20th Jun 2006 07:01
Victoria PLC20 June 2006 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Tuesday, 20 June 2006 Embargoed: 7.00am Victoria P.L.C. Manufacturers of Carpet and Carpet Yarns Preliminary Results for the 52 weeks ended 1 April 2006 2006 2005Group Revenue £52.29m £49.28m Adjusted Operating Profit* £2.87m £3.73m Adjusted Profit before Tax* £2.20m £3.01m Restructuring / closure costs £0.19m £1.31m Net assets £27.8m £26.9m Earnings per Share (adjusted)** 25.20p 30.83p Earnings per Share 23.30p 11.95p Dividend maintained 11.5p 11.5p Gaining market share in weak markets Revenues from continuing UK and Irish operations up 7% whilst revenues held inAustralia Margins impacted by price competition in UK & Australia and increased energy andraw material prices * 2006 adjusted to add back restructuring costs of £0.19m; 2005 not adjusted** 2006 after adding back restructuring costs, 2005 from continuing operationsonly "Over the last year, we have continued to focus the business so that it is bestable to deal with the economic and competitive challenges the sector faces. Withthis in mind, the Group has performed in line with our expectations. "We believe, that our business is well positioned in the higher-end of themarket and will be benefiting from recently introduced additional new rangeswhich will soon start to feed through. "We expect the markets in both the UK and Australia to remain subdued. However,your Directors are confident that the business will continue to deliver growthin both sales and profits and that the Group is well positioned to takeadvantage of market opportunities and any upturn in activity when it occurs." Enquiries:Alan Bullock, Group Managing DirectorMark Lee, Group Finance Director Fiona TooleyVictoria P.L.C. Citigate Dewe RogersonToday: +44 (0)20 7638 9571 (up to 12noon) Today: +44 (0)20 7638 9571 (up to 12noonThereafter: +44 (0)1562 749640 Thereafter: +44 (0)121 455 8370Mobile: +44 (0)7785 325701 (AB) Mobile: +44 (0)7785 703523 This announcement, together with other information on Victoria P.L.C. may befound at: www.victoria.plc.uk. -2- Victoria P.L.C. Preliminary Results for the 52 weeks ended 1 April 2006 CHAIRMAN'S STATEMENT Whilst the year has been challenging with tough market conditions prevailing, Ibelieve that the Group has nonetheless adapted well to the difficult marketenvironment and has enjoyed a satisfactory year's trading. RESULTS OF CONTINUING OPERATIONSThe Group's revenue of £52.29 million in the year being reported was up 6.10%from £49.28 million last year. Operating Profit in the same period was £2.68 million (2005: £3.73 million).After taking into account the closure costs of £188,000 relating to the dyehouse which we announced in March, profit before tax came in at £2.01 million.Our 2005 reported profit before tax of £3.01 million was pre-exceptional costsof £1.31 million which related to the closure of the Group's Axminsteroperations in that year. Adjusted earnings per share in the period were 25.2 pence (2005: 30.83 pence)from continuing operations after adding back restructuring costs. Earnings pershare including all closure and restructuring costs were 23.3p (2005: 11.95p). OPERATIONSIn the United Kingdom, the retail sector has seen the continuation of thesluggish demand for most consumer products, including floorcoverings, which wehave experienced now for almost two years. Against this back-drop, we battledhard in what was at best a stagnant market to grow our market share. Revenue from the continuing UK and Irish operations was up by 7.70% from £27.53million to £29.65 million. Profit before tax and restructuring costs was 29.5%lower at £0.72 million compared to £1.02 million in the previous year. In Australia, the economy has remained subdued throughout the year with intenseprice competition from both home and overseas manufacturers. Despite this, wemanaged to increase our revenue from carpet sales by 1.6% to A$52.3, althoughour sales from yarn to our competitors fell sharply leaving overall A$ revenuesdown by 0.9%. However, the price competition impacted on margins resulting inprofit before tax of A$4.68 million compared to the previous year 2005: A$5.95million, a reduction of 21.3%. In Canada, our associate company, Colin Campbell & Sons enjoyed anothersuccessful year with sales up 10.5% and Profit before tax up 37.7%. DIVIDENDYour Board is proposing that the dividend be maintained at 11.5p per share,which would be covered 2.03 times by earnings. The dividend, which is subject to shareholder approval at the Annual GeneralMeeting to be held on 7th August 2006, will be paid on 10th August 2006 to allmembers on the register at the close of business on 14th July 2006. PROPERTYThe 2002 Option Agreement that the Company gave to Whitbread Group PLC relatingto the purchase of Victoria's six acre sports field in Kidderminster, was notexercised by them and fell away in January 2006. As a result we had the opportunity of re-marketing the site and I am pleased toreport to shareholders that we believe we are close to concluding a conditionalsale agreement with three parties to purchase the land. continued... -3- EMPLOYEESI