MIDLANDS-based carpet manufacturer Victoria put in a resilient first-half but warned of significantly lower full-year results amid trading conditions described as “the worse we have seen in several decades”.
The Kidderminster firm, with operations in the UK, Ireland, Australia and Canada, reported an increase in pretax profit of 2.8 per cent from £1.25 million to £1.28 million for the six months ended 27th September. Revenue was up 13.8 per cent from £28.76 million to £32.71?million.
Victoria chairman Alexander Anton said: “Given the high degree of uncertainty in our markets, and coupled with the likelihood they may deteriorate further, the board anticipates the results for the full year are likely to be significantly down on last year.”
Victoria said UK sales declined markedly in August and September and as a result, revenue for the six months was flat at £12.44 million, compared to £12.43 million in the corresponding period last year.
Victoria group managing director Alan Bullock described the figures as a “creditable performance.”
He said the group had done well to put in a flat sales performance in the difficult UK market and pointed to the fact Victoria’s performance had beaten many competitors. “I think it’s been a difficult market in the UK for considerably longer than since August and September – going back into last year when we started to see the housing market cooling considerably and consumer confidence starting to waver,” he said.
“We were pleased with the first three months of the financial year.
“But then we started to see a marked downturn in the economy, not just when the banking crisis came home to bear.
“Also the housing market started to collapse, people started to fear for jobs and unemployment raised its head and we saw a marked difference in August and September. But the fact sales are flat is a commendable performance. We will have taken market share from our competitors to achieve that figure.”
Victoria said its move into the UK contract floor covering market had made “a promising start” as it seeks to diversify from the troubled residential sector.
Mr Bullock said this decision was not a defensive move but part of a growth strategy.
“Victoria is famous in the residential market but we hadn’t attempted to enter this market. We realised it is a significant part of the UK floor covering market and it was an area we wanted to enter.”
The group’s Australian operations, which account for 51 per cent of group revenues, saw strong sales growth in the first half-year with sales up 9.7 per cent from £14.02 million to £15.4 million.
Victoria benefited from a relatively strong Australian dollar exchange rate which helped revenues climb 23.1 per cent and pretax profits by 17.3 per cent.
But Mr Bullock said the company was watching the market closely as the global downturn started to bite.
“For the last few years the Australian market has done very well for Victoria.
“The economy raced ahead as it was a commodity-driven economy whereas in the UK we have a more mature market.
“Right up until August we saw Australia as relatively immune.”