Interim Results - Pre-tax Profit Up 32.2%

Victoria PLC 23 November 1999 Victoria P.L.C. - Interim Results For The Six Months To 2 October 1999 CHAIRMAN'S STATEMENT RESULTS I am pleased to report that, notwithstanding difficult trading conditions in the UK, we have achieved a continuing increase in profits and earnings for the six months to 2 October 1999. Profit before tax is 32.2% higher than last year, at £624,000 (1998: £472,000). Earnings per share increased 28.9% to 5.94p (1998: 4.61p). Cashflow remained strongly positive, with net borrowings at the end of the period of £4.08 million (1998: £5.49 million) representing gearing of 23.3% (1998: 34.5%). UNITED KINGDOM The UK market remained subdued for the first half of our financial year, and our sales in this market reflected these difficult market conditions. The fact that our competitors have found the market equally difficult is of little consolation. Our response to these poor market conditions is to manage our product offering and service levels to secure the best possible share of trade. Our new Tudor Twist product introduced on 1 June this year has already proved to be an outstanding success and further new products are scheduled for launch in the second half year. During the period, we have also joined with other UK manufacturers in forming the Carpet Foundation to promote the attractions of carpet to consumers. Exports from the UK have continued to be difficult as the pound has remained strong and price-led competition has intensified. Although our export sales were lower than in the first half of last year, we remain committed to these markets. Westwood Yarns has continued to contribute strongly, and its high quality yarns are a source of advantage to the group. AUSTRALIA The Australian market has been buoyant during the period resulting in higher sales than last year. This has led to a good increase in profitability, particularly due to the increased spinning capacity installed at Castlemaine in November 1998 being used for the full six month period. CANADA After a very strong performance in the first half of last year, the Canadian market quietened down during the second half and continued quieter during the first half of this year. This has led to a reduced contribution from our associated company, Colin Campbell & Sons compared to last year. PROPERTY We continue to make good progress on the sale of our Green Street property and further information on this is set out in a circular to shareholders which will be posted today. Since I last reported to you at the AGM, we have secured outline planning consent for the development of the site. This has taken some five years overall and now opens the way for the sale to be completed, subject to shareholders' consent. The complete relocation from the Green Street property onto one site has long been an objective of the Company because of the increase in operational efficiency which will result. With the building work at Worcester Road now nearing completion, the old site should be vacated before the end of the financial year, allowing us to secure these benefits and clearing the way for completion of the sale. CAPITAL EXPENDITURE Capital expenditure of £1.94 million during the period included on the new IT system in the UK and new plant in the UK and Australia, together with stage payments on the new office and factory buildings at our main manufacturing site in Kidderminster. We are determined to continue investing in the future of the business and have recently taken the decision to expand the capacity of our Australian spinning mill. This Australian Dollar 6.63 million (£2.65 million) project will reduce the dependence of the carpet mill on outside spinners and at the same time provide additional profits. Work on this project will commence during the second half of this financial year. PROSPECTS In the UK, it is encouraging to us that despite the poor trading conditions to which I referred earlier, current sales levels have improved over recent weeks. Orders are now running at a higher level than last year and our new product ranges, which are impacting on both our UK subsidiaries, are exceeding our expectations. Although the Australian market has now returned to a more normal state after the very active first few months of the year, we still expect to see a continuing good performance from Australia. Over the near future we expect to see additional benefits from the current and proposed investments in the business, particularly the major projects in site consolidation and increased spinning capacity. This policy of reinvesting to maintain and further develop our strong market position underpins our confidence in the continued progress of the Group. R. M. GILBERT Chairman 23 November 1999 GROUP PROFIT AND LOSS ACCOUNT Six months Six months Year to to to 2 October 30 3 April September 1999 1998 1999 Unaudited Unaudited Audited Note £000 £000 £000 Turnover 16,901 17,096 34,800 Cost of sales 12,188 12,318 25,033 -------- -------- -------- Gross profit 4,713 4,778 9,767 Distribution costs 3,084 3,142 5,850 Administration costs 1,086 1,044 2,279 Other operating income 270 104 272 -------- -------- ------- Operating profit 813 696 1,910 Interest payable 204 260 446 Share of profits of associated undertaking 15 36 40 ------- ------- ------- Profit on ordinary activities before 624 472 1,504 taxation Taxation on profit on ordinary activities 217 156 493 ------- ------- ------- Profit for the period 407 316 1,011 Dividends proposed - - 309 ------- ------- ------- Retained earnings 407 316 702 -------- ------- ------- Earnings per share - 2 5.94p 4.61p 14.73p basic Earnings per share - 5.90p 4.59p 14.63p diluted Dividends per share 3 - - 4.50p -------- ------- ------- CONSOLIDATED BALANCE SHEET Six months Six months Year to to to 2 October 30 3 April September 1999 1998 1999 Unaudited Unaudited Audited £000 £000 £000 Fixed assets Tangible assets 13,762 11,997 12,379 Investment in associated 212 217 215 undertaking ------- ------- ------- 13,974 12,214 12,594 Current assets Stock 8,849 9,154 9,135 Debtors 6,066 6,027 5,714 Cash 229 15 169 ------- ------- ------- 15,144 15,196 15,018 Creditors - amounts falling due within one year - Borrowings (2,417) (3,833) (2,342) - Other (6,556) (5,338) (6,115) ------- ------- ------- Net current assets 6,171 6,025 6,561 ------- ------- ------- Total assets less current 20,145 18,239 19,155 liabilities Creditors - amounts falling due after more than one year - Borrowings (1,895) (1,672) (1,321) - Other (70) (63) (70) Provision for liabilities and charges - deferred (691) (584) (691) taxation Net assets 17,489 15,920 17,073 -------- ------- ------- Capital and reserves (equity) Share capital 1,715 1,715 1,715 Share premium account 749 749 749 Revaluation reserve 3,006 2,909 3,005 Profit and loss account 12,019 10,547 11,604 ------- ------- ------- Total shareholders' funds 17,489 15,920 17,073 -------- ------- ------- CONSOLIDATED CASH FLOW STATEMENT Six months Six months Year to to to 2 October 30 3 April September 1999 1998 1999 Unaudited Unaudited Audited £000 £000 £000 Operating profit 813 696 1,910 Depreciation charges 556 521 1,035 Profit on sale of fixed (61) (3) (12) assets Decrease/(Increase) in 466 954 1,714 working capital Exchange rate difference on consolidation 4 (501) (89) Net cash inflow from operating activities 1,778 1,667 4,558 -------- -------- ------- Returns on investment and servicing of finance Interest paid (100) (199) (336) Hire purchase interest (104) (61) (110) (204) (260) (446) -------- -------- ------- Taxation UK corporation tax (paid) - (42) (219) Overseas tax paid - - - - (42) (219) -------- -------- ------- Capital expenditure and financial investment Payments to acquire tangible fixed assets (1,939) (587) (1,055) Receipts from sales of tangible fixed assets 67 24 79 Return of capital in associated undertaking 19 12 12 (1,853) (551) (964) Equity dividends paid (309) (240) (240) -------- -------- ------- Financing Debt due within one year Repayment of secured loans 99 (168) (168) Increase in long term loans 457 322 (93) Capital element of hire purchase payments (259) (262) (547) Receipts from financing of 273 40 80 assets 570 (68) (728) Increase / (decrease) in (18) 506 1,961 cash -------- -------- ------- NOTES TO THE INTERIM STATEMENTS 1. Basis of preparation The results for the year ended 3 April 1999 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 are based on 6,860,556 ordinary shares in issue throughout each period. 3. Dividends No interim dividend is proposed. Enquiries: Alan R Bullock Mark Lee Group Managing Director Group Finance Director Victoria P.L.C. Victoria P.L.C. Tel: 01562 823400 Tel: 01562 823400 John Folliott Vaughan Fiona Tooley Director of Corporate Finance Director Albert E Sharp Securities Citigate Dewe Rogerson Ltd. Tel: 0121 683 7212 Tel: 0121 631 2299 End IR GLMZMVZRLLMM

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