Victoria PLC - Interim Results

RNS Number:1540I

Victoria PLC

21 November 2007

Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: Wednesday, 21 November 2007

Embargoed: 7.00am

Victoria PLC

Leading manufacturers of high quality carpets in the UK, Australia and Ireland

Interim Results

six months ended September 2007

2007 2006

Revenue #28.76m #27.03m +6.4%

Operating Profit #1.58m #1.29m +23.2%

Profit before Tax #1.25m #1.00m +24.8%

Earnings per Share 12.92p 10.69p +20.9%

Solid operating cash generation

The Group's geographic spread and customer profile helped to off-set economic

and market conditions in UK and Ireland. Australia delivered a very solid

performance and increased market share

Changes to the composition of NED's combined with experienced management team to

drive and develop future strategy

'The continued growth we envisage from both existing product brands, recently

introduced product styles and other initiatives will, we believe, enable us to

take full advantage of our market leading position and successfully deal with

whatever market conditions prevail.

'The Group remains optimistic that it will deliver an overall performance ahead

of last year and in-line with both the Management's and market expectations.'

Bob Gilbert, Chairman

FULL STATEMENT ATTACHED

Enquiries:

Alan Bullock, Group Managing Director Fiona Tooley, Director

Ian Davies, Group Finance Director Keith Gabriel, Senior Account Manager

Victoria PLC Citigate Dewe Rogerson

Tel: +44 (0) 1562 749640 Tel: +44 (0) 121 455 8370

Mobile: +44 (0) 7785 325701 (AB) Mobile: +44 (0) 7785 703523 (FMT)

www.victoria.plc.uk

Victoria PLC

CHAIRMAN'S STATEMENT

Interim Results for the six months ended September 2007

I am pleased to be able to report that the Group has made a solid start to this

financial year, with the Group's geographical spread of business and customer

profile assisting us to off-set the challenging economic and market conditions

we have seen during the first half-year in both the UK and Ireland.

Financial Results Summary

Income Statement

Revenues from the Group's activities have grown by 6.4% in the half-year from

#27.0 million to #28.8 million. Operating profit has increased by 23.2% from

#1.29 million to #1.58 million. The Group has continued to demonstrate tight

operating and material cost control with a further improvement in operating

margin, on a like for like basis, from 4.8% to 5.5%

Net finance costs at #0.38 million (2006 #0.36 million) were broadly in-line

with the comparative period and remain well covered by operating profit. Profit

before tax was up 24.8% at #1.25 million compared to #1.00 million for the

corresponding period last year. Profit attributable to equity shareholders

increased 20.9% from #0.74 million to #0.90 million, with basic earnings per

share up from 10.69 pence to 12.92 pence.

Balance Sheet

The Group's net assets increased from #29.0 million at 31 March 2007 to #29.8

million at the end of the period. Inventory has increased by #1.42 million to

#17.2 million, in part reflecting increased levels of revenue, but also the

build up of product to support new ranges and the usually busy autumn period in

the UK and Ireland.

Cash Flows and Net Debt

Net cash inflow from operating activities was #1.99 million, an increase of

#0.44 million on the corresponding period last year. The net effect of the

increase in working capital, reflecting the growth in the business, was a cash

outflow of #0.37 million. Reported net debt has increased over the period by

#0.16 million from #9.69 million at 31 March 2007 to #9.85 million. The Group

continues to maintain a significant proportion of its borrowings in Australian

dollars and the effect of changes in exchange rates on overall foreign currency

borrowings, increased Group net debt by #0.19 million.

UK

Trading in the first four months of the period in the UK saw sales reasonably

ahead of the corresponding period last year, followed by a marked fall-off in

August & September. This left revenues up 1.1% in the half-year at #12.4

million. Successive base interest rate increases and the sub-prime mortgage

crisis conspired to sap consumer confidence for spending on the High Street. As

a result, operating profit in the UK was down by 23.2% to #262k with profit

before tax down to #135k.

During the first half-year, Victoria Carpets has continued to invest in

additional plant and new product ranges thus positioning itself well for the

second half of the financial year which traditionally has been the stronger

period.

Ireland

In Ireland, revenues were down by 13.7% from #3.03 million to #2.61 million with

sales declining in both the contract and residential carpet sectors. The rather

'lumpy' nature of contract sales corresponded with a particularly strong

first-half last year and accounted for the majority of this decline. Residential

carpet sales were slightly down with the General Election and a slower economy

negatively affecting consumer confidence.

