All time record revenues for Worcestershire Victoria Carpets
Kidderminster-headquartered carpet and flooring design and manufacturing company Victoria PLC, has announced that the Group has achieved all-time record revenues and operating profits for the third quarter to the end of December, continuing the strong performance for the first half-year to 3 October 2020.
Despite the UK lockdown in November, which is normally the best trading month of the year, and on-going Covid-related challenges in some of its other markets, the Group's revenues were more than 10 per cent up on the prior year.
The company has put its stellar performance down to three principal drivers. Firstly, geographical diversification – Victoria plc generates nearly 75 per cent of earnings and cash from outside the UK. The Group sells its products to thousands of flooring retailers across Europe, North America, the UK, Australasia, and the Middle East. Secondly, all of the Group's factories remained open throughout the quarter, with full production schedules, and the Group's logistics centres maintained deliveries to customers to satisfy demand, whilst providing a Covid-safe environment for our staff. The Company intends to continue operating from all of its sites during the current quarter.
Finally, the investment made in logistics and distribution in the UK, completed in late-2019, has provided Victoria with a sustainable competitive advantage. The objective of this investment was to improve customer experience - enabling retailers it supplies to hold lower inventory levels (reducing their working capital and warehousing costs), while remaining confident that product would be received when required for installation. This service level has been made possible only by Victoria's scale (the revenues and investment required precludes most competitors from independently offering the same service), is highly valued by retailers, and continues to drive an increased 'share of wallet' - as evidenced by our UK revenues increasing by more than twice the estimated growth of the market overall.
Despite these gains Victoria Plc says that its UK residential flooring market share is currently only circa 15 per cent and there is substantial headroom for continued growth.
North America is a significant existing end market for Victoria, where the Group has been successfully selling and distributing its products for more than a decade. Following the announcement last November of a major investment in the business from Koch Equity Development, the company is planning to greatly increase its distribution capabilities across North America. Koch Industries has a long-standing interest in flooring via its INVISTA business and the Stainmaster Brand.
To help achieve this, Roberto Moreno has joined Victoria Plc Group as Managing Director - Strategic Investments and Corporate Development. Roberto's role will involve working with other parties to source and diligence potential growth opportunities.
Roberto is currently living in New York, where he was previously the Chief Investment Officer for E.L. Rothschild and the Managing Member of investment company, Pine Management. Prior to this, Roberto was a Managing Director at Sandton Capital Partners. In these roles he was responsible for originating and executing investments, and management oversight of portfolio companies in Europe and North America.
Commencing on the company's results, Victoria Carpet's Executive Chairman Geoff Wilding said: "Demand for flooring product is strong from consumers' renewed focus on investing in their homes but we are outperforming the market generally and believe this to be both sustainable and on-going due to the benefits of our unique service proposition. This is a direct result of the substantial investment we made in our logistics platform during 2019.
"Undoubtedly, the UK November lockdown had some impact on our performance - we would have done even better without it - and the current lockdown may similarly impact the final quarter of FY 21. However, Victoria has clearly shown its operational resilience by achieving record revenues and earnings in the December quarter and the Board believes it is well placed to meet this headwind."
