The executive chairman of carpet and flooring manufacturer Victoria (VCP) is quick to dismiss the reaction to the EU referendum vote as a "ludicrous over-reaction" and "utter nonsense". Geoff Wilding said there had been "no drop-off whatsoever in demand" since the vote, something easily trackable given it receives orders from its retailers just hours after they're made. He added that the company's sales were overwhelmingly linked to home redecoration and so suggested Victoria would be unaffected if, as some commentators have warned, waning economic growth leads to fewer new houses being built.
Acquisitions of Quest Carpets and Interfloor Group proved materially earnings enhancing, but organic growth has also been achieved through efficiencies of scale, which allowed the group to secure better terms on its raw materials. Finance director Michael Scott added that the company spends roughly £30m on logistics, adding this could be reduced by using fewer, larger vehicles to distribute stock. Mr Scott said he expected the company could push its underlying cash profit margin up to 14 per cent from 12.6 per cent now.
Analysts at Cantor Fitzgerald upgraded their forecasts and now expect pre-tax profits of £27m for the year to April 2017 leading to EPS of 113.3p, up from £18.2m and 81.8p in FY2016.
| VICTORIA (VCP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,198p | MARKET VALUE: | £ 218m | |
| TOUCH: | 1,180-1,215p | 12-MONTH HIGH: | 1,595p | LOW: 1,024p |
| DIVIDEND YIELD: | nil | PE RATIO: | 33 | |
| NET ASSET VALUE: | 390p* | NET DEBT: | 86% | |
| Year to 2 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 77 | 1.60 | 15.6 | 10.50 |
| 2013 | 71 | -3.30 | -39.6 | 8.00 |
| 2014 | 71 | 2.30 | 24.5 | nil |
| 2015 | 127 | -1.59 | -27.4 | nil† |
| 2016 | 255 | 9.29 | 36.1 | nil |
| % change | +101 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £80.7m or 443p a share †Excludes special dividend of 292p paid in July 2014 | ||||
