Audited results for the year ended 29 March 2025

Victoria PLC

('Victoria', the 'Company', or the 'Group')

 

Audited results

for the year ended 29 March 2025

 

Revenue and earnings in line with market expectations

 

Initiatives delivered by the end of FY2025 underpin expected significant uplift in FY2026 performance

 

Refinancing announced for SSRCF and 2026 Senior Secured notes

 

Victoria, the international designer, manufacturer, and distributor of innovative flooring, today publishes its annual results for year ended 29 March 2025, and has made separate announcements confirming the refinancing of its Super Senior Revolving Credit Facility ("SSRCF") and an exchange transaction for its 2026 Senior Secured Notes, extending the maturity to 2029 (together, the "Refinancing"). The Annual Report & Accounts for the financial year ended 29 March 2025 will be posted today to shareholders who have requested a hard copy, and will be available on the Company's website at www.victoriaplc.com.

 

 

FY2025 Financial and Operational highlights

	Year ended 29 March 2025	Year ended 30 March 2024
Underlying revenue	£1,115.2m	£1,226.4m
Underlying EBITDA1	£113.7m	£159.0m
Underlying EBITDA (Pre IFRS-16)	£81.0m	£128.7m
Underlying operating profit1	£29.5m	£73.0m
Statutory operating loss	(£225.4m)	(£64.8m)
Underlying (loss)/ profit before tax1	(£11.5m)	£31.1m
Statutory net loss after tax	(£239.6m)	(£95.7m)
Underlying free cash flow2	(£36.2m)	£35.0m
Net debt, including IFRS 16 lease debt3	£897.9m	£840.0m
Net debt / EBITDA	7.9x	5.3x
Earnings / (loss) per share:
- Basic	(210.26p)	(83.15p)
- Diluted adjusted1	(5.18p)	19.35p

 

·    Performance in FY2025 was impacted by lower volumes as a result of macroeconomic headwinds across our end-markets, with demand c. 15-25% below 2019 levels across different geographies, and margins impacted by operational leverage

 

·    Management have been proactive in implementing significant "self-help" throughout the year and these are expected to benefit margins in FY2026 irrespective of market conditions

 

·    These improvements are already taking effect and the Group's EBITDA margin performance in H2 was significantly stronger than H1 (H1: 8.8%, H2: 11.6%), and Q4 FY2025 was the strongest margin performance since Q1 2024

 

·    The cost savings opportunities identified and announced at H1, totalling £32m, are already delivered or on track, with a further £50m being targeted with full run-rate to be achieved by the end of FY2027

 

·    These savings are expected to return the business back to a mid-teen EBITDA margin before the impact of cycle recovery. The cost saving projects span procurement (£10m), integration (£10m), and manufacturing efficiencies and reorganisation (£30m).

 

·    The Refinancing, which has binding support from more than 90% of the 2026 noteholders, is expected to address the 2026 maturities in full, providing the Company with significant maturity runway to execute its cost synergies program and benefit from the expected recovery in demand ahead of its future maturities.

 

·    Once completed, which is expected in late August, the Company will have material liquidity, no financial covenants, no short-term maturities and a materially extended maturity profile, and the transaction will not dilute equity holders.

 

·    The Board has begun the process to appoint a new independent non-executive director who will be appointed as part of the Board's ongoing strengthening of governance and controls, which will be a focus throughout FY2026 alongside operational efficiency improvements.

 

·    Market conditions remain at trough levels although there are tentative signs of stabilization, particularly in the UK and Southern Europe. The Group remains focused on improving margins and being disciplined on pricing, and average selling prices ("ASP") in Q1 are therefore ahead of last year. Volumes overall remain behind FY2025, but with an improving trend.

 

·    The Board expects revenue to return to a more typical H2 weighted seasonality after successive years of a contracting market, and H2 will also benefit from the ongoing self-help cost initiatives.

 

·    The Board remains confident in medium term recovery in volume and pricing

 

 

Commenting on Victoria's Outlook, Geoff Wilding, Executive Chairman, said:

 "After nearly three years of intense macroeconomic headwinds there are tentative signs that the trading environment has stabilised. Nevertheless, the Board and management remain firmly focused on factors within our control. Significant initiatives, outlined to shareholders in the FY2025 Interim Report, were executed, delivering the most profitable quarter of the year in Q4 and underpinning the expected significant uplift in margins in FY2026.

 

Our near-term priority is to continue executing internal self-help initiatives that drive margin improvements, earnings and enhance cash generation and return on capital, ensuring the Group emerges stronger regardless of the pace or shape of the macro recovery."

 

¹ Underlying performance is stated before exceptional and non-underlying items. In addition, underlying profit before tax and adjusted EPS are stated before non-underlying items within finance costs.

² Underlying free cash flow represents cash flow after interest, tax and replacement capital expenditure, but before investment in growth, financing activities and exceptional items.

³ Net debt shown before preferred equity.

 

Investor presentation

Geoff Wilding, Executive Chairman, Philippe Hamers, Group Chief Executive and Alec Pratt, Chief Financial Officer will provide a live presentation relating to the annual results via the Investor Meet Company platform on Friday 25 July at 13:00 BST.

 

The presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free to attend the presentation here.

 

Investors who already follow Victoria PLC on the Investor Meet Company platform will automatically be invited.

 

The results presentation will be made available on the Company's website on the day of results here.

 

For more information contact:

 

Victoria PLC Geoff Wilding, Executive Chairman Philippe Hamers, Group Chief Executive Alec Pratt, Chief Financial Officer		www.victoriaplc.com/investors-welcome Via Walbrook PR
Singer Capital Markets (Nominated Adviser and Joint Broker) Rick Thompson, Phil Davies, James Fischer				+44 (0)20 7496 3095
Berenberg (Joint Broker) Ben Wright, Harry Nicholas, Tom Ballard			+44 (0)20 3207 7800
Edelman Smithsfield (Joint Investor Relations) Alex Simmons			+44 (0)7970 174 353 or [email protected]
Walbrook PR (Joint Investor Relations) Paul McManus / Alice Woodings	+44 (0)20 7933 8780 or [email protected] +44 (0)7980 541 893 / +44 (0)7407 804 654

 

About Victoria PLC (www.victoriaplc.com)

 

Established in 1895 and listed since 1963 and on AIM since 2013 (VCP.L), Victoria PLC, is an international manufacturer and distributor of innovative flooring products. The Company, which is headquartered in Worcester, UK, designs, manufactures and distributes a range of carpet, rugs, flooring underlay, ceramic tiles, LVT (luxury vinyl tile), artificial grass and flooring accessories.

 

Victoria has operations in the UK, Spain, Italy, Belgium, the Netherlands, Germany, Turkey, the USA, and Australia and employs approximately 5,350 people across more than 30 sites. Victoria is Europe's largest carpet manufacturer and the second largest in Australia, as well as the largest manufacturer of underlay in both regions.

 

The Company's strategy is designed to create value for its shareholders and is focused on consistently increasing earnings and cash flow per share via acquisitions and sustainable organic growth.

 

Victoria PLC

 

Chairman and CEO's Review

 

The trading environment for the flooring industry has remained unusually difficult over the past three years. Like most industries, cyclicality is inherent in our sector although the scale and persistence of the recent downturn are unprecedented in recent memory. We nevertheless remain confident that the factors behind this decline are not structural in nature, and that Victoria is well placed to benefit as conditions improve.

 

This confidence is based upon the temporary nature of the reasons for the downturn:

1.   Demand has been dampened by a confluence of factors: the unwinding of COVID-era pull-forward of spending (which had delivered more than 30% organic growth in some of our divisions during that period), whilst inflation, lower consumer confidence, and high interest rates reduced housing transactions specifically and discretionary spending more broadly.

2.   Additionally, the surge in energy costs following the invasion of Ukraine in 2022, coupled with the highest inflation levels in a generation, placed significant upward pressure on input costs across the sector - particularly in labour and raw materials. Muted consumer demand also constrained manufacturers' ability to pass these costs through to the market, compressing operating margins.

 

With the benefit of hindsight, we did not fully anticipate the duration or severity of these headwinds. While operational changes were made last year in response to softening demand and rising costs, they were not sufficient to protect earnings. As a result, FY2025 marks the second consecutive year of declining revenue and profitability, following over a decade of consistent growth. This is not a trajectory we will allow to continue, and the fact Victoria has outperformed competitors in many of its key markets is of small comfort.

 

The Group is focussed on controlling what is in its control, in order to become a more efficient business that will be stronger as underlying markets improve. The following sections of this report outline a comprehensive set of "self-help" actions that are planned and underway in each division to restore momentum, rebuild margins, improve return on capital employed, and return the business to sustainable growth - irrespective of market conditions.

 

(£ million -  continuing)	FY16	FY17	FY18	FY19	FY20	FY21	FY22	FY23	FY24	FY25
Revenue	255.2	330.4	417.5	566.8	621.5	662.3	1,009.2	1,397.0	1,226.4	1,115.2
Underlying EBITDA - Pre IFRS16 1,2	32.3	45.7	64.7	96.3	107.2	112.0	140.4	161.7	128.7	81.0
% margin	12.7	13.8	15.5	17.0	17.2	16.9	13.9	11.6	10.5	7.3
Underlying EBITDA - Post IFRS 16					118.0	127.4	159.5	185.8	159.0	113.7
% margin					19.0	19.2	15.8	13.3	13.0	10.2

 

¹ The KPIs in the table above are alternative performance measures used by management along with other figures to measure performance. Full financial commentary is provided in the Financial Review below and the 'alternative performance measures' are reconciled to IFRS-compliant measures in the Financial Review.

 

² EBITDA figures shown are underlying, before the impact of exceptional and non-underlying items.

 

 

The objectives of this report are to help our shareholders better understand the business and be able to reach an informed view of the value of the Company, its future prospects, and its financial resilience.

 

To communicate this information, we include both IFRS and non-IFRS performance measures. The review focuses on the underlying operating results of the business, which delivered underlying EBITDA of £113.7 million (FY2024: £159.0m) and underlying EBIT of £29.5 million (FY2024: £73.0m). The Financial Review covers non-underlying items in detail, following which the IFRS reported operating loss was £225.4 million (FY2024: loss £64.8m), and additionally covers financial items and tax.

 

 

FY2025 OPERATIONAL REVIEW

Overview

 

While we fully expect demand to normalise over time- reversion to the mean is a powerful market force within cyclical consumer industries - we are not waiting passively for recovery. Across each division, we are executing a targeted programme of operational and strategic initiatives, evaluated rigorously against five key criteria:

 

1.   Return on Capital. Each initiative is assessed through a disciplined capital allocation lens. While some projects - such as centralised procurement - require minimal or no investment, others necessitate targeted capital expenditure. Only those with the strongest, near-term returns across the group are being pursued, ensuring we optimise shareholder value at every stage.

 

2.   Driving Cost Efficiency. Despite cost actions taken to date, we continue to identify meaningful opportunities to drive further efficiencies across procurement, logistics, and administrative functions using our scale to our advantage. These improvements will enhance our through-cycle profitability, regardless of market conditions.

 

3.   Improving Productivity. We are accelerating operational integration and selectively consolidating production across sites and relocating manufacturing capacity to lower cost geographies. These steps will enhance our margins and, importantly, they will also position us to benefit disproportionately from any upswing in demand through the amplifying effect of operational leverage.

 

4.   Generating Cash. A key priority for the Group is the generation of meaningful and sustained cash flow. Every initiative underway is designed with this imperative in mind - to support investment where justified, strengthen the balance sheet, and provide flexibility in a more volatile macroeconomic environment.

 

5.   Preserving Capacity. Although current volumes are subdued, we are taking care to preserve our ability to respond to future demand growth. By maintaining critical production and distribution capacity, we are safeguarding our ability to scale efficiently and take market share when the cycle turns.

 

As we review each of the divisions in this report below, we will also outline some of the projects planned and underway to deliver improved earnings and cash flow.

 

DIVISIONAL REVIEW

 

This section focuses on the underlying operating performance of each individual division, excluding exceptional and non-underlying items, which are discussed in detail in the Financial Review.

 

UK & Europe Soft Flooring - Reinforcing UK strength and optimising cost structure

 

	FY25	FY24	Growth
Volumes (sqm)	123.8 million	124.0 million	-0.2%
Underlying Revenue	£581.2 million	£636.2million	-8.6%
Underlying EBITDA	£64.3 million	£82.8 million	-22.3%
Underlying EBITDA margin	11.1%	13.0%	-195bps
Underlying EBIT	£18.9 million	£34.6 million	-45.4%
Underlying EBIT margin	3.3%	5.4%	-219bps

 

Victoria continues to be Europe's largest soft flooring manufacturer and distributor incorporating carpet, underlay, rugs, LVT, and artificial grass.

 

In previous years we have explained to shareholders the sustainable strategic advantage Victoria's integrated logistics platform, Alliance Distribution, provides to our UK business. This operation has now been expanded further into the Republic of Ireland, Northern Ireland, and Scotland, where it continues to provide best-in-class service - opening additional markets for Victoria's product range. Last year Alliance also began providing services to third party soft flooring manufacturers, generating income for the Group, and reinforcing the strength of our network. In addition, in April 2025 we began using Alliance's distribution capabilities to expand the product offering to our customers, outlined below, which will provide additional growth potential within our existing distribution network.

 

The UK is by some considerable margin the largest carpet market in Europe, consuming c.125 million sqm per year (by comparison, the second-largest market is Germany, which buys c.30 million sqm of soft flooring per year), of which Victoria has about an 18% market share. However, there are about 60 million sqm of other flooring product groups being sold in the UK market and which are actionable for Victoria through its different brands:

 

·    Cushioned vinyl           22 million m²

·    Laminate (excl DIY)    12.5 million m²

·    LVT                              15 million m²

·    Engineered Wood       10 million m²

 

Victoria's current market share in these products is c. 2%. A plan to triple volumes across these categories, acting as a pure distributor and leveraging Alliance's logistics capability is being executed, which would generate at least £20 million per annum of additional revenue at margins ahead of the divisional average.

 

In FY2025 the volume rugs segment (Balta) experienced a difficult environment generally, but particularly in two of its largest markets, the US and Germany. This created a material drag on this division's margins. Excluding the impact of Balta, the soft flooring division's margins for FY2025 increased by c.200bps to 15.4%. Significant cost saving initiatives at Balta have already been completed, but management are now looking closely at the opportunity to further orientate the manufacturing footprint towards Turkey, where the Company already has two modern, certified and low-cost factories. A lot of upside opportunity remains, with lower production costs and improved margins expected to increase the international competitiveness of Balta's rugs.

 

UK & Europe Ceramic Tiles - structural transformation underway to unlock long-term value

 

	FY25	FY24	Growth
Volumes (sqm)	32.6 million	35.9 million	-9.1%
Underlying Revenue	£280.2 million	£320.8 million	-12.6%
Underlying EBITDA	£34.9 million	£58.7 million	-40.5%
Underlying EBITDA margin	12.5%	18.3%	-582bps
Underlying EBIT	£7.7 million	£31.3 million	-75.5%
Underlying EBIT margin	2.7%	9.8%	-702bps

 

The ceramics division experienced a challenging year, with revenues and margins under pressure across the entire sector due to a combination of market dynamics and short-term disruptions. Furthermore, the high operational leverage inherent in ceramics production (kilns must operate continuously regardless of volume) meant lower volumes had a disproportionate impact on earnings. Therefore, we have implemented significant restructuring and strategic initiatives during H2 FY2025, to deliver improved near-term earnings whilst positioning the business for stronger performance and profitability as demand conditions improve.

