Victoria swings back to net profit as it expands by acquisition

Flooring designer and manufacturer Victoria reported a 6.6% improvement in revenue in its preliminary results on Tuesday, to £662.3m.

The AIM-traded firm said its underlying EBITDA was ahead 7.9% for the year ended 3 April at £127.4m, as its underlying operating profit was 3.5% firmer at £79.8m.

It swung to a total operating profit for the year of £45.9m, from a loss of £8.5m in the 2020 financial year.

Victoria’s underlying profit before tax was 4.4% higher at £50.1m, and its net profit after tax came in at £2.8m, compared to a loss of £71.8m a year earlier.

Underlying free cash flow was slightly lower at £38.8m, compared to £39.2m, while its net debt narrowed to £345.7m at year-end, from £365.9m 12 months prior.

The company’s net debt-to-EBITDA ratio was 3.1x, compared to 3.04x in the prior year.

Basic earnings per share were 2.3p, swinging from losses of 57.22p per share for 2020, while diluted adjusted earnings per share eked out gains of 0.8% to 28.66p.

Victoria noted that it refinanced all of its outstanding debt during the year, and raised additional capital for acquisitions, reducing its coupon by about 150 basis points.

It also extended its duration, so that the earliest of its senior debt would not now fall due until August 2026, with around one-third of the total not due until March 2028.

Five further earnings-enhancing acquisitions had been completed since the year ended at what the board described as “very attractive” valuations.

The firm said it still had “substantial amounts” of capital to deploy, and was in “active discussions” with additional high-quality opportunities to grow the business.

“I want to pay credit to all Victoria's management team, who, when it really mattered, delivered an extraordinary outcome for shareholders in a challenging operational environment,” said executive chairman Geoff Wilding.

“The result of their efforts is that the group is in an enviable operational and financial position to take advantage of opportunities to continue to create wealth for shareholders.”

At 0851 BST, shares in Victoria were down 3.2% at 1,060p.