Victoria Carpets hails strong revenue recovery as it returns to acquisition trail

Victoria Carpets is eyeing up further targets at “attractive prices” as it seeks out value as part of its growth plans.

The acquisitive group only made “some small bolt-on acquisitions” last year but held off on strategic purchases because it said it was unable to find opportunities that provided value for money.

However that could be about to change, and Victoria is ready to roll out the red carpet for deals that can be done at the right price.

Executive chairman Geoff Wilding said: “The events of the last few months have caused some private company owners to reassess their priorities and we are seeing some interesting, value-creating opportunities to acquire high quality businesses on attractive terms.”

Covid-19 did result in a £50m writedown of goodwill on its balance sheet, affecting all of the group’s cash generating units. This contributed to a statutory pre-tax loss of £64m, although its operating performance remained healthy.

In a statement to the stock market, it said: “It is important to understand that this is a non-cash accounting adjustment and we believe that all of the historical acquisitions represent good value for money for the group.”

Victoria is the largest manufacturer of carpet in the UK and the second largest in Australia, as well as the largest manufacturer of underlay in both countries.

Its sales has recovered strongly following the end of the lockdown period. Its June sales were slightly above its pre-Covid 19 budget after April and May had delivered 35% and 55% respectively.

The Kidderminster-based group also revealed it had increased its revenues for a seventh-consecutive year, as sales grew 10% to £621.5m. However underlying profits dipped 12% to £50.7m.

Wilding said: “Victoria continued to grow both organically and by acquisition in FY2020, despite the significant impact of Covid-19 on the business from late-February, which turned what would have been a very good year into a good year.

“Revenues, underlying earnings, and operating margins, all continued to grow despite the challenging market conditions.

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