20th Jun 2007 07:01
Victoria PLC20 June 2007 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Wednesday, 20 June 2007 Embargoed: 7.00am Victoria PLC Leading manufacturers of high quality carpets in the UK, Australia and Ireland 2007 Preliminary Results Victoria continues to win market share whilst increasing margin and profitability Focus on products, style, quality and innovation coupled with good service will continue to underpin growth • Group Revenue increased 6% to £55.43 million • Operating profit up 26% to £3.39 million • Profit before tax increased by 37% to £2.76 million • Adjusted Earnings per share (as per note 2) up 15% to 28.92p • Proposed Dividend 12.50p, up 9% • Net asset value per share increased by 4.3% to 417p • Net cash increase of £2.66 million • Good performance across most sectors against challenging economic conditions • Despite a decline in the overall market Victoria has taken market share from its competitors • New five-year service agreement with The John Lewis Partnership to warehouse, cut and deliver JLP branded carpets to its UK stores • New showroom facilities in Vancouver attracting the architect & design community "Despite the fact that the economic and trading conditions in our key marketshave remained tough and challenging the Group has made good progress on allfronts." "In the UK and Ireland we have produced a very strong performance when viewedagainst the state of the trade in general whilst, in Australia we managed to winmarket share once again against a difficult market and during a period ofconsolidation of the industry's two largest players. Our associate in Canada hashad another very successful year." "Our strategic approach is focused on growth, taking advantage of opportunitiesto exploit and build on our leading market position" "Although we are unlikely to see any real improvement in general overall marketconditions in the year ahead, the Board believe that Victoria has the structure,products and people in place to achieve the Group's objectives for the year andin particular to deliver an improved performance again within this new financialyear." Enquiries:Alan Bullock, Group Managing Director Fiona Tooley, DirectorIan Davies, Group Finance Director Keith Gabriel, Senior Account ManagerVictoria PLC Citigate Dewe RogersonToday: +44 (0) 207 638 9571 (until 11.30am) Today: +44 (0) 207 638 9571Thereafter: +44 (0) 1562 749640 Thereafter: +44 (0) 121 455 8370Mobile: +44 (0) 7785 325701 (AB) Mobile: +44 (0) 7785 703523 (FMT)www.victoria.plc.uk -2- Victoria PLC Preliminary Results for 52 weeks ended 31 March 2007 CHAIRMAN'S STATEMENTDespite the fact that the economic and trading conditions in the key markets inwhich our business operates have remained tough and indeed challenging, Ibelieve that the Group has made good progress on all fronts. Revenues from the Group's activities amounted to £55.43 million, an increase of6.0% on last year, whilst profit before tax increased by 37.3% to £2.76 million. EARNINGS & DIVIDENDBasic earnings per share increased by 24.1% from 23.30p to 28.92p and your Boardis recommending a dividend of 12.50p per share, an increase of 8.7% on lastyear. The dividend, which is subject to Shareholder approval at the Annual GeneralMeeting to be held on 24 July 2007, will be paid on 30 July 2007 to all memberson the Register at the close of business on 27 June 2007. OPERATIONSWhilst overall in the United Kingdom and Ireland demand from the residentialmarket has again remained subdued, we have produced a very strong performanceparticularly when viewed against the state of the trade in general. Revenues in the period increased by 7.0% from £29.65 million to £31.72 million.Operating profits were up by 80.91% to £1.56 million from £0.87 million lastyear and Profit before tax significantly improved by 130.7% from £0.53 millionto £1.22 million. In Australia, the market has for the second year in succession remaineddifficult. However, against a tough economic and trading environment, coupledwith the merger of the Industry's two largest carpet manufacturers, whichcreated both additional challenges and some opportunities, we again managed towin market share. Revenues from within the Australasian region improved from £22.64 million to£23.71 million, a 4.7% increase. This was, however, at the expense of marginwith operating profits down slightly from £2.22 million to £2.08 million(-6.29%), whilst Profit before tax was £1.81 million, 8.2% down on last year. In Canada, our associate company, Colin Campbell & Sons, had another verysuccessful year with sales moving forward by 16.2% to C$9.12 million and profitbefore tax up by 51.1% to C$0.59 million. PROPERTYA detailed planning application to develop the Company's former Sports Fieldsite in Kidderminster is close to being submitted to the Local Authority. Thepast year has been spent in satisfying planning matters which are a requirementif the detailed planning application is to succeed. The site will hopefullybecome, subject to final planning approval, an indoor and outdoor Bowling Centreof Excellence, a budget hotel and public house/restaurant. The net saleproceeds, subject to capital gains tax, are likely to be around £1.00 million. continued... -3- THE BOARDDuring the year, we have seen several changes to the Board. Firstly, Mark Lee the Group Finance Director left the Company in September 2006to pursue a career within a larger organisation. On behalf of