Interim Results

Victoria PLC 19 November 2001 Issued by Citigate Dewe Rogerson Ltd, Birmingham Date: Monday, 19 November 2001 Embargoed: 7.00am Victoria P.L.C. INTERIM RESULTS FOR THE SIX MONTHS TO 29 SEPTEMBER 2001 * Turnover £16.53 million * Operating Profit £738,000 * Pre-Tax profit £574,000 * Earnings per share 5.78 pence * Strengthened market position despite challenging conditions * Continuing benefit in UK from focus on independent retail sector * Strong performance from UK Spinning at Westwood Yarns * Increasing returns from Castlemaine Spinning investment in Australia * Significant investment in new products in the UK and Australia as well as in manufacturing facilities * Victoria appointed by John Lewis Partnership to manage all JLP's carpet warehousing and distribution in the UK 'We anticipate that market conditions will remain difficult for the six months ahead, and, unless we see an upturn in the Australian market and a return to more normal trading conditions in the UK in the second half year, which is traditionally our stronger period, it is perhaps now unlikely that we will be able to maintain the levels of turnover reported for last year and it is likely that profits will be significantly less than reported for the year to March 2001. 'However, our objectives are not affected by short term influences in the market and we remain confident in the future for the Group. We will continue to strengthen Victoria's position in the markets it serves and believe this is the right strategy for building long term value for shareholders.' Bob 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 Tel: 01562 749300 Tel: 0121 455 8370 Mobile: 07785 325701 (AB) Mobile: 07785 703523 Mobile: 07887 753206 (ML) -2- Victoria P.L.C. INTERIM RESULTS FOR THE SIX MONTHS TO 29 SEPTEMBER 2001 STATEMENT BY THE CHAIRMAN, R M GILBERT INTRODUCTION This has undoubtedly been a challenging six months for the Group, facing an extended downturn in the Australian market and a UK market which has, at best, been level with the previous year. Against this, we have worked hard to maintain and improve our position in the markets we supply. We have continued to invest in new plant but, more importantly, have invested heavily in products in the period, positioning the business to compete aggressively for an increased share of the market in the second half year and beyond. The result for the first six months of the year reflects these market conditions and the cost of investment in new products. RESULTS The Group results for the six months to 29 September 2001 show a profit before tax of £574,000 on turnover of £16.53 million. Sales fell 10.5% compared with the first half of last year, held back both by market conditions and an 8.4% adverse movement in the Australian exchange rate. Operating profits fell to £738,000, compared to £809,000 last year. After interest, pre-tax profits were 22.8% lower at £574,000 (September 2000: £744,000, excluding exceptional items) and earnings per share fell by 21.5% to 5.78 pence (September 2000: 7.36 pence, excluding exceptional items). UNITED KINGDOM For over five months of the period, up to the 11th of September, the level of activity in the market remained similar to the previous year, with both the home market and the export market holding up well. For the last 3 weeks of the period, the market was somewhat unsettled, and we believe that activity fell quite sharply. In these markets, Victoria Carpets enjoyed another successful half year. Our turnover was 2.6% lower, but we managed to achieve a small increase in gross profit. During the first half year, we invested heavily in the launch of five new products. The associated launch costs have been taken in the period, duly reducing the operating profit, which fell slightly compared to last year. The benefits of these new products should show in the second half as sales build. Our close relationship with the John Lewis Partnership was strengthened with an agreement, effective 1st September, for us to provide their new national carpet distribution centre from our facilities in Kidderminster. This is a major reward for the efforts we put into customer service and will benefit the company as it contributes to the cost of running our existing warehousing and distribution activities. continued... -3- On a similar theme, we were proud to be voted by the UK's biggest retail buying group, Greendale Carpets & Floorings for the Service Award as their supplier of the year for non-woven carpets. A significant part of our key target market of independent retailers belongs to the buying groups and we are pleased to enjoy good relationships with all of them. Westwood Yarns continued to contribute strongly to the Group results. Its additional heat-setting capacity was commissioned successfully in August, and the plant now has maximum flexibility to supply either set or unset yarns to Victoria and other carpet manufacturers. The increased mill capacity is now being used and is contributing additional profitability to the unit. AUSTRALIA The deterioration in market conditions, which we experienced during the second half of the last financial year, continued into the first quarter of this financial year before levelling off in the second quarter. We have responded to these market conditions by striving to maintain production and sales volumes, and this policy has limited the effect of the downturn on our results. Sales were 7% lower in volume, but 18% lower in Sterling terms, due to exchange rates and competitive pressures on pricing. Profits were affected both by the lower volumes produced and sold, and by the increased competition for sales. A critical element of competing successfully is to have an excellent offering of products and we have continued to invest heavily in this area with a significant increase in our investment in sampling and retail displays for new products. Having withdrawn its export subsidies, the Australian government introduced a new five-year programme of support for textile and floor-covering manufacturers, from which we have benefited considerably in the period. This enabled us to maintain the level of operating profit achieved in Australia in the corresponding period last year. We are now reaping increasing benefits from the recent upgrading of our Australian yarn spinning mill, and this strategic investment will continue to underwrite a strengthening of our Australian business. We are confidently positioned as the third largest carpet manufacturer in Australia and are actively investing in the future of the business with the launch of new products. CANADA The Canadian market remained reasonably active for the period under review. Our 50% associate, Colin Campbell & Sons contributed £21,000 to Group profit before tax compared to £34,000 in the corresponding period last year. PROSPECTS The Australian market appears to have stabilised and we are now looking for the first signs of an upturn there. However, with the uncertainty of world economic conditions at present, we can not forecast when this will occur. continued... -4- Predictions for the UK economy appear somewhat contradictory. We are hearing forecasts that there will be no recession, whilst at the same time seeing only bad news from businesses. This year, there is the added uncertainty of the effect that world events will have on the consumer confidence and consumer spending which drive our business. Our export business is undoubtedly going to suffer from the current downturn in the international travel and hospitality industry as hotel groups defer expenditure. We hope however that this will be relatively short lasting. In the UK residential carpet market, the traditional autumn upturn is weaker than usual, although the new products we have introduced this year are starting to show the right signs of being successful additions to our product range. We are also now benefiting from the new service revenue from the John Lewis warehousing and distribution contract. The main concern is over the level of sales activity if current world events continue to lead to worsening economic conditions. Overall, we anticipate that market conditions will remain difficult for the six months ahead, and, unless we see an upturn in the Australian market and a return to more normal trading conditions in the UK in the second half year, which is traditionally our stronger period, it is perhaps now unlikely that we will be able to maintain the levels of turnover reported for last year and it is likely that profits will be significantly less than reported for the year to March 2001. However, our objectives are not affected by short term influences in the market and we remain confident in the future for the Group. We will continue to strengthen Victoria's position in the markets it serves and believe this is the right strategy for building long term value for shareholders. -5- Victoria P.L.C. GROUP PROFIT AND LOSS ACCOUNT Six months Six months Year to to to 31 29 30 March September September 2001 2001 2000 Unaudited Unaudited Audited Note £'000 £'000 £'000 Turnover 16,526 18,471 35,320 Cost of sales 11,667 13,352 25,166 Gross profit 4,859 5,119 10,154 Distribution costs 3,315 3,228 5,727 Administration costs 1,139 1,139 2,258 Other operating income 333 57 204 Operating profit 738 809 2,373 Exceptional items 2a - 2,164 2,164 Interest payable 185 98 213 Share of profits of associated undertaking 21 33 43 Profit on ordinary activities before taxation 2b 574 2,908 4,367 Taxation on profits on ordinary activities 173 236 858 Profit for the period 401 2,672 3,509 Dividends - 1,046 1,498 Retained earnings 401 1,626 2,011 Earnings per share - basic 3 5.78p 38.68p 50.66p - diluted 5.78p 38.50p 50.55p - excluding exceptional items 5.78p 7.36p 21.75p Dividends per share 4 - 15.0p 21.50p -6- Victoria P.L.C. CONSOLIDATED BALANCE SHEET 29 September 30 September 31 March 2001 2000 2001 Unaudited Unaudited Audited £'000 £'000 £'000 Fixed assets Tangible assets 16,208 16,165 15,805 Investment in associated undertaking 269 244 252 16,477 16,409 16,057 Current assets Stock 8,180 8,216 8,791 Debtors 6,074 6,446 6,293 Cash 270 330 51 14,524 14,992 15,135 Less: current liabilities Creditors due within one year 7,529 8,307 7,792 Net current assets 6,995 6,685 7,343 Total assets less current liabilities 23,472 23,094 23,400 Less: Creditors due after one year 2,691 2,698 2,821 Provision for liabilities and charges 956 810 1,011 Net assets 19,825 19,586 19,568 Capital and reserves (equity) Share capital 1,736 1,736 1,736 Share premium account 829 829 829 Revaluation reserve 1,980 2,043 1,996 Profit and loss account 15,280 14,978 15,007 Total shareholders' funds 19,825 19,586 19,568 -7- Victoria P.L.C. CONSOLIDATED CASH FLOW STATEMENT Six months Six months Year to to to 29 30 31 September September March 2001 2000 2001 Unaudited Unaudited Audited £'000 £'000 £'000 Operating profit 738 809 2,373 Depreciation charges 707 632 1,287 Loss/(Profit) on sale of fixed assets (6) - 6 Decrease/(Increase) in working capital 973 1,964 659 Exchange rate difference on consolidation (70) (165) (409) Net cash inflow from operating activities 2,342 3,240 3,916 Returns on investment and servicing of finance Dividend received from Associate - 13 13 Interest paid (85) (43) (81) Hire purchase interest (100) (56) (132) (185) (86) (213) Taxation UK corporation tax (paid) (189) (104) (451) Overseas tax paid (74) (249) (367) (263) (353) (818) Capital expenditure and financial investment Payments to acquire tangible fixed assets (1,265) (2,978) (3,568) Receipts from sales of tangible fixed assets 25 15 37 Return of capital in associated undertaking - - - Receipts from exceptional items - 2,914 2,914 (1,240) (49) (617) Equity dividends paid (451) (1,423) (1,423) Financing Issue of share capital - 101 101 Debt due within one year (Repayment of )/increase in secured loans (201) - 206 Increase in / (repayment of) long term loans 84 (539) (134) Capital element of finance lease and hire (466) (240) (425) purchase payments Receipts from financing of assets 9 1,376 1,344 (574) 698 991 Increase / (decrease) in cash (371) 2,027 1,950 -8- Victoria P.L.C. NOTES TO THE INTERIM STATEMENTS INTERIM RESULTS FOR THE SIX MONTHS TO 29 SEPTEMBER 2001 1. Basis of preparation The results for the year ended 31 March 2001 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. Exceptional Items a. The exceptional income in the six months to September 2000 represents the profit of £2,164,000 on disposal of the Green Street property. b. Profit on ordinary activities before taxation: Six months to Six months to Year to 29 September 30 September 31 2001 2000 March 2001 As stated 574 2,908 4,367 (including exceptional income) Less: Exceptional income - (2,164) (2,164) Normalised profit before tax 574 744 2,203 (excluding exceptional income) 3. Earnings per share The earnings per share for the 6 month period to 29 September 2001 are based on 6,943,556 shares in issue throughout the period. The earnings per share for the year to 31 March 2001 and the 6 month period to 30 September 2000 are based on weighted averages of 6,926,910 and 6,910,265 shares in issue throughout the respective periods. 4. Dividends Six months to Six months to Year to 29 September 30 September 31 March 2001 2000 2001 Interim Dividend nil nil nil Special Interim Dividend nil 15p 15p Final Dividend 6.5p 21.5p

Companies

Victoria (VCP)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today