would like to thank everyone within the Group for the positive contributionthey have made to the Company's success in what are very challenging marketconditions. Above all, I would like to make special mention of Michael Oakley. Michael, ourAustralian subsidiary Executive Chairman and its former Managing Director, willbe retiring from the Board at the AGM in August having served 12 years on thePLC Board and 27 years in total with our Australian business. Pleasingly, wewill not be losing Michael who, whilst retiring from executive duties, will becontinuing in the position of Non-Executive Chairman with our Australiansubsidiary. During Michael's stewardship, he has helped steer our business tothe position of one of Australia's foremost carpet manufacturers and he ishighly respected by employees, customers and competitors alike. I am sure youwould like to join with me in wishing Michael and his wife Wendy, a very happyand long retirement. Finally, I am pleased to announce that Barry Poynter, our Australian ManagingDirector, will be appointed to the PLC Board following the AGM in August. OUTLOOKWe expect the markets in both the UK and Australia to remain subdued. However,your Directors are confident that the business will continue to deliver growthin both sales and profits and that the Group is well positioned to takeadvantage of market opportunities and any upturn in activity when it occurs. R. M GilbertChairman -4- Victoria P.L.C. Preliminary Results for the 52 weeks ended 1 April 2006 OPERATING REVIEWOver the last year we have continued to focus the business so that it is bestable to deal with the economic and competitive challenges the sector faces. Withthis in mind, the Group has performed in line with our expectations. UNITED KINGDOMVictoria Carpets in the UK has continued to witness poor trading conditions onthe High Street with the reduced level of consumer spending being well-reportedacross many sectors, including floor coverings. At the same time, whilst we have continued to see a pattern with a lack ofconsumer confidence, we have also had to contend with significant increases inenergy and raw materials costs as a result of higher oil and gas prices. Despite these challenges, we have remained focused on our core IndependentRetail business offering our customers a comprehensive range of products ofdifferentiation, backed with excellent stock and service levels. This strategyhas enabled us to win market share from our competitors. Home sales on a like-for like-basis were £21.8 million, up from £21.1 millionwhich is a creditable achievement when you look at the overall marketperformance which is reported to be down by as much as 10%. Export Sales, again on a like-for-like basis, were marginally lower at £3.47million compared to £3.53 million, reflecting a slight overhang from the closureof Axminster weaving last year. Operationally, at Victoria Carpets, we took the decision to close ourhank-dyeing operation in Kidderminster in March 2006, resulting in a full costof closure of £188,000 which has been taken in this financial year beingreported. The hank-dyeing operation was a very small part of our overall business and wasmainly used for the dyeing of Axminster and Wilton yarns. With the previousdecision to cease Axminster production in February 2005, the plant's continuingoperation became unviable. Any future requirements will be out-sourced withinthe UK more competitively. Westwood Yarns in Holmfirth, West Yorkshire continued to supply most of its yarncapacity internally to meet Victoria Carpets' demands and have been kept busythroughout the year. During the course of the year, Westwood's successfullycompleted the installation of a further new 3-metre card, which has allowed usto increase the spinning mill's capacity by an additional 16 tonnes of yarn perweek. In addition, the installation of a new dedicated white blending line wasstarted towards the end of this financial year. The line has since become operational and will enable Westwood's to moreeffectively produce the very light beige and pastel shades of yarn, which are sopopular with today's consumers. The Management team at Westwood Yarns was strengthened in December 2005 and I ampleased to welcome Trevor Chippendale to the company as Managing Director. continued... -5- IRELANDThe Irish economy saw a recovery in 2005, with both the housing and commercialproperty markets moving forward positively again. Munster Carpets, however, had a more difficult year in the contract market, withsales down marginally in both volume and value terms although, margins held upwell and were improved. Sales volumes at Navan Carpets are now starting to grow. Through the number ofnew ranges and point of sales displays now out in the market we were able toincrease sales strongly by 12.3% in the year and improved bottom lineprofitability. Overall our Irish operations performed well and I would like to pay tribute toSean Kelly, our Irish Managing Director and his team who are working tirelesslyin developing this business. AUSTRALIAOverall statistics show that the general Australian economy performed reasonablywell