Victoria (VCP) H1 2026 earnings summary

Executive summary

• Revenue declined 7% year-over-year in H1 to £528.7m, mainly due to lower volumes, but EBITDA improved to £53.5m (10.1% margin), with margin expansion driven by cost-saving initiatives despite challenging demand.

• Management executed significant cost-saving and margin improvement initiatives, with further savings targeted through FY27.

• Demand remains 20%-25% below long-term trends, but an improving top-line trend was observed through H1 and is expected to continue.

• Board remains cautious on near-term outlook due to macro volatility, inefficiencies in Belgian operations, and Rugs division transition.

• Focus remains on delivering EBITDA initiatives, deleveraging, and rebuilding credit rating.

Financial highlights

• Underlying EBITDA rose to £53.5m (10.1% margin), up from £50.2m (8.8% margin) in H1 FY25.

• Net debt stands at £1,003.9m, with leverage at 8.6x; refinancing extended maturities, with next major maturity in 2028.

• Free cash flow before CapEx and reorganization was £8.1m; CapEx for H1 was £25m, with annual guidance reduced to £50-55m.

• Statutory net loss after tax of £139.4m, mainly due to exceptional costs from Rugs reorganisation and refinancing.

• Pre-tax loss: £15.4m, compared to £13.6m loss in H1 FY25.

Outlook and guidance

• Management remains cautious due to macro volatility and operational inefficiencies, especially in the Rugs division.

• Further cost savings and margin improvements are targeted, with EBITDA initiatives on track for FY27.

• CapEx guidance reduced to £50-55m per annum; working capital savings of £40m and additional property sales of £20m+ targeted over the next 18 months.

• Positive revenue and margin growth expected in UK H2; Rugs division targeting breakeven in H2 and profitability in FY27.

• Volume and pricing expected to recover as interest rates ease and confidence returns.