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21 Apr 2021 07:00
For Immediate Release
| 21 April 2021 |
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Victoria PLC
('Victoria', the 'Company', or the 'Group')
Acquisitions of Ceramica Colli, Vallelunga and Ceramiche Santa Maria
The Board of Victoria PLC (LSE:VCP), the international designers, manufacturers and distributors of innovative floorcovering is delighted to announce that it has concluded the purchase of the assets and business of ceramic tile distributors, Ceramica Colli and Vallelunga, and the shares of ceramic tile manufacturer, Ceramiche Santa Maria. Located near Victoria's existing Italian operations, these successful, growing brands also bring significant additional spare production capacity. As a result, they will not only provide an immediate earnings contribution to the Group in their own right, but will enable continued profitable growth at Victoria's already established Italian business through the utilisation of that spare production capacity.
These acquisitions follow Victoria's recent announcement of the very strong growth that has been achieved by the Group's Italian business. It has recently been operating at full capacity with some production again being outsourced to third parties in order to meet customer demand. We advised shareholders that Victoria was actively looking at opportunities to expand further our production capacity in Italy via a repeat of the highly successful February 2020 acquisition of the factory, plant, and brands of Ceramiche Ascot. The acquisitions announced today achieve that outcome, alleviating production constraints and giving Victoria's Italian business the opportunity for further growth.
Total consideration (on a debt-free, cash-free basis) is c. €35 million and will be funded from the Company's existing resources. The acquisitions are expected to add not less than €10 million per annum of EBITDA in the next 12 months. Once full integration is completed, which is planned by the end of the financial year, the earnings contribution is expected to increase further. This increase will largely come from the insourcing of tile production that is currently outsourced due to lack of capacity, plus capitalising on the new brands to drive revenue growth.
Executive Chairman Geoff Wilding commenting on the acquisitions said "International demand for the ceramic tiles produced by our Italian business continues to grow at a remarkable rate due to the successful blend of quality, style, and value. The use of a high proportion of recycled raw materials in the tiles has proven attractive to consumers. However, maintaining service levels for our customers has, in recent months, required the business to outsource production to third parties to meet the ever-increasing demand. This is expensive in terms of margin forgone - and is addressed by this acquisition.
This is the first - and smallest - of several acquisitions we expect to conclude over the weeks and months ahead. Nevertheless, we are delighted to have acquired these businesses, which are immediately earnings accretive, but will also enable our Italian business to continue its growth and create value for shareholders."
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