Victoria results see sharp decline in profits

VICTORIA carpets saw a sharp decline in pre-tax profits despite a small increase in revenues.

The Kidderminster-based international manufacturer and distributor of carpets and floorcoverings saw pre-tax profits fall by 25.6% from £1.46m to £1.09m in its preliminary results for the year ended April 3, 2010.

But group revenue increased by 1.3% from £62.15m to £62.97m compared with the previous year, with 63.5% coming from overseas operations. Operating profit declined by 20.1% to £1.78m.

The company said that successful product introductions, better plant utilisation and the strength of Australian Dollar contributed to a strong H2 performance in Australasia.

UK operations had expanded its channels to market including signing a three-year agreement to supply floorcoverings to the insurance replacement market, Victoria said.

Borrowings have reduced from £11.43m to £7.14m, leaving the group gearing at 16.1% compared to 26% at the start of the financial year.

A company statement said: “The past year has been an extremely challenging one, as once again we have had to contend with unprecedented turmoil in world financial markets and a global recession that has continued to sap consumer confidence.

“Looking ahead, any growth in the UK and Ireland in the short-term is likely to come from product innovation and some of the new market initiatives we are developing.

“Conversely, the group is fortunate at this time to have a very strong presence in the Australasian market which is commodity driven and at this stage looks likely to see strong economic growth over the next decade.

“The combination of well invested operations around the group, a strong balance sheet, low borrowings and strong cash flow means that the group is well positioned to create and exploit future opportunities.”