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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Victoria Plc | LSE:VCP | London | Ordinary Share | GB00BZC0LC10 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -3.00 | -1.22% | 243.00 | 243.00 | 247.00 | 243.00 | 243.00 | 243.00 | 3,913 | 08:24:30 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Carpets And Rugs | 1.48B | -91.8M | -0.7982 | -3.08 | 282.93M |
From Apr 2019 to Apr 2024
TIDMVCP
RNS Number : 6563X
Victoria PLC
28 November 2017
28 November 2017
Victoria PLC
('Victoria', the 'Company', or the 'Group')
Interim Results
Another period of successful trading and growth
Victoria PLC (LSE: VCP) the international designers, manufacturers and distributors of innovative floorcoverings, is pleased to announce its consolidated interim results for the 26 weeks ended 30 September 2017.
Financial and Operational Highlights
Continuing operations H1 FY18 H1 FY17 Growth Revenue GBP189.5m GBP153.4m +24% Underlying EBITDA(1) GBP24.6m GBP20.2m +22% Underlying operating profit(1) GBP18.2m GBP14.4m +26% Operating profit GBP12.9m GBP12.0m +8% Underlying profit before tax(1) GBP15.5m GBP12.3m +26% Profit before tax GBP8.8m GBP8.4m +5% Net debt GBP98.6m GBP67.7m +46% Adjusted net debt / EBITDA(2) 1.77x 1.93x Earnings per share(3) : - Basic adjusted 13.10p 10.43p +26% - Basic 6.55p 6.57p -0.4%
-- Group revenues for the six months ended 30 September 2017 grew by 24% versus the same period in the prior year, from GBP153.4m to GBP189.5m
-- 26% increase in underlying profit before tax from GBP12.3m to GBP15.5m
-- Net debt of GBP98.6m at 30 September 2017 was a very comfortable 1.77x adjusted EBITDA(2) (2016 H1: 1.93x)
-- In June, the Company announced a reorganisation of its UK carpet manufacturing and logistics operations to further increase margins across the Group. The manufacturing reorganisation has already been completed and the new logistics operations have been planned and will be fully implemented during FY19
-- Since the half year, two hard flooring acquisitions of European ceramics manufacturers, Ceramiche Serra S.p.A. in Italy and Keraben Grupo S.A. in Spain have been announced
1. Underlying performance is stated before the impact of exceptional items and amortisation of acquired intangibles within operating profit. Underlying profit before tax and adjusted EPS are also stated before non-underlying items within finance costs (comprising mark-to-market adjustments, BGF redemption premium charge, deferred consideration fair value adjustments and exchange rate differences on foreign currency loans).
2. Adjusted net debt / EBITDA as measured in relation to the Group's bank facility covenants
3. Basic and basic adjusted earnings per share calculations set out in Note 7
Geoff Wilding, Chairman of Victoria PLC commented:
"Victoria had another successful six months and much was achieved during the period. We strengthened our management team, met all of our objectives, focused on improving efficiencies across the Group and since the period end, have also announced two significant earnings enhancing acquisitions.
Our strong operational management and the solid pipeline of acquisition opportunities gives the Board confidence that we will achieve all of our objectives for the current financial year."
For more information contact:
Victoria PLC Geoff Wilding, Chairman Philippe Hamers, Group Chief Executive Michael Scott, Group Finance +44 (0) 15 Director 6274 9300 Cantor Fitzgerald Europe (Nominated Adviser & Broker) Rick Thompson, Phil Davies, Will Goode (Corporate Finance) +44 (0) 20 Caspar Shand- Kydd, Alex Pollen 7894 7000 (Equity Sales) Berenberg (Joint Broker) Ben Wright, Mark Whitmore (Corporate +44 (0) 20 Broking) 3207 7800 Buchanan Communications Charles Ryland, Victoria Hayns, +44 (0) 20 Madeleine Seacombe 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, designs, manufactures and distributes a range of carpet, underlay, LVT (luxury vinyl tile), artificial grass and flooring accessories. Victoria has operations in the UK, Belgium, the Netherlands and Australia and employs approximately 1,800 people across 20 sites. Victoria is the UK's largest carpet manufacturer and the second largest in Australia.