 

A management decision to hold prices in the face of very weak demand to safeguard brand equity impacted near-term volumes but was judged to be important for the medium-long term. Price, once discounted by a premium brand, is extremely difficult to recover and can lead to a permanent loss of margin. Consequently, despite the very weak market, the average sales price per square metre (EUR) fell only modestly by 2.3%, reflecting this disciplined pricing approach. To compensate, management were able to reduce average production cost per square metre by 6.8% during the year due to labour savings of €1.9 million, a 25% reduction in customer claims from quality improvements, improved energy costs, and value engineering of certain products.

 

A step-change in earnings will become apparent with the completion later this year of the V4 production line in Spain. Shareholders may recall work began on this large and ultra-efficient line in FY2024 and completion has been bought forward into Q3 FY2026. Production costs will reduce by £16-19 million per annum when this line comes on-stream at full capacity.

 

SKU rationalisation reduced SKUs c.30%, enhancing inventory efficiency and improving On-Time In-Full (OTIF) delivery performance to 92%. Further gains are possible, with a consequential improvement in working capital.

 

The sale of our Turkish ceramics business, Graniser, in November 2024 removed a revenue contributor that generated approximately €15 million in H2 FY2024. While this sale reduced FY2025 revenue on a like-for-like basis, it released capital to reduce debt, and included a long-term sourcing agreement that preserves access to low-cost, high-quality tile manufacturing-thereby retaining the original strategic rationale of the acquisition.

 

All results are shown on a continuing operations basis, unless stated otherwise (Graniser, Turkish ceramics has been classified as discontinued).

 

It is important to note that notwithstanding all the steps taken to restructure the ceramics business, reduce costs, and improve operational efficiency, the structural capacity remains intact to support an eventual recovery in demand, but with improved cost control, optimised product portfolios, and better use of manufacturing assets which is expected to enhance profitability over the medium term. Savings executed throughout H2 FY2025 has meant that the ceramics division now possesses an excellent industrial gross margin, reflecting solid underlying efficiency and significant potential for earnings recovery as volume returns.

 

Australia - Resilient performance and positive outlook

 

	FY25	FY24	Growth
Volumes (sqm)	22.7 million	22.3 million	1.8%
Underlying Revenue	£103.7 million	£106.1 million	-2.3%
Underlying EBITDA	£14.0 million	£13.4 million	3.9%
Underlying EBITDA margin	13.5%	12.7%	+80bps
Underlying EBIT	£8.6 million	£8.7million	-1.7%
Underlying EBIT margin	8.3%	8.2%	+6bps

 

The Australian business continued to perform well, delivering a solid result despite continued softer demand, largely reflecting the same aforementioned macroeconomic headwinds experienced across Victoria's other markets. Nonetheless, the business maintained healthy margins, supported by disciplined cost control and price adjustments in response to moderating input costs.

 

All core product segments, synthetic carpet, wool carpet, and underlay, performed in line with budget expectations. The LVT segment encountered a more competitive landscape, but continued product development already in process and innovation are expected to support further growth. Opportunity remains to deliver cost savings through efficiencies across our Australian businesses, which management are actively exploring.

 

Victoria's strong market share and operational expertise in Australia have been key factors in the business's resilience. With no structural changes in market dynamics and ongoing drivers such as population growth through inward migration and new household formation, the Company anticipates a recovery in demand as macroeconomic pressures ease.

 

North America - Resilient positioning in a challenging market

 

	FY25	FY24	Growth
Volumes (sqm)	6.7 million	6.8 million	-2.0%
Underlying Revenue	£150.0 million	£163.3 million	-8.1%
Underlying EBITDA	£7.5 million	£11.8 million	-36.5%
Underlying EBITDA margin	5.0%	7.3%	-224bps
Underlying EBIT	£2.1 million	£6.8 million	-68.9%
Underlying EBIT margin	1.4%	4.1%	-274bps

 

Victoria's North American operations are exclusively focused on distribution, supplying a mix of own-manufactured products such as rugs, artificial turf, and ceramic tiles, produced in our European facilities, alongside third-party sourced flooring. As has been widely reported by peers in the sector, North American trading conditions remain highly challenging. Elevated mortgage rates have driven U.S. housing transactions to their lowest levels in 27 years, significantly dampening demand across the industry.

 

In this context, operational efficiency has been a significant focus for management, and cost savings are being rapidly executed. These have included pricing initiatives, minimum order quantities and reduction of heads. The benefits of these began to be realised in Q4 FY2025 and will benefit FY2026.

 

Whilst of little impact in FY2025, the recently announced US tariff regime has obviously been a focus post year end. Firstly, it is important to note that as currently structured the tariffs impact Victoria's US business less than many of our competitors. For example, lumber-based flooring, which is 20% of our US revenue is exempt from tariffs. More importantly, as a pure distribution business, the division has the flexibility to source from lower tariff jurisdictions (including US domestic manufacturers) unlike competitors with fixed production sites in higher tariff countries.

 

However, management also took swift action to mitigate the residual tariff exposure. Ahead of the tariff announcement we built inventory - either within the U.S. or in transit, which is exempt from tariffs - to provide management an opportunity to negotiate vendor concessions and evaluate customer price adjustments before shipping products subject to the new tariffs. We expect imports to remain a significant proportion of the US market into the medium term as there is not currently production capacity domestically to supply the current demand.

 

The Board remains vigilant for any second order impacts of the tariff related disruption, but currently believes the self-help initiatives being implemented will be more material to improving the division's performance in FY2026.

 

CASHFLOW & LIQUIDITY

 

Net operating cash flow was in line with management expectations with Free Cash Flow of £(56.8) million after movements in working capital, tax, interest payments, capex, and all exceptional costs.

 

	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
IFRS Reported EBITDA	5.3	8.7	30.4	43.1	53.5	72.5	60.3	120.3	134.1	85.0	69.0	(98.4)
Adj EBITDA	5.1	15.8	32.3	45.7	64.7	96.3	118.0	127.4	159.5	185.8	159.0	113.7
Adj EBITDA (pre IFRS-16)	5.1	15.8	32.3	45.7	64.7	96.3	107.2	112.0	140.4	161.7	128.7	81.0
FCF1	18.3	8.4	15.3	22.5	12.5	8.9	32.2	30.2	20.1	5.9	32.1	(21.3)
FCF post pref2	18.3	8.4	15.3	22.5	12.5	8.9	32.2	27.6	10.6	(12.9)	(12.3)	(56.8)

 

¹ FCF: Net cash flow from operating activities after movements in working capital, tax, interest payments, all capex, and all exceptional costs.

² FCF post-pref: Net free cash flow defined as above but assuming 100% of the preferred share dividend was paid in cash instead of PIK.

 

As previously guided, capital expenditure normalised during the year, with total spend of £77.2 million, including the one-off investment in the new V4 ceramics line in Spain. Normalised capex investment is expected to be broadly £60 million per year, reflecting the Group's ongoing focus on disciplined capital allocation and operational efficiency.

 

Tightening credit insurance policies across the building products sector impacted trading terms during the period, including for Victoria. In response, the Group continued to implement targeted inventory rationalisation initiatives aimed at improving working capital. This remains a key area of focus, with structured internal incentives in place to support delivery of defined improvement targets.

 

Victoria maintained a strong liquidity position at year-end, with total cash and undrawn credit facilities exceeding £150 million. This provides the Group with flexibility to manage market conditions while continuing to invest in strategic initiatives.

 

Refinancing has been a significant focus for the Group in FY2025. The proposed refinancing will provide a strong and flexible financing structure for the business to implement it self-help led recovery plan and to continue consolidating its position as a leader in the flooring industry as the cycle-recovers. Further detail on refinancing considerations is provided within the Financial Review section of this report.

 

CAPITAL ALLOCATION

 

The Board evaluates all investment decisions through the lens of maximising medium-term free cash flow per share. This disciplined approach underpins the Group's financial strategy, and allows investment where there is a clear opportunity to enhance the long-term cash-generating capacity of the business.