during the year under review. Economic conditions, however, varied greatlywithin Australia, with the resource-based economies in the West and the Northperforming well, but the major States of New South Wales and Victoria, where themarket for homewares is greatest, remaining very subdued. New residential dwelling completions, particularly Capital City apartments, wereagain down on the preceding year. Our Australian business, however, completed another satisfactory year, and verymuch in line with their budget forecasts. Sales for the year were marginally down on the previous year at A$53.7 million(2005: A$54.2 million). However, the fall was in yarn sales to our competitors,and our revenue from the sale of carpets was up 1.6% to A$ 52.3 million. Withintense competition in quiet markets impacting on our ability to raise sellingprices in-line with cost increases, our margins were adversely affected. Net Profit before tax was 22% lower at A$4.7 million. With the Australian dollar relatively strong for most of the year, imports,predominantly on synthetic carpets, continued to improve their share of themarket. As synthetic carpets now account for some 70% of the Australian marketdemand, our Company successfully launched several solution-dyed nylon productsduring the year, with yarns out-sourced from both the USA & China. Thisunquestionably expands the appeal of the our product ranges to retailers acrossAustralia, but in no way reduces our focus on retaining our pre-eminent positionwith quality wool products in our Australian and overseas markets. Our Castlemaine & Bendigo yarn production facilities continued at similar levelsof output to the previous year of around 3,000 tonnes for the twelve months. Weare now the biggest woollen spun producer of carpet yarn in Australia,accounting for more than half the wool and wool rich blends of carpet yarn spunin this country. Investment during the year continued in new plant and equipment, with a secondSuperba continuous heat-setting line installed at the Bendigo plant, and a newstate-of the-art, Level Cut Loop (LCL) tufting machine installed at Dandenong.This tufter will produce "point of difference" products for both the Australianand export markets. These investments in new plant and equipment continue to qualify for positiveassistance from the Australian Government's, Strategic Investment Programme(SIP). Exports, mainly to New Zealand and North America, accounted for more than 10% ofour turnover which is well above the industry average. We are confident that ourexpanded product offerings will allow our business to continue to grow bothsales and profitability. continued... -6- CANADAThe Western Canadian economy has continued to prove resilient to the economicdown-turn seen in other countries and in parts of North America. Colin Campbell& Sons, our Western Canadian based associate company, has again seen anothergood year of progress and results. Sales increased across our product offerings by 10.6% in value from C$ 7.10million to C$ 7.85 million and Net Profit before tax was up by 37.7 %. During August 2006, Campbell's Vancouver operation will move into exciting newshowroom facilities, which will enable us to further expand our productportfolio. In addition to the existing carpet broadloom and rug business, thisbusiness, for the first time, will be offering high-end contemporary furnitureto its existing designer/architect customer base. OUTLOOKWithin the United Kingdom there is still no real evidence that consumer demandor footfall on the High Street is returning. We are therefore anticipating thatthere is unlikely to be any growth in the market in real terms. We believe, however, that our business is well positioned in the higher-end ofthe market and will be benefiting from recently introduced additional new rangeswhich will soon start to feed through. These together with the re-colouring toour popular Duchess and Tudor Twist ranges planned during this Summer shouldalso further underpin sales in the traditionally busier Autumn/Winter sellingseasons. In Ireland, with the economy looking stronger again and with our expandedproduct offerings we are optimistic of continuing to grow both sales andprofits. Westwood Yarns under the stewardship of their new Managing Director and withrecently expanded capacity should continue to be a valuable asset for the Group. In Canada, whilst only a small part of our business, Campbell's look set fair tocontinue to grow both sales and profits. Again this year, the economic picture in Australia remains uncertain withaggressive competition from both home and overseas suppliers likely to continueto impact margins. Hitherto, in a market which over the last 18 months has beenflat at best and highly competitive we have managed to increase our market shareand I see no reason to believe why we should not continue to out perform themarket. Overall, across the business, we expect to continue to take market share fromweaker players. Alan R BullockGroup Managing Director -7- Victoria P.L.C. Preliminary Results for the 52 weeks ended 1 April 2006 FINANCIAL REVIEW SUMMARY OF RESULTSDuring the year the Group's operations pursued a strategy of maintaining andincreasing market share to take best advantage of the difficult marketconditions in which we compete. The result of this is reflected in revenuesincreasing by 6.1 per cent to £52.3m. However, with considerable pressure onmargins, pre-tax profits reduced by 33 per cent to £2.01m. A dividend of 11.5pence per share is proposed out of earnings of 23.3 pence per share. INTERNATIONAL FINANCIAL REPORTING STANDARDSThe accounts to 1 April 2006 are the first to be prepared by the Group underInternational Financial Reporting Standards (IFRS) adopted for use in theEuropean Union. Victoria PLC has amended its accounting policies to comply withthe standards issued by the International Accounting Standards Board andinterpretations issued by the International Financial Reporting InterpretationsCommittee which have been issued and are effective (or are available for earlyadoption) at 1 April 2006. The Group has not elected for early adoption of IFRS7 or the amendments toIAS39. The comparative figures for the period ended 2 April 2005 have been restated tocomply with adopted IFRS. They were previously prepared under UK GenerallyAccepted Accounting Principles. The main changes are the translation of the results of overseas operations ataverage exchange rates, the revaluation of land and buildings and provision ofdeferred tax on their balance sheet values, accounting for dividends when paid,rather than when proposed, and the revaluation of financial instruments. Theadoption of IFRS has no effect on cash-flow. The changes will be set out indetail in the notes to the Report & Accounts being posted to Shareholders. All of the comparative figures referred to in this Annual Report relate to therestated figures under IFRS for the period ended 2 April 2005. UK & IRELANDRevenues from continuing activities in the UK and Ireland were 7.7 per centhigher at £29.65 million (2005: £27.53 million) Operating profits from continuing operations in the UK and Ireland were £1.05million (2005: £1.34 million) before the exceptional cost of closing thedye-house. The cost of closing the dye-house in Kidderminster is shown as a businessrestructuring cost within the operating profit in the Income Statement. The fullcost of £188,000 includes redundancy costs and the write down of plant andequipment. The cost savings from using third party dyeing are already comingthrough as planned in the first months of the new financial year. Capital expenditure of £1.30 million during the period related principally tothe additional card and spinning installed at Westwood Yarns, together with thenew white blending line. AUSTRALIAOur Australian company worked hard to maintain sales and managed to maintainRevenue at A$53.7 million (2005: A$54.2 million). With the benefit of a strongerAustralian dollar, this translates to a 4.1per cent increase in contribution toGroup Revenues from £21.8 million to £22.6 million However, facing severe competition in a depressed market, the operating profitmargin was reduced from 12.3% to 9.8% and operating profit fell fromA$6.64 million to A$5.27 million (£2.67 million to £2.22 million). continued... -8- We continued to invest in new plant and machinery, with a spend of A$3.50million (£1.48 million) in the year. Our investment programme attracted ongoingsupport from the Australian Government's Strategic Investment Programme andgrant income accounted for A$0.52 million of operating profit, compared toA$1.06 million the previous year. INTERESTInterest costs reduced slightly from £0.76 million to £0.74 million, as themovement in fair value of financial instruments taken through the IncomeStatement reduced. SHARE OF PROFITS OF ASSOCIATED COMPANYOur associated company Colin Campbell and Sons, which is 50% owned by the Group,made further advances. Revenues again increased, this year by 10.5 per cent, andthe Group's share of post tax profit increased to £73,000 (2005: £46,000). PROFIT BEFORE TAXATIONProfit before tax for the year was £2.01 million (2005: £3.01m on continuingoperations). TAXATIONThe tax charge for the year was £0.39 million with the effective rate of 20%kept down by lower tax rates overseas and a one-off reduction in the deferredtax provision for the realisation of property values through sale as extrareliefs become available in Australia. Absent the latter one-off reduction theeffective rate is circa 27%. EARNINGS PER SHAREEarnings attributable to shareholders were 23.30 pence per share, or 25.20 penceexcluding restructuring costs. This compares to adjusted earnings (i.e. earningsfrom continuing activities) in 2005 of 30.83 pence per share, and unadjustedearnings of 11.95 pence per share. The number of shares in issue was unalteredduring the year and there are no options or other dilutive arrangements. DIVIDENDThe Board will be recommending a maintained final dividend of 11.5 pence pershare (2005: 11.5p) at the Company's Annual General Meeting on 7 August 2006.The proposed dividend is 2.03 times covered by earnings (2005: 1.04 x cover). FINANCINGThe Group's balance sheet continues to strengthen, with net assets increasing