everyone involvedwith Victoria, I would like to thank Mark for his efforts and commitment duringhis eight-year tenure and wish him every possible success in his new career. I would then like to welcome Ian Davies to the Board as our new Group FinanceDirector. I am sure that Ian will make a significant contribution to the Boardand to the future development and growth of the Group. Last, but not least, John Duncan retired from the Company on 30 April 2007having spent 37 years with Victoria Carpets in the UK, 11 years of which he waspart of the Group Board. John has been a great servant to the Group throughouthis career and he will be greatly missed by both his colleagues and the trade ingeneral. On behalf of the Board and the Shareholders may I wish John and hiswife Margaret a very happy and long retirement. Above all, I would also like tothank him for all he has done for the Company. EMPLOYEESThe continued good performance of the Group and its sound prospects for thefuture could not have been achieved without a committed and highly competentteam at all levels of the business. I take this opportunity to express mypersonal thanks to everyone in the Group for the efforts they have put intoachieving yet another successful year. PROSPECTSAlthough we are unlikely to see any real improvement in general overall marketconditions in the year ahead, the Board believe that we have the structure,products and people in place to achieve our objectives for the year and inparticular to deliver an improved performance again within this new financialyear. Bob GilbertChairman20 June 2007 -4- Victoria PLC Preliminary Results for 52 weeks ended 31 March 2007 GROUP MANAGING DIRECTOR'S - OPERATING REVIEW UNITED KINGDOMThe past twelve months in the UK have been extremely challenging with erraticmarket conditions prevailing. The market in the first half of the financial yearwas badly affected by the long, hot, dry spell of weather, which was hardlyconducive to consumers buying carpeting. The Autumn trading was then stronger,only to see the effects of higher energy costs and interest rate increasessapping consumer confidence after Christmas and through into the first quarterof 2007. Statistics have shown a 5% decline during the year in the market and yet despitethis backdrop, I am pleased to report that Victoria has performed well and hascontinued to take market share from its competitors. Carpet sales were up by 7.3% from £25.46 million to £27.32 million, primarilydriven by an extremely active programme of new range launches. As we stated atthe time of our interim results, there were nine new product introductions alonein the first half of our financial year, which undoubtedly helped us out-performthe market. Carpet sales in the UK were up from £21.69 million to £23.28 million, reflectingparticularly strong growth to The John Lewis Partnership (+20.9%), who remainour biggest customer. Sales to our core independent retail sector also saw goodgrowth (+7.9%) and, in fact, this sector remains key to our market strategy andwithin these results represents 63% of our total UK sales. Export sales also increased from £3.77 million to £4.04 million, a 7.2%improvement over last year. Operationally, Victoria Carpets has focused on maximising operationalefficiencies by making full use of the additional space created following theplanned closure of both the Axminster weaving and dyehouse in March 2005 andApril 2006 respectively. I am pleased to report that despite significant increases in energy costs, wehave seen a 14.8% reduction in the kWh of electricity used over the past twelvemonths as a direct result of investing in energy saving measures. Victoria Carpets' spend on both new ranges and 'Point-of-Sale' (POS)merchandising displays has again been kept at high levels throughout the year.Our investment in keeping product ranges fashionable and current is, we believe,keeping us ahead of our competitors and is in no small measure responsible forus growing our business within what is reported to be a declining market. continued... -5- Likewise, service remains a priority and at the forefront as we seek todifferentiate ourselves from the competition. Victoria has again been recognisedfor its efforts in this area when, for the fifth year in succession, we won theGreendale Flooring Award for 'Best Service Provider'. Greendale is perhaps theUK's foremost independent retail buying group and their members are veryimportant to us. We were also delighted at the same time to be awarded 'BestProduct' by the same buying group for our recently re-coloured Tudor TwistCollection which has proved to be a very successful range within our portfolio. During the year, Victoria entered into a new five-year service agreement withThe John Lewis Partnership (JLP). Under this agreement, we warehouse, cut anddeliver all of JLP branded carpet ranges to their UK store network. As part ofthis new service contract, Victoria has installed new IT Systems, which willlink all JLP stores on-line to our warehousing, thereby improving stock checkingand order processing. Victoria is rightly proud of its special relationship withJLP and we believe that this extension to our service agreement underpins thisrelationship. Looking ahead to the current financial year: Victoria has placed an order for anadditional 1/8th gauge tufting machine which is needed to meet demand. Victoriahas again an active programme of new product introductions