"Mud floors" or market recovery?

Victoria boss Geoff Wilding offers optimism that the depressed flooring market will recover eventually "unless people wish to return to walking on mud floors".

The unusual forecast came in the sign off to a set of disappointing half year results which saw sales at the leading flooring conglomerate fall by 4% and a prediction that more challenges were to come - see related story.

But the Victoria executive chairman signed off his report with a "things can only get better" conclusion.

"The long-term sector fundamentals remain strong as, whilst consumer spending on flooring may be subdued during difficult macro-economic conditions, unless people wish to return to walking on mud floors, demand always recovers.

"The current lower demand is a result of purchase decisions deferred, not purchases forgone: carpet continues to age, stains don't magically disappear with the passing of time, ceramic tiles continue to chip or crack, style and fashion move on. Therefore, as consumer confidence and discretionary spending rebounds Victoria will, of course, benefit from significant pent-up demand - just as it always has done in the past," he said.

"We cannot predict precisely when the rebound will occur although we are (clearly) continually closer to that point. Nevertheless, we view the second half of FY2024 with caution, with increased geopolitical uncertainty and continuing high mortgage rates impacting consumer confidence and discretionary spending. Consequently, we are managing the business to optimise results, market share, and cash flow until the inevitable recovery in demand," said Mr Wilding.

Shareholders in Victoria PLC reacted strongly to the results with its share price falling from over from about 300p per share to a low of 245p before recovering slightly to around 250p this morning. Back in July, Victoria shares were worth more than 700p.