to£27.8 million (2005: £26.9 million). With net borrowings of £12.11 million atthe year-end, net gearing reduced slightly to 43.6% (2005: 44.3%). Mark LeeGroup Finance Director -9- Victoria P.L.C. Consolidated Income Statement For the 52 weeks ended 1 April 2006 Notes 52 weeks 52 weeks ended ended 1 April 2 April 2006 2005 £'000 £'000Continuing operationsRevenue 1 52,288 49,282Cost of sales (37,566) (34,333)-------------------------------------------------------------------------------Gross profit 14,722 14,949Distribution costs (9,770) (9,489)Administrative expenses (3,007) (2,777)Restructuring costs (188) -Other operating income 921 1,047-------------------------------------------------------------------------------Operating profit 1 2,678 3,730Share of results of associated company 73 46Finance costs (740) (764)-------------------------------------------------------------------------------Profit before tax 1 2,011 3,012Tax (393) (871)-------------------------------------------------------------------------------Profit for the period from continuingoperations 1,618 2,141Discontinued operations(Loss) for the period from discontinuedoperations 2 - (1,311)--------------------------------------------------------------------------------Profit for the period 1,618 830--------------------------------------------------------------------------------Attributable to:Equity holders of the parent 1,618 830--------------------------------------------------------------------------------Earnings per shareFrom continuing operationsBasic 23.30p 30.83p--------------------------------------------------------------------------------Diluted 23.30p 30.83p--------------------------------------------------------------------------------From continuing and discontinuedoperationsBasic 23.30p 11.95p--------------------------------------------------------------------------------Diluted 23.30p 11.95p-------------------------------------------------------------------------------- The comparative figures for the 52 weeks ended 2 April 2005 have been restatedto reflect the adoption of International Financial Reporting Standards. -10- Victoria P.L.C. Consolidated Statement of Recognised Income and Expense For the 52 weeks ended 1 April 2006 52 weeks 52 weeks ended ended 1 April 2006 2 April 2005 £'000 £'000Exchange differences on translation of foreignoperations 83 (89)-------------------------------------------------------------------------------Net income/(loss) recognised directly in equity 83 (89)Profit for the period 1,618 830-------------------------------------------------------------------------------Total recognised income and expense for theperiod 1,701 741-------------------------------------------------------------------------------Attributable to:Equity holders of the parent 1,701 741------------------------------------------------------------------------------- -11- Victoria P.L.C. Balance Sheet For the 52 weeks ended 1 April 2006 Group Notes 1 April 2006 2 April 2005 £'000 £'000Non-current assetsIntangible assets 527 548Property, plant and equipment 24,172 23,813Investment property 180 180Investment in subsidiary undertakings - -Investment in associated company 440 348Deferred tax asset 659 1,366-------------------------------------------------------------------------------Total non-current assets 25,978 26,255-------------------------------------------------------------------------------Current assetsInventories 16,110 14,686Trade and other receivables 10,215 9,503Current tax asset - 145Cash and cash equivalents 234 369-------------------------------------------------------------------------------Total current assets 26,559 24,703-------------------------------------------------------------------------------Non-current assets classified as heldfor sale - 304-------------------------------------------------------------------------------Total assets 52,537 51,262-------------------------------------------------------------------------------Current liabilitiesTrade and other payables 8,505 7,498Current tax liabilities 961 644Financial liabilities 7,551 7,378-------------------------------------------------------------------------------Total current liabilities 17,017 15,520-------------------------------------------------------------------------------Non-current liabilitiesTrade and other payables 1,090 1,145Financial liabilities 4,849 4,959Deferred tax liabilities 1,774 2,733-------------------------------------------------------------------------------Total non-current liabilities 7,713 8,837-------------------------------------------------------------------------------Total liabilities 24,730 24,357-------------------------------------------------------------------------------Net assets 1 27,807 26,905-------------------------------------------------------------------------------EquityIssued share capital 1,736 1,736Share premium account 829 829Retained earnings 25,242 24,340-------------------------------------------------------------------------------Equity attributable to equity holders ofthe parent 27,807 26,905-------------------------------------------------------------------------------Total