Victoria reports 'very strong' trading as it mitigates cost rises

(Sharecast News) - Flooring company Victoria updated the market on its trading on Tuesday, reporting that it continued to be "very strong" across all of its geographies and product groups, with double-digit percentage increases over 2019.
The AIM-traded firm quipped that 2020 comparatives were "meaningless", due to the complete lockdowns covering the same period last year.

It said that encouragingly, leading indicators such as housing transactions, savings rates, and consumer confidence suggested that the current high levels of consumer demand for its products would be sustained for the foreseeable future.

The company said it had been able to mitigate the inflation recently seen globally in certain raw material prices through a combination of selling price increases and supplier negotiations, though it expected the inflation to be only transitory.

Additionally, the group said it was "very pleased" with the post-completion performance of its recently-announced acquisitions.

It said its management team was now fully engaged integrating those businesses into its existing operations, adding that it was confident that the acquired businesses would have a "meaningful positive impact" on its earnings and free cash flow in the current financial year.

Work was continuing on further acquisition opportunities, with the board saying it expected to report additional acquisition-led growth in the short-term.

Following the Koch Equity Development preferred equity investment in November and the subsequent bond issue in February and March, Victoria said it had a "significant" amount of capital ready to deploy for acquisitions and expected to do so, while maintaining its stated financial policy.

"In my 30 years in the industry, I have never known it to be busier at this time of the year," said chief executive officer Philippe Hamers.

"Our continually enhanced service proposition has proven to be the cornerstone of the Company's growth trajectory.

"Victoria's production is running at full capacity and some of our factories have orders taking all their output through until autumn."

Hamers said the company was outsourcing some production, to ensure service standards were met and market share gains sustained.

"The value of our management team's depth of industry experience and entrepreneurial initiative has proven invaluable as we have been able to overcome the risk of potential raw material shortages by leveraging our long-term relationships, size, and extensive knowledge of supply chain options.

"I am confident shareholders will be very pleased with the way the business is performing this year."

Victoria said it would announce its preliminary results for year ended 3 April on 20 July.

At 0904 BST, shares in Victoria were up 2.99% at 1,035p.