The Group's strategy is designed to create value for its shareholders, focused on consistently increasing earnings per share via acquisitions and sustainable organic growth.
The Group's trading subsidiaries include:
UK & Europe: Abingdon Flooring Ltd, Alliance Distribution Ltd, Avalon B.V, Distinctive Flooring Ltd, Ezi Floor Ltd, Grass Inc. B.V, Interfloor Ltd, Keraben Grupo S.A., Victoria Belgium N.V, Victoria Carpets Ltd, View Logistics Ltd, Westex (Carpets) Ltd, Whitestone Weavers Ltd
Australia: Quest Flooring Pty Ltd, Primary Flooring Pty Ltd, The Victoria Carpet Co. Pty Ltd
Chairman's Statement
The first half of this year was another period of successful trading and growth for the Group. The Board is confident that the Group will meet all of its objectives for the year and anticipates that performance will be in line with current market expectations for the year to 31 March 2018, updated for the recently announced acquisitions of Keraben Grupo S.A. and Ceramiche Serra S.p.A.
Operational developments
In line with the rapid growth of the Group, the management team was further strengthened with the appointment of Philippe Hamers as Chief Executive in March and he has already had an important beneficial impact on Victoria. He has full responsibility - and autonomy - for the Group's operations and his deep industry knowledge and management skills are already delivering measurable gains across the business:
Closure of manufacturing at Kidderminster site
In June, we announced the planned closure of the carpet-making factory in Kidderminster. Analysis had showed that output and flexibility could be enhanced by reducing from three UK production sites to two.
This was completed during September with our UK carpet production now shared between our two factories, located in Yorkshire and South Wales. Inevitably there was some short-term disruption to supply, which has now been totally put behind us.
The resulting increase in productivity will contribute noticeably to our continued growth in operating margins across the Group.
Logistics
Logistics, the physical distribution of products from our factories and warehouses to retailers, is an expensive component of the business, costing approximately 10% of revenues.
Therefore, we initiated a project which has now been running for about 12 months to carefully analyse our network and cost structure to find an optimal solution that both improves service levels, whilst reducing operational costs. The team responsible for this project, made up of senior management together with specialist consultants, delivered their proposals during the period under review and their plan is now being executed, with a material beneficial impact anticipated over the next 12-15 months.
Acquisitions
Increasing Victoria's revenues and profits from outside the UK has been a firm objective for the Group. Clearly Europe represents a very large and growing market, while diversifying the sources of our income reduces economic risk.
Shareholders will recall that last year the Company flagged that it would be developing its presence in the hard-flooring sector. Hard flooring categories includes products such as ceramic tiles, LVT (Luxury Vinyl Tiles), wood, stone, etc. and is typically used in kitchens, bathrooms, and entrances in residential applications and throughout commercial projects.
The reasons for doing so were simple: Hard flooring constitutes over half the flooring market and accessing it opens up a substantial opportunity for further growth. Furthermore, Victoria has developed a very broad and deep distribution network in the UK and Australia, with many of the retailers selling hard flooring alongside carpet. We have been very successful at cross-selling our underlay products and are confident that we will be able to achieve a similar outcome with hard flooring. Additionally, for structural reasons, some categories of hard flooring are able to maintain higher margins than traditional carpet manufacturing.
As a result, we established and recruited a director-level appointment for hard flooring in May, and have spent months visiting dozens of hard flooring manufacturers in Europe to understand the market and identify the best opportunities for Victoria.
Although after the period end covered by the interim results, due to their size and potential impact on the business, I will comment briefly on Victoria's two recent acquisitions, both of which were in hard flooring:
Ceramiche Serra S.p.A.
Serra, operating from sites in Serramazzoni, Sassuolo (near Bologna), the heart of the Italian ceramics industry, manufactures ceramic flooring, which is sold domestically and exported internationally. It sells to a combination of wholesalers, retail groups, and independent stores throughout Continental Europe, North America, and the Far East.
In line with Victoria's acquisition criteria, the management team at Serra has committed to running the business as part of Victoria for a minimum period of four years and continuing to develop its growth. This acquisition is due to complete very shortly.
For the year ended 31 December 2016, Serra generated audited revenues of EUR28.2 million (GBP25.2 million), EBITDA of EUR10.5 million (GBP9.4 million), and EBIT of EUR10.0 million (GBP8.9 million).