equity 27,807 26,905------------------------------------------------------------------------------- The comparative figures for the 52 weeks ended 2 April 2005 have been restatedto reflect the adoption of International Financial Reporting Standards. -12- Victoria P.L.C. Cash Flow Statement For the 52 weeks ended 1 April 2006 Group 52 weeks 52 weeks ended ended 1 April 2006 2 April 2005 £'000 £'000Net cash from operating activities 2,957 1,852-------------------------------------------------------------------------------Investing activitiesDividends received from associates 23 -Purchases of property, plant and equipment (2,773) (1,962)Proceeds on disposal of property, plant andequipment 435 158-------------------------------------------------------------------------------Net cash used in investing activities 2,315 (1,784)-------------------------------------------------------------------------------Financing activities(Decrease)/increase In long-term loans (73) 340Receipts from financing of assets 639 124Payment of finance lease and HP liabilities (934) (1,093)Dividends paid (799) (799)-------------------------------------------------------------------------------Net cash (used in)/from financing activities (1,167) (1,428)---------------------------------------- --------------------------------------Net (decrease)/increase in cash and cashequivalents (525) (1,360)Cash and cash equivalents at beginning of period (5,827) (4,435)Effect of foreign exchange rate changes (11) (32)-------------------------------------------------------------------------------Cash and cash equivalents at end of period (6,363) (5,827)------------------------------------------------------------------------------- -13- Victoria P.L.C. Notes to the Accounts 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. The Axminsterweaving operations, previously reported within UK & Ireland, were discontinuedin March 2005. Note 2 provides further information on the discontinuedoperations. Geographical segment information for revenue, operating profit and areconciliation to entity net profit is presented below. Income Statement 52 weeks ended 1 April 2006 52 weeks ended 2 April 2005 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 & Ireland 29,647 865+ (337) 528 27,529 1,340 (325) 1,015Australia 22,641 2,222 (250) 1,972 21,753 2,667 (249) 2,418------------------------------------------------------------------------------------------------------- 52,288 3,087 (587) 2,500 49,282 4,007 (574) 3,433Share ofresults ofassociate - - - 73 - - - 46 Central costs - (409) (153) (562) - (277) (190) (467)-------------------------------------------------------------------------------------------------------Totalcontinuingoperations 52,288 2,678 (740) 2,011 49,282 3,730 (764) 3,012------------------------------------------------------ ----------------------------------Tax (393) (871) ------ ------Profit aftertax fromcontinuingactivities 1,618 2,141 Profit for theperiod fromdiscontinuedoperations - (1,311) ------ ------ Profit aftertax anddiscontinuedoperations 1,618 830 ------ ------ * The share of profits of the associated company is shown net of tax as requiredby IAS 1. + 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 1 April As at 2 April 2006 2005 Segment Segment Segment Segment assets liabilities assets liabilities £'000 £'000 £'000 £'000 UK & Ireland 30,058 12,675 28,868 11,989 Australia 21,652 8,599 21,841 9,325 Canada 440 - 348 - Unallocated centralassets/liabilities 387 3,457 205 3,043-------------------------------------------------------------------------------- 52,537 24,730 51,262 24,357-------------------------------------------------------------------------------- The investment in associated company is held directly by the parent entity anddoes not relate specifically to either geographic segment. 52 weeks 52 weeks ended ended 1 April 2006 2 April 2005 £'000 £'000Depreciation and amortisationUK and Ireland 1,139 1,167Australia 1,181 1,069Unallocated central - 4-------------------------------------------------------------------------------- 2,320 2,240-------------------------------------------------------------------------------- continued... -14- No other significant non-cash expenses were deducted in measuring segmentresults. Capital expenditureUK and Ireland 1,298 869Australia 1,475 1,080Unallocated central - 13-------------------------------------------------------------------------------- 2,773 1,962-------------------------------------------------------------------------------- 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. Profit or Loss from Discontinued OperationsThe Group's Axminster weaving operations were discontinued in March 2005. Theresults of the discontinued activity are shown as follows: 2006 2005 £'000 £'000Redundancy costs - 438Write-down of plant and machinery - 127Write-down of stocks - 433--------------------------------------------------------------------------------Closure costs - 998Loss during the period - 844Less: Taxation - (531)--------------------------------------------------------------------------------Loss from discontinued