the following data: Number of Shares Half-year Half-year ended ended 29 September 30 September 2007 2006 ------------------------------------------------------------------------------- Weighted average number of ordinary shares for the purposes of basic earnings per share 6,943,556 6,943,556 Effect of dilutive potential ordinary shares: Share options - - ------------------------------------------------------------------------------- Weighted average number of ordinary shares for the purposes of diluted earnings per share 6,943,556 6,943,556 ------------------------------------------------------------------------------- Half-year ended Half-year ended 29 September 2007 30 September 2006 Earnings EPS Earnings EPS £'000 pence £'000 pence -------------------------------------------------------------------------------- Profit for the period from continuing operations 897 12.92 742 10.69 Profit for the period from discontinued operations - - - - -------------------------------------------------------------------------------- Profit for the period from continuing and discontinued operations 897 12.92 742 10.69 -------------------------------------------------------------------------------- Earnings per share - basic continuing 12.92 10.69 - basic discontinued - - -------------------------------------------------------------------------------- - basic 12.92 10.69 -------------------------------------------------------------------------------- - diluted 12.92 10.69 -------------------------------------------------------------------------------- The effect of dilutive shares on the earnings for the purposes of diluted earnings per share is £nil (2006: £nil). The denominators used for all basic, diluted and adjusted earnings per share are as detailed in the 'number of shares' table above. 6 Notes to the Cash Flow Statement a) Reconciliation of operating profit to net cash from operating activities Half-year Half-year Year ended ended ended 29 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 -------------------------------------------------------------------------------- Operating profit from continuing operations 1,583 1,285 3,385 Discontinued operations profit before tax - - - Adjustments for: - Depreciation of property, plant and equipment 1,169 1,121 2,226 - Amortisation of intangible assets 13 14 27 - (Profit)/loss on disposal of property, plant and equipment (2) (5) 8 - Exchange rate difference on consolidation 362 (197) (18) - Business reorganisation costs - - - -------------------------------------------------------------------------------- Operating cash flows before movements in working capital 3,125 2,218 5,628 (Increase)/decrease in working capital (370) (59) 801 -------------------------------------------------------------------------------- Cash generated from operations 2,755 2,159 6,429 Interest paid (379) (390) (792) Income taxes (paid)/received (383) (217) (576) -------------------------------------------------------------------------------- Net cash from operating activities 1,993 1,552 5,061 -------------------------------------------------------------------------------- b) Analysis of net debt At Cash flow Other Exchange At 31 March £'000 non-cash movement 29 September 2007 2007 £'000 movement £'000 £'000 £'000 ------------------------------------------------------------------------------------ Cash 644 146 - 33 823 Overdrafts (4,337) (1,156) - (12) (5,505) ------------------------------------------------------------------------------------ Increase/(decrease) in cash in period (3,693) (1,010) - 21 (4,682) Secured commercial bills Payable more than one year (2,883) 542 - (157) (2,498) Finance leases Payable less than one year (924) 397 (375) (19) (921) Payable more than one year (1,985) (40) 375 (29) (1,678) Bank loans Payable less than one year - - - - - Payable more than one year (204) 140 - (6) (70) Decrease in net debt in period - 1,039 - - - ------------------------------------------------------------------------------------ Total (9,689) 29 - (189) (9,849) ------------------------------------------------------------------------------------ 7 Exchange Rates The results of overseas subsidiaries and associated undertakings 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: Half-year Half-year Year ended ended ended 29 September 2007 30 September 2006 31 March 2007 ------------------------------------------------------------------------------ Australia - average rate 2.3845 2.4565 2.4687 Australia - period end 2.3023 2.5031 2.4279 Euro - average rate 1.4710 1.4577 1.4717 Euro - period end 1.4326 1.4746 1.4735 Canadian dollar - average rate 2.1296 2.0676 2.1540 Canadian dollar - period end 2.0246 2.0840 2.2627 8 Related Party Transactions During the period, the Group had transactions with its associate comprising sales of goods to the value of £197k (2006: £307k) and provision of services worth £41k (2006: nil). At 29 September 2007 the Group was owed £243k (2006: £317k). All goods and services were provided at market rates. 9 Risks and Uncertainties The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Group's medium term performance and the factors which mitigate these risks have not changed from those set out on page 29 of the Group's 2007 Annual Report, a copy of which is available on the Group's website - www.victoria.plc.uk. The Chairman's Statement includes consideration of uncertainties affecting the Group in the remaining six months of the year. 10 Information Rights Under section 146 of the Companies Act 2006, registered shareholders of fully listed companies are able to nominate the underlying beneficial owners of their shares to receive information rights from 1 October 2007. Companies are required to fulfil these requests from 1 January 2008. Please note that beneficial owners of shares nominated by the registered holders of those shares are required to direct all communications to the registered holder of their shares rather than to the Company's registrar, Capita Registrars, or the Company directly. 11 Statement of Directors' Responsibilities The Directors confirm that to the best of their knowledge the condensed set of financial statements has been prepared in accordance with IAS 34, 'Interim financial reporting' as adopted by the European Union, and includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7 and 4.2.8 of the United Kingdom's Financial Services Authority. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Victoria (VCP)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today