 

Consistent with this philosophy, the Board has made two notable strategic investments over the past decade. Firstly, in FY2019 to integrate the UK manufacturing operations and develop the Alliance centralised logistics platform, which required an exceptional investment of £20.9 million; and more recently, exceptional expenditure of £28.9 million to support the integration and optimisation of Balta, acquired in April 2022. In the case of the Balta restructuring capex, it was offset by the sale of surplus real estate arising from the reorganisation for £58 million. Both initiatives were significant investments in both time and resources but have strengthened the Group as we look towards the next cycle.

 

To provide shareholders with greater transparency, Table A presents a seven-year breakdown of capital expenditure, distinguishing between growth and maintenance spending. This historical context helps clarify the Group's underlying maintenance capex requirements:

 

Table A

Capex	FY19	FY20	FY21	FY22	FY23	FY24	FY25
	£m	£m	£m	£m	£m**	£m**	£m
Maintenance	23.5	25.4	20.9	40.9	45.5	42.3	46.9
Expansionary / Reorganisational*	20.9	8.4	7.6	12.4	54.1	19.2	30.3
Total	44.4	33.8	28.5	53.3	99.6	61.5	77.2
Maintenance Capex as a percentage of revenue	4.1%	4.1%	3.2%	4.0%	3.1%	3.4%	4.2%

 

* Includes capital expenditure incurred as part of reorganisational and synergy projects to drive higher productivity and lower operating costs.

**The step-up in FY23 is due to the Balta acquisition, which has both a short-term impact from integration, plus an ongoing increase in quantum (albeit not percentage) due to the increased size of the Group.

 

Table B summarises the exceptional expenditure items in FY2025.

 

Table B

Exceptional reorg costs (by area)	Redundancy cash costs	Legal & Professional cash costs	Asset removal / relocation cash costs	Provisions movement / other non-cash	FY2025 Total	FY2024 Total
	£m	£m	£m	£m	£m	£m
Balta re-organisation	4.0	3.8	-	(3.0)	4.8	14.9
Ceramics re-organisation	0.8	0.4	1.5	2.7	5.4	0.1
UK Carpets re-organisation	0.8	0.5	2.4	0.2	3.9	-
Interfloor re-organisation	1.0	0.4	0.6	0.4	2.4	-
Cali integration	0.2	-	0.1	-	0.3	0.8
Total	6.8	5.1	4.6	0.3	16.8	15.8

 

The Board will prioritise allocation of the Group's free cash flow to prudently optimise the Group's balance sheet together with maximising the medium-term free cash flow per share. The Board acknowledges the significant investment in time and resources required to deliver operational differentiation and the right strategic structure of the Group. However, as a listed company with a permanent equity base, we are better placed to make these tough decisions than owners who may have a shorter-term horizon.

 

LEVERAGE

 

The Board recognises that the Group's current level of leverage is above what we would consider optimal for the business over the long term. While the Group retains strong liquidity - with more than £150 million of cash and available facilities - reducing leverage is a clear priority for the Board.

 

This will be achieved by increasing the Group's earnings through the execution of the internal initiatives outlined throughout this Report, which are designed to materially lower the Group's cost base and improve manufacturing productivity. The Group's federated structure provides flexibility to monetise operating assets if desired and if better returns can be achieved by deploying capital elsewhere in the group or by reducing leverage.

 

This commitment is demonstrated clearly by the recent disposal of Graniser, and we are confident that this disciplined approach will deliver meaningful progress on leverage while supporting the Group's long-term growth ambitions.

 

DIVIDENDS

 

It is the Board's view that there are significant opportunities to invest in the business significantly ahead of its cost of capital and that the Group will benefit from ongoing reduction in its leverage levels. Therefore, the Company does not expect to pay dividends in the medium term.

 

OUTLOOK

 

After nearly three years of intense macroeconomic headwinds - marked by elevated input costs and significantly suppressed demand - there are tentative signs that the trading environment has stabilised, and in some geographies is beginning to improve. However, the Board and management remain firmly focused on factors within our control. Significant initiatives (outlined to shareholders in the FY2025 Interim Report) were delivered by the end of FY2025 and underpin the expected significant uplift in earnings in FY2026.

 

Our near-term priority is to continue executing internal "self-help" initiatives that drive margins, earnings and enhance cash generation, ensuring the Group emerges stronger regardless of the pace or shape of macro recovery. The board reconfirms its commitment to the £80m cumulative cost savings targeted by the end of FY2027 set in the Q3 update. This implies a further £50m of cost savings to be executed through FY2026 and FY2027, equivalent to an incremental 4% of margin based on FY2025 revenue.

 

Acquisitions:

 

Acquisitions remain a central pillar of Victoria's growth strategy. We now have a number of leading platforms within our portfolio, which are increasingly integrated and makes us the natural consolidator within those markets. The Board is rightly prioritising the substantial value that can be unlocked from within existing operations, but continues to maintain dialogue with potential acquisition targets. When market conditions align we will seek to acquire businesses available at attractive valuations that offer clear actionable synergies with our existing operations.

 

This disciplined approach - and buying near the bottom of the cycle - has the potential to materially improve earnings per share and accelerate de-leveraging.

 

Operations:

 

Notwithstanding the work that has been completed over the last 24 months, there remains considerable scope to drive additional productivity gains across the business, as outlined in this Report. Consequently, our immediate focus remains on driving internal performance through a disciplined programme of "self-help" initiatives. These actions - centred on cost efficiency, margin enhancement, and working capital improvement - are grounded in execution, not macro timing and therefore fully within our control and designed to deliver tangible gains in earnings and cash flow regardless of the macroeconomic backdrop.

 

Whilst we are very focused on improving financial performance, it is important to also appreciate Victoria's key strengths: leading market positions, a portfolio of upper mid-market and premium brands, a diversified and loyal customer base, strong distribution capabilities in high value markets, a differentiated service proposition, a cash generative and high returns business model through the cycle.

 

CONCLUSION

 

Henry Ford famously said, "You can't build a reputation on what you're going to do." The Board and management fully acknowledge this truth - and the imperative it places on us to deliver. While this Report outlines a number of initiatives underway to rebuild profitability, we are equally focused on restoring Victoria's decade-long reputation as a creator of shareholder value, following two challenging years. The conclusion of our refinancing will provide a strong and flexible base to build from as we enter the next cycle.

 

Whilst recent cyclicality has impacted our performance, it is important, to view recent performance in the context of the industry in which we operate. The flooring market in Victoria's core regions - Europe and the US - is substantial, with an estimated value of around USD 60 billion (GBP 51 billion) and over the last 25 years, this market has delivered consistent volume growth of approximately 2.6% per annum. This long-term trend has been severely interrupted in recent years, yet both the underlying need for flooring remains, along with a bias towards growth underpinned by structural factors that remain firmly in place: an ageing housing stock requiring renovation, growing household formation, persistent housing shortages, and consumers' increasing focus on design and lifestyle. Therefore, as macroeconomic conditions improve, volumes are expected to rebound toward their long-term trajectory. That is the nature of cyclical industries: recovery follows contraction. (And to remind shareholders of the potential: a 5% increase in volume demand is expected to contribute approximately £25 million to Victoria's earnings - and volumes are estimated to be down 20-25% on 2019 levels.) 

 

In the meantime, our focus remains on what we can control: executing cost-efficiency programmes, driving productivity, and gaining share in our markets. The timing of the demand rebound may be uncertain, but with each passing month we move closer to that inflection point - and we are positioning the business to be ready to capitalise.

 

Geoffrey Wilding	Philippe Hamers
Executive Chairman	Chief Executive Officer

                                   

24 July 2025

 

 

Financial Review

 

HIGHLIGHTS

 

FY2025 saw the continuation of a challenging trading environment as end markets continued to adapt to higher interest rates across our key geographies. Victoria has used this period of cyclically lower demand to focus on managing the things that it can control through targeted cost saving initiatives across its businesses.

 

Volumes and revenue declined across the Group with UK & Europe Soft Flooring being the most impacted. Underlying Revenue for the Group was 9% down at £1,115.2m and Underlying EBITDA declined to £113.7m as lower volumes adversely impacted operational leverage. The decline in volumes has been partially offset by the ongoing cost saving initiatives implemented by each division and the Group as a whole, and it is expected that FY2026 will benefit from the full year impact of these improvements.

 

This Financial Review is structured into several sections, focused on the detail within the financial statements which warrants further explanation or granular analysis.  Commentary on the underlying performance of the Group, analysing the trends in underlying revenue and operating margins, and other commercial activities in the year is provided in the Divisional Review section of the Chairman & CEO Report.  The Exceptional & Non-Underlying Items section below provides an important, detailed report on all of the items that bridge from the underlying results (for example, underlying operating profit of £29.5 million) to the IFRS statutory performance of £225.4 million operating loss and, ultimately, £239.6 million continuing loss after tax.  The final sections set out the cash flows of the Group on a basis consistent with past years, and the year-end net debt position.

 

Underlying measures of performance are classified as 'Alternative Performance Measures' and should be reviewed in conjunction with comparable IFRS figures. It is important to note that these APMs may not be comparable to those reported by other companies. Underlying results exclude significant costs (such as significant legal, major restructuring and transaction items), they should not be regarded as a complete picture of the Group's financial performance, which is presented in its Total results.  The exclusion of other Adjusting Items may result in Adjusted Earnings being materially higher or lower than Total Earnings. In particular, when significant impairments, restructuring changes and legal costs are excluded, Adjusted Earnings will be higher than Total Earnings.

 

A summary of the underlying and reported performance of the Group is set out below.

 

	2025			2024
	Underlying performance	Non- underlying items	Reported numbers	Underlying performance	Non- underlying items	Reported numbers
	£m	£m	£m	£m	£m	£m
Revenue	1,115.2	2.9	1,118.1	1,226.4	7.7	1,234.1
Gross profit / (loss)	361.0	(24.9)	336.1	414.2	(18.4)	395.8
Margin %	32.4%			33.8%
Amortisation of acquired intangibles	-	(31.5)	(31.5)	-	(38.6)	(38.6)
Other operating expenses	(331.5)	(198.5)	(530.0)	(341.2)	(80.8)	(422.0)
Operating profit / (loss)	29.5	(254.9)	(225.4)	73.0	(137.8)	(64.8)
Margin %	2.6%			6.0%
Add back depreciation & amortisation	84.3			85.9
Underlying EBITDA	113.7			158.9
Margin %	10.2%			13.0%
Preferred equity items	-	1.0	1.0	-	(5.4)	(5.4)
Other finance costs	(41.0)	(1.4)	(42.4)	(41.9)	(4.8)	(46.7)
(Loss) / profit before tax	(11.5)	(255.3)	(266.8)	31.1	(148.0)	(116.9)
(Loss) / profit after tax	(12.1)	(227.5)	(239.6)	32.2	(127.9)	(95.7)
EPS basic	(10.62p)		(210.26p)	27.99p		(83.15p)
EPS diluted	(5.18p)		(210.26p)	19.35p		(83.15p)

 

The Group incurred £208.1 million of exceptional operating costs during the year, primarily a non-cash cost resulting from the impairment of intangible and tangible assets. In addition, the Group incurred £31.5 million of amortisation of acquired intangibles (primarily customer relationships and brand names) and other non-underlying items of £15.3 million (primarily the accounting impact of non-cash share incentive plan charges and hyperinflation accounting).  The significant majority of these costs, £238.2m, are non-cash, with only £16.7m being cash costs incurred by the business. Further details are provided later in this Financial Review.

 

ACQUISITIONS AND DISPOSALS

 

On 18 November 2024, the Group completed the sale to dispose of B3 Ceramics Danismanlik ("Graniser") following the significant negative impact of geopolitical instability in several of its key markets. Graniser was a specific business segment within the UK & Europe - Ceramic Tiles (Spain / Turkey CGU).   As a result, the operations of Graniser have been classified as discontinued operations in accordance with IFRS 5. Total consideration received was €36.8 million (£30.9m¹) paid as €10.0 million (£8.4 m¹) cash on completion, plus the assumption of €26.8 million (c. £22.5m¹) of net debt resulting in a net gain on sale after tax of £7.2m.  All obligations and liabilities associated with the discontinued operation have been transferred to the buyer as part of the transaction.  The business was loss-making at the time of sale, resulting in a positive impact on Group earnings, as well as providing a release of capital, and demonstrates the board's ongoing focus on ROCE and disciplined capital allocation.

 

^1. Converted to GBP at a rate of 1.19 GBP/EUR.

 

FINANCING

 

Debt financing and facilities

 

Currently the Group's senior debt comprises €489 million (c. £430m) of notes with a fixed coupon of 3.625% and maturity of August 2026, and €250 million (c. £220m) of notes with a fixed coupon of 3.75% and maturity of March 2028 along with a £150m Revolving Credit Facility which matures in February 2026.

 

Other debt facilities in the Group represent small, local working capital facilities at the subsidiary level, which are renewed or amended as appropriate from time to time.  The total outstanding amount drawn from these facilities at the year-end was £96.5 million, as shown below in the Net Debt section of this Financial Review.

 

Preferred equity

There have been no changes to the preferred equity arrangements in the year, with a total in issue of £225 million (plus those issued for the 'Payment In Kind' of the fixed coupon, whereby new preferred shares are issued as opposed to cash payment, at the Group's option). 

 

 

EXCEPTIONAL AND NON-UNDERLYING ITEMS

 

This section of the Financial Review runs through all of items classified as exceptional or non-underlying in the financial statements.  The nature of these items is, in many cases, the same as the prior year as the financial policy around these items has remained unchanged, for consistency.

 

The Group incurred £208.1 million of exceptional costs during the year (FY2024: £93.0m).  Exceptional items are one-offs that will not continue or repeat in the future, for example the legal and due diligence costs for a business acquisition, as whilst further such costs might arise if new acquisitions are undertaken, they will not arise again on the same business and would disappear if the Group adopted a purely organic strategy.

 

	2025	2024
Exceptional items	£'m	£'m
Acquisition and disposal related costs	(0.9)	(1.0)
Reorganisation, re-financing and other costs	(15.8)	(19.4)
Gain on disposal of assets and investments	1.9	-
Loss on disposal of subsidiaries	(6.9)	-
Exceptional impairment charge	(186.4)	(72.6)
Total exceptional items	(208.1)	(93.0)

 

This total exceptional cost figure is made up of numerous components, both income and costs.  Description of the specific items is provided below:

 

·    Acquisition and disposal related costs - these costs relate primarily to advisory fees and legal services in relation to previous acquisitions.

 

·    Reorganisation, refinancing and other costs - this consists of cost in relation to small reorganisation projects across the business and in FY2025 includes £2.4m of costs incurred in relation to the refinancing of the group. IFRS requires those costs to be expensed as incurred until the point when the project is completed in which case they are capitalised and amortised over the life of the financial instruments to which they relate.

 

·    Exceptional impairment charge - Exceptional impairment charge in the 'UK & Europe - Soft flooring (Rugs)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets by £87 million due to the weak demand environment.  As no goodwill attaches to this CGU, the impairment charge was applied against intangible fixed assets (£40.4m) and tangible fixed assets (£46.6m). Further weaker demand in the European ceramics industry has resulted in an impairment in the 'UK & Europe - Ceramic Tiles (Spain)' CGU where the carrying value of assets exceeded the recoverable amount of the CGU by £80 million. As no goodwill attaches to this CGU, the impairment charge was applied against intangible fixed assets (£50.3m) and tangible fixed assets (£29.7m). Exceptional impairment charge in the 'UK & Europe - Ceramic Tiles (Italy)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets by £14.6 million due to the weak demand environment and the goodwill has been fully impaired. In FY2024 goodwill of £24.7m in the UK & Europe - Ceramics (Spain & Turkey) CGU was impaired as a result of reduced production in Spain and the division continued its programme to integrate and optimise production. Separately, weaker demand in the US impacting Cali Bamboo resulted in an impairment of £42.5 million.

