For Immediate Release
13 January 2021
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.
('Victoria', the 'Company', or the 'Group')
Record Performance for Q3 Trading
North America opportunity
December Quarter (Q3) Trading
The Board of Victoria PLC (LSE:VCP), the international designers, manufacturers and distributors of innovative floorcovering, is pleased to advise that the strong performance Victoria announced for the first half-year to 3 October 2020 has continued, with the Group achieving all-time record revenues and operating profits for the third quarter to the end of December.
Despite the UK lockdown in November, which is normally the best trading month of the year, and on-going Covid-related challenges in some of our other markets, the Group's revenues were more than 10% up on the prior year. This performance was due to three principal drivers:
· Firstly, Victoria's business is now highly diversified geographically - generating nearly 75% of earnings and cash from outside the UK. The Group sells its products to thousands of flooring retailers across Europe, North America, the UK, Australasia, and the Middle East.
· Secondly, all of the Group's factories remained open throughout the quarter, with full production schedules, and the Group's logistics centres maintained deliveries to our customers to satisfy demand, whilst providing a Covid-safe environment for our staff.
The Company intends to continue operating from all of its sites during the current quarter.
· Finally, our strategic investment in logistics and distribution in the UK, completed in late-2019, has provided Victoria with a sustainable competitive advantage. The objective of this investment was to improve our customer experience - enabling retailers we supply to hold lower inventory levels (reducing their working capital and warehousing costs), whilst still being confident that product would be received when required for installation. This service level has been made possible only by Victoria's scale (the revenues and investment required precludes most competitors from independently offering the same service), is highly valued by retailers, and continues to drive an increased 'share of wallet' - as evidenced by our UK revenues increasing by more than twice the estimated growth of the market overall. Despite these gains our UK residential flooring market share is currently only circa 15% and there is substantial headroom for continued growth.
North America opportunity/Senior executive hire
North America is a significant existing end market for Victoria, where the Group has been successfully selling and distributing its products for more than a decade. As noted at the time of the material investment by Koch Equity Development (November 2020), the Board believes there is an opportunity to greatly increase our distribution capabilities across North America. Koch Industries has a long-standing interest in flooring via its INVISTA business and the Stainmaster Brand.
To execute the opportunity, the Board is pleased to announce that Roberto Moreno has joined the Group as Managing Director - Strategic Investments and Corporate Development. Roberto's role will involve working with other parties to source and diligence potential growth opportunities.
Roberto is currently living in New York, where he was previously the Chief Investment Officer for E.L. Rothschild and the Managing Member of investment company, Pine Management. Prior to this, Roberto was a Managing Director at Sandton Capital Partners. In these roles he was responsible for originating and executing investments, and management oversight of portfolio companies in Europe and North America.
The Board looks forward to updating shareholders on progress in North America in due course.
Executive Chairman Geoff Wilding commenting on the record performance said:
"Demand for flooring product is strong from consumers' renewed focus on investing in their homes but we are outperforming the market generally and believe this to be both sustainable and on-going due to the benefits of our unique service proposition. This is a direct result of the substantial investment we made in our logistics platform during 2019.
Undoubtedly, the UK November lockdown had some impact on our performance - we would have done even better without it - and the current lockdown may similarly impact the final quarter of FY 21. However, Victoria has clearly shown its operational resilience by achieving record revenues and earnings in the December quarter and the Board believes it is well placed to meet this headwind."
For more information contact: