Full Year Trading Update-Record Results
12 April 2021
For Immediate Release
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Victoria PLC
('Victoria,' the 'Company,' or the 'Group')
Full Year Trading Update
Record Results
Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, provides the following trading update for the financial year ended 3 April 2021 ("FY21").
The Board is pleased to announce that, in spite of the on-going COVID-19 related challenges in our markets, the Group has achieved record results for FY21, reflecting the resilience of the commercial and operational performance of the business. The Group expects, subject to finalisation of the accounts and audit, FY21 revenues to be in excess of £640 million (FY20: £621.5m) - despite the impact of the April-May 2020 lockdowns, which saw over £50 million of revenue reduction in those two months compared to the prior year - and underlying EBITDA to be in excess of £120 million (2020: £118.1m).
Operational Performance
This was a year in which we completed no major acquisitions and therefore the record trading results were driven by organic performance. Victoria has invested heavily over the past five years in building the pre-eminent management team in the European flooring industry. Their collective deep operational experience, entrepreneurial initiative, sense of ownership (almost all managers are shareholders), and, most importantly, their ability to execute have delivered significant value for shareholders over an extremely challenging 12 months.
To briefly recap on some key operational achievements:
· Minimised negative operating cash flow to just £6 million in Q1, during total lockdown in all our main markets - protecting the business and therefore shareholders by maintaining strong liquidity and avoiding any requirement for a value-destroying discounted equity issuance.
· Capitalised on strong consumer demand by restarting manufacturing and logistics operations as soon as lawfully permitted - ahead of competitors. The result was a post-lockdown double-digit growth in revenues.
· Completed the integration of Ascot Gruppo Ceramiche providing production capacity and brands that enabled the annual revenue from our Italian business to exceed €100 million from just €28 million four years ago.
· Sustainable c.200+bps margin expansion. The various initiatives in logistics and factory productivity, which were completed on time and on budget, have delivered as exactly planned and driven meaningful and sustainable margin expansion post lockdown.
Acquisitions Update
As previously announced, the Board of Victoria has invested a significant amount of management focus during the past year identifying additional suitable acquisition opportunities and, more recently, the Company has reorganised its financing arrangements to provide it with a significant amount of capital for acquisitions, as well as extending its debt financing maturities and reducing interest rates.
The various, and constantly changing, Covid-19 related travel restrictions that have been in place in the UK and across Europe during the first three months of the year have impacted the pace of due diligence. However, recent easing of restrictions in key geographies have reduced or eliminated this constraint and the Board anticipates being able to report further acquisition-led growth in the near future.
Outlook
The trading outlook for the current FY22 financial year is very encouraging in terms of both revenue and margins.
The Group continues to experience strong, ongoing consumer demand across its key markets. Furthermore, housing transactions, a key 12-18 month leading indicator of flooring sales, are at very high levels - not only in the UK, but across our markets (more than 70% of the Group's earnings are now generated from outside the UK), which suggests demand will be maintained for some period.
More importantly, the post-lockdown uplift in margin observed in the interim results published in November 2020 is structural due to completed synergy projects and therefore sustainable. There have been some increases in raw material prices in recent months, but the Group has been able to successfully mitigate these.
However, it clearly remains difficult to forecast accurately given the ongoing impact of, and uncertainty caused by, government actions in response to COVID-19 and therefore we will continue to keep re-instatement of formal earnings guidance under review and will comment further as soon as we feel it is prudent to do so.
Victoria remains focused on its mission to create wealth for shareholders.
For more information contact:
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Victoria PLC Geoff Wilding, Executive Chairman Philippe Hamers, Group Chief Executive Michael Scott, Group Finance Director |
+44 (0) 1562 749 610 |
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N+1 Singer (Nominated Adviser and Joint Broker) Rick Thompson, Phil Davies, Alex Bond
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+44 (0) 207 496 3095 |
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Berenberg (Joint Broker) Ben Wright, Mark Whitmore, Tejas Padalkar
Peel Hunt (Joint Broker) Adrian Trimmings, Andrew Clark
Buchanan Communications (Financial PR) Charles Ryland, Chris Lane, Tilly Abraham |
+44 (0) 203 207 7800
+44 (0) 207 418 8900
+44 (0) 20 7466 5000 |
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About Victoria Established in 1895 and listed since 1963 and on AIM since 2013 (VCP.L), Victoria PLC, is an international manufacturer and distributor of innovative flooring products. The Group, which is headquartered in Kidderminster, UK, designs, manufactures and distributes a range of carpet, flooring underlay, ceramic tiles, LVT (luxury vinyl tile), artificial grass and flooring accessories. Victoria has operations in the UK, Spain, Italy, Belgium, the Netherlands and Australia and employs approximately 3,400 people across more than 20 sites. Victoria is the UK's largest carpet manufacturer and the second largest in Australia, as well as the largest manufacturer of underlay in both regions. The Group's strategy is designed to create value for its shareholders and is focused on consistently increasing earnings and cash flow per share via acquisitions and sustainable organic growth. (Further information about Victoria can be found on its website, www.victoriaplc.com.) |
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