NOT FOR DISTRIBUTION TO ANY PERSON LOCATED OR RESIDENT IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. NOT FOR PUBLICATION IN THE UNITED STATES. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL ANY NOTES.

23 February 2021

THIS RELEASE CONTAINS INSIDE INFORMATION

Victoria PLC
("Victoria", the "Company", or the "Group")

Proposed offering of Senior Secured Notes and Current Trading Update

Leverage neutral bond issue

The Board of Victoria PLC (LSE:VCP) is pleased to announce that, following continued strong operating performance (see current trading update below) and favourable market conditions, it intends to offer €350 million in aggregate principal amount of Senior Secured Notes due 2026 (the "Notes"). Net proceeds will be used for general corporate purposes, in particular acquisitions, and the partial refinancing of existing 2024 senior secured notes to further improve the maturity profile of the Group's debt.

The Board wishes to highlight the following key items:

·    Leverage neutral transaction. The new bonds will not increase net debt (subject to transaction fees and expenses), with pro-forma senior net leverage of c. 2.8x and pro-forma total net leverage of c. 3.1x¹. Other than amounts used for the partial refinancing, the cash raised will remain on balance sheet until invested into earnings-accretive acquisitions, which the Board believe will happen in the short term.

·    Consistent Financial Policy. The Board stresses that Victoria's prudent financial policy remains unchanged.  The Group is committed to its financial policy of c. 3x senior net leverage post-completion of acquisitions, falling to 2x when in 'steady state'.

·    Existing Strong Liquidity. Even prior to Koch Equity Development's commitment of £175 million of perpetual preferred equity in November 2020, Victoria had £200 million of cash and undrawn credit-lines as of September 2020. Hence the additional capital from the proposed bond issue is solely intended to be deployed on high-quality, near-term acquisitions.

Current trading

As announced on 13 January, the Group achieved record revenues and operating profits for the 3rd quarter to December 2020 - despite the existence of lockdowns and other Covid-related challenges in various markets. Trading for the quarter delivered revenues of c. £184 million, an increase of c. 16% at constant-currency on the equivalent period in the prior year. This comprises a c. 11% increase in the UK & Europe Soft Flooring division, driven by organic growth; a c. 26% increase in UK & Europe Ceramic Tiles, driven by a combination of organic growth and the acquisition of Ceramiche Ascot in March 2020; and a c. 9% increase in Australia, driven by organic growth.

As reported in our interim results, the Group's EBITDA margin post initial lockdown increased on a like-for-like basis by more than 300bps versus the prior year, driven by investments in manufacturing and distribution and 'bottom slicing' of margin-dilutive products that have produced a sustainable competitive advantage. The positive trend in margin continued further in Q3.

As a result, EBITDA for the 12 months ended December 2020 was £120.0 million - above that for the last financial year to March 2020, despite the inclusion of the April to June Covid-19 lockdowns.

Further information

In relation to the above-mentioned refinancing, the Company intends later today to announce a simultaneous tender offer for certain of its existing notes and to distribute a conditional redemption notice in respect of certain existing notes. These announcements will follow in due course.

The Notes will be the general, senior obligations of the Company and will be guaranteed by certain of the Company's subsidiaries. Interest on the Notes will be payable semi-annually in arrears. The interest rate and offering price will be determined at the time of pricing of the offering, subject to market conditions.

An update will follow in due course.

Note:

(1) Leverage consistent with the methodology used by our lending banks, pre-IFRS 16 and - for the avoidance of doubt - excluding the KED perpetual preferred equity.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other security and shall not constitute an offer, solicitation or sale in the United States or in any jurisdiction in which, or to any persons to whom, such offering, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any jurisdiction.

The Notes and the related guarantees have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

This announcement may include projections and other "forward-looking" statements within the meaning of applicable securities laws. Any such projections or statements reflect the current views of the Company about future events and financial performance. The use of any of the words "expect," "anticipate," "continue," "will," "project," "should," "believe," "plans," "intends" and similar expressions are intended to identify forward-looking information or statements. Although the Company believes that the expectations and assumptions on which such forward-looking statements and information are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that such statements and information will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.

The forward-looking statements and information contained in this announcement are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information future events or otherwise, unless so required by applicable securities laws. Within the United Kingdom, this announcement is directed only at persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("relevant persons"). The investment or investment activity to which this announcement relates is only available to and will only be engaged in with relevant persons and persons who receive this announcement who are not relevant persons should not rely or act upon it.

Manufacturer target market (MIFID II product governance; UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs or UK PRIIPs key information document (KID) has been prepared as not available to retail investors in EEA or the United Kingdom, respectively.

This announcement contains inside information within the meaning of Regulation (EU) No 596/2014 of 16 April 2014 on market abuse. The person responsible for arranging the release of this announcement on behalf of the Company is Michael Scott, Group Finance Director.

FOR FURTHER INFORMATION CONTACT: