For Immediate Release 26 June 2017
('Victoria,' the 'Company,' or the 'Group')
Significant Demand drives Manufacturing and Logistics Reorganisation
Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, today announces that due to rapid growth and continued significant demand for its products, it is reorganising the Group's UK manufacturing footprint and logistics operations principally to increase production capacity and improve service levels for customers.
Each of these positive developments will also progressively improve margins for the Group.
Increasing manufacturing productivity
Given the significant expansion of the Group in recent years, Philippe Hamers, the Group Chief Executive, has, following his appointment in March 2017, reviewed the UK manufacturing footprint with the goal of increasing capacity while improving production efficiency. The reorganisation of the manufacturing capability, which involves the transfer of manufacturing operations in Kidderminster to the Group's two other UK carpet production facilities, will:
· Rationalise the Group's manufacturing operations to drive further incremental margin uplift.
· Optimise asset utilisation and positively impact manufacturing efficiency to provide significant - and much needed - additional capacity without material capex.
The Kidderminster site will continue to operate with head office, product development, and new warehousing and showroom functions.
Strengthening of Group Logistics
As previously advised to shareholders, for the past eight months the Group has, in conjunction with specialist consultants, been reviewing its UK logistics network in order to improve margins for the Group and enhance service levels for customers. These objectives will be achieved with the reorganising and include:
· Immediately relocating the current Midlands distribution centre, which has become too small for purpose, into the Group's Kidderminster site. This action will provide significantly increased capacity.
· Opening a Southern distribution centre to the North West of London by late 2018, servicing all of the Group's brands, and thereafter a further new distribution centre, in the North of England.
The Board is pleased to announce that the Group continues to trade well. Completion of the integration of recent acquisitions in the UK, the Netherlands, and Australia, has ensured that the Group's underlying profits before tax will be well ahead of last year and the Board is confident of meeting market expectations for the financial year ending 31 March 2018.
The Board believes Victoria is well placed for further growth given its expanding international operations, which now represent over a third of the business. In addition, reshaping the Group will achieve meaningful cost and margin synergies, freeing up capital for further domestic and international earnings enhancing acquisitions.
Geoff Wilding, Executive Chairman, Victoria PLC commented:
"The successful growth of Victoria has enabled the Group to reassess how best to utilise its manufacturing and logistics capabilities. By reorganising our manufacturing and logistics operations, we will continue to grow Victoria's earnings per share and free cash flow.
"We have done this before, of course. Shareholders will no doubt recall our manufacturing rationalisation in Australia in 2014, which was highly successful with resultant revenue growth and improvement in margins that have been very pleasing.
"Additionally, we remain confident that further significant earnings-accretive acquisition growth, in addition to underlying organic development, can be achieved to create further shareholder value."
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
For more information contact:
Victoria PLC +44 (0) 1562 749 300
Geoff Wilding, Chairman
Philippe Hamers, Chief Executive
Michael Scott, Group Finance Director
Cantor Fitzgerald Europe +44 (0) 20 7894 7000
(Nominated Adviser & Broker)
Rick Thompson, Phil Davies, Michael Reynolds (Corporate Finance)
Mark Westcott, Caspar Shand-Kydd (Sales)
finnCap +44 (0) 20 7220 0500
Matt Goode, Carl Holmes (Corporate Finance)
Tim Redfern (Corporate Broking)
Buchanan Communications +44 (0) 20 7466 5000
Charles Ryland, Victoria Hayns, Madeleine Seacombe
This information is provided by RNS