The resultant effect was to see operating profit down from #204k to #118k and

profits before tax down from #185k to #100k.

Again in Ireland there was a heavy spend on new ranges and point-of-sale display

units positioning the business well for the second half year.

Australia

In an otherwise buoyant Australian economy, only the commodity driven states of

Western Australia and Queensland enjoyed strong growth in the housing sector.

The major states of New South Wales and Victoria remained relatively flat with

consumer demand dampened by interest rate increases.

In this context, our Australian operation has delivered a very solid performance

and has increased its market share. Revenues in Australia grew strongly from

#11.7 million to #13.7 million, an increase of 17.1%.

Pleasingly, new product introductions made last year also enabled us to grow our

gross profit margin by 2.8%. Operating profit increased by #0.49 million, up by

53.2 % to #1.41 million and profit before tax increased by 61.1% from #0.79

million to #1.28 million.

Canada

Colin Campbell, our Canadian Associate Company, has continued to make excellent

progress with revenues up 13.6% to C$ 4.87 million. Profits before tax increased

6.5% to C$427k from C$401k in the corresponding period last year.

Directorate Changes

As shareholders will be aware, the Company recently announced changes to the

composition of its Non-executive Director team.

This is the last report that I will make to shareholders in my capacity as a

Director and Non-executive Chairman of Victoria. After eleven enjoyable years in

the Chair, I have decided to step down and retire. At the same time, my fellow

Non-executive Director, Keith Ackroyd will also retire.

I take this opportunity to welcome Mr Aram Shishmanian and Ms Nikki Beckett to

the Board as Non-executive Directors. They joined the Company in October and

will work alongside the Executive team and my successor, Alexander Anton, who

will take up the Chair on 3 December 2007.

The timing of these changes clearly allows for an orderly transition by the

Company's current Non-executives to the new team whilst also dovetailing well

with the Group's strategic planning programme for the future.

I believe that when I retire from the Board at the end of the month, I leave the

Group in good health and with an experienced management team which, when

combined with the additional skills of the newly appointed Non-executive

Directors, will be capable of taking the business forward over the next few

years.

Current Trading Prospects

Our growth to date reflects a creditable performance for the Group, especially

as we continue to operate in a difficult period for UK retailers.

Whilst there continues to be a clear lack of visibility about the short to

medium term economic and market prospects in the UK and Ireland, we are

witnessing stronger market conditions in Australia and Canada.

The continued growth we envisage from both existing product brands, recently

introduced product styles and other initiatives will, we believe, enable us to

take full advantage of our market leading position and successfully deal with

whatever market conditions prevail.

The Group remains optimistic that it will deliver an overall performance ahead

of last year and in-line with both the Management's and market expectations.

Bob Gilbert

Chairman

21 November 2007

Victoria PLC

Consolidated Income Statement

For the half-year ended 29 September 2007 (unaudited)

Notes Half-year Half-year Year ended

ended ended 31 March 2007

29 September 30 September #'000

2007 2006

#'000 #'000

--------------------------------------------------------------------------------

Revenue 3 28,757 27,026 55,426

Cost of sales (20,208) (19,288) (39,003)

--------------------------------------------------------------------------------

Gross profit 8,549 7,738 16,423

Distribution costs (5,662) (5,459) (10,641)

Administrative expenses (1,644) (1,531) (3,097)

Other operating income 340 537 700

Exceptional items - - -

--------------------------------------------------------------------------------

Operating profit 3 1,583 1,285 3,385

Share of results of

associated company 45 78 104

Finance costs (379) (362) (727)

--------------------------------------------------------------------------------

Profit before tax 1,249 1,001 2,762

Taxation 4 (352) (259) (754)

--------------------------------------------------------------------------------

Profit for the period 897 742 2,008

--------------------------------------------------------------------------------

Attributable to:

Equity holders of the parent 897 742 2,008

--------------------------------------------------------------------------------

Earnings per share

From continuing operations

Basic 5 12.92p 10.69p 28.92p

--------------------------------------------------------------------------------

Diluted 12.92p 10.69p 28.92p

--------------------------------------------------------------------------------

Consolidated Statement of Recognised Income and Expense

For the half-year ended 29 September 2007 (unaudited)

