REG - Victoria PLC - Audited results for the year ended 30 March 2024
19/06/2024 07:00
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RNS Number : 0215T Victoria PLC 19 June 2024
Victoria PLC
('Victoria', the 'Company', or the 'Group')
Audited Results
for the year ended 30 March 2024
Revenue and earnings in line with market expectations
Cautious outlook for FY2025, but strong operational fundamentals in place as
demand normalises
Victoria PLC (LSE: VCP) the international designers, manufacturers and
distributors of innovative flooring, announces its audited results for the
year ended 30 March 2024. Whilst macro-economic factors continue to impact
consumer spend on flooring, the Group nevertheless outperformed the wider
flooring market in several of its key geographies.
FY2024 Financial and Operational highlights
Year ended Year ended
30 March 2024 1 April 2023
Underlying revenue £1,256.5m £1,461.4m
Underlying EBITDA(1) £160.7m £196.0m
Underlying EBITDA (Pre IFRS-16) £129.6m £171.3m
Underlying operating profit(1) £73.6m £118.8m
Statutory operating loss (£51.8m) (£24.1m)
Underlying profit before tax(1) £27.1m £76.9m
Statutory net loss after tax (£108.0m) (£91.8m)
Underlying free cash flow(2) £28.2m £71.3m
Net debt(3) £632.9m £658.3m
Net debt / EBITDA(4) 4.4x 3.4x
Earnings / (loss) per share:
- Basic (93.85p) (79.35p)
- Diluted adjusted(1) 19.12p 39.06p
· Execution of the integration projects has continued at pace with the
resulting productivity gains and cost savings protecting the Group's
underlying EBITDA margin, which fell by less than 100bps despite revenue
falling by nearly 14%.
· Completion of the UK & Europe broadloom carpet integration
resulted in a margin improvement of 370bps leading to underlying EBITDA for
the division to increase by 23.8% to £82.8 million despite lower volumes -
underlining the success of Victoria's Balta integration project.
· Management remains focussed on completing the integration projects
which are expected to deliver a structural improvement in the Company's
operating margins of 250-350 bps.
· Production capacity has been maintained alongside the 16% (1,170
person) reduction in employees enabled by the integration and reorganisation
of the Group's business units, ensuring normalised demand can be met when it
returns.
· The Group boasts a strong liquidity position with cash and undrawn
credit lines in excess of £250 million.
· Almost all debt financing takes the form of Senior Notes, which have
no financial maintenance covenants. Although the earliest tranche is not due
for repayment until August 2026, the Board has started working on refinancing
options to allow adequate time to optimise the terms of the replacement
funding and management remain focussed on reducing Group leverage ratio ahead
of the refinancing.
· Through the course of FY2024 Grant Thornton continued their work on
addressing the concerns expressed in their FY2023 report in relation to
Hanover Flooring Limited, a small subsidiary contributing 1.25% of Group
revenue. These extensive additional procedures evidenced that there was no
financial misconduct and all payments due to Victoria have been received, no
money is unaccounted for, and Victoria has suffered no loss. Consequently, the
auditors have confirmed in the FY2024 Audit Report that their concerns have
been appropriately satisfied.
· The Board are confident that, notwithstanding near-term challenging
macro-economic conditions, all businesses benefit from strong economic
fundamentals, and skilled and dedicated management are well placed as demand
normalises.
Commenting on Victoria's Outlook, Geoff Wilding, Executive Chairman, said:
"Whilst we remain cautious about near-term trading conditions and cannot
predict precisely when demand will normalise, we are (logically) continually
moving closer to that point. As interest rates fall, housing transactions and
deferred residential renovation, improvement and repair purchases will
rebound, driving flooring demand. We expect the market outperformance and
productivity improvements secured over the last 24 months to then be rapidly
reflected in Victoria's earnings and cash flow. Until this occurs, we remain
focussed on minimising controllable costs and driving market share gains."
(1) Underlying performance is stated before exceptional and non-underlying
items. In addition, underlying profit before tax and adjusted EPS are stated
before non-underlying items within finance costs.
(2) Underlying free cash flow represents cash flow after interest, tax and
replacement capital expenditure, but before investment in growth, financing
activities and exceptional items.
(3) Net debt shown before right-of-use lease liabilities, preferred equity,
bond issue premia and the deduction of prepaid finance costs.
(4) Leverage shown consistent with the measure used by our lending banks.
For more information contact:
Victoria PLC www.victoriaplc.com/investors-welcome
(http://www.victoriaplc.com/investors-welcome)
Geoff Wilding, Executive Chairman
Via Walbrook PR
Philippe Hamers, Group Chief Executive
Brian Morgan, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Joint Broker) +44 (0)20 7496 3095
Rick Thompson, Phil Davies, James Fischer
Berenberg (Joint Broker) +44 (0)20 3207 7800
Ben Wright, Richard Bootle
Walbrook PR (Media & Investor Relations) +44 (0)20 7933 8780 or victoria@walbrookpr.com
(mailto:victoria@walbrookpr.com)
Paul McManus, Louis Ashe-Jepson
+44 (0)7980 541 893 / +44 (0)7747 515 393
About Victoria PLC (www.victoriaplc.com (http://www.victoriaplc.com) )
Established in 1895 and listed since 1963 and on AIM since 2013 (VCP.L),
Victoria PLC, is an international manufacturer and distributor of innovative
flooring products. The Company, which is headquartered in Worcester, UK,
designs, manufactures and distributes a range of carpet, flooring underlay,
ceramic tiles, LVT (luxury vinyl tile), artificial grass and flooring
accessories.
Victoria has operations in the UK, Spain, Italy, Belgium, the
Netherlands, Germany, Turkey, the USA, and Australia and employs
approximately 6,300 people across more than 30 sites. Victoria is Europe's
largest carpet manufacturer and the second largest in Australia, as well as
the largest manufacturer of underlay in both regions.
The Company's strategy is designed to create value for its shareholders and is
focused on consistently increasing earnings and cash flow per share via
acquisitions and sustainable organic growth.
Victoria PLC
Chairman and CEO's Review
Last year, flooring demand fell more than we expected, impacting revenue and
margins.
Why did this happen? Firstly, let us assure shareholders it is not because,
after 129 years, Victoria has suddenly forgotten how to competitively
manufacture and sell flooring. In fact, the contrary is true and we are
pleased to confirm that the Group outperformed the wider market in several of
its key geographies. (More on this later in the report). Nevertheless, two
macro-factors combined to create a perfect storm in terms of consumer demand
for flooring:
1. Pull-forward of demand in FY2021 and FY2022. Consumers understandably
invested heavily in their homes during Covid-19 lockdowns and the normal
repair/replacement/improvement ("RMI") cycle was accelerated. The magnitude of
this effect varied across geographies, but long-term industry data suggests
the 'excess consumption' in 2021/22 has now been largely offset by the
abnormally low consumption of the last two years.
2. Macro-economic environment depressing consumer discretionary spending.
Central banks increasing interest rates to levels not seen in a generation,
inflation driving higher prices for essentials, and less perceived job
security led to lower consumer confidence over the last 24 months and
therefore less spending on discretionary items such as flooring.
Consequently, FY2024 was the first year of negative revenue and earnings
growth for more than 10 years.
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Revenue 71.4 127.0 255.2 330.4 417.5 566.8 621.5 662.3 1,019.8 1,461.4 1,256.5
(£ million)
Underlying 129.6
EBITDA(1, 2) 5.1 15.8 32.3 45.7 64.7 96.3 107.2 112.0 143.5 171.3
(£ million)
EBITDA margin % 7.2 12.4 12.7 13.8 15.5 17.0 17.2 16.9 14.1 11.7 10.3
(1) The KPIs in the table above are alternative performance measures used by
management along with other figures to measure performance. Full financial
commentary is provided in the Financial Review below.
(2) Underlying EBITDA in FY20 through FY24 is stated before the impact of IFRS
16 for consistency of comparison with earlier years. IFRS-reported EBITDA for
these years are £118m, £127m, £163m, £196m and £161m respectively.
The objectives of this report are to help our shareholders better understand
the business and be able to reach an informed view of the value of the
Company, its future prospects, and its financial resilience.
In order to communicate this information, we include both IFRS and non-IFRS
performance measures. The review focuses on the underlying operating results
of the business, which delivered underlying EBITDA of £160.7 million (FY2023:
£196.0m) and underlying EBIT of £73.6 million (FY2023: £118.8m). The
Financial Review covers non-underlying items in detail, following which the
IFRS reported operating loss was £51.8 million (FY2023: loss £24.1m), and
additionally covers financial items and tax.
Shareholders are of course free to accept or disregard any of this data but we
want to ensure that you have access to similar information Victoria's Board
and management use in making decisions.
FY2024 OPERATIONAL REVIEW
Overview
The global flooring market is c. USD 242 billion(1) (GBP 186 billion(2)), and
c. USD 60 billion (GBP 51 billion(2)) in Victoria's key markets of Europe and
the US, with volume growth over the last 25 years of c. 2.6%(1) per annum.
There are fundamental drivers that sustain this long-term growth and, whilst
demand was somewhat subdued in FY2023, with a further and sharper reduction
experienced across the flooring industry in FY2024, this was due to near-term
macroeconomic conditions and the natural state of the sector is continued
expansion in the regions where Victoria trades.
These long-term fundamental industry drivers include continually ageing
housing stock with interiors requiring repair and renovation, higher household
formation, broad housing shortages, and increasingly style-conscious
consumers. All these factors have continued to apply throughout the extended
period of high inflation and high interest rates and, as has happened in
previous cycles, we therefore believe demand will rebound as our markets
experience a more favourable interest rate environment.
Given this backdrop, management's focus throughout FY2024 was on completing
the integration/reorganisation projects described in previous reports to
shareholders to ensure the Group is well-positioned to benefit from the
inevitable demand recovery. We expect these actions, which have maintained
production capacity despite a 16% (1,170 person) reduction in employees, to
deliver a structural improvement in the Company's operating margins of 250-350
bps alongside lower capex and a more competitive market position due to better
customer service levels, lower cost manufacturing, and wider distribution. We
recognise that it isn't the product per se that leads to success, it's the
ability to make and distribute that product efficiently.
(1) Freedonia Global Flooring Report 2023
(2) GBP/USD 1.29
DIVISIONAL REVIEW
This section focuses on the underlying operating performance of each
individual division, excluding exceptional and non-underlying items, which are
discussed in detail in the Financial Review and Note 2 to the accounts.
UK & Europe Soft Flooring - Margin expansion and strong out-performance of
the wider market
FY2024 FY2023 Growth
Volumes (sqm) 132.4 million 149.9 million -11.7%
Revenue £636.2 million £718.8 million -11.5%
Underlying EBITDA £82.8 million £66.9 million +23.8%
Underlying EBITDA margin 13.0% 9.3% +370bps
Underlying EBIT £34.6 million £27.2 million +27.3%
Underlying EBIT margin 5.4% 3.8% +170bps
Victoria is Europe's largest soft flooring manufacturer and distributor.
Following 31% like-for-like ("LFL")(3) organic revenue growth in FY2022 and
4.7% LFL growth in FY2023, LFL revenue declined 10.5% in FY2024. However,
independent market research suggests UK volumes were down circa 20%, which
makes up the largest portion of the division, indicating that Victoria has
continued to outperform the market - a factor the Board believes augurs well
for earnings as demand recovers.
3 Like-for-like revenue growth is growth at constant currency, adjusting for
the pro-forma impact of acquisitions where relevant
It is also important to note that some of the lower volume was due to 'bottom
slicing' - the decision by our operational management to remove low margin
SKU's from the product range and eliminate non-profitable customers. As part
of the reorganisation projects the Group has had underway over the last 18
months, management have been rigorously reviewing each SKU and customer to
ensure an adequate margin is made on each one. In cases where the margin is
insufficient and a price increase is unsustainable, the product has been
discontinued and/or the customer no longer supplied. Although this impacts
headline revenue, it leads to higher margins, improved cash flow, and a higher
return on working capital.
Significantly, despite the inevitable negative impact of operational gearing
from the lower volumes of soft flooring being produced and higher cost inputs
(raw materials, labour, and energy), operating margins improved by 370bps to
13.0%. Consequently, despite the 11.5% fall in revenue, underlying EBITDA
increased by more than 23% to £82.8 million and EBIT by more than 27% to
£34.6 million.
This pleasing performance is primarily down to the three factors:
1. Successful completion of the integration of Balta's broadloom carpet
business (acquired in April 2022) into the Group's UK operation. This has been
a major project costing circa £19 million and involving the complete closure
of a factory in Belgium, with extensive redundancies, and re-siting of
machinery to the UK but has led to significant productivity gains and,
consequently, margin improvements.
2. The ongoing reorganisation of the Balta rug business, consisting of the
consolidation of production facilities in Belgium alongside transferring
significant production capacity to Turkey, where the Company has two modern,
certified and low-cost factories. The circa £31 million cost of this project
predominantly entailed construction of an additional building in Turkey,
extensive relocation of plant and machinery, and redundancies in Belgium. A
lot of upside opportunity remains and as this project moves to completion, we
expect a further reduction in production costs and improved margins, which
will increase the international competitiveness of Balta's rugs and should
lead to top line growth as a result.
3. Our logistics capability continues to provide Victoria with what we
believe to be a robust and sustainable competitive advantage that is
responsible for driving market share gains. Retailers value service and
product availability over the last few pennies in price (no margin at all is
made by a retailer on unavailable product!). Apart from further enhancing
Victoria service proposition, our logistics operation, Alliance Flooring
Distribution, is also now generating third-party logistics income.
UK & Europe Ceramic Tiles - challenging macro-economic conditions
FY2024 FY2023 Growth
Volumes (sqm) 43.6 million 53.9 million -19.0%
Revenue £350.9 million £453.3 million -22.6%
Underlying EBITDA £60.3 million £105.8 million -43.0%
Underlying EBITDA margin 17.2% 23.3% -620bps
Underlying EBIT £31.8 million £77.5 million -58.9%
Underlying EBIT margin 9.1% 17.1% -800bps
Following double-digit LFL revenue and EBITDA growth in FY2023 as the Group
benefitted from competitors struggling in what were exceptionally challenging
trading conditions, these key metrics returned to FY2022 levels in FY2024.
Three factors contributed to lower revenue:
1. Firstly, volumes across Victoria's key markets declined by as much as
25% as consumers deferred investing in their homes in the face of significant
cost of living pressures.
2. Secondly, Management's decision to hold prices in the face of very weak
demand to protect our premium brand position. Although this created additional
near-term challenges for our sales people, safeguarding brand equity was
judged to be important for the medium-long term. Price, once discounted by a
premium brand, is extremely difficult to recover as customers understandably
resist subsequent increases and can lead to a permanent loss of margin.
3. Finally, alongside all the other European ceramics businesses, Victoria
has been facing sudden and very aggressive pricing competition from ceramics
manufacturers based in India. However, in April 2024 anti-dumping and
countervailing duty (or anti-subsidy) petitions were filed by the industry
with the US government, seeking the imposition of substantial tariffs
(estimated between 408% to 828%) on imports of ceramic tile from India. (A
similar application is expected to the European Commission). The industry
expects the US government to launch an investigation and anticipates a
favourable outcome this year.
This revenue decline directly led to materially lower margins due to negative
production variances arising from the lower volumes. Additionally, volatility
in the Turkish Lira and government-mandated wage increases ahead of an
election also contributed circa 1.2% of margin compression.
Clearly, the Board is not satisfied with the ceramics division's trading
results and a number of initiatives have been initiated to mitigate this
impact without losing capacity for the anticipated recovery:
(i) A project is underway to fully integrate production across our three
ceramics businesses to optimise efficiency. The factories have different
equipment and different cost structures that makes one factory more efficient
than another to produce a particular type of tile. The project is to ensure
production takes place at the optimal facility and will include increased
manufacturing in Turkey, which has many of the cost advantages of the Indian
manufacturers and yet, being much closer to Europe, has much lower
transportation costs.
(ii) Working with our key customers we reformulated the clay composition so
that thinner tiles could be manufactured with no increase in breakages. This
action lowers energy consumption and speeds up production.
(iii) The Saloni brand now focusses exclusively on high-end commercial
applications, with stylish new showrooms for the Architecture & Design
community opened in key locations in Spain. This change in approach to the
market has been well received and we are now seeing double-digit LFL revenue
growth this year - albeit off a relatively low base of €75 million.
Australia - Stable margins in a softer market
FY2024 FY2023 Growth
Volumes (sqm) 22.3 million 23.3 million -3.9%
Revenue £106.1 million £120.9 million -12.2%
Underlying EBITDA £13.4 million £15.3 million -12.3%
Underlying EBITDA margin 12.7% 12.7% -bps
Underlying EBIT £8.7 million £10.0million -12.9%
Underlying EBIT margin 8.2% 8.3% -10bps
Following double-digit organic growth in FY2023, demand was softer in
Australia across all flooring categories in FY2024 due to broadly the same
macro-economic factors seen in Victoria's other markets. Selling prices were
adjusted as inflationary inputs moderated, but margins were maintained despite
the lower volumes.
However, there has been no structural change in the Australian market and with
ongoing inwards migration and household formation, we expect demand in
Australia to recover as high inflation and interest rates moderate.
North America - Operational excellence programmes deliver ongoing margin
expansion
FY2024 FY2023 Growth
Volumes (sqm) 7.1 million 6.1 million +15.7%
Revenue £163.3 million £168.4 million -3.1%
Underlying EBITDA £11.8 million £9.3 million +27.4%
Underlying EBITDA margin 7.3% 5.5% +170bps
Underlying EBIT £6.8 million £6.0 million +12.3%
Underlying EBIT margin 4.1% 3.6% +60bps
Our North American business consists entirely of distribution businesses -
selling products (rugs, artificial turf, and ceramic tiles) manufactured in
Victoria's European factories alongside outsourced products.
Market conditions were challenging throughout the year, with demand down 7-9%
for the industry as a whole. Despite this backdrop, we were able to increase
operating margins through commercial excellence programmes, and opportunity
exists for further improvement. North America continues to be a key market for
Victoria and the Group's North American-sourced revenues (including exports to
the US by our European factories) exceeds USD 350 million.
CASHFLOW & LIQUIDITY
Net operating cash flow was in line with management expectations with Free
Cash Flow of £23.2 million after movements in working capital, tax, interest
payments, capex, and all exceptional costs.
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
IFRS Reported EBITDA 5.3 8.7 30.4 43.1 53.5 72.5 60.3 120.3 140.9 94.6 92.6
Adj EBITDA 5.1 15.8 32.3 45.7 64.7 96.3 118.1 127.4 162.8 196.0 160.7
Adj EBITDA (pre IFRS-16) 5.1 15.8 32.3 45.7 64.7 96.3 107.2 112.0 143.5 171.3 129.6
FCF(1) 18.3 8.4 15.3 22.5 12.5 8.9 32.2 30.2 20.1 5.9 23.2
FCF post pref(2) 18.3 8.4 15.3 22.5 12.5 8.9 32.2 27.6 10.6 (12.9) 0.8
1. FCF: Net cash flow from operating activities after movements in
working capital, tax, interest payments, all capex, and all exceptional costs.
2. FCF post-pref: Net free cash flow defined as above but assuming
100% of the preferred share dividend was paid in cash instead of PIK.
As predicted, capex costs reverted to normal levels of £62.5 million for the
period and are expected to broadly remain at this level for the foreseeable
future. This compares with £99.6 million for the full year FY2023 and
reflects the completion of the major reorganisation projects.
Although progress has been slower than we had anticipated, the Group is
improving its working capital management, primarily through better control of
inventory. Nevertheless, this source of cash remains a key area of focus with
management incentives in place for delivery of defined targets.
Victoria continues to maintain a strong liquidity position and the Group
finished the period with cash and undrawn credit lines in excess of £250
million. Furthermore, almost all Victoria's debt financing takes the form of
long-dated Senior Notes ("bonds") which, in themselves, have no financial
maintenance covenants, with the earliest tranche not due for repayment until
August 2026. Nevertheless, the Board has started working on a range of
refinancing options to allow adequate time to optimise the terms of the
replacement funding. Further commentary on refinancing considerations is
provided within the Financial Review.
CAPITAL ALLOCATION
The Board views every investment decision through the prism of maximising the
medium-term free cash flow per share. This policy does not preclude us from
investing in order to optimise the future cash generating power of the
business, and the Board has done so twice in the last 10 years - in FY2019 to
integrate the UK manufacturing operation and build its logistics platform, and
over the last 24 months to optimise the future performance of Balta, which was
acquired in April 2022.
As foreshadowed in last year's report, during FY2024 growth/restructuring
capex and exceptional costs fell significantly as the integration and
reorganisation projects arrived at their conclusion.
Table A sets out the breakdown of capex spending for the last six years to
help shareholders better understand normal maintenance capex levels, with the
last major reorganisation project being in FY2019:
Table A
Capex FY19 FY20 FY21 FY22 FY23 FY24
£m £m £m £m £m** £m
Maintenance 23.5 25.4 20.9 40.9 45.5 43.0
Growth & Restructuring* 20.9 8.4 7.6 12.4 54.1 19.2
Total 44.4 33.8 28.5 53.3 99.6 62.2
Maintenance Capex as a percentage of revenue 4.1% 4.1% 3.2% 4.0% 3.1% 3.4%
* Includes capital expenditure incurred as part of reorganizational and
synergy projects to drive higher productivity and lower operating costs.
**The step-up in FY23 is due to the Balta acquisition, which has both a
short-term impact from integration, plus an ongoing increase in quantum
(albeit not percentage) due to the increased size of the Group.
Table B summarises the exceptional expenditure items in FY2024, which are much
reduced from FY2023 as expected as the re-organisation/integration projects
move towards completion.
Table B
Exceptional reorg costs Redundancy cash costs Legal & Asset removal/ Provisions movement FY2024 FY2023
Professional cash costs relocation cash costs /other non-cash Total Total
£m £m £m £m £m £m
Balta re-organisation 17.4 0.1 10.3 (12.9) 14.9 31.5
Saloni re-organisation 0.1 - - - 0.1 7.6
Graniser integration 1.8 0.1 - (1.1) 0.8 0.3
Cali integration - - - 0.8 0.8 1.4
Total 19.3 0.2 10.3 (13.2) 16.6 40.8
The Board will prioritise allocation of the Group's free cash flow to
prudently optimise the Group's balance sheet together with maximising the
medium-term free cash flow per share.
LEVERAGE
Leverage spiked during FY2024 primarily due to the decline in operating
earnings. Whilst the Group continues to enjoy a more-than-adequate £250
million of available liquidity, the Board and management are very focussed on
reducing the Group's net debt/EBITDA ratio ahead of refinancing the existing
bond issuances.
This will be achieved by both reducing the numerator - the absolute quantum of
debt - from operating cash flow and the sale of surplus/non-core assets, and
by increasing the denominator - the Group's earnings - as completion of the
various integration projects and other actions discussed elsewhere in this
Report remove very significant costs from the business.
DIVIDENDS
For the reasons detailed in previous years' Annual Reports, it remains the
Board's view (as it has been for the last ten years) that it can continue to
successfully deploy capital to optimise the creation of wealth for
shareholders and therefore it has again resolved not to pay a final dividend
for FY2024.
GOVERNANCE
The Board took seriously the issues raised last year from the audit of Hanover
Flooring Limited, a small subsidiary contributing 1.25% of Group revenue.
Firstly, once the FY2023 results were announced the Board removed the
management restriction that had been previously imposed by the Board on the
auditors solely in relation to this subsidiary. This allowed the auditors to
perform additional work on the subsidiary's accounting records. These
extensive additional procedures (detailed further in the Financial Review)
supported the Board's conclusion reached last year that there was no financial
misconduct and all payments due to Victoria have been received, no money is
unaccounted for, and Victoria has suffered no loss. Consequently, the auditors
have confirmed that all their concerns have been appropriately satisfied.
Secondly, the finance function of this subsidiary was enhanced with a number
of experienced professionals who strengthened the operational integrity of the
control environment, bringing it up to the standard of the rest of the
Group. The enlarged team was managed by the Group Head of Risk and Compliance
with oversight from the Group CFO. We continued to use a Big Four accounting
firm to help us reconcile historic accounting records in relation to the early
years after this business was acquired and this allowed us to reduce
unreconciled amounts to less than £0.6m as well as ensure that cash which
should have been remitted to Victoria has been to our satisfaction. We have
used this experience to enhance our template for future acquisitions to ensure
that this issue does not arise again and also to further strengthen the Group
Risk and Compliance team. Further commentary on matters relating to last
year's audit has been provided within the Financial Review.
OUTLOOK
We are confident that, notwithstanding near-term challenging macro-economic
conditions, all our businesses benefit from strong economic fundamentals, and
skilled and dedicated management.
Acquisitions:
Acquisitions remain a core part of Victoria's long-term growth strategy.
However, whilst the cost of capital is so high, the Board has prioritised the
meaningful opportunity to optimise earnings within our existing business and,
importantly, reducing leverage.
Nevertheless, we actively continue to maintain relationships with potential
acquisitions, and therefore, at the right time and within our leverage policy,
we will continue to deploy capital to build scale, expand distribution,
broaden our product range, and widen the economic moat around our business as
we have successfully done over the previous 10 years.
Operations:
It is noteworthy that despite revenue falling by nearly 14% in FY2024, the
Group's underlying EBITDA margin fell by less than 100bps, despite the
inevitable operational leverage impact of lower volumes. A key contributing
factor to this broadly consistent operating margin was the productivity gains
realised throughout the year as the various integration and reorganisation
projects moved towards completion. Encouragingly, additional margin
improvement is expected in FY2025 - even in a flat market - due to the full
year effect of the lower cost base impacting earnings.
However, opportunities still exist to further enhance productivity across the
Group. Everything we do operationally is about increasing productivity -
lowering the cost to manufacture and distribute each square metre of flooring
- and improving the customer (retailers and distributors) experience, seeking
to become an increasingly valuable part of their business.
Therefore, whilst management will continue to fine-tune the gains secured from
the current operational projects, FY2025 will see further integration of our
ceramics division to drive higher productivity, leveraging of our distribution
channels to grow revenue, and the scaling up of commercial excellence
programmes to expand margins.
CONCLUSION
Alongside all other global flooring companies, Victoria has suffered from the
large drop in flooring demand over the last 24 months. However, critically,
the fall is not structural and, as the macro-economic factors that have
contributed to the low demand abate, the fundamental need for flooring will
result in volumes rebounding to the long-term mean - that is the very essence
of cyclical industries.
In calendar 2023, flooring volume across Victoria's key markets was estimated
to be some 20% below the levels of 2019 (which were broadly in line with the
25-year average growth rate). Simple reversion to the mean therefore suggests
demand normalisation should deliver a volume uplift from 2023 levels of more
than 25%. Whilst the Group's FY2025 financial outlook is largely based on
current demand, it is interesting to note the potential impact normalising
demand could have on the business as each 5% increase in volume is expected to
drive a £25 million increase in Victoria's earnings.
In conclusion, whilst we remain cautious about near-term trading conditions
and cannot predict precisely when the anticipated rebound will occur, we are
(logically) continually moving closer to that point. As interest rates fall,
housing transactions and deferred residential renovation and repair purchases
will rebound, driving flooring demand. The market share gains and productivity
improvements secured over the last 24 months we expect to be rapidly reflected
in Victoria's earnings and cash flow. Until this occurs, we remain focussed on
optimising controllable costs and driving market share gains.
Geoffrey Wilding Philippe Hamers
Executive Chairman Chief Executive Officer
18 June 2024
Financial Review
HIGHLIGHTS
In what has been a challenging environment for our industry Victoria benefited
from reorganisational work undertaken in prior years whilst not being immune
to poor demand in the market.
The business has been focused on reducing lower margin products and customers,
lowering the cost base and structurally reducing working capital.
Volumes declined during FY2024 with UK & Europe Ceramics being the most
impacted. This led to a decline in underlying revenue of £204.9 million
(14.0%). Underlying EBITDA declined from £196.0 million to £160.7 million as
lower volumes impacted operational leverage despite significant cost
reductions in UK & Europe Soft Flooring from the reorganisation projects
undertaken as part of the Balta Rugs integration.
Inflation has had an impact year on year, albeit less than in prior years and
raw materials and energy costs have returned to more normal levels.
