Victoria reports 'solid' trading despite ongoing Australia lockdowns

(Sharecast News) - Flooring designer and manufacturer Victoria said in an update on Tuesday that its recent trading had been "solid", with consumers continuing to invest in their homes and commercial demand for flooring returning.
The AIM-traded firm, which was holding its annual general meeting, said year-to-date revenues were around 70% ahead of the same period last year, or 50% on a like-for-like basis excluding the impact of acquisitions, and were more than 50% ahead of the same period in 2019.

That growth was despite the extended and ongoing lockdowns in Australia that had materially affected sales in that division, which normally makes up around 15% of group revenues.

Inflationary pressures on raw materials experienced earlier in the year had abated somewhat, the board said, although at the time it took action to broadly maintain operating margins.

The group's investment in its UK logistics operation was paying dividends, the directors added, with the "superior service" Victoria provided driving an increased share-of-wallet.

Its acquisitions in Italy, the Netherlands and the United States, as announced earlier in the year were performing in line with expectations.

"The synergies being realised as the operational integration moves forward in Italy are better than expected by management," the board said in its statement.

"It has become clear that, with the completion of some minor upgrades, the clay atomisers acquired as part of Santa Maria will be capable of servicing more production than anticipated, reducing the cost of clay, the single-most important raw material in a ceramic tile."

Work was already underway, meanwhile, to distribute certain products manufactured in the group's European factories into the US via the Cali online business.

"Consumer demand for Cali's unique luxury vinyl tile (LVT) products continues to exceed management expectations.

"Consequently, LVT sales now amount to more than 10% of group revenues."

Victoria said the continued growth of its artificial grass business, where annual revenues now exceeded €80m, with the addition of the most premium brands in the product category in Royal Grass and Edel Grass, had enabled some margin-enhancing vertical integration in fibre extrusion.

"There is further strong growth potential with this product category as consumer demand continues to grow.

"The group continues to be involved in active negotiations on several high quality, value-creating acquisition opportunities, and has the capital in place to execute on them."

Victoria said it would provide a full update on trading for the 26 weeks to 2 October with its interim results in November.

At 1135 BST, shares in Victoria were up 1.33% at 1,064p.