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LONDON (Alliance News) - Carpets and floor coverings manufacturer and distributor Victoria PLC Friday said it swung to a pretax profit in its last financial year as revenue rose, it cut costs and booked a gain on the sale of properties, and it said it was encouraged about its outlook as the economic recovery improves consumer confidence.
The company, which operates in the UK and Australia, was hit hard by the economic downturn that followed the financial crisis as consumer spending dried up. Over the past year it has focused on cutting costs and improving its cash position.
That focus has paid off, as it reported a pretax profit of GBP2.3 million in the year to March 29, compared with the GBP3.3 million loss it reported a year earlier. Its revenue rose to GBP71.4 million, from GBP70.9 million, and it slashed its debt to GBP1.5 million at the end of the year, from GBP7.5 million a year earlier, thanks to improved cash generation.
"Much of the underlying improvement has come from a relentless day-to-day focus on costs, margins, and sales growth," Chairman Geoff Wilding said in a statement.
It also booked a GBP3.3 million profit on the sale of properties after selling and leasing back some of its properties in the UK and Australia.
Still, it said it had decided not to pay a dividend for its last financial year after paying a special dividend of GBP2.92 a share in July as part of a deal that saw Camden Holdings Ltd, a company owned by a trust in which Wilding is the settler and discretionary beneficiary, take a 50% stake in the company.
"The board would like to send a clear signal to shareholders of the company's commitment to paying dividends as part of its plan to create wealth for shareholders and it is intended to recommence dividends next year," Victoria said in its statement.
Wilding said the company is encouraged by its outlook, with the UK residential property market showing signs of increased consumer confidence.
Like-for-like growth in the UK, excluding recent acquisition Westex, was 1.7% to GBP28.2 million in the last financial year, it said. The existing UK operations also posted earnings before interest and tax of GBP403,000, a steep improvement from the GBP1.8 million loss posted a year earlier.
"The Australian market is also showing signs of economic improvement, which will, in time, translate into consumer confidence and increased demand for carpet," he said.
The improvement in Victoria's financial position was despite its acquisition of UK tufted carpet maker Westex in November last year for an initial GBP16 million in cash. It said Friday that Westex had been "seamlessly integrated" and was significantly boosting group earnings.
Westex's EBIT rose to GBP4.5 million in fiscal 2014, from GBP3.7 million in 2013.
Victoria shares were up 11.1% at 200.00 pence Friday morning, one of the biggest gainers on the AIM All-Share index.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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