This Financial Review is structured into several sections, focused on the
detail within the financial statements which warrants further explanation or
granular analysis. Commentary on the underlying performance of the Group,
analysing the trends in underlying revenue and operating margins, and other
commercial activities in the year is provided in the Divisional Review section
of the Chairman & CEO Report. The Exceptional & Non-Underlying Items
section below provides an important, detailed report on all of the items that
bridge from the underlying results (for example, underlying operating profit
of £73.6 million) to the IFRS statutory performance of £51.8 million
operating loss and, ultimately, £108.0 million loss after tax. The final
parts set out the cash flows of the Group on a basis consistent with past
years, and the year-end net debt position.
Underlying measures of performance are classified as 'Alternative Performance
Measures' and should be reviewed in conjunction with comparable IFRS figures.
It is important to note that these APMs may not be comparable to those
reported by other companies. Underlying results exclude significant costs
(such as significant legal, major restructuring and transaction items), they
should not be regarded as a complete picture of the Group's financial
performance, which is presented in its Total results. The exclusion of other
Adjusting items may result in Adjusting earnings being materially higher or
lower than Total earnings. In particular, when significant impairments,
restructuring changes and legal costs are excluded, Adjusted earnings will be
higher than Total earnings.
A summary of the underlying and reported performance of the Group is set out
below.
2024 2023
Underlying Non- Reported Underlying Non- Reported
performance
underlying
numbers
performance
underlying
numbers
items
items
£m £m £m £m £m £m
Revenue 1,256.5 16.5 1,273.0 1,461.4 18.8 1,480.2
Gross Profit 417.4 (26.6) 390.8 474.8 (40.1) 434.7
Margin % 33.2% 32.5%
Amortisation of acquired intangibles - (40.9) (40.9) - (41.5) (41.5)
Other operating expenses (343.7) (58.0) (401.7) (356.0) (61.3) (417.3)
Operating profit / (loss) 73.6 (125.4) (51.8) 118.8 (142.9) (24.1)
Margin % 5.9% 8.1%
Add back depreciation & amortisation 87.0 77.2
Underlying EBITDA 160.7 196.0
Margin % 12.8% 13.4%
Preferred equity items - (5.4) (5.4) - (26.9) (26.9)
Other finance costs (46.5) (27.2) (73.7) (41.9) (17.7) (59.6)
Profit / (loss) before tax 27.1 (158.0) (130.9) 76.9 (187.5) (110.6)
Profit / (loss) after tax 31.8 (139.8) (108.0) 59.6 (151.4) (91.8)
EPS basic 27.66p (93.85p) 51.47p (79.35p)
EPS diluted 19.12p (93.85p) 39.06p (79.35p)
The Group incurred £93.6 million of exceptional operating costs during the
year, primarily a non-cash cost resulting from the impairment of goodwill,
with the remainder mostly relating to the reorganisation of Balta. In
addition, the Group incurred £39.5 million of amortisation of acquired
intangibles (primarily customer relationships and brand names) and other
non-underlying items (net credit of £7.6 million (primarily the accounting
impact of acquisition earn-outs and hyperinflation accounting). Further
details are provided later in this Financial Review.
ACQUISITIONS AND INTEGRATION
There were no acquisitions despite this remaining part of our overall
strategy. We continued to integrate our recent acquisitions, Balta, Cali and
IWT.
FINANCING
Debt financing and facilities
Victoria has attractively priced, long-dated facilities and liquidity headroom
in excess of £250 million.
The Group's senior debt comprises €489 million (c. £430m) of notes with a
fixed coupon of 3.625% and maturity of August 2026, and €250 million (c.
£220m) of notes with a fixed coupon of 3.75% and maturity of March 2028 along
with a £150m Revolving Credit Facility which matures in February 2026.
Other debt facilities in the Group represent small, local working capital
facilities at the subsidiary level, which are renewed or amended as
appropriate from time to time. The total outstanding amount drawn from these
facilities at the year-end was £62.5 million, as shown below in the Net Debt
section of this Financial Review.
Whilst the Group has no immediate need to refinance its facilities, as there
are more than two years until the first tranche of our senior debt matures, we
have taken a number of actions to ensure that we are ready to avail ourselves
of favourable market conditions and secure the most attractive refinancing
options as and when they arise.
To reduce leverage:
· Management have initiated the disposal of surplus real estate with
the sale of property in Belgium giving net proceeds of £27.9 million received
in October 2023 and are planning to raise a further circa. £50m from other
real estate assets in our portfolio and expect this to complete in FY2025.
· the Group is also structurally reducing its working capital balances
which we expect to contribute circa. £30m of cash in FY2025.
· Victoria continues to review all aspects of our operational model to
ensure that we are selling products and procuring raw materials at the best
prices and there are active programmes in place to improve profitability.
The reduction in leverage will allow us to benefit from higher credit ratings
and from the best available coupon on any future facilities.
We are engaging with independent professional advisors, adding to our own
in-house knowledge and experience, to work alongside us with our core banking
group to evaluate all of the financing options available to us as performance
and the markets improve. We are considering a range of options which could
include a combination of equity, bank, public and private financing
arrangements all of which are available to us.
We will be ready to take refinancing actions when we have evaluated the
options and when the financial markets are conducive to give us the best
prices but given the tenor and attractive pricing of our current arrangements
we believe we have no immediate need to do so.
Preferred equity
There have been no changes to the preferred equity arrangements in the year,
with a total in issue of £225 million (plus those issued for the 'Payment In
Kind' of the fixed coupon, whereby new preferred shares are issued as opposed
to cash payment, at the Group's option).
EXCEPTIONAL AND NON-UNDERLYING ITEMS
This section of the Financial Review runs through all of items classified as
exceptional or non-underlying in the financial statements. The nature of
these items is, in many cases, the same as the prior year as the financial
policy around these items has remain unchanged, for consistency.
The Group incurred £93.6 million of exceptional costs during the year
(FY2023: £85.4m). Exceptional items are one-offs that will not continue or
repeat in the future, for example the legal and due diligence costs for a
business acquisition, as whilst further such costs might arise if new
acquisitions are undertaken, they will not arise again on the same business
and would disappear if the Group adopted a purely organic strategy.
2024 2023
Exceptional items £'m £'m
Acquisition related costs (1.0) (4.0)
Reorganisation and other costs (20.1) (44.4)
Fixed asset impairment - (47.5)
Negative goodwill arising on acquisition - 90.5
Exceptional goodwill impairment (67.2) (80.0)
Intangible asset impairment (5.4) -
Total exceptional items (93.6) (85.4)
This total exceptional cost figure is made up of numerous components, both
income and costs. Description of the specific items is provided below:
· Acquisition related costs - these costs relate primarily to advisory
fees and legal services in relation to previous acquisitions, with the figure
much reduced versus previous years due to the pause of M&A activity.
· Reorganisation costs - in the prior year, the Group made a
significant investment decision in restructuring the Rugs and UK broadloom
businesses of Balta which represents the majority of the £20.1 million in
FY2024 (Balta-related reorganisation costs in FY2023 were £31.5m), with small
reorganisation and integration projects around the Group contributing in
smaller amounts.
· Exceptional goodwill and intangible impairment - in FY2023 goodwill
in the UK & Europe - Ceramics (Spain & Turkey) CGU was impaired and
reduced production in Spain, as a result of the integration programme within
the ceramics division has resulted in a further impairment of £24.7 million
being taken in the CGU, along with a £5.4m impairment being taken to
customer-related intangible assets. Separately, weaker demand in the US
impacting Cali Bamboo resulting in an impairment of £42.5 million.
· The other prior year items are described in more detail in Note 2 to
the Accounts.
Non-underlying items are ones that do continue or repeat, but which are deemed
not to fairly represent the underlying business. Typically, they are
non-cash in nature and / or will only continue for a finite period of time.
2024 2023
Non-underlying operating items £'m £'m
Acquisition-related performance plans (6.7) (10.3)
Non-cash share incentive plan charge (2.7) (3.6)
Amortisation of acquired intangibles (excluding hyperinflation) (39.5) (40.3)
Unwind of fair value uplift to acquisition opening inventory (0.6) (10.9)
Depreciation of fair value uplift to acquisition property, plant and machinery (5.1) (9.1)
Hyperinflation depreciation adjustment (6.0) (4.2)
Hyperinflation amortisation adjustment (1.4) (1.1)
Hyperinflation monetary gain/(loss) 45.9 38.9
Other hyperinflation adjustments (excluding depreciation and monetary gain) (15.6) (16.9)
(31.6) (57.6)
Non-underlying items in the year:
· Acquisition-related performance plan charge - this represents the
accrual of contingent earn-out liabilities on historical acquisitions where
those earn-outs are linked to the ongoing employment of the seller(s). This
amount decreased versus the prior year as earn-outs on historical acquisitions
have expired.
· Non-cash share incentive plan charge - the charge under IFRS 2
relating to the pre-determined fair value of existing senior management share
incentive schemes. This charge is non-cash as these schemes cannot be
settled in cash.
· Amortisation of acquired intangibles - the amortisation over a finite
period of time of the fair value attributed to, primarily, brands and customer
relationships on all historical acquisitions under IFRS. It is important to
note that these charges are non-cash items and that the associated intangible
assets do not need to be replaced on the balance sheet once fully
written-down. Therefore, this cost will ultimately disappear from the Group
income statement.
· Unwind of fair value uplift to acquisition opening inventory - under
IFRS the opening balance sheet of each acquisition is fair valued, and this
includes inventory. As such, this opening inventory is no longer held at
cost, rather at net realisable value, which means that for the period of time
over which it is sold no profit will be recorded in the Group consolidated
accounts despite the fact that the target business itself generated a
profit. Any newly purchased inventory post-acquisition is held at cost in
the ordinary course. Given this is not representative of the underlying
performance of the acquired business, this one-off uplift in cost of sales is
classed as exceptional.
