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
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