operations - 1,311-------------------------------------------------------------------------------- 2006 2005 £'000 £'000Loss from discontinued activities during the periodRevenue - 3,302Cost of sales - (3,516)--------------------------------------------------------------------------------Gross (loss) - (214)Distribution costs - (516)Administrative expenses - (87)--------------------------------------------------------------------------------Operating (loss) - (817)Interest payable - (27)--------------------------------------------------------------------------------(Loss) during the period - (844)-------------------------------------------------------------------------------- No separate balance sheet is available for this activity and hence a cash flowstatement can not be produced. Non-current assets used in the discontinued operations were written down toestimated recoverable value of £304,000 at 2 April 2005 and transferred to"Non-current assets classified as held for sale". Inventories relating to thediscontinued activities were written down to net realisable value of £219,000 at2 April 2005. 3. Earnings per ShareThe calculation of earnings per ordinary equity share in the parent entity isbased on the following earnings and number of shares: 2006 2005Earnings (£'000) basic and diluted Profit from continuing operations attributable to ordinaryequity holders of the parent entity 1,618 2,141 Loss from discontinued operations attributable to the parententity - (1,311)--------------------------------------------------------------------------------Profit attributable to ordinary equity holders of the parententity 1,618 830--------------------------------------------------------------------------------Number of shares (thousands)- in issue throughout the period 6,944 6,944-------------------------------------------------------------------------------- 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. continued... -15- 4. Rates of ExchangeThe results of overseas subsidiary and associated undertakings have beentranslated into sterling at the average exchange rates prevailing during theperiods. The balance sheets are translated at the exchange rates prevailing atthe period ends: 2006 2005 Average Year end Average Year endAustralia 2.3730 2.4326 2.4892 2.4441Euro 1.4623 1.4333 1.4666 1.4573Canada 2.1276 2.0235 2.3589 2.2940-------------------------------------------------------------------------------- 5. Notes to the Cash Flow StatementReconciliation of operating profit to net cash from operating activities Group 2006 2005 £'000 £'000 Operating profit from continuing operations 2,678 3,730Operating loss from discontinued operations - (817)Cash element of exceptional charge - (438)Adjustments for:- Depreciation of property, plant and equipment 2,293 2,213- Business reorganisation costs 188 -- Amortisation of intangible assets 27 27- (Profit)/loss) on disposal of property, plant and equipment (55) (57)- Exchange rate difference on consolidation 36 60--------------------------------------------------------------------------------Operating cash flows before movements in working capital 5,167 4,718Increase in working capital (1,093) (1,128)--------------------------------------------------------------------------------Cash generated by operations 4,074 3,590Interest paid (740) (745)Income taxes (paid)/received (377) (993)--------------------------------------------------------------------------------Net cash from operating activities 2,957 1,852-------------------------------------------------------------------------------- 6. Reconciliation of Net Cash Flow to Movement in Net Debt 2006 2005 £'000 £'000(Decrease) in cash in the year (525) (1,360)Decrease in debt and lease financing 369 629--------------------------------------------------------------------------------Change in net debt resulting from cash flow (156) (731)Exchange rate difference on consolidation (38) (26)--------------------------------------------------------------------------------Movement in net debt in the year (194) (757)Net debt at beginning of year (11,917) (11,160)--------------------------------------------------------------------------------Net debt at end of year (12,111) (11,917)-------------------------------------------------------------------------------- 7. The results have been extracted from the audited financial statement of thegroup for the year ended 1st April 2006. These audited financial statementsincorporate an unqualified audit report. The results do not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Statutoryaccounts for the year ended 2nd April 2005, which incorporated an unqualifiedauditor's report, have been filed with Registrar of Companies. 8. The Report & Accounts will be posted to shareholders by 6 July 2006. Furthercopies will be available from the Company's Registered Office: Worcester Road,Kidderminster, Worcestershire, DY10 1HL or via the website www.victoria.plc.uk. 9. The Annual General Meeting is being held at the Registered Office of theCompany, as above, at 2.30pm on Monday 7th August 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Victoria