Victoria (VCP) H2 2024 earnings summary

Executive summary

• Victoria PLC is a global designer, manufacturer, and distributor of flooring products with a 129-year history, offering ceramic tiles, carpet, underlay, LVT, and artificial grass.

• Achieved consistent organic growth of 5% CAGR since 1997, with EBITDA margin expanding from 3% in FY2013 to 12.8% in FY2024.

• Growth strategy centers on disciplined acquisitions and integration, with 23 acquisitions since 2013 generating synergies and above-average margins.

• Ample liquidity with over £250 million in cash and undrawn credit lines; management is prioritizing deleveraging.

• FY2024 saw softer demand (15-25% below 2019 levels) due to inflation and post-COVID demand pull-forward, but long-term sector drivers remain robust.

Financial highlights

• FY2024 revenue was £1,256.5m, down 14% year-over-year (FY2023: £1,461.4m).

• Underlying EBITDA was £160.7m, down from £196.0m in FY2023; operating margin at 12.8% (FY2023: 13.4%).

• Pre-tax profit was £27.2m, a significant decrease from £76.9m in FY2023.

• Net free cash flow per share was £0.92, down from £1.36 in FY2023.

• Adjusted net debt/EBITDA leverage increased to 4.4x from 3.4x in FY2023.

Outlook and guidance

• FY2025 outlook assumes continued subdued demand; each 5% revenue increase is expected to add over £25m to annual earnings and cash flow.

• Over £20m in annual EBITDA synergies expected from completed integration projects.

• Focus on deleveraging and refinancing 2026 senior notes.

• Management expects leverage ratio to fall as free cash generation increases and capex normalizes.