 

·    Sale and lease back - the Group entered a sale and lease back transaction in September 2024 at one of the Belgium facilities. The contribution received was £30.4m (from sale of 90% of the shares received) and the remaining 10% of shares held at year end within Other investments valued at £3.2m. This resulted in a gain of £17.4m. Of which £15.1m has been recognised against the Right-of-use asset and £2.3m gain recognised as non-underlying with the income statement.

 

·    The other prior year items are described in more detail in Note 2.

 

Non-underlying items are items that do continue or repeat, but which are deemed not to fairly represent the underlying business.  Typically, they are non-cash in nature and / or will only continue for a finite period of time.

 

	2025	2024
Non-underlying operating items	£'m	£'m
Acquisition-related performance plans	(0.4)	(6.7)
Non-cash share incentive plan charge	(3.5)	(2.7)
Amortisation of acquired intangibles (excluding hyperinflation)	(31.5)	(38.6)
Unwind of fair value uplift to acquisition opening inventory	-	(0.6)
Depreciation of fair value uplift to acquisition property, plant and machinery	(5.7)	(5.0)
Hyperinflation depreciation adjustment	(5.8)	(4.3)
Hyperinflation monetary gain/(loss)	12.8	23.2
Other hyperinflation adjustments (excluding depreciation and monetary gain)	(12.7)	(10.1)
	(46.8)	(44.8)

 

Non-underlying items in the year:

 

·    Acquisition-related performance plan charge - this represents the accrual of contingent earn-out liabilities on historical acquisitions where those earn-outs are linked to the ongoing employment of the seller(s). This amount has significantly decreased versus the prior year as earn-outs on historical acquisitions have expired.

 

·    Non-cash share incentive plan charge - the charge under IFRS 2 relating to the pre-determined fair value of existing senior management share incentive schemes.  This charge is non-cash as these schemes cannot be settled in cash. 

 

·    Amortisation of acquired intangibles - the amortisation over a finite period of time of the fair value attributed to, primarily, brands and customer relationships on all historical acquisitions under IFRS.  It is important to note that these charges are non-cash items and that the associated intangible assets do not need to be replaced on the balance sheet once fully written-down.  Therefore, this cost will ultimately disappear from the Group income statement.

 

·    Depreciation of fair value uplift to acquisition property - under IFRS the opening balance sheet of each acquisition is fair valued and this has resulted in an increase in the value of certain property assets when they were acquired.  The higher valuation results in higher depreciation which is not representative of the underlying performance of the acquired business and the increase in depreciation is classed as exceptional.

 

As described below there were a number of adjustments made to the income statement in relation to hyperinflation. The hyperinflation adjustments represent the impact of restating the non-monetary items on the Turkish entities balance sheet based on the change in the general price index between the acquisition date and the reporting date, as well as the indexation of the income statement, with the gain/loss on the monetary position being included within the income statement.

 

Adjustment in respect of hyperinflation

 

During FY2023 inflation in Turkey, where Victoria has a plant used to produce rugs for Balta Rugs (UK & Europe - Soft Flooring), passed the threshold of inflation exceeding 100% over a three-year cumulative period in March 2022. Under IAS29 this is one of the key indicators for hyperinflation accounting needing to be adopted. This resulted in the revaluation of the 2 April 2022 opening balance sheet for these businesses as well as indexing of the numbers of all subsequent financial years. We have treated these adjustments as non-underlying to ensure comparability of results year on year.

 

The impact of hyperinflation on the income statement is as follows:

 

	2025	2024
Hyperinflation adjustment summary	£'m	£'m
Revenue	2.9	7.7
Cost of sales	(19.4)	(20.5)
Operating costs	10.8	21.6
EBIT	(5.6)	8.8
EBITDA	0.1	13.0
Finance costs	0.4	(0.6)
Profit/(loss) before tax	(5.2)	8.3
Deferred tax	(1.3)	(3.2)
Profit/(loss) for the period from continuing operations	(6.5)	5.0
Other comprehensive income - CTA	29.1	8.5

 

In FY25 the Turkish Lira depreciated lower than the CPI in Turkey which has led to a comparatively bigger Gross Domestic Product variance than the Turkish Lira variance. This has impacted the comparative restatement of OCI figures to current purchasing power. There has also been an increase in intercompany revenue from FY24.

Further details of exceptional and non-underlying operating items are provided in Note 2.

 

In addition to the above operating items, there were a number of non-underlying financial items in the year.

 

	2025	2024
Non-underlying financial costs	£'m	£'m
Finance items related to preferred equity	1.0	(5.4)
Acquisition related items	1.5	1.5
Gain on bond repurchase	-	2.0
Fair value adjustment to notes redemption option / amortisation inception derivative	1.2	1.2
Mark to market adjustments and gains on foreign exchange forward contracts	0.5	(0.2)
Translation difference on foreign currency loans	(5.0)	(8.6)
Other financial expenses (hyperinflation)	0.4	(0.6)
Defined benefit pension (law change)	-	(0.1)
Other non-underlying	(2.9)	(6.3)
	(0.4)	(10.2)

 

These items are described below:

 

·    Finance items related to preferred equity - the preferred equity issued in November 2020 and further in January 2022 is treated under IFRS 9 as a financial liability with a number of associated embedded derivatives.  There are a number of resulting financial items taken to the income statement in each period, including the cost of the underlying host contract and the income or expense related to the fair-valuation of the warrants and embedded derivatives.  However, the preferred equity is legally structured as equity and is also equity-like in nature - it is contractually subordinated, never has to be serviced in cash, and contains no default or acceleration rights - hence the resultant finance costs or income are treated as non-underlying.

 

	2025	2024
Finance items related to preferred equity	£m	£m
Amortised cost of host instrument	(8.4)	(19.0)
Fair value movement on associated equity warrants	9.4	13.6
Fair value movement on embedded redemption option	-	-
Total	1.0	(5.4)

 

·    Fair value adjustment to notes redemption option - attached to the senior notes is an early repayment option which, on inception, was recognised as an embedded derivative asset at a fair value of £4.3m. This asset is revalued at each reporting date, with the movement taken through the P&L. The value of the senior debt liabilities recognised were increased by a corresponding amount at initial recognition, which then reduces to par at maturity using an effective interest rate method. A credit of £1.2m was recognised in the period (2024: £1.2m), with a £nil fair value of the derivative asset at both period ends.

 

·    Mark to market adjustments on foreign exchange forward contracts - across the group we analyse our upcoming currency requirements (for raw material purchases) and offset the exchange rate risk via a fixed, diminishing profile of forward contracts out to 12 months.  This non-cash cost represents the mark-to-market movement in the value of these contracts as exchange rates fluctuate.

 

·    Translation difference on foreign currency loans - this represents the impact of exchange rate movements in the translation of non-Sterling denominated debt into the Group accounts.  The key items in this regard are the Euro-denominated €489 million 2026 corporate bonds, and €250 million 2028 corporate bonds.

 

·    Other financial expense (hyperinflation) - restated finance costs within Turkish entities based on the change in the general price index between the date when the finance costs were initially recorded and the reporting date.

 

·    Defined benefit pension - defined benefit pension change due to restructuring in the prior period.

 

Further details of non-underlying finance items are provided in Note 3.

 

OPERATING PROFIT AND PBT

 

The table below summarises the underlying and reported profit of the Group, further to the commentary above on underlying performance and non-underlying items.

 

Operating profit and PBT	2025	2024
	£'m	£'m
Underlying operating profit	29.5	73.0
Reported operating loss	(225.4)	(64.8)
Underlying (loss) / profit before tax	(11.5)	31.1
Reported loss before tax	(266.8)	(116.9)

 

Reported operating loss (earnings before interest and taxation) of £225.4 million (FY2024: £64.8 million). After removing the exceptional and non-underlying items described above, underlying operating profit was £29.5 million (FY2024: £73.0m).