· Depreciation of fair value uplift to acquisition property - this is
the same effect as described above, except relating to property within fixed
assets as opposed to inventory.
As described below there were a number of adjustments made to the income
statement in relation to Hyperinflation. The hyperinflation adjustments
represents the impact of restating the non-monetary items on the Turkish
entities balance sheet based on the change in the general price index between
the acquisition date and the reporting date, as well as the indexation of the
income statement, with the gain/loss on the monetary position being included
within the income statement.
Adjustment in respect of hyperinflation
During FY2023 inflation in Turkey, where Victoria has two businesses, Graniser
(UK & Europe Ceramic Tiles) and Balta Rugs (UK & Europe - Soft
Flooring), passed the threshold of inflation exceeding 100% over a three-year
cumulative period in March 2022. Under IAS29 this is one of the key indicators
for hyperinflation accounting needing to be adopted. This resulted in the
revaluation of the 2 April 2022 opening balance sheet for these businesses as
well as indexing the FY2023 and FY2024 numbers. We have treated these
adjustments as non-underlying to ensure comparability of results year on year.
The impact of hyperinflation on the income statement is as follows:
2024 2023
£'m £'m
Revenue 16.5 18.9
Cost of sales (37.5) (38.1)
Operating costs 43.9 35.8
EBIT 22.9 16.6
EBITDA 30.4 22.0
Finance costs (6.7) (1.8)
Profit before tax 16.2 14.8
Deferred tax (5.2) 0.2
Profit for the period 11.0 15.0
Other comprehensive income - CTA 7.4 16.5
Further details of exceptional and non-underlying operating items are provided
in Note 2 to the accounts.
In addition to the above operating items, there were a number of
non-underlying financial items in the year.
2024 2023
Non-underlying financial costs £'m £'m
Finance items related to preferred equity (5.4) (26.9)
Acquisition related items 1.5 -
Gain on bond repurchase 2.0 -
Fair value adjustment to notes redemption option / amortisation inception 1.2 (2.0)
derivative
Mark to market adjustments and gains on foreign exchange forward contracts (0.2) (0.4)
Translation difference on foreign currency loans (24.6) (13.3)
Other financial expenses (hyperinflation) (6.7) (1.8)
Defined benefit pension (law change) (0.4) (0.2)
Other non-underlying (28.6) (17.8)
(32.5) (44.6)
The significant items are described below:
· Finance items related to preferred equity - the preferred equity
issued in November 2020 and further in January 2022 is treated under IFRS 9 as
a financial liability with a number of associated embedded derivatives.
There are a number of resulting financial items taken to the income statement
in each period, including the cost of the underlying host contract and the
income or expense related to the fair-valuation of the warrants and embedded
derivatives. However, the preferred equity is legally structured as equity
and is also equity-like in nature - it is contractually subordinated, never
has to be serviced in cash, and contains no default or acceleration rights -
hence the resultant finance costs or income are treated as non-underlying.
2024 2023
Finance items related to preferred equity £m £m
Amortised cost of host instrument (19.0) (26.8)
Fair value movement on associated equity warrants 13.6 20.3
Fair value movement on embedded redemption option - (20.5)
Total 5.4 (26.9)
· Fair value adjustment to notes redemption option - Attached to the
senior notes is an early repayment option which, on inception, was recognised
as an embedded derivative asset at a fair value of £4.3m. This asset is
revalued at each reporting date, with the movement taken through the P&L.
The value of the senior debt liabilities recognised were increased by a
corresponding amount at initial recognition, which then reduces to par at
maturity using an effective interest rate method. A credit of £1.2m was
recognised in the period (2023: £2.7m charge), with a £nil fair value of the
derivative asset at both period ends.
· Mark to market adjustments on foreign exchange forward contracts -
across the group we analyse our upcoming currency requirements (for raw
material purchases) and offset the exchange rate risk via a fixed, diminishing
profile of forward contracts out to 12 months. This non-cash cost represents
the mark-to-market movement in the value of these contracts as exchange rates
fluctuate.
· Translation difference on foreign currency loans - this represents
the impact of exchange rate movements in the translation of non-Sterling
denominated debt into the Group accounts. The key items in this regard are
the Euro-denominated €489 million 2026 corporate bonds, and €250 million
2028 corporate bonds.
· Other financial expense (hyperinflation) - restated finance costs
within Turkish entities based on the change in the general price index between
the date when the finance costs were initially recorded and the reporting
date.
· Defined benefit pension (law change) - Turkish government announced
an early retirement law change in the prior year based on being in employment
back in 1999.
Further details of non-underlying finance items are provided in Note 3 to the
accounts.
OPERATING PROFIT AND PBT
The table below summarises the underlying and reported profit of the Group,
further to the commentary above on underlying performance and non-underlying
items.
Operating profit and PBT 2024 2023
£'m £'m
Underlying operating profit 73.6 118.8
Reported operating (loss) / profit (after exceptional items) (51.8) (24.1)
Underlying profit before tax 27.1 76.9
Reported loss before tax (after exceptional items) (130.9) (110.6)
Reported operating loss (earnings before interest and taxation) of £51.8
million (FY2023: £24.1 million). After removing the exceptional and
non-underlying items described above, underlying operating profit was £73.6
million (FY2023: £118.8m).
Reported loss before tax increased to £130.9 million (FY2023: £110.6m).
After removing the exceptional and non-underlying items described above,
underlying profit before tax was £27.1million (FY2023: £76.9m).
TAXATION
The reported tax credit in the year of £22.9 million (FY2023: £18.8m) was
distorted by the impact of the exceptional and non-underlying costs, which
contributed to a tax credit of £18.2 million. On an underlying basis, the tax
credit for the year was £4.7 million (FY2023 charge: £17.3m) against
adjusted profit before tax of £27.1 million (FY2023: £76.9m). Removing the
effect of prior year items results in an underlying effective current year tax
rate of 19.2% (FY2023: 19.6%).
EARNINGS PER SHARE
The Group delivered a basic loss per share of 93.85p (FY2023: 79.35p) due to
exceptional costs in relation to restructuring, amortisation of amortisation
of acquired intangibles, and impairment recognised on goodwill. Adjusted
earnings per share (before non-underlying and exceptional items) on a
fully-diluted basis was 19.12p (FY2023: 39.06p). The decrease in EPS is driven
by the greater dilutive impact of the preference shares and reduced earnings.
Basic and diluted earnings / (loss) per share 2024 2023
Basic earnings / (loss) per share (93.85p) (79.35p)
Diluted adjusted earnings per share 19.12p 39.06p
OPERATING CASH FLOW
Cash flow from operating activities before interest, tax and exceptional items
was £106.4 million which represents a conversion of 82% of underlying EBITDA
(pre-IFRS 16).
Operating and free cash flow 2024 2023
£'m £'m
Underlying operating profit 73.6 118.8
Add back: underlying depreciation & amortisation 87.0 77.2
Underlying EBITDA 160.7 196.0
Payments under right-of-use lease obligations (35.6) (29.3)
Non-cash items (3.5) (15.1)
Underlying movement in working capital (15.2) 6.3
Operating cash flow before interest, tax and exceptional items 106.4 157.8
% conversion against underlying operating profit 145% 133%
% conversion against underlying EBITDA (pre-IFRS 16) 82% 92%
Interest paid (32.6) (34.8)
Corporation tax paid (2.5) (11.4)
Capital expenditure - replacement / maintenance net of disposals (43.0) (40.3)
Free cash flow before exceptional items 28.2 71.3
% conversion against underlying operating profit 38% 60%
% conversion against underlying EBITDA (pre-IFRS 16) 22% 42%
Pre-exceptional free cash flow of the Group - after interest, tax and net
replacement capex - was £28.2 million. Compared with underlying operating
profit (i.e. post-depreciation), this represents a conversion ratio of 38%.
Cash conversion was positively impacted in the year by lower interest and tax
paid amounts.
The underlying movement in working capital was an outflow of £15.2 million.
This was driven by inventories being above the levels required for the current
market environment and we took action during the year to reduce the inventory
levels. This resulted in an inflow in the second half of the year of £12.4
million. We expect further improvements in FY25 as we make structural changes
to our inventory levels and we should see a further reduction in working
capital as the cash from the sale of inventories completes its way through the
receivables cycle.
A full reported statement of cash flows, including exceptional and
non-underlying items, is provided in the Consolidated Statement of Cash Flows.
NET DEBT
As at 30 March 2024, the Group's net debt position (excluding IFRS 16
right-of-use leases and preferred equity) was £632.9 million (1 April 2023:
£658.3m). Free cash flow of £27.9 million was generated in the year, while
£51.1 million was invested in organic growth / synergy initiatives.
Acquisition-related expenditure (primarily representing payment of deferred
and contingent consideration) was £15.8 million.
Applying our banks' adjusted measure of financial leverage, the Group's year
end net debt to EBITDA ratio was 4.4x (FY2023: 3.4x).
The leverage increase is primarily driven by the reduced earnings in the year.
As a result of changing conditions and with the higher interest rates that are
likely to be experienced for the foreseeable future, it is the Board's
objective to reduce the Group's net debt/EBITDA ratio ahead of refinancing the
senior secured notes.
Free cash flow to movement in net debt 2024 2023
£'m £'m
Free cash flow before exceptional items (see above) 28.2 71.3
Capital expenditure - growth / synergy (19.2) (54.1)
Proceeds on disposal of surplus real estate assets 27.9 -
Exceptional reorganisation cash cost (32.0) (25.3)
Investment in organic growth / synergy projects (23.2) (79.4)
Acquisition of subsidiaries - (119.7)
Total debt acquired or refinanced - (87.4)
Deferred and contingent consideration payments (14.9) (4.6)
Exceptional M&A costs (1.0) (4.0)
Acquisition-related working capital absorption - (17.3)
Acquisitions - related (15.8) (233.1)
Buy back of ordinary shares (3.2) (7.8)
Net refinancing cash flow (3.2) (7.8)
Other debt items including factoring and prepaid finance costs 17.4 24.4
Translation differences on foreign currency cash and loans 22.0 (27.0)
Other exceptional items 39.4 (2.6)
Total movement in net debt 25.4 (251.6)
Opening net debt (658.3) (406.6)
Net debt before obligations under right-of-use leases (632.9) (658.3)
Net debt 2024 2023
£'m £'m
Net cash and cash equivalents 72.8 90.4
Senior secured debt (at par) (632.0) (660.2)
Super senior RCF (10.3) (12.5)
Bank loans and other facilities (62.5) (75.0)
Finance leases and hire purchase arrangements (pre IFRS 16) (1.0) (1.0)
Net debt before obligations under right-of-use leases (632.9) (658.3)
Adjusted net debt / EBITDA 4.4x 3.4x
Senior secured notes (interest) (5.2) -
Bond issue premium - non-cash (related to initial value of redemption option) (2.4) (3.6)
Pre-paid finance costs on senior debt 5.7 7.9
Preferred equity, associated warrants and embedded derivatives (286.6) (281.2)
Factoring and receivables financing facilities (38.4) (25.1)
Obligations under right-of-use leases (incremental to above finance leases) (166.8) (171.3)
Statutory net debt (net of prepaid finance costs) (1,126.6) (1,131.5)
HANOVER FLOORING LIMITED
Last year as part of their work in auditing the Annual Report and Accounts for
the 52 weeks ended 1 April 2023 our auditor, Grant Thornton, raised concerns
around the control environment, completeness of accounting records and
instances of non-compliance with High Value Dealer regulations at Hanover
Flooring Limited, a small subsidiary, which in 2023 had revenue of £18.7m, a
statutory loss of £1.2m and net liabilities of £0.4m. Grant Thornton issued
a qualified opinion, solely in respect of this small subsidiary, following our
decision to impose a limitation of scope on their work as they had not
completed all the work they wanted to do on the subsidiary. This limitation
was placed on Grant Thornton due to the Board's belief that, notwithstanding
the extensive work carried out with the support of accounting and legal
professional advisors, further audit procedures by Grant Thornton would not
provide them with sufficient and appropriate evidence in a timescale that
would have allowed for the timely delivery of our FY2023 financial statements.
Once the accounts had been delivered, the Board lifted the limitation on Grant
Thornton to permit them to continue their work on addressing the concerns and
this continued through the course of this year. We note that Grant Thornton
have not qualified their audit report on either opening or current year
balances in relation to Hanover as their concerns have been appropriately
satisfied.
The Board took an active role in challenging management to ensure that the
appropriate control environment was put in place and every effort was made to
close gaps in accounting records:
· In August last year we began strengthening the Hanover finance
function and recruiting project team to complete detailed balance sheet
account reconciliations for prior years. This team was led by the Group Head
of Risk and Compliance under the direct supervision of the Group CFO. This
team was bolstered by the continued input of a big four accounting firm to
provide additional bandwidth.
· The team implemented appropriate controls in the business including
in the areas of cash management, where an embargo was put in place, and credit
management. This embargo meant that there could be no further instances of
non-compliance with High Value Dealer regulations. As disclosed in last year's
annual report management appropriately have advised the relevant regulatory
authorities and, with the benefit of appropriate legal advice, have made a
provision for the expected fine which is expected to be immaterial.
· The team performed a further detailed review of all receipts into the
business from whatever source, including the monies held in trust in the
seller's bank account using their further understanding of the cash allocation
process and were able to confirm within a low tolerance that all monies that
should have been received by Victoria have been or will be as part of the
final earnout payment for the business.
Management performed a lessons-learned exercise as part of the process and a
number of actions have been taken as a result which include:
· Updating our post-merger integration process to include more detailed
oversight of the use of sellers' bank accounts for any period of time;
· Providing additional training on cash handing and related laws and
regulations to all relevant teams in Victoria; and
· Increasing the number of internal audit resources to allow for more
timely reviews of the control environments of each subsidiary.
Hanover Flooring now has a more robust control environment and appropriate
work has been undertaken to ensure that Victoria has not suffered any
financial loss. We have also reviewed all of the recent acquisitions in the
Group to confirm that the issues raised in relation to the control
deficiencies at Hanover were not found elsewhere and found that to be the
case.
ACCOUNTING STANDARDS
The financial statements have been prepared in accordance with UK-adopted
international accounting standards. There have been no changes to
international accounting standards this year that have a material impact on
the Group's results. No forthcoming new international accounting standards
are expected to have a material impact on the financial statements of the
Group.
GOING CONCERN
The consolidated financial statements for the Group have been prepared on a
going concern basis.
Brian Morgan
Chief Financial Officer
18 June 2024
Consolidated Income Statement
For the 52 weeks ended 30 March 2024
52 weeks ended 30 March 2024 52 weeks ended 1 April 2023
Underlying Non- Reported Underlying Non- Reported
performance
underlying
numbers
performance
underlying
numbers
items
items
Notes £m £m £m £m £m £m
Revenue 1 1,256.5 16.5 1,273.0 1,461.4 18.8 1,480.2
Cost of Sales (839.1) (43.1) (882.2) (986.6) (58.9) (1,045.5)
Gross profit 417.4 (26.6) 390.8 474.8 (40.1) 434.7
Distribution and administrative expenses (348.6) (98.9) (447.5) (360.4) (193.4) (553.8)
Negative goodwill arising on acquisition - - - - 90.5 90.5
Other operating income 4.8 0.1 4.9 4.4 0.1 4.5
Operating profit / (loss) 73.6 (125.4) (51.8) 118.8 (142.9) (24.1)
Comprising:
Operating profit before non-underlying and exceptional items 73.6 - 73.6 118.8 - 118.8
Amortisation of acquired intangibles 2 - (40.9) (40.9) - (41.5) (41.5)
Other non-underlying items 2 - 9.2 9.2 - (16.0) (16.0)
Exceptional goodwill and intangible impairment 2 - (72.6) (72.6) - (80.0) (80.0)
Other exceptional items 2 - (21.1) (21.1) - (5.4) (5.4)
Finance costs 3 (46.5) (32.6) (79.1) (41.9) (44.6) (86.5)
Comprising:
Interest on loans and notes 3 (36.8) - (36.8) (33.6) - (33.6)
Amortisation of prepaid finance costs for bank loans 3 (2.7) - (2.7) (2.8) - (2.8)
Unwinding of discount on right-of-use lease liabilities 3 (7.0) - (7.0) (5.4) - (5.4)
Preferred equity items 3 - (5.4) (5.4) - (26.9) (26.9)
Other finance items 3 - (27.2) (27.2) (0.1) (17.7) (17.8)
Profit / (loss) before tax 27.1 (158.0) (130.9) 76.9 (187.5) (110.6)
Taxation credit / (charge) 4.7 18.2 22.9 (17.3) 36.1 18.8
Profit / (loss) for the period 31.8 (139.8) (108.0) 59.6 (151.4) (91.8)
(Loss) / earnings per share - pence basic 4 (93.85) (79.35)
diluted 4 (93.85) (79.35)
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 30 March 2024
52 weeks ended 52 weeks ended
30 March 2024
1 April 2023
£m £m
Loss for the period (108.0) (91.8)
Other comprehensive expense
Items that will not be reclassified to profit or loss:
Actuarial loss on defined benefit pension scheme (1.9) (2.0)
Items that will not be reclassified to profit or loss (1.9) (2.0)
Items that may be reclassified subsequently to profit or loss:
Hyperinflation foreign exchange adjustments 16.5
(9.0)
Retranslation of overseas subsidiaries (21.8) (2.1)
Items that may be reclassified subsequently to profit or loss (30.8) 14.4
Other comprehensive (expense) / income (32.7) 12.4
Total comprehensive expense for the period attributable to the owners of the (140.7) (79.4)
parent
Consolidated Balance Sheet
As at 30 March 2024
30 March 2024 1 April 2023 (Restated)
£m £m
Non-current assets
Goodwill 102.6 173.6
Intangible assets other than goodwill 250.7 305.5
Property, plant and equipment 447.8 462.6
Right-of-use lease assets 157.2 162.0
Investment property 0.2 0.2
Deferred tax assets 7.9 1.7
Total non-current assets 966.4 1,105.6
Current assets
Inventories 326.1 355.4
Trade and other receivables 238.1 268.6
Current tax assets 4.1 14.7
Cash and cash equivalents 94.8 93.3
Assets classified as held for sale - 25.8
Total current assets 663.1 757.8
Total assets 1,629.5 1,863.4
Current liabilities
Trade and other current payables (320.3) (363.8)
Current tax liabilities (4.7) (6.9)
Obligations under right-of-use leases - current (31.2) (27.6)
Other financial liabilities (94.3) (65.2)
Provisions (12.1) (21.5)
Total current liabilities (462.6) (485.0)
Non-current liabilities
Trade and other non-current payables (7.2) (7.3)
Obligations under right-of-use leases - non-current (136.5) (144.6)
Other non-current financial liabilities (672.7) (706.2)
Preferred equity (274.2) (255.2)
Preferred equity - contractually-linked warrants (12.4) (26.0)
Deferred tax liabilities (56.7) (89.3)
Retirement benefit obligations (8.4) (8.0)
Provisions (21.0) (22.8)
Total non-current liabilities (1,189.1) (1,259.4)
Total liabilities (1,651.7) (1,744.4)
Net (liabilities) / assets (22.2) 119.0
Equity
Share capital 6.3 6.3
Retained earnings (27.4) 85.7
Foreign exchange reserve (20.8) 1.0
Hyperinflation foreign exchange reserve 7.5 16.5
Other reserves 12.2 9.5
Total equity (22.2) 119.0
Consolidated Statement of Changes in Equity
For the 52 weeks ended 30 March 2024
Share Retained Foreign exchange reserve Hyper-inflation foreign exchange reserve Other Total
capital
earnings
reserves
equity
£m £m £m £m £m £m
At 2 April 2022 6.3 187.3 3.1 - 5.9 202.6
Loss for the period to 1 April 2023 - (91.8) - - - (91.8)
Other comprehensive expense for the period - (2.0) - - - (2.0)
Retranslation of overseas subsidiaries - - (2.1) 16.5 - 14.4
Total comprehensive loss - (93.8) (2.1) 16.5 - (79.4)
Buy back of ordinary shares - (7.8) - - - (7.8)
Share-based payment charge - - - - 3.6 3.6
Transactions with owners - (7.8) - - 3.6 (4.2)
At 1 April 2023 6.3 85.7 1.0 16.5 9.5 119.0
Loss for the period to 30 March 2024 - (108.0) - - - (108.0)
Other comprehensive expense for the period - (1.9) - - - (1.9)
Retranslation of overseas subsidiaries - - (21.8) (9.0) - (30.8)
Total comprehensive loss - (109.9) (21.8) (9.0) - (140.7)
Buy back of ordinary shares - (3.2) - - - (3.2)
Share-based payment charge - - - - 2.7 2.7
Transactions with owners - (3.2) - - 2.7 (0.5)
At 30 March 2024 6.3 (27.4) (20.8) 7.5 12.2 (22.2)
Consolidated Statement of Cash Flows
For the 52 weeks ended 30 March 2024
52 weeks ended 52 weeks ended
30 March 2024 1 April 2023
£m £m
Cash flows from operating activities
Operating loss (51.8) (24.1)
Adjustments for:
Depreciation and amortisation of IT software 98.2 90.5
Amortisation of acquired intangibles 40.9 41.5
Hyperinflation impact (30.4) (22.0)
Negative goodwill arising on acquisition - (90.5)
Goodwill impairment 67.1 80.0
Acquisition-related performance plan charge 6.7 10.3
Acquisition-related performance plan payment (10.8) -
Amortisation of government grants (0.9) (1.3)
Profit on disposal of property, plant and equipment (2.1) (1.8)
Intangible asset impairment 5.4 -
Fixed asset impairment - 47.5
Loss on disposal of leased assets - 1.5
Share incentive plan charge 2.7 3.6
Defined benefit pension (0.6) (2.5)
Net cash flow from operating activities before movements in working capital, 124.4 132.7
tax and interest payments
Change in inventories 12.0 62.8
Change in trade and other receivables 20.2 40.6
Change in trade and other payables (47.7) (114.5)
Change in provisions (11.8) 19.1
Cash generated by continuing operations before tax and interest payments 97.1 140.7
Interest paid on loans and notes (32.6) (34.8)
Interest relating to right-of-use lease assets (6.8) (5.4)
Income taxes paid (2.5) (11.4)
Net cash inflow from operating activities 55.2 89.1
Investing activities
Purchases of property, plant and equipment (58.5) (96.4)
Purchases of intangible assets (4.0) (3.2)
Proceeds on disposal of property, plant and equipment 28.2 5.3
Proceeds on disposal of intangible assets 0.3 -
Deferred consideration and earn-out payments (4.1) (4.6)
Acquisition of subsidiaries net of cash acquired - (119.7)
Net cash used in investing activities (38.1) (218.6)
Financing activities
Proceeds from debt 48.4 66.0
Repayment of debt (34.3) (75.4)
Buy back of ordinary shares (3.2) (7.8)
Payments under right-of-use lease obligations (28.7) (23.9)
Net cash used in financing activities (17.9) (41.1)
Net (decrease) / increase in cash and cash equivalents (0.8) (170.6)
Cash and cash equivalents at beginning of period 90.4 258.0
Effect of foreign exchange rate changes (2.4) 3.0
Cash and cash equivalents at end of period 87.2 90.4
Comprising:
Cash and cash equivalents 94.8 93.3
Bank overdrafts (7.6) (2.9)
87.2 90.4
NOTES
1. Segmental
information
The Group is organised into four operating segments: soft flooring products in
UK & Europe; ceramic tiles in UK & Europe; flooring products in
Australia; and flooring products in North America. The Executive Board (which
is collectively the Chief Operating Decision Maker) regularly reviews
financial information for each of these operating segments in order to assess
their performance and make decisions around strategy and resource allocation
at this level.
The UK & Europe Soft Flooring segment comprises legal entities primarily
in the UK, Republic of Ireland, the Netherlands and Belgium (including
manufacturing entities in Turkey and a distribution entity in North America),
whose operations involve the manufacture and distribution of carpets, rugs,
flooring underlay, artificial grass, LVT, and associated accessories. The UK
& Europe Ceramic Tiles segment comprises legal entities primarily in
Spain, Turkey, Italy, UK and France, whose operations involve the manufacture
and distribution of wall and floor ceramic tiles. The Australia segment
comprises legal entities in Australia, whose operations involve the
manufacture and distribution of carpets, flooring underlay and LVT. The North
America segment comprises legal entities in the USA, whose operations involve
the distribution of hard flooring, LVT and tiles.
Whilst additional information has been provided in the operational review on
sub-segment activities, discrete financial information on these activities is
not regularly reported to the CODM for assessing performance or allocating
resources.
No operating segments have been aggregated into reportable segments. Both
underlying operating profit and reported operating profit are reported to the
Executive Board on a segmental basis.
Transactions between the reportable segments are made on an arm length's
basis. The reportable segments exclude the results of non revenue generating
holding companies, including Victoria PLC. These entities' results have been
included as unallocated central expenses in the tables
below.
52 weeks ended 30 March 2024
UK & UK & Australia North Unallocated Total
Europe
Europe
America
central
Soft Flooring
Ceramic Tiles
expenses
£m £m £m £m £m £m
Income statement
Revenue 643.8 359.7 106.1 163.3 - 1,273.0
Underlying operating profit / (loss) 34.6 31.8 8.7 6.8 (8.3) 73.6
Non-underlying operating items (11.9) (9.1) (1.6) (5.6) (3.6) (31.8)
Exceptional operating items (16.5) (31.0) (0.0) (43.3) (2.8) (93.6)
Operating profit / (loss) 6.3 (8.3) 7.1 (42.1) (14.8) (51.8)
Underlying net finance costs (46.5)
Non-underlying finance costs (32.6)
Loss before tax (130.9)
Tax credit 22.9
Loss for the period (108.0)
52 weeks ended 1 April 2023
UK & UK & Australia North Unallocated Total
Europe
Europe
America
central
Soft Flooring
Ceramic Tiles
expenses
£m £m £m £m £m £m
Income statement
Revenue 722.9 468.0 120.9 168.4 - 1,480.2
Underlying operating profit / (loss) 27.2 77.5 10.0 6.0 (1.9) 118.8
Non-underlying operating items (30.0) (12.0) (1.7) (9.2) (4.6) (57.5)
Exceptional operating items 5.8 (90.1) (0.1) 2.8 (3.8) (85.4)
Operating profit / (loss) 3.0 (24.6) 8.2 (0.4) (10.3) (24.1)
Underlying net finance costs (41.9)
Non-underlying finance costs (44.6)
Loss before tax (110.6)
Tax credit 18.8
Loss for the period (91.8)
2. Exceptional and non-underlying items
52 weeks ended 52 weeks ended
30 March 2024 1 April 2023
£m £m
Exceptional items
(a) Acquisition related costs (1.0) (4.0)
(b) Reorganisation and other costs (20.1) (44.4)
(c) Fixed asset impairment - (47.5)
(d) Negative goodwill arising on acquisition - 90.5
(e) Exceptional goodwill impairment (67.2) (80.0)
(f) Intangible asset impairment (5.4) -
(93.6) (85.4)
Non-underlying operating items
(g) Acquisition-related performance plans (6.7) (10.3)
(h) Non-cash share incentive plan charge (2.7) (3.6)
(i) Amortisation of acquired intangibles (excluding hyperinflation) (39.5) (40.3)
(j) Unwind of fair value uplift to acquisition opening inventory (0.6) (10.9)
(k) Depreciation of fair value uplift to acquisition property, plant and (5.1) (9.1)
machinery
(l) Hyperinflation depreciation adjustment (6.0) (4.2)
(m) Hyperinflation amortisation adjustment (1.4) (1.1)
(n) Hyperinflation monetary gain / (loss) 45.9 38.9
(o) Other hyperinflation adjustments (excluding depreciation and monetary (15.6) (16.9)
gain)
(31.8) (57.5)
Total (125.4) (142.9)
Representing functional categorisation of:
Revenue (see notes l,m,n,o) 16.5 18.8
Cost of sales (see notes j,k,l,m,n,o) (43.0) (58.9)
Distribution and administrative expenses (99.0) (193.4)
Negative goodwill arising on acquisition - 90.5
Other operating income (see notes l,m,n,o) 0.1 0.1
(125.4) (142.9)
(a) One-off third-party professional fees in connection with prospecting and
completing specific acquisitions during the period.
