Victoria sweeps flooring market woes under the carpet
Victoria has insisted a “normalisation” of flooring demand is “moving closer” despite full-year profit and revenue tumbling.
Underlying profit before tax dipped from £76.9m to £27.1m, alongside a 14 per cent fall in revenue to £1.23bn, as macro-economic factors impacted consumer spend on flooring.
Underlying earnings before interest, taxation, depreciation and amortization (EBITDA) also fell from £196m to £160.7m. However, Victoria argued it still “outperformed” the wider flooring market in “several of its key geographies.”
“Whilst we remain cautious about near-term trading conditions and cannot predict precisely when demand will normalise, we are (logically) continually moving closer to that point,” Geoff Wilding, Executive Chairman of Victoria, said.
“As interest rates fall, housing transactions and deferred residential renovation, improvement and repair purchases will rebound, driving flooring demand.”
He added: “We expect the market outperformance and productivity improvements secured over the last 24 months to then be rapidly reflected in Victoria’s earnings and cash flow. Until this occurs, we remain focussed on minimising controllable costs and driving market share gains.”
Originally founded in 1895 from a small factory weaving tapestry carpets in Scotland’s Kirkcaldy, London-listed Victoria has become a leading international flooring supplier, employing around 7,300 people.
But it has suffered a torrid 12 months, with shares down over 70 per cent amid a huge drop in demand due to high interest rates and inflation and a slowdown in house buying.
It also faced scandal in September as auditors at Grant Thornton warned there were “risk factors of fraud” as well as “potential irregularities” regarding certain transactions at its subsidiary Hanover Flooring.
It said afterward the board had “immediately moved to comprehensively address the issues” and today’s report confirmed there was no financial misconduct, no money was lost and all payments were received.
Prior to the results, the company had forecast the drop in revenue and EBITDA