 

Reported loss before tax increased to £266.8 million (FY2024: £116.9m).  After removing the exceptional and non-underlying items described above, underlying loss before tax was £11.5million (FY2024: Profit of £31.1m).

 

TAXATION

 

The reported tax credit on continuing operations in the year of £27.2 million (FY2024: £21.2m) was distorted by the impact of the exceptional and non-underlying costs, which contributed to a tax credit of £25.1 million. On an underlying basis and removing the effect of prior year items, the tax credit for the year was £3.0 million (FY2024 charge: £6.9m against an adjusted loss before tax of £11.5 million (FY2024: Profit of £31.1m). This results in an underlying effective current year tax rate of 26.2% (FY2024: 22.2%).

 

EARNINGS PER SHARE

 

The Group delivered a basic loss per share of 210.26p (FY2024: 83.15p) due to exceptional costs in relation to restructuring, amortisation of acquired intangibles, and impairment recognised on intangible and tangible assets. Adjusted earnings per share (before non-underlying and exceptional items) on a fully-diluted basis was (5.18)p (FY2024: 19.35p). The decrease in EPS is driven by the greater dilutive impact of the preference shares and reduced earnings.

 

Basic and diluted earnings / (loss) per share	2025	2024
Reported basic loss per share	(210.26p)	(83.15p)
Diluted adjusted (loss) / earnings per share	(5.18p)	19.35p

 

OPERATING CASH FLOW

 

Cash flow from operating activities before interest, tax and exceptional items was £45.1 million which represents a conversion of 56% of underlying EBITDA (pre-IFRS 16).

 

Operating and free cash flow	2025	2024
	£'m	£'m
Underlying operating profit	29.5	73.0
Add back: underlying depreciation & amortisation	84.2	86.0
Underlying EBITDA	113.7	159.0
Payments under right-of-use lease obligations (including interest)	(39.6)	(34.8)
Non-cash items	(3.7)	(3.5)
Movement in working capital	(25.3)	(11.4)
Operating cash flow before interest, tax and capex	45.1	109.3
% conversion against underlying operating profit	153%	150%
% conversion against underlying EBITDA (pre-IFRS 16)	56%	85%
Interest paid	(32.7)	(29.7)
Corporation tax paid	(1.7)	(2.3)
Capital expenditure - replacement / maintenance	(46.9)	(42.3)
Free cash flow before exceptional items	(36.2)	35.0
% conversion against underlying operating profit	(123)%	48%
% conversion against underlying EBITDA (pre-IFRS 16)	(45)%	27%

 

Pre-exceptional free cash flow of the Group - after interest, tax and net replacement capex - was an outflow of £36.2 million having been impacted by lower earnings and an investment in working capital.

 

The underlying movement in working capital was an outflow of £25.3 million. This was driven by a reduction in creditors in the second half of the year as production was managed to the lower volume levels that the market was experiencing and was partly offset by a cash inflow from debtors as a more disciplined approach was taken to credit terms and collections.

 

A full reported statement of cash flows, including exceptional and non-underlying items, is provided in the Consolidated Statement of Cash Flows.

 

NET DEBT

 

As at 29 March 2025, the Group's net debt position (excluding preferred equity) was £897.9 million (30 March 2024: £840.0m).  The Group invested £56.4 million in organic growth / synergy initiatives which was more than offset by disposals of non-core property and assets. Acquisition-related expenditure (primarily representing payment of deferred and contingent consideration) was £12.0 million.

 

The Group's year end net leverage ratio (excluding preferred equity) was 7.9x (FY2024: 5.3x). The leverage increase is primarily driven by the reduced earnings in the year.

 

Free cash flow to movement in net debt	2025	2024
	£'m	£'m
Free cash flow before exceptional items (see above)	(36.2)	35.0
Exceptional reorganisation cash cost	(26.1)	(31.1)
Capital expenditure - expansionary / reorganisation	(30.3)	(19.2)
Proceeds from fixed asset and subsidiary disposals	58.9	19.3
M&A expenditure including deferred / contingent consideration and related fees	(13.3)	(15.9)
Buy back of ordinary shares	(1.1)	(3.2)
Non-cash right-of-use liability movements	(26.1)	(0.1)
Translation differences on foreign currency cash and loans and other non-cash movements within debt	16.3	17.8
Total movement in net debt	(57.9)	2.6
Opening net debt	(840.0)	(842.6)
Net debt before preferred equity	(897.9)	(840.0)

 

 

	Net debt	2025	2024
		£'m	£'m
	Net cash and cash equivalents	56.6	72.8
	Super senior RCF1	(44.2)	(10.3)
Senior secured notes1		(624.0)	(633.9)
	Bank loans and other facilities	(50.7)	(62.4)
	Obligations under right-of-use leases	(189.8)	(167.8)
	Factoring and receivables financing facilities	(45.8)	(38.4)
	Net debt before preferred equity	(897.9)	(840.0)
	Net leverage ratio (net debt / EBITDA)	7.9x	5.3x
	Preferred equity, associated warrants and embedded derivatives	(285.6)	(286.6)
	Statutory net debt (net of prepaid finance costs)	(1,183.5)	(1,126.6)

 

¹ Inclusive of accrued interest, issue premium (where applicable) and net of prepaid finance costs

 

ACCOUNTING STANDARDS

 

The financial statements have been prepared in accordance with UK-adopted international accounting standards. There have been no changes to international accounting standards this year that have a material impact on the Group's results. No forthcoming new international accounting standards are expected to have a material impact on the financial statements of the Group.

 

GOING CONCERN

 

The consolidated financial statements for the Group and Parent Company have been prepared on a going concern basis.

 

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Chairman and CEO Review.

 

As of 29 March 2025, the Group had circa £45m outstanding under its existing Super Senior RCF (the "SSRCF") which matures in February 2026, circa €490m of 3.625% Senior Secured Notes due in August 2026 (the "2026 Notes") and €250m of 3.75% Senior Secured Notes due in March 2028 (the "2028 Notes").

 

The Company will launch a series of public consent solicitations and a public exchange offer to holders of its 2026 Notes to exchange their existing 2026 Notes into a new tranche of notes (the "New Notes"), to mature four years following the date of the proposed transaction (the "2026 Notes transaction"). The New Notes will be junior to the new Super Senior Credit Facility, but senior to all other parts of the capital structure including the existing 2026 Notes and 2028 Notes. Prior to the launch of the public consent solicitations and exchange offer, the Company has agreed private exchanges and transaction support agreements with holders of more than 90% of the 2026 Notes, who represent greater than 50% of all Senior Secured Notes outstanding, to support the proposed transaction.

 

The New Notes will include an interest coupon of 9.875%, settled in cash on a half-yearly basis.  At the election of the Company, for the first twelve months following issuance the coupon can be reduced to 1.000% of cash pay and 8.875% via Payment In Kind (PIK), with the PIK'd coupon being added to the principal at the end of each six-month period, paid through the issuance of additional New Notes.

 

The New Notes will have a significantly higher coupon than the 2026 Notes. In addition, the Company has offered to exchange the 2026 Notes at par, with additional fees available for noteholders who participate in the consent solicitation, subject to certain terms and conditions.

 

The Board believes the exchange offer is therefore attractive to existing noteholders. As a result, the Company expects to receive a high level of support from noteholders for the offer, and expects closing to occur in August 2025.

 

Simultaneous with the closing of the exchange offer, the Company will enter into, as previously announced, an agreement to refinance the existing SSRCF with a new Super Senior Credit Facility (the "SSCF"), due January 2030, with a springing maturity six months prior to the maturity date of the New Notes.

 

The existing SSRCF is on an entirely revolving basis and contains a springing leverage covenant (a covenant which is triggered if leverage is above a certain level), whereas the new facility agreement will comprise a combination of term loan and committed RCF, and does not contain any maintenance or springing covenants.  The absence of such covenants, along with the debt incurrence covenants within the indenture for the New Notes, allow for greater flexibility for the Company and therefore an improvement in liquidity available under the new SSCF.

