Victoria eyeing earnings and cash flow boost as it reports record revenue for fiscal 2023

Worcestershire-headquartered Victoria PLC said it was expecting increased earnings and cash flow in its next financial year as the flooring firm integrates the many acquisitions it has made in recent years.

In its results for the year to end-April, 2023, the company, which was established in 1895, revealed that for the first time, it had sold over 200 million square metres of flooring in the full year, generating record revenue of £1.46 billion (full year 2023: £1.02 billion).

READ MORE: Revenue and profits up at Victoria Carpets

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by over 20.4% compared to the previous year at £196 million (FY22: £162.8 million).

The underlying pre-tax profit was £76.9 million, up 4.2% from £73.8 million a year earlier.

Victoria noted that after "making and integrating two-dozen acquisitions over the last 10 years", it had now achieved a scale that it anticipates will result in "higher productivity, more efficient logistics, wider distribution, and lower input costs" than almost all its competitors.

The "signs of life" in some geographies noted in earlier market announcements, has continued to be seen - most noticeably in the UK, it added.

Geoff Wilding, the group's executive chairman, told investors: "Victoria benefits greatly from being in a long-duration, steady growth industry that will drive compounding organic growth for decades."

He added: "We expect FY2024 to be a year of two halves, with stronger H2 earnings as the productivity gains from completion of the major integration projects are experienced.

"Completion of the projects is also expected to result in Victoria's free cash flow increasing sharply from H2 FY2024, with management focussed on returning to our long-run average cash conversion of EBITDA to net free cash flow of 55%.

"Further ahead, FY2025 will see the full integration benefits with an expected uplift in margins driving an additional increase in earnings and free cash flow."

AIM-quoted Victoria designs, manufactures and distributes a range of carpet, flooring underlay, ceramic tiles, LVT (luxury vinyl tile) and flooring accessories.

Its operations are in the UK, Spain, Italy, Belgium, the Netherlands, Germany, Turkey, the USA, and Australia and it employs around 7,300 people across more than 30 sites.

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