Outlook "remains positive" says Victoria
Victoria plc is confident about future business after reporting a record performance including nearly 8% organic growth and said the long-term trend for flooring remains relentlessly positive.
Posting its Interim Results for the six months ended 1 October 2022, Kidderminster-based Victoria saw sales grow 59% after acquisitions which includes the rugs and UK carpet divisions of Balta - a move which the company says makes it Europe's biggest soft flooring company.
Overall, the group has achieved revenue of £776.1m, versus £489m in the comparative period last year a 58.7% increase and underlying EBITDA (cashflow) of £100.1m compared with £84.5m last year (+18.5%). The manufacturer also reported a loss before tax of £53.1m, with £48.7m of that being due to hyperinflation adjustments and a retranslation of overseas subsidiaries.
Geoff Wilding, Executive Chairman of Victoria PLC commented: "In the near term it is likely that disposable incomes in some markets will come under further pressure, from higher interest rates and inflation and the resulting weakening consumer demand may make additional price increases to offset higher input costs more difficult for the Company to implement.
"Nevertheless, whilst acknowledging these challenges, I am pleased to say that the Board continues to be confident that synergy gains and proactive management actions will enable Victoria’s financial performance for FY2023 to be in line with market consensus expectations and the outlook for the business remains positive,” he said.
In a slightly quirky addendum, the chief executive quoted the Chinese curse "may you live in interesting times.” He said: "Few would argue that we are presently living in “interesting times”. Yet, despite the fact that the current uncertain environment creates a meaningful business risk, it simply isn’t possible to predict the future with sufficient precision to effectively manage this risk.
"The Board remains confident in the future of the business. Consumers have demanded flooring ever since some Palaeolithic cave-dweller decided mud was a sub-optimal surface for the cave and, irrespective of any short-term headwinds, the long-term trend for flooring remains relentlessly positive at c.2.6% per annum (albeit volume growth was 4.9% in 2021).
Integration of recent acquisitions is proceeding apace and on schedule says Victoria and as a result, cash flow at Victoria, after exceptional costs relating to the integration projects, will be in excess of £100 million in H2.
The company also says it has maintain margins at a stable level despite inflationary pressures.
