Victoria ends year in line with market expectations

25th Apr 2023 12:23

(Sharecast News) - Flooring firm Victoria confirmed in a trading update on Tuesday that its full-year revenues and underlying EBITDA were in line with market expectations.

The AIM-traded company said that indicated successful progress in the integration of earnings-enhancing acquisitions, adding that it had a confident outlook for 2024.

It said that despite challenging macroeconomic conditions, Victoria was set to achieve its 10th consecutive year of revenue and underlying operating profit growth for the 12 months ended 1 April.

For the first time in its history, it said total volume sold would exceed 200 million square metres - more than 29,500 football fields - with revenues of more than £1.45bn.

The company said it also continued to experience growth in underlying operating cash flow.

Victoria said the acquisition of Balta Group's UK carpet divisions and rugs in April last year allowed it to establish itself as Europe's largest carpet and rug manufacturer.

The integration of Balta was proceeding successfully, with the reorganisation programme on schedule, and the board expecting completion this year.

It added that it expected to realise synergy gains of at least €15m per annum, or 2% in margin for the division, on completion.

The reorganisation programme consisted of three key projects, with the first being Balta's carpet manufacturing relocating from Belgium to the UK, leading to a net reduction of 295 employees.

Victoria said the move would enable Balta to sell the same historical quantity, but with lower production and transport costs, along with improved customer service from shorter delivery times.

Secondly, the Balta rug manufacturing operation would be consolidated onto Victoria's large site at Sint-Baafs Vijve in Belgium, with the closure of the nearby factory at Avelgem, together with the relocation of some production to Usak in Turkey.

Finally, non-core assets acquired with the Balta transaction would be sold, with the proceeds being used alongside the group's operational cash generation to further reduce group leverage.

"We are laser-focussed on the reorganisation of Balta and the integration of other recent acquisitions," said executive chairman Geoff Wilding.

"Completion of these projects is expected to deliver a significant uplift in productivity and cash flow, even during a period of economic uncertainty, which underpins our confidence in outlook for 2024 earnings growth and deleveraging."

Victoria said it expected to announce its preliminary results for the year ended 1 April in July.

At 1152 BST, shares in Victoria were up 3.26% at 490.5p.

Reporting by Josh White for Sharecast.com.