TIDMVCP
RNS Number : 8604O
Victoria PLC
13 October 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
13 October 2021
Victoria PLC
('Victoria,' the 'Company,' or the 'Group')
Trading Ahead of Market Expectations
Half-Year Trading Update
Victoria PLC, (LSE: VCP) the international designers,
manufacturers and distributors of innovative flooring, provides the
following trading update.
The Board is pleased to announce that the Group's underlying
profit before tax will be ahead of consensus market expectations
for the financial year ending 2 April 2022.
Trading
Group revenue continues to increase, driven by strong consumer
demand for flooring products:
-- Victoria's Italian ceramic business has its full production
output now sold out until Q2 2022 - an unprecedented situation -
and management are actively working on plans to further increase
capacity.
-- The UK logistics operation, which is going from strength to
strength, continues to provide a compelling service proposition to
Victoria's customers, flooring retailers, driving market
outperformance in Victoria's UK soft-flooring business.
-- Australian lockdowns, the longest in the world, will come to
an end in October, and we are anticipating a strong contribution to
H2, following a limited, but profitable, contribution in H1.
-- The Group's extensive Luxury Vinyl Tile ('LVT') product range
continues to grow. After more than two decades in the European
market, where it was invented, LVT continues to replace laminates
and sheet vinyl as a floor-covering, with the market share of soft
flooring and ceramic tiles broadly unchanged for the last 15 years,
comprising around 60% of flooring purchased in Victoria's primary
markets.
-- Victoria's artificial grass business goes from strength to
strength. Although there has been sharp price increases in the raw
materials for artificial grass, since the pandemic European
consumers' preference for locally produced product rather than Far
East imports has been noticeable.
The demand for flooring experienced this year has primarily come
from existing home owners redecorating. However, the Board expects
demand to continue next year and beyond, due to the high level of
housing transactions that has been experienced in many of the
Group's key markets this year. Housing sales are a good 12-18 month
leading indicator of remodelling-led demand for flooring, which is
Victoria's core market.
Operating Margins and Inflation
As previously reported, operating margins were broadly
maintained during H1. Although the significant inflationary
pressures experienced earlier in the year on many raw materials
have eased somewhat, energy and other costs continue to rise.
Therefore, the Group will continue to actively manage input and
output pricing with suppliers and customers to protect margins on a
LFL basis. There is always a time lag in passing on costs, but the
Group has demonstrated its pricing resilience over the last nine
years with steadily increasing operating margins, despite a wide
range of trading conditions.
Supply Chain security
There has been considerable commentary in recent months about
supply chain issues being experienced across a variety of
industries. Whilst long lead times are seen for LVT products, the
Board is pleased to advise that with generally short and
diversified supply lines, along with the Group entering this period
with a greater-than-normal level of raw materials having
anticipated possible supply issues, the company is not experiencing
problems with production and delivery of its flooring.
Chief Executive, Philippe Hamers, said:
"Managing our way successfully and profitably through the
extraordinary conditions of the last 18 months, with pandemic
lockdowns followed by inflation and supply challenges, has
highlighted the value of having the industry's best management team
at Victoria. The Group has achieved record operating earnings in
the first half of the year and all the credit lies with the skill
and dedication of the operational managers.
The conditions we have faced in the first half will, almost
certainly, continue for the rest of the year, but I am confident
the Group will continue to deliver for its shareholders."
For more information contact:
Victoria PLC
Geoff Wilding, Executive Chairman
Philippe Hamers, Group Chief Executive
Michael Scott, Group Finance Director +44 (0) 1562 749 610
Singer Capital Markets (Nominated Adviser
and Joint Broker)
Rick Thompson, Phil Davies, Alex Bond +44 (0) 207 496 3095
Berenberg (Joint Broker)
Ben Wright, Mark Whitmore, Tejas Padalkar
Peel Hunt (Joint Broker)
Adrian Trimmings, Andrew Clark +44 (0) 203 207 7800
Buchanan Communications (Financial PR) +44 (0) 207 418 8900
Charles Ryland, Chris Lane, Vicky Hayns,
Tilly Abraham +44 (0) 20 7466 5000
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, USA, Spain, Italy, Belgium,
the Netherlands and Australia and employs approximately 3,800
people across more than 25 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 .)
The person responsible for arranging the release of this
announcement on behalf of the Company is Michael Scott, Group
Finance Director.
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