Victoria Share News (VCP)

(Sharecast News) - Floor coverings manufacturer and distributor Victoria reported a 2% dip in first-half pre-tax profit on Tuesday despite a rise in revenue as it took a hit from increased interest costs from its bond offering earlier in the year.
In the half-year to 28 September, underlying pre-tax profit nudged down to £27.5m from £28.2m in the first half of last year, while revenue increased 16% to £315.9m.

The company attributed the decline in profit to higher interest costs from the recent bond issue and the additional borrowings following the acquisition of Spanish tile maker Saloni in August last year, along with the accounting impact of IFRS 16.

Victoria said net debt rose to £364.3m from £342.7m the year before, which represents 3.3x earnings before interest, taxes, depreciation and amortisation.

Executive chairman Geoff Wilding said: "Victoria has delivered both revenue growth and margin growth in the first half of our 2020 financial year, in challenging market conditions. Alongside these organic-led gains, we also made a small acquisition in Spain, which, following completion of its integration in the first quarter of next year, is expected to contribute meaningful earnings to Victoria due to operational synergies that will result from the integration.

"We were also pleased to successfully complete our bond issue in July, as this provides the group with secure, long-term financing to support our continued organic and acquisition-based growth."

In July, Victoria completed a €330m bond offering in order to repay its existing bank debt and for general corporate purposes.

At 1300 GMT, the shares were down 6.2% at 394p.