Half-year Half-year Year

ended ended ended

29 September 2007 30 September 2006 31 March 2007

#'000 #'000 #'000

--------------------------------------------------------------------------------

Exchange differences

on translation of

foreign operations 819 (402) (33)

--------------------------------------------------------------------------------

Net income/(loss)

recognised directly in

equity 819 (402) (33)

Profit for the period 897 742 2,008

--------------------------------------------------------------------------------

Total recognised

income and expense for

the period 1,716 340 1,975

--------------------------------------------------------------------------------

Attributable to:

Equity holders of the parent 1,716 340 1,975

--------------------------------------------------------------------------------

Victoria PLC

Consolidated Balance Sheet

As at 29 September 2007 (unaudited)

29 September 2007 30 September 2006 31 March 2007

#'000 #'000 #'000

--------------------------------------------------------------------------------

Non-current assets

Intangible assets 486 504 491

Property, plant and

equipment 24,354 23,275 23,846

Investment property 180 180 180

Investment in

associated company 565 507 469

Deferred tax asset 1,016 646 983

--------------------------------------------------------------------------------

Total non-current

assets 26,601 25,112 25,969

--------------------------------------------------------------------------------

Current assets

Inventories 17,160 15,406 15,740

Trade and other

receivables 10,132 11,182 9,603

Financial asset 11 - 10

Cash at bank and in

hand 823 633 644

--------------------------------------------------------------------------------

Total current assets 28,126 27,221 25,997

--------------------------------------------------------------------------------

Total assets 54,727 52,333 51,966

--------------------------------------------------------------------------------

Current liabilities

Trade and other

payables 9,437 8,849 8,234

Current tax

liabilities 1,051 977 998

Financial liabilities 6,426 7,264 5,261

--------------------------------------------------------------------------------

Total current

liabilities 16,914 17,090 14,493

--------------------------------------------------------------------------------

Non-current liabilities

Trade and other

payables 1,502 976 1,209

Financial liabilities 4,246 5,154 5,072

Deferred tax

liabilities 2,234 1,764 2,209

--------------------------------------------------------------------------------

Total non-current liabilities 7,982 7,894 8,490

--------------------------------------------------------------------------------

Total liabilities 24,896 24,984 22,983

--------------------------------------------------------------------------------

Net assets 29,831 27,349 28,983

--------------------------------------------------------------------------------

Equity

Issued share capital 1,736 1,736 1,736

Share premium 829 829 829

Retained earnings 27,266 24,784 26,418

--------------------------------------------------------------------------------

Total equity 29,831 27,349 28,983

--------------------------------------------------------------------------------

Victoria PLC

Consolidated Cash Flow Statement

For the half-year ended 29 September 2007 (unaudited)

Notes Half-year Half-year Year

ended ended ended

29 September 30 September 31 March

2007 2006 2007

#'000 #'000 #'000

-------------------------------------------------------------------------------

Net cash inflow

from operating

activities 6a 1,993 1,552 5,061

-------------------------------------------------------------------------------

Investing activities

Dividends received

from associates - - 32

Purchases of

property, plant and

equipment (1,106) (527) (1,959)

Proceeds of

disposals of

property, plant and 10 19 74

equipment

-------------------------------------------------------------------------------

Net cash used in

investing

activities (1,096) (508) (1,853)

-------------------------------------------------------------------------------

Financing activities

(Decrease)/increase

in long-term loans (682) 663 347

Receipts from

financing of assets 40 339 870

Payment of finance

leases/HP

liabilities (397) (564) (963)

Dividends paid (868) (799) (799)

-------------------------------------------------------------------------------

Net cash (used

in)/from investing

activities (1,907) (361) (545)

-------------------------------------------------------------------------------

Net (decrease)/increase

in cash and cash

equivalents (1,010) 683 2,663

Cash and cash

equivalents at

beginning of period (3,693) (6,363) (6,363)

Effect of foreign

exchange rate

changes 21 13 7

-------------------------------------------------------------------------------

Cash and cash

equivalents at end

of period 6b (4,682) (5,667) (3,693)

-------------------------------------------------------------------------------

Victoria PLC

Notes to the Interim Financial Statements

For the half-year ended 29 September 2007 (uanudited)

1 General Information

These condensed consolidated financial statements for the six months ended 29

September 2007 have not been audited or reviewed by the Auditors. They were

approved by the Board of Directors on 20 November 2007.

