Victoria (VCP) H1 2025 earnings summary

Executive summary

• Demand for flooring products remained materially below the 25-year trend but stabilized, with volumes flat yet subdued due to macroeconomic conditions; long-term sector growth drivers remain intact in the $200bn global flooring market.

• Management focused on efficiency, cost savings, and integration of acquisitions, removing £12m in costs in H1 and targeting £32m annualized savings by FY 2026.

• Graniser (Turkey) was disposed of post-period, improving the balance sheet and reducing leverage by 0.5x, while maintaining access to low-cost product via a supply agreement.

• Net operating cash flow before interest, tax, and exceptionals was £31.7m, with working capital inflow of £2.1m after three years of increases.

• Statutory net loss after tax was £141.7m, reflecting challenging market conditions and significant exceptional charges.

Financial highlights

• Revenue from continuing operations was £568.8m, down 9% year-over-year; EBITDA was £50.2m, with an EBITDA margin of 8.8%, down from 14.8% prior year.

• Statutory operating loss was £140.8m, driven by £120m in exceptional impairment charges.

• Underlying loss before tax was £13.6m; underlying free cash flow was negative £12.7m.

• Net debt stood at £658.2m, with net debt/EBITDA at 6.2x; liquidity lines exceeded £200m.

• Property and business disposals realized over £60m, supporting liquidity and deleveraging.

Outlook and guidance

• Cost-saving initiatives are expected to deliver £32m in annualized savings by FY 2026.

• Management expects short-term profit recovery as cost actions take effect, with a clear path to mid-high teen EBITDA margins as demand normalizes.

• Macro factors such as potential interest rate cuts and improved consumer confidence could support demand recovery.

• Each 5% volume uplift is expected to drive over £25m in additional earnings.