Keraben Grupo S.A.
Keraben, is based in Castellon, (near Valencia), where it has more than four million square feet of facilities. The company manufactures mid to high-end ceramic flooring and wall tiles, which are sold via a combination of wholesalers, retail groups, independent speciality stores, and DIY chains throughout Continental Europe, North America, and the Far East.
Keraben is a large, well-invested business with a strong market reputation. It is led by a proven, established management team which has successfully and consistently grown the business over recent years. They are financially incentivised to remain with, and continue to grow, the business for a minimum of three years.
For the year ended 31 December 2016, Keraben generated audited revenues of EUR118.3 million (GBP106.4 million), adjusted EBITDA of EUR36.4 million (GBP32.7 million), and adjusted EBIT of EUR27.5 million (GBP24.7 million). The Board expects that normalised earnings should be about 10% higher for the year to 31 December 2017.
Borrowings
Net debt at 30 September was GBP98.6m, which represents a very comfortable 1.77x adjusted EBITDA.
Flooring manufacturers structured like Victoria can generate large amounts of cash. Favourable supplier arrangements, rapid manufacturing matched to demand, customer payment terms, and longevity of key items of plant all contribute to a very high percentage of reported earnings turning to net cash. This was reportedly one of the key reasons legendary investor, Warren Buffett, acquired the world's second largest flooring manufacturer, Shaw Industries.
Victoria has consistently demonstrated over the last five years that, while there is a significant seasonal profile in its net debt (our working capital levels peak in September each year due to the increase in demand during the pre-Christmas rush, plus the timing of our deferred consideration payments are substantially weighted to H1), overall cash generation is aligned to annual earnings. Management across the entire Victoria Group is very focussed on cash generation, which gives the Board the confidence to appropriately deploy debt to fund acquisitions.
However, as a Board, we always seek to maintain a balance between debt and equity and shareholders will note that the company placed 23 million new ordinary shares recently (post the interim results period) with institutions to raise GBP180 million to part fund the purchase of Keraben. The placing was significantly over-subscribed, which was very encouraging.
Outlook
The markets in which Victoria trades - the UK, Europe, and Australia - continue to experience demand.
Nonetheless we continue to maintain tight control over costs and inventory to ensure that the Group is well positioned should selling conditions change. To that end, the Group is very focused on the level of variability in our cost base. Victoria is more lowly geared operationally than I suspect some shareholders appreciate. Over half of Victoria's cost base fluctuates directly with sales (e.g. raw materials and energy) and a further circa 30% is capable of being varied within a few weeks (e.g. labour, logistics and marketing costs), should conditions change.
Growth in earnings per share will continue from both organic improvements and acquisitions. There is no shortage of acquisition opportunities, although we remain very selective. Our strong positive cash-flow, together with supportive bankers and shareholders ensure further acquisition-based growth can be funded. By maintaining very strict criteria and strong price discipline, I am confident that future acquisitions will continue to be earnings enhancing and a useful tool to both strengthen the Group and create wealth for shareholders.
Therefore, once again, I am pleased to say the Board faces the balance of the financial year with confidence and a positive outlook.
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Condensed Consolidated Income Statement
For the 26 weeks ended 30 September 2017 (unaudited)
26 weeks ended 30 26 weeks ended 1 52 weeks ended 1
September 2017 October 2016 April 2017 (Audited)
Underlying Non- Reported Underlying Non- Reported Underlying Non- Reported
perfor-mance underlying numbers perfor-mance underlying numbers perfor- underlying numbers
items items mance items
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- --------- ------ ------------- ----------- ---------- ------------- ----------- ---------- ----------- ----------- ----------
Continuing
Operations
Revenue 3 189,485 - 189,485 153,405 - 153,405 330,406 - 330,406
Cost of Sales (127,573) - (127,573) (103,007) - (103,007) (220,791) - (220,791)
Gross profit 61,912 - 61,912 50,398 - 50,398 109,615 - 109,615
Distribution
costs (28,412) - (28,412) (29,285) - (29,285) (54,886) - (54,886)
Administrative
expenses (15,419) (5,331) (20,750) (6,997) (2,440) (9,437) (21,507) (7,036) (28,543)
Other operating
income 116 - 116 291 - 291 445 - 445
Operating
profit/(loss) 18,197 (5,331) 12,866 14,407 (2,440) 11,967 33,667 (7,036) 26,631
----------------- --------- ------ ------------- ----------- ---------- ------------- ----------- ---------- ----------- ----------- ----------
Comprising:
Operating profit
before non-underlying
and exceptional
items 3 18,197 - 18,197 14,407 - 14,407 33,667 - 33,667
Amortisation
of acquired
intangibles - (3,050) (3,050) - (1,946) (1,946) - (4,432) (4,432)
Exceptional
items 3,4 - (2,281) (2,281) - (494) (494) - (2,604) (2,604)
----------------- --------- ------ ------------- ----------- ---------- ------------- ----------- ---------- ----------- ----------- ----------
Finance Costs 5 (2,747) (1,333) (4,080) (2,116) (1,470) (3,586) (4,259) (3,598) (7,857)
Comprising:
Interest payable
on loans 5 (2,206) - (2,206) (1,785) - (1,785) (3,555) - (3,555)
Amortisation
of prepaid
finance
costs 5 (306) - (306) (202) - (202) (419) - (419)
Interest accrued
on BGF loan 5 (97) (115) (212) (72) (90) (162) (169) (202) (371)
Net interest expense
on defined benefit
pensions 5 (138) - (138) (57) - (57) (116) - (116)
Other
non-underlying
finance costs 5 - (1,218) (1,218) - (1,380) (1,380) - (3,396) (3,396)
----------------- --------- ------ ------------- ----------- ---------- ------------- ----------- ---------- ----------- ----------- ----------
Profit/(loss)
before tax 15,450 (6,664) 8,786 12,291 (3,910) 8,381 29,408 (10,634) 18,774
Taxation 6 (3,536) 706 (2,830) (2,802) 395 (2,407) (6,437) 255 (6,182)
Profit/(loss)
for the period 11,914 (5,958) 5,956 9,489 (3,515) 5,974 22,971 (10,379) 12,592
----------------- --------- ------ ------------- ----------- ---------- ------------- ----------- ---------- ----------- ----------- ----------
Earnings per
share - pence basic 7 6.55 6.57 13.84
diluted 7 6.44 6.46 13.60
----------------- --------- ------ ------------- ----------- ---------- ------------- ----------- ---------- ----------- ----------- ----------
Condensed Consolidated Statement of Comprehensive
Income
For the 26 weeks ended 30 September 2017
(unaudited)
26 weeks 26 weeks 52 weeks
ended ended ended
30 September 1 October 1 April
2017 2016 2017
(Audited)
GBP000 GBP000 GBP000
--------------------------------------- -------------- ----------- ----------
Profit for the period 5,956 5,974 12,592
------------------------------------------- -------------- ----------- ----------
Other Comprehensive income/(expense):
Items that will not be
reclassified to profit
or loss:
Actuarial gains/(losses)
on pension scheme 1,841 (6,550) (7,846)
(Decrease)/increase in deferred
tax asset relating to pension
scheme liability (365) 1,214 1,448
Items that will not be
reclassified to profit
or loss 1,476 (5,336) (6,398)
------------------------------------------- -------------- ----------- ----------
Items that may be reclassified
subsequently to profit
or loss
Retranslation of overseas
subsidiaries (723) 1,716 1,943
Items that may be reclassified
subsequently to profit or loss (723) 1,716 1,943
----------------------------------------- -------------- ----------- ----------
Other comprehensive income/(expense) 753 (3,620) (4,455)
----------------------------------------- -------------- ----------- ----------
Total comprehensive income for the
year attributable to the owners of
the parent 6,709 2,354 8,137
------------------------------------------- -------------- ----------- ----------
Condensed Consolidated Balance Sheet
As at 30 September 2017 (unaudited)
30 Sept 1 Oct 1 April
2017 2016 2017
(Audited)
GBP000 GBP000 GBP000
-------------------------------------- -------- -------- -----------
Non-current assets
Goodwill 58,272 48,949 59,830
Intangible assets 63,072 42,174 66,320
Property, plant and equipment 44,641 41,220 41,826
Investment property 180 180 180
Deferred tax asset 4,938 4,818 4,986
------------------------------------------
Total non-current assets 171,103 137,341 173,142
------------------------------------------ -------- -------- -----------
Current assets
Inventories 77,430 63,261 73,062
Trade and other receivables 53,843 46,789 55,076
Cash at bank and in hand 28,721 21,501 27,979
Total current assets 159,994 131,551 156,117
------------------------------------------ -------- -------- -----------
Total assets 331,097 268,892 329,259
------------------------------------------ -------- -------- -----------
Current liabilities
Trade and other payables 75,540 70,488 82,873
Current tax liabilities 3,303 3,750 4,260
Other financial liabilities 651 617 617
------------------------------------------
Total current liabilities 79,494 74,855 87,750
------------------------------------------ -------- -------- -----------
Non-current liabilities
Trade and other payables 16,888 14,850 19,855
Other financial liabilities 125,078 87,617 116,086
Deferred tax liabilities 14,374 8,393 15,190
Retirement benefit obligations 9,162 9,734 11,086
Total non-current liabilities 165,502 120,594 162,217
------------------------------------------ -------- -------- -----------
Total liabilities 244,996 195,449 249,967
------------------------------------------ -------- -------- -----------
Net assets 86,101 73,443 79,292
------------------------------------------ -------- -------- -----------
Equity
Share capital 4,548 4,548 4,548
Share premium 52,472 52,467 52,472
Retained earnings 23,883 10,895 16,451
Foreign exchange reserve 4,304 4,800 5,027
Other reserves 894 733 794
Total equity 86,101 73,443 79,292
------------------------------------------ -------- -------- -----------
Condensed Consolidated Statement of Changes
in Equity
For the 26 weeks ended 30 September 2017
(unaudited)
Share Share Retained Foreign Other Total
exchange
capital premium earnings reserve reserves equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 2 April 2016 4,548 52,462 10,257 3,084 682 71,033
----------------------------- -------- -------- --------- --------- --------- --------
Profit for the period to
1 October 2016 ---- ---- 5,974 ---- ---- 5,974
Other comprehensive loss
for the period ---- ---- (5,336) ---- ---- (5,336)
Retranslation of overseas
subsidiaries ---- ---- ---- 1,716 ---- 1,716
Total comprehensive profit ---- ---- 638 1,716 ---- 2,354
----------------------------- -------- -------- --------- --------- --------- --------
Issue of share capital ---- 5 ---- ---- ---- 5
Share-based payment charge ---- ---- ---- ---- 51 51
Transactions with owners ---- 5 ---- ---- 51 56
----------------------------- -------- -------- --------- --------- --------- --------
At 1 October 2016 4,548 52,467 10,895 4,800 733 73,443
----------------------------- -------- -------- --------- --------- --------- --------
At 2 April 2016 4,548 52,462 10,257 3,084 682 71,033
----------------------------- -------- -------- --------- --------- --------- --------
Profit for the period to
1 April 2017 ---- ---- 12,592 ---- ---- 12,592
Other comprehensive loss
for the period ---- ---- (6,398) ---- ---- (6,398)
Retranslation of overseas
subsidiaries ---- ---- ---- 1,943 ---- 1,943
----------------------------- -------- -------- --------- --------- --------- --------
Total comprehensive income ---- ---- 6,194 1,943 ---- 8,137
----------------------------- -------- -------- --------- --------- --------- --------
Issue of share capital ---- 10 ---- ---- ---- 10
Share-based payment charge ---- ---- ---- ---- 112 112
Transactions with owners ---- 10 ---- ---- 112 122
----------------------------- -------- -------- --------- --------- --------- --------
At 1 April 2017 4,548 52,472 16,451 5,027 794 79,292
----------------------------- -------- -------- --------- --------- --------- --------
At 2 April 2017 4,548 52,472 16,451 5,027 794 79,292
----------------------------- -------- -------- --------- --------- --------- --------
Profit for the period to
30 September 2017 ---- ---- 5,956 ---- ---- 5,956
Other comprehensive income
for the period ---- ---- 1,476 ---- ---- 1,476
Retranslation of overseas
subsidiaries ---- ---- ---- (723) ---- (723)
