Victoria : Annual Report and Accounts 2023

Annual Report and Accounts

for the 52 weeks ended 1 April 2023

www.victoriaplc.com

stock code: VCP

WELCOME TO VICTORIA PLC

Victoria is a designer, manufacturer and distributor of innovative flooring products.

GROUP FINANCIAL AND OPERATIONAL HIGHLIGHTS

BY APPOINTMENT TO

HER MAJESTY THE QUEEN CARPET MANUFACTURERS VICTORIA CARPETS LTD KIDDERMINSTER

UNDERLYING REVENUE (£m)	UNDERLYING OPERATING PROFIT (£m)1
23				23
1,461.4		118.8
22	1,019.8				22	107.9
21	662.3						21	79.8
20	621.5						20	77.1
IFRS REPORTED OPERATING PROFIT / (LOSS) £m	ADJUSTED NET DEBT / EBITDA2
23	(24.1)						23				3.4x
22	53.6		22			2.7x
21	45.9			21				3.1x
20	(8.5)						20			3.0x

• For the first time in the Company's history, the total volume of flooring sold in FY2023 exceed 200 million square metres (more than 29,500 football fields), generating record revenues of £1.46 billion.
• Solid like-for-like organic revenue growth of 2.8%, despite challenging macro-economic conditions and following very strong like-for-like organic growth of +19.2% in the previous 12 months.
• Underlying EBITDA grew by +20.4% over the prior year to £196.0 million.
• Year-endnet leverage was 3.44x, with the Group's senior debt consisting entirely of fixed rate, covenant-lite bonds falling due in August 2026 and March 2028.
• A resilient balance sheet, with cash and undrawn credit lines at the year-end in excess of £250 million.
• FY2023's focus on the successful integration of acquisitions has resulted in the projects' completion this month. The outcome is anticipated to conservatively deliver a £20+ million per annum increase in EBITDA.
• The Group's integration expenditure (exceptional expenses and capex) of the last three years is coming to an end. Consequently, the Board anticipates free cash flow to increase sharply. For the five-year period FY2015-2019, the Group averaged cash conversion of EBITDA to Net Free Cash Flow of 55%3, which the Board believes is a sustainable, long-term ratio and one management is focused on returning to in the near-term.
• Whilst the Group's FY2024 financial outlook is largely based on steady-state demand and underpinned by the various integration projects, each future 5% increase in overall revenue, which is Victoria's long-run organic growth rate, would be expected to deliver earnings and cash flow growth of more than £25 million per annum.
• The "signs of life" in some geographies noted in earlier market announcements, has continued to be seen - most noticeably in the UK, where we believe the Group is benefitting from the service it offers customers and its mid-high end product positioning and underlying earnings year-to-date are ahead of both budget and the same period last year.

1. underlying and before exceptional and non-underlying items
2. applying our lending banks' measure of financial leverage
3. cash generated after replacement capex, interest, and tax as a percentage of EBITDA

Read the Victoria snapshot on pages 02 and 03

Victoria PLC Annual Report and Accounts 2023

Stock Code: VCP

OUR MISSION STATEMENT

TO CREATE WEALTH FOR OUR SHAREHOLDERS

Read the Financial review on pages 18 to 30

Visit our corporate website www.victoriaplc.com

Business and Performance

CONTENTS

Business and Performance

Group financial and operational	IFC
highlights
A snapshot of Victoria PLC	02
Chairman and CEO review	04
Strategic report	13
Financial review	18
Environmental, Social and Governance	31
Report

Our Governance

Board of Directors	43
Directors' report	44
Statement of Directors' responsibilities	48

Our Financials

Independent auditor's report	49
Consolidated income statement	64
Consolidated statement	65
of comprehensive income
Consolidated and Company	66
balance sheets
Consolidated and Company	67
statements of changes in equity
Consolidated and Company	68
statements of cash flows
Significant accounting policies	69
Notes to the accounts	79

Other Information

Shareholder information	143
Registered offices of subsidiaries	144
Glossary	146
Appendix	147

www.victoriaplc.com

01

A Snapshot of Victoria PLC

OVERVIEW

The Group designs, manufactures and distributes a wide range of carpets, ceramic tiles, underlay, LVT (luxury vinyl tile), artificial grass and flooring accessories.

UNDERLYING REVENUE		OPERATING PROFIT		EMPLOYEES
UK & Europe Soft Flooring	48.9%	UK & Europe Soft Flooring	21.3%	UK & Europe Soft Flooring	53.3%
UK & Europe Ceramic Tiles	31.6%	UK & Europe Ceramic Tiles	65.2%	UK & Europe Ceramic Tiles	37.2%
Australia	8.2%	Australia	8.4%	Australia	5.1%
North America	11.3%	North America	5.1%	North America	4.4%

UK & EUROPE SOFT FLOORING

Underlying Revenue

£718.8m

Employees

3,884

m2 flooring sold

115.8m

m2 underlay sold

51.3m

UK & EUROPE CERAMIC TILES

Underlying Revenue

£453.3m

Employees

2,714

m2 flooring sold

53.9m

AUSTRALIA

Underlying Revenue

£120.9m

Employees

369

m2 flooring sold

8.4m

m2 underlay sold

14.7m

NORTH AMERICA

Underlying Revenue

£168.4m

Employees

321

m2 flooring sold

6.1m

02

Victoria PLC Annual Report and Accounts 2023

Stock Code: VCP

Business and Performance

LOCATION OF OPERATIONS

The Group has operations in the UK, Europe, Turkey, the USA and Australia, employing approximately 7,300 people at more than 30 sites.

UNITED KINGDOM

Dumfries,

Hartlepool,

Dumfries & Galloway

County Durham

Accessories production

Sales & marketing

Distribution

Distribution

Keighley,

Dewsbury,

West Yorkshire

West Yorkshire

Underlay production

Carpet production

Sales & marketing

Sales & marketing

Distribution

Distribution

Worcester,

Worcestershire

Head Office

Rossendale,

Distribution

Lancashire

Underlay production

Sales & marketing

Distribution

Newport,

South Wales

Carpet production
		Hemel Hempstead,
Sales & marketing
		Hertfordshire
Distribution	Kidderminster,
Distribution
	West Midlands
	Sales & marketing

EUROPE

OSS,

Genemuiden, Netherlands

Netherlands

Artificial grass

Sales & marketing

Manufacturing

Distribution

Uden, Netherlands

Waregem,

Sales & marketing

Aalten, Netherlands

Belgium

Sales & marketing

Carpet and Rugs

Manufacturing

Ronse,

Rahden,

Germany

Izmir, Turkey

Belgium

Artificial grass

Ceramics production

Sales & marketing

Manufacturing

Usak, Turkey

Rugs Manufacturing

Castellon, Spain		Sassuolo, Italy		Alfonsine, Italy
Ceramics production	Ceramics production	Ceramics production
Sales & marketing	Sales & marketing	Sales & marketing
Distribution	Distribution	Distribution

AUSTRALIA

Sydney

Underlay production

Sales & marketing

Distribution

Melbourne

Carpet production

Sales & marketing

Distribution

NORTH AMERICA

Los Angeles, California

Atlanta, Georgia

Distribution

Rugs distribution

San Diego, California		Palm City, Florida
LVT & Wood Flooring		Ceramic Tiles & LVT Flooring
Sales & Marketing		Sales & Marketing
Distribution		Distribution

www.victoriaplc.com

03