Carpet maker Victoria back in profit after weathering boardroom storm

WORCESTERSHIRE carpet manufacturer Victoria has successfully emerged from one of the most turbulent periods in its history with a return to profit.

The company, torn apart by internal wrangling and a bitter boardroom battle which saw a rival group wrench control of the business, has overturned  a full year pre-tax loss of more than £3m into a profit of £2.28m.

Geoff Wilding, the company’s chairman, said he was delighted with the performance.

“I am pleased to advise shareholders that the financial year for 2014 marked a significant improvement in Victoria’s financial position,” he said in the company’s full year results.

Group revenues grew by 0.7% (6.8% in constant currency terms) from £70.91m last year to £71.39m. Group operating profit was said to have been boosted as a result of continued improvements in like-for-like group profitability and the strong performance of its Globesign acquisition.

Group profit before tax and exceptional items from continuing operations increased from a loss of £0.96m to a profit of £2.05m and after exceptional items, the group recorded a pre-tax profit from continuing operations of £2.28m, compared with a £3.34m pre-tax loss in the prior year.

Basic earnings per share saw the business overturn a loss of 39.56p into a positive 24.52p.
            
However, the company said it would not be recommending a dividend due to the very large dividend paid in July this year.

The Kidderminster company also significantly reduced its debt levels following a successful restructuring. This has seen the company total debt levels of £1.48m, as against £7.5m this time last year.

Operationally, the company said the acquisition of Westex, considered the UK’s premium tufted carpet manufacturer, was seamless and it has significantly enhanced the group’s earnings.

In 2014, Westex generated profits of £4.53m although the contribution to Victoria’s pre-tax profit was only £1.17m, reflecting the fact that Victoria only owned the business for just three months of the financial year.

The strengthening UK market also had a beneficial effect on the business, achieving a like-for-like sales growth of 1.7% to £28.21m (2013: £27.73m), excluding the impact of Westex.

The Australian market did not fare as well, with sales down by 1.1% on the prior year at A$65.40m. The year also saw the company rationalise its spinning mills in Australia, significantly improving its operational efficiencies in the market.

New product ranges were also successfully launched during the year. These being a reaction to evolving market trends.

Wilding said: “2014 marked a significant improvement in Victoria’s financial position. Much of the underlying improvement has come from our relentless day-to-day focus on costs, margins and sales growth.”

“We are encouraged by the outlook for our business, with the UK residential property market showing signs of increased consumer confidence. The Australian market is also showing signs of economic improvement, which will, in time, translate into consumer confidence and increased demand for carpet.
   
“With the reshaping of the business that has already occurred, together with the improving market conditions and other opportunities that we see, I am optimistic about the group’s future.”
 

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