planned for the firsthalf of 2007, which should enable us to continue to grow the business despitemarket conditions which are unlikely to show any real improvement in theshort-term. Westwood Yarns, the Group's UK spinner, has enjoyed a reasonably busy year withthe bulk of its yarn capacity being utilised in-house at Victoria Carpets. A newwhite blending line has been installed during the year, which is now enabling usto manufacture the very light white and beige shades of carpets that are sopopular with today's consumer, with less risk of contamination from eitherforeign coloured fibres or vegetable matter. We have also placed a contract with a specialist machinery manufacturer whichwill enable Westwood Yarns to manufacture plied yarns for the first time. Thenew equipment will be installed during summer 2007 and we expect it to beoperational in the second half of this new financial year. This enhancement at Westwood's plant will see overall yarn capacity increased byaround 10%. More importantly, it will enable them to supply Victoria with someof the premium value yarns that it currently has to outsource from the market,whilst also providing security of supply, further operational efficiencies andcost savings. AUSTRALIADuring the past year, the State economies of Queensland and Western Australiahave maintained a degree of buoyancy whilst the more populous States of Victoria& New South Wales have experienced little or no growth at all. New building starts have continued at a low level throughout the year, whilstspending on consumer durables such as carpets remained weak. Against this backdrop and in a year of contrasting halves, our Australianoperation recovered well from a weak first-half which saw net profits down byalmost 24% to record a net profit of A$4.50 million for the full year, just 4%down on the previous year's reported profits of A$4.70 million. This was arobust performance in a tough market and which was in-line with our budgetexpectations. continued... -6- Sales for the year were up by 9% from A$53.73 million to A$58.52 million. This,in a market which showed no real growth at all but which was assisted by theextremely positive reaction to both our new wool and synthetic ranges made on anew state-of-the-art level cut loop (LCL) tufting machine installed at Dandenongin late 2006. We have been particularly pleased with the general market reaction to ourincreased range of synthetic products which we have added to our productoffering during the year. Although we will still be remaining focused on thewool and wool-rich products, which are our core business, we will look tocontinue to develop our synthetic ranges. The acquisition by Godfrey Hirst of its major competitor Feltex in October 2006and the subsequent rationalisation of these two major Australian/New Zealandcarpet manufacturers has, as we anticipated, caused some market disruption. Ithas also presented us with additional sales opportunities as well as allowing usto identify and attract to our Australian operation some extremely talented keypersonnel from these leading players, which has substantially bolstered ourSales & Marketing team. Today, Victoria is now the number two producer of residential carpet inAustralia and, despite somewhat indifferent market conditions, our Australianbusiness continues to take market share from the competition. Our exports to New Zealand and Pacific Rim countries, particularly NorthAmerica, increased strongly by 18% in the year despite the continuing strengthof the Australian Dollar. The strength of the Australian currency, however, does have some implicationsfor the level of imported products being brought into the local market,particularly in view of the reduced import protection now afforded to Australianmanufacturers. Operationally, we have had a busy year in Australia. Carpet production levels at our Dandenong factory reached an all-time record inthe year, up by 13% on the previous record levels achieved last year. As well asadding to the tufting plant's capacity and flexibility with the installation ofa new LCL tufter, the main item of investment in plant and equipment during theyear was the installation of a completely new finishing oven at the Dandenongplant. This major project was executed and successfully completed in the summershut-down without any disruption to sales. The backing line has afforded usimproved productivity through increased line speeds, greater energy efficiencyand higher quality of finished carpet. Our two Spinning Mills at Bendigo and Castlemaine, both in the State of Victoria, operated below full capacity in the first half of the year and, whilst theywere better utilised during the second half, they still had some under utilisedcapacity. The performance of both Mills during the year was satisfactory andthey contributed well to the overall performance of the Australian operation. In accordance with the terms of our 2002 Purchase Agreement, when we acquiredthe Pacific Textiles Spinning Mill in Bendigo, we exercised the option toacquire the freehold of the land at the option price previously agreed of A$1.70million. This brought total capital expenditure made in Australia during thecourse of the year to A$3.90 million. continued... -7- We believe that our Australian business is well positioned to improve on itssolid performance achieved last year. Our continued investment in plant, newproduct development and quality people places us in a particularly strongposition to deal with the competition we experience within this marketplace fromAustralian and New Zealand manufacturers, as well as from growing imports. Whilst we are optimistic that we will this year once again out-perform themarket, it is likely that there will be no positive assistance from the economyin general, which remains flat and may continue to be so until after Federalelections are completed later this year. IRELANDOur Irish businesses are focused primarily on distribution to two differentsegments of the floor coverings market. Munster Carpets markets and sells mainlythrough the design & specification route targeting the commercial contractmarket. Navan Carpets on the other hand is marketing and selling principally tothe residential market through the independent retailers, as well as to thehotel industry. As is often the case, these markets run at different paces and are dependent onthe economic cycle, and this has certainly been the case in the year currentlyunder review. Over the past year, the Irish economy in general has been relatively robust,with a strong growth in GDP of around 6% per annum. This growth has flowed wellinto the commercial contract market for floor coverings and I am pleased toreport that Munster Carpets has exploited these market conditions well. Theirsales were up by 21% in volume, 31% in value and the margins on these sales werevery pleasing too, with net profits advancing by 48%. From a residential floor covering perspective, the pattern of trade in both theIrish and UK markets has been somewhat similar with the long hot summer of 2006badly affecting footfall through the retail shops. Despite the poor start to theyear, the Autumn trading season picked up well and, for the year as a whole,sales were up by 8%. The margins were, however, affected by the discontinuationof some ranges being cleared to make way for new product introductions. Overall, our combined Irish businesses produced a creditable performance withrevenues up by 15.3% and profit before tax up by 13.7%. The maturing Special Savings Incentive Accounts (SSIAs), a Government supportedtax-efficient savings scheme may give a boost to consumer confidence later in2007. Irrespective of whether or not this does flow through into additionalfloor covering sales in the forthcoming year, our Irish businesses still havefairly good prospects for organic growth with the strong programme of newproduct introductions planned for launch in the coming year. This shouldunderpin both sales revenues and profits in the year ahead. CANADAColin Campbell, our Canadian associate company, has enjoyed another verysuccessful year as their business continues to go from strength to strength. The Western Canadian economy in which Campbell's mainly operate has been buoyantfor a while now and its strength has been underpinned by both its wealth ofnatural resources and the Winter Olympics, which are to be held in BritishColumbia in 2010. continued... -8- Campbell's prime business is as a decorative supply house, 'trade-only showroom'supplying high quality floor coverings to interior designers and architects whoare dealing with both high-end residential and leading commercial clients. I ampleased to report that this part of the business has continued to perform welland during the second half of the year under review, Campbell's added anexclusive range of designer furniture to their product offering, whichrepresents the first step to providing a wider product assortment of homefurnishings. The business will of course continue to focus on broadloom,wall-to-wall carpeting, as well as area rugs for which the business has perhapsbeen better known. But we are confident that by adding other decorative items,such as furniture, we can further expand sales through the architects anddesigners who, in addition to specifying floor covering, also buy other items offurnishings. In September 2006, Campbell's opened innovative contemporary showrooms in theVancouver waterfront area. Taking a disused fish packer's warehouse, a leadingVancouver architect has created a fashionable and chic showroom which hasrapidly become a destination venue for British Columbia's designers andarchitects looking for great floor coverings. These showrooms, as well asoffering increased floor space for merchandising, have proved highly attractiveto the design community, our core customer. In addition to the decorative supply business, Campbell's has been pioneeringsales through the internet portal called 'Nature's Carpets'. Nature's Carpets are totally non-toxic and biodegradable carpets suitable forpeople who may be allergic to certain chemicals or off-gases. These products aremade using natural un-dyed wools with no chemical treatment and are tufted intonatural jute and backed with natural latex. They are totally 'green' being madefrom renewable resources. Given the growing demand and very positive results achieved through internetsales of this form of carpeting, Campbell's will now be rolling out an extendedsales and marketing programme across the United States and Canada using adedicated sales team as well as continuing with the web-based programme whichwill attract increased sales for this niche product offering. Overall, Campbell's sales increased during the period by 16.2% from Can$7.85million to Can$9.12 million, whilst profit before tax was up from Can$0.39million to Can$0.59 million (+51.1%). Net margin on sales rose from 4.9% to6.4%. Victoria's associated share of profits in the year were Can$0.30 millionup from Can$0.20 million last year. The outlook for our Canadian business remains promising. With the strongerproduct offering planned, we are confident of seeing continuing growth withinthis business. Alan BullockGroup Managing Director20 June 2007 -9- Victoria PLC Preliminary Results for 52 weeks ended 31 March 2007 FINANCIAL REVIEW HEADLINE RESULTSProfit before tax increased by 37.3% to £2.76 million, compared to £2.01 millionfor 2006. Revenue rose by 6% from £52.29 million to £55.43 million. Earnings per share (as per note 2) were 28.92p, up 24.1% (2006: 23.30p) withadjusted earnings per share also at 28.92p, showing an increase of 14.8% on theprior year (2006: 25.20p). REVENUE AND OPERATING PROFIT UK AND IRELANDRevenue was up 7% from £29.64 million to £31.72 million. The business in the UKoperated in a market that did not demonstrate any significant growth. Againstthis background, the business continued to focus on tight operating and materialcost control. Combined with the operational gearing effect of higher revenues,this enabled operating margin to increase from 2.9% to 4.9%. Operating profit for the UK and Ireland increased by 80.8% to £1.56 million(2006: £0.87 million). AUSTRALIARevenue rose by 8.9% to A$58.52 million compared to A$53.73 million for 2006.The market conditions in Australia remained subdued but the increased profile ofsynthetic carpet has supported growth. Price competition amongst carpetsuppliers has continued to be a feature of the marketplace and our operatingmargin declined from 9.8% to 8.8%. Operating profit has fallen by 2.5% fromA$5.27 million to A$5.14 million. Further investments have been made in our equipment and facilities. Thiscontinues to attract grants under the Australian government's StrategicInvestment Programme, which accounted for A$0.4 million of operating profit incomparison with A$0.51 million last year. SHARE OF PROFITS OF ASSOCIATED COMPANYThere was also an increased contribution from our associated company, ColinCampbell and Sons, which is 50% owned by the Group. Revenues increased by 16.2%from Can$7.84 million to Can$9.12 million, accompanied by an improvement inoperating margins. Our share of the pre tax profit increased by Can$0.10 millionto Can$0.30 million. INTERESTInterest costs remained in-line with the previous year at £0.73 million. Theincrease in base rates in the period was mitigated by lower borrowings and themovement in the fair value of financial instruments. Interest was covered 4.6times by operating profit (2006: 3.9 times). continued... -10- PROFIT BEFORE TAXATIONProfit before taxation for the year was £2.76 million (2006: £2.01 million). TAXATIONThe effective rate of tax on profit for the year was 27.3%. This is higher than2006 (19.5%) which had benefited from extra reliefs in Australia that hadreduced the deferred tax provision for the realisation of property valuesthrough sale. Without these extra reliefs, the effective rate in 2006 would havebeen approximately 27%. EARNINGS PER SHAREBasic earnings per share grew by 24.1% to 28.92p (2006: 23.30p). The growth inearnings per share, however, was impacted by the rise in the effective rate oftax. Adjusted earnings per share is also 28.92p, compared to 25.20p, excludingrestructuring costs in 2006. The number of shares in issue remained constantduring the year and there remain no options or other dilutive arrangement. DIVIDENDSWe are recommending a final dividend of 12.50p per share this year, compared to11.50p in 2006. This represents an 8.7% increase and our aim will be to delivercontinued dividend growth in future years. NET ASSETSOur net asset value at the financial year end increased by 4.2% to £28.98million (2006: £27.81 million). The main movement in the balance sheet wasfinancial liabilities which reduced by £2.06 million from £12.40 million to£10.33 million. CASH FLOW AND NET DEBTOur net cash inflow was £2.66 million, reducing our cash and cash equivalentborrowings to £3.69 million (2006: £6.36 million). This compares with a net cashoutflow in 2006 of £0.52 million. We have continued to invest in our facilities and equipment during the year andour capital expenditure totalled £1.96 million (2006: £2.77 million). Spend onplant and machinery is down £1.84 million on previous years, in-line withexpectations, as key equipment replacement programmes have been completed.During the year, we acquired the freehold to the property at Bendigo inAustralia, which we had leased since acquisition of the business at thatlocation, for £0.75 million. HEDGINGThe Group uses derivative financial instruments to manage our interest rateexposure in the UK. The Group has two swaps covering £3.00 million, withmaturity dates in July 2007 and July 2009. Our policy is to continue to utilisesuch instruments as deemed appropriate. The Group reviews its currency exposure relating to trading operations involvingthe export sale of goods or import of raw materials or capital equipment. TheGroup may utilise forward currency contracts to manage any currency exposureswhere it is considered that currency movements may be volatile and the amountsinvolved significant. The principal exposure of the Group relates to the investment in its Australiansubsidiary. The Group maintains a significant proportion of its borrowings inAustralian dollars which helps to provide