Victoria hopes sales have hit the floor as it issues profit warning
Flooring group Victoria has issued a profit warning after months of “soft” sales, with the industry in the grip of “the longest decline in demand in the last 30 years”.
The Worcester-based manufacturer has estimated that market demand is down by nearly 25% compared with 2019, but said it has “continued to improve its competitive position – particularly in the UK”.
It revealed “earnings are likely to be below consensus expectations” despite forecasting an improvement in the second half of its financial year. It pointed hopefully to housing market data that indicates momentum in house sales, which is a key driver of demand for flooring, both before and after a house is sold.
Victoria is Europe’s largest carpet manufacturer and the second largest in Australia, and employs more than 6,000 people.
Philippe Hamers, chief executive of Victoria, said: “The flooring sector is experiencing the most severe and longest decline in demand in the last 30 years.
“During this period, we have focussed on optimising productivity and reducing operational costs whilst maintaining the same potential production capacity.”
It has made annual savings of £5m through the merger of its Balta & Carpet Line Direct and Victoria & Hugh Mackay brands, and will generate a further £5m from next year by relocating production from Belgium to Turkey.
Victoria has also begun a major investment project in its Spanish ceramics production with it hopes will improve earnings by up to £19m per year when it is complete in 18 months’ time.