(b) In the prior year, the Group made a significant investment decision in
restructuring the Rugs and UK broadloom businesses of Balta which represents
the majority of the £20.1 million, with small reorganisation and integration
projects around the Group contributing in smaller amounts.
(c) Prior year included an asset impairment cost of £47.5m relating to acquired
Balta property, plant & machinery. One property was revalued on
acquisition using a depreciated replacement cost valuation approach however
due to subsequent restructuring decisions the property was transferred to
assets held for sale and sold post year end.
(d) Prior period negative goodwill of £90.5m arose on the acquisition of Balta,
Ragolle and IWT. Ragolle achieved this through favourable bilateral
negotiations. IWT's negative goodwill was due to the accounting treatment of
the accrued employment costs. Balta's negative goodwill was linked to the fact
further spend was required to restructure the business and due to fair value
uplift of property. See point b.
(e) Exceptional goodwill impairment charge, reduced production in Spain, as a
result of the integration programme within the ceramics division has resulted
in a further impairment of £24.7 million being taken in the UK & Europe -
Ceramics (Spain & Turkey) CGU, along with weaker demand in the US
impacting Cali Bamboo resulting in an impairment of £42.5 million.
(f) Further to the exceptional goodwill impairment noted above, as a result of
this testing, a charge was taken against the customer related intangible
assets within Saloni.
(g) Charge relating to the accrual of expected liability under acquisition-related
performance plans.
(h) Non-cash, IFRS2 share-based payment charge in relation to the long-term
management incentive plans.
(i) Amortisation of intangible assets, primarily brands and customer
relationships, recognised on consolidation as a result of business
combinations.
(j) One-off cost of sales charge reflecting the IFRS 3 fair value adjustment on
inventory acquired on new business acquisitions, given this is not
representative of the underlying performance of those businesses.
(k) Cost of sales depreciation charge reflecting the IFRS 3 fair value adjustment
on buildings and plant and machinery acquired on new business acquisitions,
given this is not representative of the underlying performance of those
businesses.
(l,m,n,o) Impact of hyperinflation indexation in the period. The hyperinflation impact
in the period on revenue was £16.5m (2023: £18.9m income), cost of sales was
£37.5m charge (2023: £38.1m charge), admin expenses was £43.9m income
(FY23: £35.8m income ) and other operating income was £nil (2023: £0.1m).
3. Finance costs
52 weeks ended 52 weeks ended
30 March 2024 1 April 2023
£m £m
Underlying finance items
Interest on bank facilities and notes (36.8) (33.6)
Amortisation of prepaid finance costs on loans and notes (2.7) (2.8)
Unwinding of discount on right-of-use lease liabilities (7.0) (5.4)
Net interest expense on defined benefit pensions - (0.3)
Retranslation on foreign cash balances 0.1 0.2
(46.5) (41.9)
Non-underlying finance items
(a) Finance items related to preferred equity (5.4) (26.9)
(b) Unwinding of present value of deferred and contingent earn-out liabilities (0.5) (0.3)
(c) Fair value adjustment to deferred consideration and contingent earnout 2.0 0.3
Acquisitions related 1.5 -
(d) Gain on bond repurchase 2.0 -
(e) Fair value adjustment to notes redemption option / amortisation inception 1.2 (2.0)
derivative
(f) Mark to market adjustments and gains on foreign exchange forward contracts (0.2) (0.4)
(g) Translation difference on foreign currency loans and cash (24.6) (13.3)
(h) Hyperinflation - finance portion (6.7) (1.8)
(i) Defined benefit pension (0.4) (0.2)
Other non-underlying (28.6) (17.7)
(32.6) (44.6)
(a) The net impact of items relating to preferred equity issued to Koch Equity
Development during the current and prior periods.
(b) Current period non-cash costs relating to the unwind of present value
discounts applied to deferred consideration and contingent earn-outs on
historical business acquisitions. Deferred consideration is measured at
amortised cost, while contingent consideration is measured under IFRS 9 / 13
at fair value. Both are discounted for the time value of money.
(c) Fair value reduction to contingent liability resulting in a credit. Prior year
credit arose due to partial waiver of deferred consideration payable due to
formally agreeing a reduction in the overall liability.
(d) The Company has generated a gain on bonds repurchased as the purchase price
was lower than the carrying amount. This has happened as market interest rates
have risen since the bonds were issued, reducing their market value.
(e) Attached to the senior notes is an early repayment option which, on inception,
was recognised as an embedded derivative asset at a fair value of £4.3m. This
asset is revalued at each reporting date, with the movement taken through the
P&L. The value of the senior debt liabilities recognised were increased by
a corresponding amount at initial recognition, which then reduces to par at
maturity using an effective interest rate method. A credit of £1.2m was
recognised in the period (2023: £2.7m charge), with a £nil fair value of the
derivative asset at both period ends.
(f) Non-cash fair value adjustments on foreign exchange forward contracts.
(g) Net impact of exchange rate movements on third party and intercompany loans.
(h) Other finance cost/income impact of hyperinflation.
(i) Defined benefit pension change due to restructuring in current period and
prior period related to a change in Turkish law.
See Financial Review for further details of these items.
4. Earnings per share
The calculation of the basic, adjusted and diluted earnings / (loss) per share
is based on the following data:
52 weeks ended 52 weeks ended
30 March 2024 1 April 2023
Basic Adjusted Basic Adjusted
£m £m £m £m
Loss attributable to ordinary equity holders of the parent entity (108.0) (108.0) (91.8) (91.8)
Exceptional and non-underlying items:
Exceptional items - 93.6 - 85.4
Non-underlying items - 64.4 - 102.1
Tax effect on adjusted items where applicable - (18.2) - (36.1)
(Loss) / earnings for the purpose of basic and adjusted earnings per share (108.0) 31.8 (91.8) 59.6
Weighted average number of shares
52 weeks ended 52 weeks ended
30 March 2024 1 April 2023
Number Number
of shares
of shares
(000's) (000's)
Weighted average number of shares for the purpose of basic and adjusted 115,046 115,746
earnings per share
Effect of dilutive potential ordinary shares:
Share options and warrants 1,621 1,569
Weighted average number of ordinary shares for the purposes of diluted 116,667 117,315
earnings per share
Preferred equity and contractually-linked warrants 49,771 35,213
Weighted average number of ordinary shares for the purposes of diluted 166,438 152,528
adjusted earnings per share
The potential dilutive effect of the share options has been calculated in
accordance with IAS 33 using the average share price in the period.
The Group's earnings / (loss) per share are as follows:
52 weeks ended 30 March 2024 52 weeks ended 1 April 2023
Pence Pence
Earnings / loss per share
Basic earnings / (loss) per share (93.85) (79.35)
Diluted earnings / (loss) per share (93.85) (79.35)
Basic adjusted earnings per share 27.66 51.47
Diluted adjusted earnings per share 19.12 39.06
Diluted earnings per share for the period is not adjusted for the impact of
the potential future conversion of preferred equity due to this instrument
having an anti-dilutive effect, whereby the positive impact of adding back the
associated financial costs to earnings outweighs the dilutive impact of
conversion/exercise. Diluted adjusted earnings per share does take into
account the impact of this instrument as shown in the table above setting out
the weighted average number of shares. Due to the loss incurred in the year,
in calculating the diluted loss per share, the share options, warrants and
preferred equity are considered to be non-dilutive.
5. Rates of exchange
2024 2023
Average Year end Average Year end
Australia - AUD 1.9134 1.9369 1.7679 1.8458
Europe - EUR 1.1594 1.1690 1.1557 1.1360
United States - USD 1.2577 1.2626 1.2065 1.2345
Turkey - TRY 34.4101 40.8163 21.6304 23.6755
6. Net Debt
Analysis of net debt
Reconciliation of movements in the Group's net debt position:
Group At Cash flow Non-cash movement Exchange movement At
on inception
2 April 2023
of leasing contract Other non-cash changes 30 March 2024
expenditure
£m £m £m £m £m £m
Cash and cash equivalents 93.3 4.1 - - (2.6) 94.8
Bank overdraft (2.9) (4.8) - - 0.2 (7.6)
Net cash and cash equivalents 90.4 (0.7) - - (2.4) 87.2
Bank overdraft - (14.4) - - - (14.4)
Senior secured debt (gross of prepaid finance costs):
- due in less than one year - - - - - -
- due in more than one year (663.8) 7.6 - (2.0) 18.6 (639.6)
Unsecured loans:
- due in less than one year (62.3) (9.2) - (5.4) 4.6 (72.4)
- due in more than one year (50.3) 2.0 - 8.3 1.2 (38.8)
Net debt (686.0) (14.7) - 0.8 22.0 (678.0)
Obligations under right-of-use leases:
- due in less than one year (27.6) 28.7 (25.0) (8.1) 0.8 (31.2)
- due in more than one year (144.6) - - 4.3 3.8 (136.5)
Preferred equity (gross of prepaid finance costs) (281.2) - - (5.4) - (286.6)
Prepaid finance costs:
- In relation to senior debt 7.9 0.5 - (2.7) - 5.7
Financing liabilities (1,221.9) 15.2 (25.0) (11.0) 28.9 (1,213.8)
Net debt including right-of-use lease liabilities, issue premia, preferred (1,131.5) 14.5 (25.0) (11.0) 26.5 (1,126.6)
equity and prepaid finance costs
The Annual Report & Accounts will be posted to shareholders in due
course. Further copies will be available from the Company's Registered
Office: Worcester Six Business Park, Worcester, Worcestershire, WR4 0AE or via
the website: www.victoriaplc.com (http://www.victoriaplc.com)
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