The information for the year ended 31 March 2007 does not constitute statutory

accounts as defined in section 240 of the Companies Act 1985. A copy of the

statutory accounts for that year has been delivered to the Registrar of

Companies. The Auditors' report on those accounts was unqualified.

2 Accounting Policies

These condensed consolidated financial statements should be read in conjunction

with the Group's financial statements for the year ended 31 March 2007, which

were prepared in accordance with IFRSs as adopted by the European Union.

The accounting policies and basis of consolidation of these condensed financial

statements are consistent with those applied and set out on pages 40 to 44 of

the Group's audited financial statements for the year ended 31 March 2007.

In the current financial year, the Group will adopt International Financial

Reporting Standard 7 'Financial Instruments: Disclosures' (IFRS 7) for the first

time. As IFRS 7 is a disclosure standard, there is no impact of that change in

accounting policy on the half-yearly financial statements. Full detail of the

change will be disclosed in our annual report for the year ending March 2008.

3 Business Segments

For management purposes, the Group is organised into four operating divisions

according to the geographical areas where they are managed. These divisions are

the basis on which the Group reports its primary segment information. The four

divisions are UK, Ireland, Australia and the Canadian Associate.

Segment information for revenue, operating profit and a reconciliation to entity

net profit is presented below.

Half-year ended 29 September 2007 Half-year ended 30 September 2006

Revenue Operating Finance Profit Revenue Operating Finance Profit

#'000 profit costs before #'000 profit costs before

#'000 #'000 tax #'000 #'000 tax

#'000 #'000

--------------------------------------------------------------------------------------------------

UK 12,432 262 (127) 135 12,293 341 (158) 183

Ireland 2,611 118 (18) 100 3,027 204 (19) 185

Australia 13,714 1,414 (138) 1,276 11,706 923 (131) 792

Canada - - - 45 - - - 78

--------------------------------------------------------------------------------------------------

Subtotal 28,757 1,794 (283) 1,556 27,026 1,468 (308) 1,238

Central costs - (211) (96) (307) - (183) (54) (237)

--------------------------------------------------------------------------------------------------

Total

continuing

operations 28,757 1,583 (379) 1,249 27,026 1,285 (362) 1,001

--------------------------------------------------- ------------------------------

Tax (352) (259)

--------------------- ------ ------

Profit after

tax from

continuing

operations 897 742

Profit for the period

from discontinued

operations - -

--------------------- ------ ------

Profit after

tax and

discontinued 897 742

operations

--------------------- ------ ------

4 Tax Charge

Half-year Half-year

ended ended

29 September 2007 30 September 2006

#'000 #'000

--------------------------------------------------------------------------------

Current tax:

UK corporation tax (52) (13)

Overseas taxation charge 404 272

--------------------------------------------------------------------------------

352 259

Deferred tax:

Current year - -

--------------------------------------------------------------------------------

Total 352 259

--------------------------------------------------------------------------------

Corporation tax for the interim period is charged at 28.2% (2006: 28.1%),

representing the best estimate of the weighted average annual corporation tax

rate expected for the full financial year.

5 Earnings and Earnings per Share

The calculation of the basic and diluted earnings per share is based on the

following data:

Number of Shares Half-year Half-year

ended ended

29 September 30 September

2007 2006

-------------------------------------------------------------------------------

Weighted average number of ordinary

shares for the purposes of basic earnings

per share 6,943,556 6,943,556

Effect of dilutive potential ordinary shares:

Share options - -

-------------------------------------------------------------------------------

Weighted average number of ordinary

shares for the purposes of diluted earnings

per share 6,943,556 6,943,556

-------------------------------------------------------------------------------

Half-year ended Half-year ended

29 September 2007 30 September 2006

Earnings EPS Earnings EPS

#'000 pence #'000 pence

--------------------------------------------------------------------------------

Profit for the period from continuing

operations 897 12.92 742 10.69

Profit for the period from

discontinued operations - - - -

--------------------------------------------------------------------------------

Profit for the period from continuing

and discontinued operations 897 12.92 742 10.69

--------------------------------------------------------------------------------

Earnings per share

- basic continuing 12.92 10.69

- basic discontinued - -

--------------------------------------------------------------------------------

- basic 12.92 10.69

--------------------------------------------------------------------------------

- diluted 12.92 10.69

--------------------------------------------------------------------------------

The effect of dilutive shares on the earnings for the purposes of diluted

earnings per share is #nil (2006: #nil).

The denominators used for all basic, diluted and adjusted earnings per share are

as detailed in the 'number of shares' table above.

6 Notes to the Cash Flow Statement

a) Reconciliation of operating profit to net cash from operating activities

Half-year Half-year Year

ended ended ended

29 September 30 September 31 March

2007 2006 2007

#'000 #'000 #'000

--------------------------------------------------------------------------------

Operating profit from

continuing operations 1,583 1,285 3,385

Discontinued operations profit

before tax - - -

Adjustments for:

- Depreciation of

property, plant and

equipment 1,169 1,121 2,226

- Amortisation of

intangible assets 13 14 27

- (Profit)/loss on

disposal of property,

plant and equipment (2) (5) 8

- Exchange rate

difference on

consolidation 362 (197) (18)

- Business reorganisation costs - - -

--------------------------------------------------------------------------------

Operating cash flows

before movements in

working capital 3,125 2,218 5,628

(Increase)/decrease in

working capital (370) (59) 801

--------------------------------------------------------------------------------

Cash generated from

operations 2,755 2,159 6,429

Interest paid (379) (390) (792)

Income taxes

(paid)/received (383) (217) (576)

--------------------------------------------------------------------------------

Net cash from

operating activities 1,993 1,552 5,061

--------------------------------------------------------------------------------

b) Analysis of net debt

At Cash flow Other Exchange At

31 March #'000 non-cash movement 29 September

2007 2007

#'000 movement #'000 #'000

#'000

------------------------------------------------------------------------------------

Cash 644 146 - 33 823

Overdrafts (4,337) (1,156) - (12) (5,505)

------------------------------------------------------------------------------------

Increase/(decrease) in cash

in period (3,693) (1,010) - 21 (4,682)

Secured commercial

bills

Payable more

than one year (2,883) 542 - (157) (2,498)

Finance leases

Payable less

than one year (924) 397 (375) (19) (921)

Payable more

than one year (1,985) (40) 375 (29) (1,678)

Bank loans

Payable less than one

year - - - - -

Payable more

than one year (204) 140 - (6) (70)

Decrease in

net debt in

period - 1,039 - - -

------------------------------------------------------------------------------------

Total (9,689) 29 - (189) (9,849)

------------------------------------------------------------------------------------

7 Exchange Rates

The results of overseas subsidiaries and associated undertakings have been

translated into sterling at the average exchange rates prevailing during the

periods. The balance sheets are translated at the exchange rates prevailing at

the period ends:

Half-year Half-year Year

ended ended ended

29 September 2007 30 September 2006 31 March 2007

------------------------------------------------------------------------------

Australia - average

rate 2.3845 2.4565 2.4687

Australia - period end 2.3023 2.5031 2.4279

Euro - average rate 1.4710 1.4577 1.4717

Euro - period end 1.4326 1.4746 1.4735

Canadian dollar -

average rate 2.1296 2.0676 2.1540

Canadian dollar -

period end 2.0246 2.0840 2.2627

8 Related Party Transactions

During the period, the Group had transactions with its associate comprising

sales of goods to the value of #197k (2006: #307k) and provision of services

worth #41k (2006: nil). At 29 September 2007 the Group was owed #243k (2006:

#317k). All goods and services were provided at market rates.

9 Risks and Uncertainties

The Board continuously assesses and monitors the key risks of the business. The

key risks that could affect the Group's medium term performance and the factors

which mitigate these risks have not changed from those set out on page 29 of the

Group's 2007 Annual Report, a copy of which is available on the Group's website

- www.victoria.plc.uk. The Chairman's Statement includes consideration of

uncertainties affecting the Group in the remaining six months of the year.

10 Information Rights

Under section 146 of the Companies Act 2006, registered shareholders of fully

listed companies are able to nominate the underlying beneficial owners of their

shares to receive information rights from 1 October 2007. Companies are required

to fulfil these requests from 1 January 2008.

Please note that beneficial owners of shares nominated by the registered holders

of those shares are required to direct all communications to the registered

holder of their shares rather than to the Company's registrar, Capita

Registrars, or the Company directly.

11 Statement of Directors' Responsibilities

The Directors confirm that to the best of their knowledge the condensed set of

financial statements has been prepared in accordance with IAS 34, 'Interim

financial reporting' as adopted by the European Union, and includes a fair

review of the information required by Disclosure and Transparency Rules 4.2.7

and 4.2.8 of the United Kingdom's Financial Services Authority.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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