Victoria sees sales fall
EMBATTLED carpet maker Victoria has warned it is likely to breakeven at best for the first half of the year due to continuing tough markets.
The firm, currently embroiled in a bitter boardroom battle for control of the business, said despite maintaining market share in the six months to September 29 sales were below the level seen in the same period last year.
Victoria Carpets operates Westwood Yarns, in Holmfirth.
In a trading update ahead of its interims the firm said: “Trading throughout the group has been satisfactory, particularly in the light of the prevailing difficult market and economic conditions in both of the group’s principal operating territories.
“Market share has been maintained or increased in poor market conditions but overall group sales will be below those in the equivalent period last year. The board is anticipating a breakeven outcome in the first half, after continued investment in new product initiatives and before exceptional costs.”
It said careful management of stock and working capital had resulted in a lower-than-expected net and in the UK, the company had also successfully secured new banking facilities, moving a substantial amount of borrowings from short term overdraft to fixed longer term facilities which will expire in 2015.
Trading conditions in the UK and Ireland remained extremely tough during the first six months, with both weak consumer sentiment and the impact of the Jubilee and Olympics reducing footfall on the High Street.
However, it added the group continued to see increased sales to the John Lewis Partnership, the Insurance Replacement Market and within both the contract and export markets.
It said the final quarter of the calendar year was usually its strongest selling season, however, the difficult trading conditions made it difficult to predict what might happen.
Victoria said it would have a better idea how things stood by the time the interim results are published in November. The firm has also shelved proposals on a proposed move to the Alternative Investment Market until things are clearer.
However, the future direction of the business may be determined before then. A general meeting on Wednesday will see whether shareholders are prepared to back former non-executive directors Geoff Wilding and Alexander Anton in their attempt to seize control of the board and generate growth.
The two men, together with former non-executive director Sir Bryan Nicolson stepped down from the board earlier this year in a row of an incentive scheme.
The company confirmed in its statement today that the costs of dealing with this dispute were £0.2m although some of the legal costs were being contested.
The cost of arranging the general meeting has been estimated at £0.27m.