a natural hedge against the investmentexposure. continued... -11- FUTURE FUNDINGThe gearing of the Group is now significantly lower than in 2006 and our currentfacilities will provide sufficient debt capacity in 2007. The strong cashgeneration is providing capacity for future investments. Capacity exists inSterling, Euros and Australian dollars to cover anticipated capital expenditureand working capital requirements. KEY PERFORMANCE INDICATORS (KPIS)As part of the detailed budgeting process, each subsidiary is required toestablish targets across a range of financial and non-financial indicators. Atthe monthly Board meetings, the Managing Director is required to present areview on progress against these targets. The non-financial KPIs may differ ineach subsidiary but are focused on delivering high levels of customersatisfaction, introducing new products and services which meet the needs of ourcustomers, ensuring operational effectiveness and attracting, retaining anddeveloping key employees. The financial KPIs reviewed and reported by all subsidiaries, focus on profitgrowth, profitability improvement, inventory management, levels of debt, cashgeneration, future levels of borrowing requirement and return on capitalemployed. CHANGES IN ACCOUNTING POLICIES There have been no changes in accounting policies this year. Ian DaviesGroup Finance Director20 June 2007 -12- Victoria PLC CONSOLIDATED INCOME STATEMENT for the 52 weeks ended 31 March 2007 Notes 52 weeks ended 52 weeks ended 31 March 2007 1 April 2006 £'000 £'000--------------------------------------------------------------------------------Revenue 1 55,426 52,288Cost of sales (39,003) (37,566)--------------------------------------------------------------------------------Gross profit 16,423 14,722Distribution costs (10,641) (9,770)Administrative expenses (3,097) (3,007)Other operating income 700 921Restructuring costs - (188)--------------------------------------------------------------------------------Operating profit 1 3,385 2,678 Share of results of associated company 104 73Finance costs 1 (727) (740)--------------------------------------------------------------------------------Profit before tax 1 2,762 2,011Taxation 1 (754) (393)--------------------------------------------------------------------------------Profit for the period 2,008 1,618 Attributable to equity holders ofthe parent 2,008 1,618-------------------------------------------------------------------------------- Earnings per share - pence Basic 2 28.92 23.30 Diluted 2 28.92 23.30-------------------------------------------------------------------------------- -13- Victoria PLC CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE for the 52 weeks ended 31 March 2007 52 weeks ended 52 weeks ended 31 March 2007 1 April 2006 £'000 £'000-------------------------------------------------------------------------------Exchange differences on translation offoreign operations (33) 83-------------------------------------------------------------------------------Net income/(loss) recognised directly inequity (33) 83 Profit for the period 2,008 1,618-------------------------------------------------------------------------------Total recognised income and expense for theperiod 1,975 1,618-------------------------------------------------------------------------------Attributable toEquity holders of the parent 1,975 1,618------------------------------------------------------------------------------- -14- Victoria PLC BALANCE SHEETS for the 52 weeks ended 31 March 2007 Group Company 31 March 2007 1 April 2006 31 March 2007 1 April 2006 £'000 £'000 £'000 £'000--------------------------------------------------------------------------------Net-current assets Intangibleassets 491 527 - - Property, plantand equipment 23,846 24,172 5,312 5,373 Investmentproperty 180 180 180 180 Investment insubsidiaryundertakings - - 3,321 3,321 Investment inassociatedcompany 469 440 56 56 Deferred taxasset 983 659 3 13--------------------------------------------------------------------------------Totalnon-currentassets 25,969 25,978 8,872 8,943--------------------------------------------------------------------------------Current assets Inventories 15,740 16,110 - - Trade and otherreceivables 9,603 10,215 4,505 4,074 Financial asset 10 - 10 - Cash at bank andin hand 644 234 - ---------------------------------------------------------------------------------Total currentassets 25,997 26,559 4,515 4,074--------------------------------------------------------------------------------Total assets 51,966 52,537 13,387 13,017--------------------------------------------------------------------------------Current liabilities Trade and otherpayables 8,234 8,505 61 130 Current taxliabilities 998 961 - - Financialliabilities 5,261 7,551 2,782 2,645--------------------------------------------------------------------------------Total currentliabilities 14,493 17,017 2,843 2,775--------------------------------------------------------------------------------Non-currentliabilities Trade and otherpayables 1,209 1,090 - - Financialliabilities 5,072 4,849 - - Deferred taxliabilities 2,209 1,774 695 682--------------------------------------------------------------------------------Totalnon-currentliabilities 8,490 7,713 695 682--------------------------------------------------------------------------------Totalliabilities 22,983 24,730 3,538 3,457--------------------------------------------------------------------------------Net