Carpetmaker Victoria declares half-year losses despite revenue and profits up

CARPET manufacturer Victoria has said it is encouraged by improving market conditions despite announcing a half year loss of more than £5.7m.

The loss borne by the Kidderminster company, which operates Westwood Yarns in Holmfirth, refers to the infamous boardroom battle the business underwent last year and its aftermath.

The company’s latest interim results show revenue up almost £6m to £40.51m (H1 2013: £34.53m), with pre-tax profit before exceptional items rising to £2.4m (H1 2013: £0.5m).

However, all this was wiped out due to £8.12m of exceptional items, £7.55m of which came from a charge in relation to the Contract for Differences between Victoria and Camden Holdings which was terminated in July 2014.

Last year Victoria shareholders approved the terms of the Contract for Differences which was subsequently entered into by the company. The payment of a special dividend entitled Camden Holdings, the owner of the contract to terminate the agreement. This enabled Victoria to make a cash payment pursuant to the terms of the contract.

Camden is a company owned by The Camden Trust of which Victoria executive chairman, Geoff Wilding, is the settlor and a discretionary beneficiary.
 
Victoria sought the approval of shareholders to issue new ordinary shares to Camden which in turn agreed to re-invest the entire cash amount into the new shares.

Following the subscription for the new shares, Camden owned 50% of the enlarged issued share capital and voting rights of Victoria.

Given the latest results, Wilding – not surprisingly – opted to focus on the positive.

He said the business was increasingly encouraged by market conditions, although consumer confidence had some way to go before returning to normal.

Rising house sales in its principal markets of the UK and Australia is attributed as the main driver to growth.

Wilding said investors should also be encouraged by the fact many employees had recently become shareholders.

“The motivation, commitment, and belief in the business this engenders should not be underestimated,” he said. 

The company, which has recently acquired Abingdon Flooring and been the beneficiary of a £10m loan from the Business Growth Fund, is now looking to grow its market share.

Wilding said: “Although Victoria has grown significantly in the last 12 months, the group’s revenues still represents only a tiny fraction of the markets in which it trades. There is both potential for sales to increase in line with the market and the opportunity to grow market share.
 
“The board believes it has an appropriate strategy to further improve the group’s performance and is focussed on its execution.”