Total comprehensive income ---- ---- 7,432 (723) ---- 6,709
----------------------------- -------- -------- --------- --------- --------- --------
Share-based payment charge ---- ---- ---- ---- 100 100
Transactions with owners ---- ---- ---- ---- 100 100
----------------------------- -------- -------- --------- --------- --------- --------
At 30 September 2017 4,548 52,472 23,883 4,304 894 86,101
----------------------------- -------- -------- --------- --------- --------- --------
Condensed Consolidated Statements
of Cash Flows
For the 26 weeks ended 30 September
2017 (unaudited)
26 weeks 26 weeks 52 weeks
ended ended ended
30 Sept 1 Oct 1 April
2017 2016 2017
(Audited)
GBP000 GBP000 GBP000
----------------------------------------- --------- --------- -----------
Cash flows from operating activities
Operating profit from continuing
operations 12,866 11,967 26,631
Adjustments For:
Depreciation charges 6,424 5,829 12,039
Amortisation of intangible assets 3,050 1,946 4,432
Asset impairment - - 17
Amortisation of government grants (121) (118) (233)
Loss/(profit) on disposal of
property, plant and equipment 35 (1) (40)
Share-based employee remuneration 100 51 112
Defined benefit pension (221) (221) (221)
Net cash flow from operating activities
before movements in working capital 22,133 19,453 42,737
Change in inventories (2,503) (1,592) (445)
Change in trade and other receivables 2,527 (1,190) (5,919)
Change in trade and other payables (4,731) (2,967) 4,752
Cash generated by continuing
operations 17,426 13,704 41,125
Interest paid (2,206) (1,841) (3,554)
Income taxes paid (4,955) (2,721) (5,792)
Net cash inflow from operating
activities 10,265 9,142 31,779
------------------------------------------ --------- --------- -----------
Investing activities
Purchases of property, plant
and equipment (6,937) (6,030) (9,422)
Proceeds on disposal of property,
plant and equipment 123 48 215
Deferred consideration and earn-out
payments (9,451) (8,332) (10,314)
Acquisition of subsidiaries
net of cash acquired (3,060) - (37,798)
Net cash used in investing activities (19,325) (14,314) (57,319)
------------------------------------------ --------- --------- -----------
Financing activities
Increase in long-term loans 10,117 7,385 34,283
Issue of share capital - - 10
Repayment of obligations under
finance leases/hire purchase (408) (475) (934)
Net cash generated in financing
activities 9,709 6,910 33,359
------------------------------------------ --------- --------- -----------
Net increase in cash and cash
equivalents 649 1,738 7,819
Cash and cash equivalents at
beginning of period 27,979 19,078 19,078
Effect of foreign exchange rate
changes 93 685 1,082
Cash and cash equivalents at
end of period 28,721 21,501 27,979
------------------------------------------ --------- --------- -----------
Comprising:
Cash at bank and in hand 28,721 21,501 27,979
Bank overdrafts - - -
28,721 21,501 27,979
----------------------------------------- --------- --------- -----------
Notes to the Condensed Half-Year Financial Statements
1 General information
These condensed consolidated financial statements for
the 26 weeks ended 30 September 2017 have not been
audited or reviewed by the Auditors. They were approved
by the Board of Directors on 27 November 2017.
The information for the 52 weeks ended 1 April 2017
does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006. A copy of the
statutory accounts for that year has been delivered
to the Registrar of Companies. The Auditors' report
on those accounts was unqualified and did not include
a reference to any matter to which the Auditor drew
attention by way of emphasis without qualifying the
report and did not contain statements under Section
498(2) or 498(3) of the Companies Act 2006.
2 Basis of preparation and accounting policies
These condensed consolidated financial statements should
be read in conjunction with the Group's financial statements
for the 52 weeks ended 1 April 2017, which were prepared
in accordance with IFRSs as adopted by the European
Union.
The accounting policies and basis of consolidation
of these condensed financial statements are consistent
with those applied and set out on pages 29 to 36 of
the Group's audited financial statements for the 52
weeks ended 1 April 2017.
Having reviewed the Group's projections, and taking
account of reasonable possible changes in trading performance,
the Directors believe they have reasonable grounds
for stating that the Group has adequate resources to
continue in operational existence for the foreseeable
future.
Accordingly, the Directors continue to adopt the going
concern basis in preparing the financial statements
of the Group.
3 Segmental information
The Group is organised into two operating divisions,
the sale of floorcovering products in the UK and Australia.
Geographical segment information for revenue, operating
profit and a reconciliation to entity net profit is
presented below.
Income statement
26 weeks ended 30 Sep 26 weeks ended 1 Oct
2017 2016
UK & Australia Un-allocated Total UK & Australia Un-allocated Total
Europe central Europe central
expenses expenses
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ---------- ------------- -------- ---------- ---------- ------------- --------
Revenue 130,690 58,795 - 189,485 112,082 41,323 - 153,405
Underlying
operating
profit 12,498 6,364 (665) 18,197 10,812 4,141 (546) 14,407
Non-underlying
operating
items (2,743) (278) (29) (3,050) (1,578) (368) - (1,946)
Exceptional
operating
items (1,458) (86) (737) (2,281) - - (494) (494)
Operating
profit 8,297 6,000 (1,431) 12,866 9,234 3,773 (1,040) 11,967
Underlying
finance costs (2,747) (2,116)
Non-underlying
finance costs (1,333) (1,470)
Profit before
tax 8,786 8,381
Tax (2,830) (2,407)
--------------------- ======== ========== ============= ======== ========== ========== ============= ========
Profit for
the period 5,956 5,974
--------------------- -------- ---------- ------------- -------- ---------- ---------- ------------- --------
Management information is reviewed on a segmental basis
to operating profit.
Other segmental
information
26 weeks ended 26 weeks ended
30 September 2017 1 October 2016
UK & Australia Total UK & Australia Total
Europe Europe
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ---------- ------------- -------- ---------- ----------
Depreciation 4,911 1,513 6,424 4,612 1,217 5,829
Amortisation
of acquisition
intangibles 2,772 278 3,050 1,578 368 1,946
7,683 1,791 9,474 6,190 1,585 7,775
--------------------- -------- ---------- ------------- -------- ---------- ----------
26 weeks ended 26 weeks ended
30 September 2017 1 October 2016
UK & Australia Total UK & Australia Total
Europe Europe
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------- -------- ---------- ------------- -------- ---------- ----------
Capital expenditure 6,047 890 6,937 5,092 938 6,030
--------------------- -------- ---------- ------------- -------- ---------- ----------
4 Exceptional Items
26 Weeks 26 Weeks
ended ended
30 Sep 1 Oct
2017 2016
GBP000 GBP000
------------------------- --------------------- ----------------
(a) Acquisition related
costs 440 494
(b) Reorganisation
costs 1,841 -----
Exceptional items 2,281 494
----------------------------- --------------------- ----------------
All exceptional items are classified within
administrative expenses.
(a) Professional fees in connection with prospecting
acquisitions during the period.
(b) Reorganisation costs comprise various fees incurred
to date in relation to reviewing the Group's manufacturing
and logistics operations, as well as other corporate
restructuring.
5 Finance Costs
2017 2016
GBP000 GBP000
------------------------------------------ ------- -------
Interest payable on bank loans and
overdrafts 1,675 1,253
Cash interest payable on BGF loan 500 500
Interest payable on Hire Purchase
and Finance Leases 31 32
Total interest payable on loans 2,206 1,785
Amortisation of prepaid finance costs 306 202
Interest rolled up into BGF loan 97 72
Net interest expense on defined benefit
pensions 138 57
------------------------------------------- ------- -------
Underlying interest costs 2,747 2,116
(a) BGF loan and option, redemption
premium charge 115 90
(b) Unwinding of present value of
deferred and contingent earn-out
liabilities 1,261 1,317
(c) Mark to market adjustment on
foreign exchange forward contracts (43) 63
4,080 3,586
------------------------------------------ ------- -------
(a) Non-cash annual cost of the redemption
premium in relation to the BGF loan and
option.
(b) Deferred and contingent consideration in
respect to acquisitions is measured under IFRS
3, initially at fair value discounted for the
time value of money. The present value is then
remeasured at each half-year and year-end in
relation to the unwind of this discount. In
addition, any changes to contingent earn-outs
arising from actual and forecast business performance
are reflected. All such adjustments are non-cash
items.