assets 28,983 27,807 9,849 9,560--------------------------------------------------------------------------------Equity Issued sharecapital 1,736 1,736 1,736 1,736 Share premium 829 829 829 829 Retainedearnings 26,418 25,242 7,284 6,995--------------------------------------------------------------------------------Total equity 28,983 27,807 9,849 9,560-------------------------------------------------------------------------------- -15- Victoria PLC CASH FLOW STATEMENTS for the 52 weeks ended 31 March 2007 Group Company 52 weeks 52 weeks 52 weeks 52 weeks ended ended ended ended 31 March 1 April 31 March 1 April 2007 2006 2007 2006 £'000 £'000 £'000 £'000--------------------------------------------------------------------------------Net cash inflowfrom operatingactivities 5,061 2,957 574 407--------------------------------------------------------------------------------Investing activities Dividendsreceived fromassociates 32 23 32 23 Purchases of intangible fixed - - - -assets Purchase ofproperty, plantand equipment (1,959) (2,773) - - Proceeds ofdisposals ofproperty, plant 74 435 - 10and equipment--------------------------------------------------------------------------------Net cash used ininvestingactivities (1,853) (2,315) 32 33--------------------------------------------------------------------------------Financing activities (Decrease)/increase in long-termloans 347 (73) - - Receipts fromfinancing ofassets 870 639 - - Payment offinanceleases/HPliabilities (963) (934) - - Dividends paid (799) (799) (799) (799)--------------------------------------------------------------------------------Net cash (usedin)/frominvesting (545) (1,167) (799) (799)activities--------------------------------------------------------------------------------Net(decrease)/increase in cash and 2,663 (525) (193) (358)cash equivalents Cash and cashequivalents atbeginning (6,363) (5,827) (2,590) (2,232)of period Effect offoreign exchangerate changes 7 (11) - ---------------------------------------------------------------------------------Cash and cashequivalents atend of (3,693) (6,363) (2,783) (2,590)period-------------------------------------------------------------------------------- -16- Victoria PLC NOTES TO THE PRELIMINARY ANNOUNCEMENT 1 Segmental InformationFor management purposes, the Group is organised into three operating divisionsaccording to the geographical areas where they are managed. These divisions arethe basis on which the Group reports its primary segment information. The threedivisions are UK & Ireland, Australia and the Canadian associate. Geographical segment information for revenue, operating profit and areconciliation to entity net profit is presented below. Income 52 weeks ended 31 March 2007 52 weeks ended 1 April 2006Statement Revenue Operating Finance Profit Revenue Operating Finance Profit £'000 profit charges before £'000 profit charges before £'000 £'000 tax* £'000 £'000 tax* £'000 £'000------------------------------------------------------------------------------------------------UK & 31,720 1,564 (346) 1,218 29,647 865# (337) 528Ireland Australia 23,706 2,082 (271) 1,811 22,641 2,222 (250) 1,972------------------------------------------------------------------------------------------------ 55,426 3,646 (617) 3,029 52,288 3,087 (587) 2,500 Share ofresults Of - - - 104 - - - 73associate Central - (261) (110) (371) - (409) (153) (562)costs------------------------------------------------------------------------------------------------TotalcontinuingOperations 55,426 3,385 (727) 2,762 52,288 2,678 (740) 2,011---------------------------------------------- ------------------------------------Tax (754) (393) ------- ------Profit aftertax from 2,008 1,618continuingactivities ------- ------ * The share of profits of the associated company is shown net of tax as requiredby IAS1. # Operating profit from the UK and Ireland operations is stated after a £188,000charge for business reorganisation costs (closure of Kidderminster dyehouse). Intersegment sales between the UK and Ireland and Australia were immaterial inthe current and comparative periods. Balance Sheet As at 31 march 2007 As at 1 April 2006 Segment Segment Segment Segment Assets Liabilities Assets Liabilities £'000 £'000 £'000 £'000--------------------------------------------------------------------------------UK & Ireland 28,239 9,901 30,058 12,675 Australia 22,994 9,544 21,652 8,598 Canada 469 - 440 - Unallocated centralassets/liabilities 264 3,538 387 3,457-------------------------------------------------------------------------------- 51,966 22,983 52,537 24,730-------------------------------------------------------------------------------- The investment in associated company is held directly by the parent entity anddoes not relate specifically to either geographic segment. continued... -17- Other Segmental Information 52 weeks 52 weeks ended ended 31 March 2007 1 April 2006 £'000 £'000---------------------------------------------------------------------------------Depreciation and Amortisation UK and Ireland 1,024 1,139 Australia 1,229 1,181 Unallocated central - --------------------------------------------------------------------------------- 2,253 2,320-------------------------------------------------------------------------------- No other significant non-cash expenses were deducted in measuring segmentresults. Capital Expenditure UK and Ireland 379 1,298 Australia 1,580 1,475 Unallocated central - --------------------------------------------------------------------------------- 1,959 2,773-------------------------------------------------------------------------------- Business Segments:No secondary segmental information is reported as the Directors consider thatsubstantially all of the Group's operations relate to a single activity, that ofthe manufacture and sale of carpets. 