Deal-hungry design-led carpets maker and distributor Victoria's (VCP:AIM) magical run continues, the shares weaving a 17.5p gain to £11.35 on the acquisition of Australian carpets maker Quest. Increasing the scale of its operations down under, Victoria's fourth acquisition in a year stokes another round of earnings upgrades.
Victoria, whose fortunes have been dramatically turned round by chairman Geoff Wilding (pictured below), is paying A$35 million or £16.4 million in total for Quest, a designer and seller of premium-quality carpets across Australia and New Zealand. Significantly, the deal turns Victoria into the second largest carpet maker in Australasia.
Wilding insists Quest, based near Melbourne and founded in 1978, is 'an extremely well-run and growing business' and says 'it took time to persuade the current owners to accept our offer.' It boasts an impressive track record over the past three years, despite testing macro-economic conditions in Australia, while all the existing management team are remaining with the business.
Moreover, Wilding says 'the acquisition will be immediately earnings enhancing for Victoria's shareholders even before the significant benefits expected to flow from the increased scale of our operations in Australia.' Quest is Victoria's fourth acquisition in the past year, following on from the takeovers of Westex, Abingdon Flooring and Whitestone.
Analysts are pushing through further upgrades for Victoria, a business seeing improving macro-economic trends in the UK and Australia. Cantor Fitzgerald Europe's Freddie George increases his published price target from £12 to £14 and his full-year pre-tax profit forecast from £10 million to £11.5 million. For next year, he upgrades his taxable profits estimate by over 20% from £11.5 million to £14 million.