(c) Non-cash fair value adjustment
on foreign exchange forward contracts.
6 Tax
2017 2016
GBP000 GBP000
------------------------------------ ------- --------
Current tax
- Current year UK 1,594 2,392
- Current year overseas 2,075 1,187
3,669 3,579
------------------------------------ ------- --------
Deferred Tax
- Credit recognised in the current
year (839) (1,236)
- Adjustments in respect of prior
years - 64
(839) (1,172)
------------------------------------ ------- --------
Total tax charge 2,830 2,407
------------------------------------- ------- --------
The overall effective corporation tax rate
on underlying profit before tax is 22.9%
(2016: 22.8%), representing the best estimate
of the weighted average annual corporation
tax rate expected for the full financial
year.
7 Earnings per share
The calculation of the basic, adjusted and diluted
earnings per share is based on the following data:
Basic Adjusted Basic Adjusted
2017 2017 2016 2016
GBP000 GBP000 GBP000 GBP000
--------------------------------------- ------- --------- ----------- -----------
Profit attributable to ordinary
equity holders of the parent
entity 5,956 5,956 5,974 5,974
Exceptional items:
Amortisation of acquired
intangibles - 3,050 - 1,946
Acquisition related cost - 440 - 494
Reorganisation costs - 1,841 - -
BGF loan and option, redemption
premium charge - 115 - 90
Deferred and contingent consideration
fair value adjustments - 1,261 - 1,317
Mark to market adjustment
on foreign exchange forward
contracts - (43) - 63
Tax effect on adjusted items
where applicable - (706) - (395)
Earnings for the purpose
of basic and adjusted earnings
per share 5,956 11,914 5,974 9,489
---------------------------------------- ------- --------- ----------- -----------
Weighted average number of
shares
2017 2016
Number Number
of shares of shares
(000's) (000's)
Weighted average number of shares for
the purpose of basic and adjusted earnings
per share 90,969 90,967
Effect of dilutive potential
ordinary shares:
BGF share options 3,266 2,973
Weighted average number of ordinary shares
for the purposes of diluted earnings
per share 94,235 93,940
------------------------------------------------------------ ----------- -----------
The potential dilutive effect of the share options
has been calculated in accordance with IAS 33 using
the average share price in the period.
The Group's earnings per
share are as follows:
2017 2016
Pence Pence
--------------------------------------- ------- --------- ----------- -----------
Earnings per share
Basic adjusted earnings per
share 13.10 10.43
Diluted adjusted earnings
per share 12.64 10.10
Basic earnings per share 6.55 6.57
Diluted(1) earnings per share 6.44 6.46
---------------------------------------- ------- --------- ----------- -----------
(1) Earnings for the purpose of diluted (basic)
earnings per share have been adjusted to add back
the Business Growth Fund ('BGF') redemption premium
charge as this cost is only incurred if the BGF
share options are not exercised.
8 Rates of exchange
The results of the Group's overseas subsidiaries
have been translated into Sterling at the average
exchange rates prevailing during the periods. The
balance sheets are translated at the exchange rates
prevailing at the period ends:
26 26 52
Weeks Weeks weeks
ended ended ended
30 1 1
Sep Oct April
2017 2016 2017
------------------------------- ---- --------- -------- --------
Australia (A$) -
average rate 1.6805 1.8196 1.7435
Australia (A$) -
period end 1.7104 1.6942 1.6448
Euro (EUR) - average
rate 1.1417 n.a 1.1785
Euro (EUR) - period
end 1.1341 n.a 1.1777
----------------------------------------- --------- -------- --------
9 Risks and uncertainties
The Board continuously assesses and monitors the
key risks of the business. The key risks that could
affect the Group's medium term performance and the
factors which mitigate these risks have not changed
from those set out on page 11 of the Group's 2017
Annual Report, a copy of which is available on the
Group's website - www.victoriaplc.com. The Chairman's
Statement includes consideration of uncertainties
affecting the Group in the remaining six months of
the year.
On behalf of the Board
Geoffrey Wilding
Chairman
27 November 2017
The company news service from the London Stock Exchange
END
IR GMMZMGNFGNZZ
(END) Dow Jones Newswires
November 28, 2017 02:01 ET (07:01 GMT)
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