Victoria PLC the international designers, manufacturers and distributors of floorcoverings which has its headquarters in Kidderminster, is continuing to takeadvantage of difficult market conditions to actively pursue market share.
In a statement released today, the Board says it recognises this approach, which impacted earnings this year, has unsettled some shareholders but believes it to be in the best long-term interests of the Group and its shareholders.
The Group expects that the current-year to March 2019 EBITDA (Earnings before interest, tax, depreciation and amortization)is likely to be £95m-£97 million (2018: £64.7m), with the Group’s 2019 underlying pre-tax profits being around 35-39% higher than 2018 (2018: £40.8m).
Across markets that the Board believes are down 6-8% in the UK and Australia and flat in Europe, the Group has continued to grow overall like-for-like revenues and gain market share by winning new retailers as customers from competitors and securing a greater share of expenditure from existing customers of Victoria.
This growth has, as expected, come at a short-term cost with the introduction of lower margin, volume products.
Victoria says it has also temporarily absorbed, rather than passed on, substantial increases in underlay raw material prices in recent months and some large one-off costs associated with the consolidation of the Group’s UK logistics operations.
The Board says the key now is to ensure margins continue to increase. In the November announcement the Group referenced plans to recover some margin gains temporarily foregone in the drive for top-line growth. Almost all these actions Victoria planned to take to increase margins have now been successfully completed.
The Board says it expects these actions to materially enhance earnings in the coming 2020 financial year.