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,' the 'Company,' or the 'Group')
Full Year Trading Update
Results Ahead of Market Expectations
Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, provides the following positive trading update:
The Board is pleased to announce that, for the fifth consecutive year, the Group's revenue and underlying profit before tax are expected to be ahead of consensus market expectations for the financial year ended 31 March 2018.
The Group's performance, driven by the strong operational management team, has continued to deliver like-for-like growth, gains in market share, plus operational synergies. This has included the previously announced rationalisation of the UK manufacturing facilities, which has positively impacted gross profit margin and reduced overheads since being implemented during the financial year. The trading performance of the two ceramics businesses acquired in late 2017 has also been encouraging and consistent with expectations.
Victoria remains focused on its mission to create wealth for shareholders.
In line with the Group's strategy to diversify both geographically and by product category, nearly 60% of the Group's earnings are now generated from outside the UK and are spread across several categories of flooring including carpets, ceramics, underlay, and LVT. This geographic and product diversification, coupled with the low operational gearing inherent in the business, reduces the Group's overall operational risk.
Ongoing operational improvements in logistics, procurement, and production efficiencies are expected to continue to deliver further organic earnings growth over the coming 12 months.
Additionally, the Board of Victoria has invested a significant amount of management focus during the past year identifying additional suitable acquisition opportunities. Shareholders should anticipate further acquisition-led growth focussed on Europe.
Geoff Wilding, Executive Chairman, commented:
"We are now seeing the clear benefits of our strategy to develop a broadly based, resilient flooring business, where operational and manufacturing synergies lower costs, whilst also providing a robust platform for organic and acquisitive growth. This is in no small part due to the excellence of our wider senior management teams who continue to drive the business and create opportunities to grow market share while maintaining margins.
The Board is encouraged by 2018 trading to date. Together with progress on ongoing internal initiatives to deliver synergies and revenue growth, and the very attractive acquisition prospects already identified, the Board is confident it will deliver another year of significant, earnings-accretive growth in the 2018/19 financial year."
Date of Preliminary Results
The Board of Victoria expect to announce the Group's preliminary results for the year ended 31 March 2018 in July 2018.
... glad I topped up yesterday and over the last week!
I think the Carpetright situation has stablised which was unsettling the markets but would have no major affect on the group. They might lose money if Carpetright go under owing the group money, but I would guess that most of the debt would be insured and there is more profit margin in supplying carpets to smaller retailers than to big companies.
Mr Wilding has already said the sales are still strong for the group and and the drop is near to the bottom if not there yet. I can't see them going below 700-710 at worst.
I'm sure there will be more acquisitions before too long and probably tile manufactures in europe now that they have seen the profit potential out there.
I believe will be seeing new highs in the share price by summer time!
Agreed. Carpetright is suffering for company specific reasons. Also worth noting that if there are general concerns about the UK market and what that means for VCP, over half of VCP's profits come from outside the UK now.
I do love the sound of another Capital Markets Day for Vic. There's always a little surge in the price over the next week or so!
The Board of Victoria PLC (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, is today holding a capital markets day for investors and analysts at the Company's recently acquired Keraben Grupo, S.A., European ceramic tile business based near Valencia in Spain.
The visit will enable attendees to see first-hand how well-invested Keraben's operations is - and to better understand the business' strategy, commercial positioning, manufacturing and distribution processes. It will also provide an opportunity to discuss the business with members of the senior team other than the Board and to understand in more detail how the Group is managed and controlled.
And for those spooked by the Carpetright bad trading update ...
The Group experienced very good levels of trading in the important December quarter, which has continued into the New Year, and looks forward to providing its usual trading update in April 2018.
Some positive recent press and research over last few days. VCP tipped (again) by Midas on Mail on Sunday yesterday and also in today's Growth Company Investor. Article in Small Company Sharewatch today is also positive about the two latest acquisitions and future prospects and endorses Berenberg's £9.50 price target.
The Board of Victoria PLC (the "Company") (LSE: VCP) the international designers, manufacturers and distributors of innovative floorcoverings, notes the press speculation surrounding the potential sale process of Keraben Grupo, S.A., a European ceramic tile manufacturing business, being undertaken by the current owners (the "Potential Acquisition").
The Board has previously stated that it is part of its growth strategy to make highly selective acquisitions and therefore it is frequently in discussions with a number of parties. The Board can confirm that it is evaluating a number of opportunities including this one.
In the event that the Potential Acquisition were to proceed it would be classified as a Substantial Transaction for the purposes of the AIM Rules for Companies. However, there is no guarantee that it will proceed.
A further announcement will be made in due course as appropriate.
Well todays news, has certainly pushed VCP and broke through to a new all time high.
I am always nervous when price of shares march ahead without any apparent reason , as I always think they also could tumble, twice as fast, so now this acquisition has been announced, looks like the market likes it.
Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, is pleased to announce it has agreed to acquire Italian ceramic flooring manufacturer, Ceramiche Serra S.p.A. ("Serra") (the "Acquisition"), for cash consideration of up to 56.5 million (£50.4 million) (the "Total Consideration"), net of cash acquired as part of the Acquisition, to be funded from the Company's cash reserves and existing debt facilities.
36.5 million (£32.6 million) of the Total Consideration is to be paid on completion, with the balance of 20.0 million (£17.8 million) (the "Contingent Consideration") to be paid over the next four years, subject to the business meeting annual targets in earnings before interest, tax, depreciation and amortisation ("EBITDA").
The Acquisition will be immediately and significantly earnings accretive on completion.
"Positive note in latest Growth Company Investor where they reiterate their buy recommendation. Article reads:
"Carpets and floor coverings specialist Victoria delivered
an excellent set of results for the year to March. Revenue
growth of 25 per cent was outstripped by earnings per share
growth of an impressive 50 per cent. The shares have been
a terrific recommendation and, having spoken to
management, were convinced theres plenty more to go for.
An important influence on last years results was the 1.2
percentage point gain in EBITDA margin, which rose to 13.8
per cent. Management has a 16 per cent target, and its
reasonable to expect them to hit this on a three-year view.
Each 1 per cent gain in margin is worth 12.5 per cent to the
So theres still good organic growth to come. But the major
part of the story remains the strategy of using the prodigious
cash flow generated by carpet manufacturing and
distribution to make acquisitions. Chairman Geoff Wilding
points out that the European flooring market is five times the
size of the UKs, with literally dozens of family-owned
companies. He has compiled a shortlist of targets and is
engaged in active discussions, so we should expect further
accretive acquisitions before much longer.
Theres scope to acquire £30 million of EBITDA by gearing
up to the companys self-imposed debt ceiling. The shares
are on a p/e of around 20 times this year, falling to 18 times
in March 2019. However, its reasonable to expect Victoria
to outperform brokers margin assumptions and its almost
certain that it will make more than one earnings-enhancing
acquisition in this time frame."
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