Carpet group posts half year sales decline

Victoria PLC, the international designers, manufacturers and distributors of innovative flooring, has announced a decline in half year sales.

According to its half year-report for the six months ended 30 September 2023, total sales were down 4.1% to £643.4m from £771.5m, while underlying EBITDA resulted at £95.8m, down from £100.1m.

Underlying EBITDA margin improved 100bps to 14.9%, compared to the prior six-month period (H2 FY23), resulting in an increase of 0.7% in Underlying EBITDA (in constant currency) to £95.8m. Pre-tax losses stood at £19.2m, down from a profit of £53.1m.

A key contributing factor to H1 FY24 margin improvement, was the relocation of significant manufacturing to Victoria’s modernised UK factories, delivering “much-enhanced productivity, lower logistics costs and improved customer service”.

Geoff Wilding, Executive Chairman of Victoria PLC commented: “Our H1 performance was in line with management expectations with softer demand offset by higher margins beginning to come through from the reorganisation programme started 18 months ago.

“A key contributing factor to this margin improvement, and as described in the Reorganisation projects, was the relocation of significant manufacturing to our modernised UK factories, delivering much-enhanced productivity, lower logistics costs and improved customer service.

“The remainder of the year continues to look more challenging with ongoing lower demand maintaining pressure on top line sales, alongside inflation edging up raw material input costs. Accordingly, the Board now expects the resulting impact of these headwinds to slightly more than offset the c. £20m EBITDA benefit from the previously announced reorganisation programme. Nevertheless, thanks to the extensive reorganisation Victoria has undertaken over the last 24 months, the business is far better prepared to meet these challenges.”

Victoria has also announced that Zachary Sternberg is leaving Victoria’s board after five years as a non-executive director in order to rebalance his time commitments.

Geoff Wilding, Chairman, commented: “During Zach’s time at Victoria, the Group has grown from a mid-sized flooring manufacturer to a global flooring group with current annual revenues of nearly £1.5 billion and 6,750 employees. In line with this growth, we recognise our obligations under the QCA Corporate Governance Code to ensure our board has an appropriate number of independent and non-executive directors. To that end we are engaging in a formal search to strengthen the Board and ensure we have the necessary skills and knowledge to lead the Company in its next stage of growth.

“I’ve enjoyed working with Zach a great deal over the last five years and his participation in our board discussions has been invaluable. The Board, and myself personally, would like to sincerely thank Zach for his contribution.”

Zach Sternberg, said: “I have enjoyed my time working with the board at Victoria, and as I rebalance my own time commitments, I am happy to leave with such significant shareholders remaining on the board.”

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