Last checked at 26 Apr 2012 07:00
26 April 2012
Victoria PLC
Trading Update
Victoria PLC ('Victoria' or 'Company'), a leading international manufacturer, supplier and distributor of contemporary design-led carpets, carpet tiles and other floorcoverings, today announces the following trading update.
Since the release of the Company's last Interim Management Statement on 6 February 2012, trading conditions in Victoria's two main market areas of Australasia and the United Kingdom have remained extremely challenging.
Revenue in Australia was down in the last quarter of the Company's financial year by 9.6% in local currency and by 2.6% in Sterling terms. Whilst the softening of trading conditions in Australasia was seen for the first time in recent years in Q3, there was a further rapid and significant softening of market conditions in February and March 2012, as consumers saved more and reduced spending on discretionary items such as floor coverings.
Despite the difficult trading conditions, the United Kingdom business, including the Republic of Ireland, finished with a strong Q4 in the financial year ended 31 March 2012, with revenues up 12% in constant currency terms. The insurance replacement market continued to perform well and there was a good finish to the year in both export and home contract markets, with robust sales to the hospitality sector.
The Board anticipatesthat pre-tax profit (pre-exceptional items) for the year ended 31 March 2012 will be in line with the market forecasts that were published prior to the sales process in January 2012.
Exceptional non-recurring costs of circa £0.7m will be charged in the 2011/12 financial year, relating to the restructuring of the Group's Irish businesses and costs associated with both the recent General Meeting and the formal sales process. Borrowing levels at the year-end for the Group were below those originally forecast, but will increase again in the first half of the new financial year with the build up of inventory and marketing spend to support major new range launches in both the UK and Australia.
Trading conditions in the UK and Australia are likely to remain very challenging. The Board believes that the changes in consumer taste in the Australasian market over the past year, away from wool carpets towards synthetic pile carpets, may be a permanent structural change. As a consequence, pre-emptive action has been taken to restructure the woollen spinning mills in Australia. The 'right-sizing' of the mills will give rise to material non-recurring costs in the first half of the new financial year.
Overall, the Board believes that the actions taken will position the Company well for the future and the business remains well placed to capitalise on opportunities when economic conditions improve.
Victoria will announce its preliminary results for the year ended 31 March 2012 in June 2012.
Enquiries:
Victoria PLC
Alan Bullock, Group Managing Director
Ian Davies, Group Finance Director
Tel: +44 (0)1562 749300
Brunswick Group
Kate Holgate
Mazar Masud
Tel: +44 (0)20 7404 5959
Notes to editors
Victoria PLC
Victoria PLC is a leading international manufacturer, supplier and distributor of contemporary design-led carpets, carpet tiles and other floorcoverings. It was originally founded in 1895 from a small factory weaving tapestry carpets in Victoria Road, Kirkcaldy, Scotland, and aims to be the leading quality floorcovering brand in Australasia and the United Kingdom.