Victoria Regulatory News (VCP)

Victoria PLC

('Victoria,' the 'Company,' or the 'Group')

Result of Annual General Meeting

Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative floorcoverings, held its Annual General Meeting at 11.00 am today in its Registered Offices at Worcester Road, Kidderminster, Worcestershire, DY10 1JR. 

At the AGM, the Company's Chairman, Katherine Innes Ker, made the following statement:

"I am delighted to report another year of progress at Victoria with revenues up 9.4% to £77.13 million; pre-tax profits before non-recurring exceptional costs up 14.7% to £2.21 million; and basic adjusted earnings per share up 29.2% to 23.71p. This was achieved despite a difficult trading environment and substantial investment in new products ranges and channels to market.

Given this strong performance, the Board, as previously announced, recommended a final dividend payment of 7.0p, resulting in a total 2012 dividend of 10.5p per share. This is an increase of 16.7% over the prior year.

Following a strategic review, we have put in place a clear and achievable strategy for the Company which the Board believes will maximise returns for all shareholders and which is supported by all directors, including the former Non-executive Directors; Sir Bryan Nicholson, Geoffrey Wilding and Alexander Anton.

Victoria's ongoing strategy is to develop its Australian and UK businesses through sales growth, margin enhancement and a shift towards a distribution based business from its historic manufacturing and supply model. Corporate transactions will be considered where there are opportunities to generate accelerated returns to shareholders and the Board will work with its financial advisers to maximise shareholder value.

This year's AGM is unusual in that there has been a significant amount of disruption at Board level, leading to the resignations of the former Non-executive Directors.

In recent weeks significant differences arose between the former Non-executive Directors and the rest of the Board in relation to an incentive scheme which they had proposed for themselves. Their scheme incentivised them to break up the business within two years and would pay them 50% of any value created after shareholders had received a fairly low threshold of £3 per share. This means that shareholders would have paid them as much as 25% of the value that already exists in your Company. The former Non-executive Directors would have received such extraordinary rewards simply for being on the Board at the time of the sale, rather than for creating any additional value.

The Board took independent advice on the scheme, and rejected it because it was neither fair nor reasonable and ran contrary to best practice corporate governance. An alternative and fairer scheme, which we would have been able to recommend to shareholders, was proposed to them but this was rejected out of hand, as it failed to meet the expectations they had set for themselves. 

This issue had become so divisive that the Board no longer operated effectively and the three former Non-executive Directors left the Board. Alexander Anton and Geoffrey Wilding are now seeking to have themselves reinstated with the support of New Fortress Finance who has requisitioned a General Meeting to do so. 

It is noteworthy that, commenting on the former Directors' requisition, the UK Individual Shareholders Society, recently issued a communication supporting the Board's stance which said: "This seems to be an outrageous case of a few larger shareholders trying to gain financial advantage for themselves as opposed to benefiting all shareholders. Directors should act in the interests of all shareholders, not just in their personal interests, and they should not require these grossly excessive incentive arrangements to simply do their jobs to the best of their abilities as Non-executive Directors."

A third General Meeting of your company this year will be held in October and we will be posting a notice of this meeting shortly. 

We urge you to pay close attention to the reasons why we recommend that you do not support the two former Directors' return to the Board. There was no disagreement over the future direction of your Company, only about the terms demanded for the three Non-executive Directors remuneration. We conclude that Alexander Anton and Geoffrey Wilding both seek re-election and to replace me as Chairman to gain control of your Board and to gain for themselves the extraordinary rewards they seek. 

It is important that all shareholders use their votes so that they are not subjugated to the will of minority shareholders. We intend to do all we can to make sure that every shareholder understands what is in prospect and has the chance to have their say on the future stewardship of their Company."

Following concerns expressed by shareholders attending the meeting, Geoff Wilding was invited to address the meeting to explain the position of the former non-executive directors who are seeking re-election to the Board at the forthcoming General Meeting in October. Mr. Wilding made the following points to the meeting:

1. The incentive scheme that had previously been proposed has been abandoned. Should he and Alexander Anton be reappointed to the Board in October, they envisage a new incentive scheme being proposed which will have to be approved by the UKLA and put to a shareholder vote.

2. In response to a question as to whether he would be a non-executive director if reappointed, Mr. Wilding said that he envisaged becoming an executive director.

3. Mr. Wilding confirmed to the meeting that, if reappointed, his intention was to stay with the Company for a two year time period which he considered would be consistent with any new incentive scheme that may be proposed.

4. He declined to confirm that the Company would continue in its current form or that parts of the business would not eventually be sold.

The following resolutions were put to shareholders at the Company's Annual General Meeting:

The votes having been cast, all resolutions were approved with the exception of resolution seven and the re-elections of David Garman, Roger Hoyle, Alan Bullock and Barry Poynter who will cease to be directors of the Company with immediate effect. Alan Bullock and Barry Poynter continue in their executive roles as the Group's Managing Director and Managing Director of Australia.

In light of David Garman, Roger Hoyle, Alan Bullock and Barry Poynter not having been re-elected, the Board is made up of one director only. In order to ensure that the Board can conduct its business, pursuant to Article 104.1 of the Company's Articles of Association, the Chairman has appointed David Garman as a non-executive director with immediate effect.

- Ends -

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