Express & Star

Carpet and floorings group Victoria hails fifth year of growing sales and profits

Profits and revenue at Kidderminster-based flooring group Victoria will be ahead of market expectations for the fifth year in a row, it revealed today.

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The headquarters of floorings group Victoria in Kidderminster

In a trading update for the year to the end of March, the company said its performance had "continued to deliver like-for-like growth, gains in market share, plus operational synergies".

Executive chairman Geoff Wilding said: ""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."

The last year has seen Victoria see the impact of 2016's move to rationalise its UK manufacturing facilities, closing its factory operations in Kidderminster after more than a century.

It left around 150 still working at Kidderminster, which remains the company headquarters and centre of product development, with new warehousing and showroom facilities.

The company said the reorganisation had a positive impact on Victoria's gross profit margin and reduced overheads.

Carpets are now just part of the offering from floorings group Victoria

Victoria said: "The trading performance of the two ceramics businesses acquired in late 2017 has also been encouraging and consistent with expectations."

The 122-year-old group paid £246.5m for Spanish tiling company Grupo Keraben and £50m for Italy’s Ceramiche Serra.

The group's aggressive expansion over recent years means it now generates nearly 60 per cent of its earnings outside the UK, across carpets, ceramic tiling, underlay and LVT - luxury vinyl tiles.

"This geographic and product diversification, coupled with the low operational gearing inherent in the business, reduces the group's overall operational risk," said Victoria.

"Ongoing operational improvements in logistics, procurement, and production efficiencies are expected to continue to deliver further organic earnings growth over the coming 12 months."

Meanwhile the carpet company remains on the takeover trail: "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.

The full figures for the year to the end of March are due to be published in July.