2 Earnings per ShareThe calculation of earnings per ordinary equity share in the parent entity isbased on the following earnings and number of shares: 2007 2006 £'000 £'000--------------------------------------------------------------------------------Earnings (£'000) basic and diluted Profit attributable to ordinary equity holders of the parent 2,008 1,618entity--------------------------------------------------------------------------------Number of shares (thousands) - in issue throughout theperiod 6,944 6,944--------------------------------------------------------------------------------Earnings per share (basic and undiluted) in pence 28.92p 23.30p-------------------------------------------------------------------------------- No arrangements existed during the period or the comparative period that mightrequire the issue of shares and hence the diluted earnings per share are thesame as the basic earnings per share. The calculation of the following non-statutory item used in the Chairman'sStatement and Financial Review is set out below: Adjusted earnings 2007 2006 £'000 £'000-------------------------------------------------------------------------------Profit from continuing operations attributable to Ordinaryequity holders of the parent Entity 2,008 1,618 Restructuring costs (net of 30% tax) - 132------------------------------------------------------------------------------- 2,008 1,750-------------------------------------------------------------------------------Adjusted earnings per share 28.92p 25.20p------------------------------------------------------------------------------- continued... -18-3 Rates of Exchange 2007 2006 Average Year end Average Year end-------------------------------------------------------------------------------Australia 2.4687 2.4279 2.3730 2.4326Euro 1.4717 1.4735 1.4623 1.4333Canada 2.1540 2.2627 2.1276 2.0235 4 Notes to the Cash Flow StatementReconciliation of operating profit to net cash from operating activities Group Company 2007 2006 2007 2006 £'000 £'000 £'000 £'000-------------------------------------------------------------------------------Operating profit from continuing operations 3,385 2,678 1,215 1,092 Adjustments for:- Depreciation of property, plant and equipment 2,226 2,293 61 61 - Business reorganisation costs - 188 - - - Amortisation of intangible assets 27 27 - - - (Profit)/loss on disposal of property, plant and equipment 8 (55) - - - Exchange rate difference on consolidation (18) 36 - --------------------------------------------------------------------------------Operating cash flows before movements inworking capital 5,628 5,167 1,276 1,153 Increase/(decrease) in working capital 801 (1,093) (526) (592)--------------------------------------------------------------------------------Cash generated by operations 6,429 4,074 750 561Interest paid (792) (740) (176) (153)Income taxes (paid)/received (576) (377) - (1)--------------------------------------------------------------------------------Net cash from operating activities 5,061 2,957 574 407-------------------------------------------------------------------------------- 5 Analysis of Net Debt At 1 April Cash Other Exchange At 2006 flow non-cash Movement 31 March 2007 changes £'000 £'000 £'000 £'000 £'000---------------------------------------------------------------------------------Cash 234 410 - - 644 Bank loans payableless (6,597) 2,253 - 7 (4,337)than oneyear and overdrafts---------------------------------------------------------------------------------Cash and cashequivalents (6,363) 2,663 - 7 (3,693) Secured commercialbills Payable less than one - - - - -year Payable more than oneyear (2,261) (618) - (4) (2,883) Finance leases and hire purchaseagreements Payable less than oneyear (899) 963 (986) (2) (924) Payable more than oneyear (2,100) (870) 986 (1) (1,985) Bank loans payablemore (488) 271 - (13) (204)than oneyear--------------------------------------------------------------------------------Net debt (12,111) 2,409 - 13 (9,689)-------------------------------------------------------------------------------- 6 The results have been extracted from the audited financial statements of the Group for the year ended 31 March 2007. Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company will publish full financial statements that comply with IFRSs. These audited financial statements incorporate an unqualified audit report. The results do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 1 April 2006, which incorporated an unqualified auditor's report, have been filed with the Registrar of Companies. 7 The Report & Accounts will be posted to shareholders by 25 June 2007. Further copies will be available from the Company's Registered Office: Worcester Road, Kidderminster, Worcestershire, DY10 1HL or via the website: www.victoria.plc.uk. 8 The Annual General Meeting is being held at the Registered Office of the Company, as above, at 2:30 pm on Tuesday, 24 July 2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Victoria