 

The new facility is fully committed and will be available to be drawn, subject to satisfaction of customary conditions precedent and the refinancing of the 2026 Notes.

 

As a result of the 2026 Notes transaction and the refinancing of the SSRCF not having completed at the time of the approval of the annual report and accounts, there is a material uncertainty relating to events or conditions that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern. However, the Directors believe that the proposed transaction represents an appropriate and achievable plan to address the Group's funding requirements, although the successful completion of the proposed transaction cannot be guaranteed.

 

Going concern assessment

The Group's cash position, net of overdrafts, as at 29 March 2025 was £56.6m (2024: £72.8m), and it maintains significant additional liquidity through local financing lines and its existing and proposed new SSCF.  The Group expects to generate positive operating cash flows in the forecast period to 31 July 2026.

In assessing the Group as a going concern, a cashflow forecast through to 31 July 2026 was modelled, representing a twelve-month period of assessment in-line with market practice, with the base case aligned with our budget and medium-term strategic plan, consistent with the model used in the testing of impairment.  In all scenarios modelled, no future hypothetical, acquisitions were included in the assumed cashflows, due to there being no certainty over any acquisitions outside of those already completed to date.  The capital structure factored into the going concern assessment is based on the successful completion of both the 2026 Notes transaction and the replacement of the SSRCF as the Directors are confident that the transactions will complete successfully.

 

To take into account the current uncertainty in consumer demand, a downside scenario was modelled, assuming a significant drop in EBITDA as a result of lower volumes versus the base forecast to ensure that even in a downside scenario, sufficient liquidity was maintained through the forecast period.  This downside scenario did not result in a change in our view that the business remains a going concern.

 

A reverse stress-test scenario was modelled, purely for the purposes of sensitising earnings such that liquidity is fully absorbed within the twelve-month period of assessment.  The required adjustment is a circa 85% reduction to the projected EBITDA, and circa 100% reduction in operating cashflows during the forecast period.  This scenario assumes that all facilities which mature during the period are repaid in full and not replaced, while certain facilities which have no fixed maturity are assumed not to be revoked.  Substantial mitigating actions, which would be taken in such a scenario, have not been modelled in this extreme scenario. The Group does not consider the reverse stress-test a plausible scenario.

 

Having considered the work undertaken as described above, and in light of the expectation of a successful exchange offer completing, the Directors are of the view that the Group is well placed to manage its business risks.  Accordingly, the Directors continue to adopt the going concern basis in preparing the Annual Report and Accounts.

 

Alec Pratt

Chief Financial Officer

24 July 2025

 

Consolidated Income Statement

For the 52 weeks ended 29 March 2025

 

			52 weeks ended 29 March 2025			52 weeks ended 30 March 2024 (restated)*
			Underlying performance	Non- underlying items	Reported numbers	Underlying performance	Non- underlying items	Reported numbers
		Notes	£m	£m	£m	£m	£m	£m
Revenue		1	1,115.2	2.9	1,118.1	1,226.4	7.7	1,234.1
Cost of sales			(754.2)	(27.8)	(782.0)	(812.2)	(26.1)	(838.3)
Gross profit			361.0	(24.9)	336.1	414.2	(18.4)	395.8
Distribution and administrative expenses			(337.7)	(230.1)	(567.8)	(345.9)	(119.5)	(465.4)
Other operating income			6.2	0.1	6.3	4.7	0.1	4.8
Operating profit / (loss)			29.5	(254.9)	(225.4)	73.0	(137.8)	(64.8)
Comprising:
Operating profit before non-underlying and exceptional items			29.5	-	29.5	73.0	-	73.0
Amortisation of acquired intangibles		2	-	(31.5)	(31.5)	-	(38.6)	(38.6)
Other non-underlying items		2	-	(15.3)	(15.3)	-	(6.2)	(6.2)
Exceptional impairment charge		2	-	(186.4)	(186.4)	-	(72.6)	(72.6)
Other exceptional items		2	-	(21.7)	(21.7)	-	(20.4)	(20.4)
Finance costs		3	(41.0)	(0.4)	(41.4)	(41.9)	(10.2)	(52.1)
Comprising:
Interest on loans and notes			(30.7)	-	(30.7)	(32.3)	-	(32.3)
Amortisation of prepaid finance costs for bank loans			(2.2)	-	(2.2)	(2.7)	-	(2.7)
Unwinding of discount on right-of-use lease liabilities			(7.9)	-	(7.9)	(6.8)	-	(6.8)
Preferred equity items		3	-	1.0	1.0	-	(5.4)	(5.4)
Other finance items		3	(0.2)	(1.4)	(1.6)	(0.1)	(4.8)	(4.9)
(Loss) / profit before tax			(11.5)	(255.3)	(266.8)	31.1	(148.0)	(116.9)
Taxation (charge) / credit			(0.6)	27.8	27.2	1.1	20.1	21.2
(Loss) / profit from continuing operations for the period			(12.1)	(227.5)	(239.6)	32.2	(127.9)	(95.7)
Discontinued operations
Loss from discontinued operations for the period			(6.3)	(18.5)	(24.8)	(0.4)	(11.9)	(12.3)
Total (loss) / profit for the period			(18.4)	(246.0)	(264.4)	31.8	(139.8)	(108.0)
Loss per share from continuing operations - pence	basic	4			(210.26)			(83.15)
	diluted	4			(210.26)			(83.15)
Loss per share from total operations - pence	basic	4			(232.02)			(93.85)
	diluted	4			(232.02)			(93.85)

 

* See Note 7 for further details regarding discontinued operations

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 29 March 2025

 

	52 weeks ended 29 March 2025		52 weeks ended 30 March 2024
	£m		£m
Loss for the period	(264.4)		(108.0)
Other comprehensive income / (expense)
Items that will not be reclassified to profit or loss:
Actuarial gain / (loss) on defined benefit pension scheme	0.5		(1.9)
Items that will not be reclassified to profit or loss	0.5		(1.9)
Items that may be reclassified subsequently to profit or loss:
Hyperinflation foreign exchange adjustments	34.6		(9.0)
Retranslation of overseas subsidiaries	(15.4)		(21.8)
Subsidiary disposal - reclassification of translation reserves	(8.6)		-
Items that may be reclassified subsequently to profit or loss	10.6		(30.8)
Other comprehensive income / (expense)	11.1		(32.7)
Total comprehensive expense for the period attributable to the owners of the parent	(253.3)		(140.7)
Total comprehensive expense for the period attributable to the owners of the parent arises from:
Continuing operations	(235.5)		(119.1)
Discontinued operations	(17.8)		(21.6)
	(253.3)		(140.7)

 

Consolidated Balance Sheet

As at 29 March 2025

 

		29 March 2025	30 March 2024
		£m	£m
Non-current assets
Goodwill		88.9	102.6
Intangible assets other than goodwill		111.5	250.7
Property, plant and equipment		344.4	447.8
Right-of-use lease assets		162.6	157.2
Investment property		0.2	0.2
Other investments		3.2	-
Deferred tax assets		8.9	7.9
Total non-current assets		719.7	966.4
Current assets
Inventories		303.7	326.1
Trade and other receivables		226.9	238.1
Current tax assets		2.1	4.1
Cash and cash equivalents		77.6	94.8
Total current assets		610.3	663.1
Total assets		1,330.0	1,629.5
Current liabilities
Trade and other current payables		(272.7)	(320.3)
Current tax liabilities		(6.2)	(4.7)
Obligations under right-of-use leases - current		(30.0)	(31.2)
Other financial liabilities		(135.4)	(94.3)
Provisions		(7.1)	(12.1)
Total current liabilities		(451.4)	(462.6)
Non-current liabilities
Trade and other non-current payables		(8.1)	(7.2)
Obligations under right-of-use leases - non-current		(159.9)	(136.5)
Other non-current financial liabilities		(650.2)	(672.7)
Preferred equity		(282.5)	(274.2)
Preferred equity - contractually-linked warrants		(3.1)	(12.4)
Deferred tax liabilities		(24.3)	(56.7)
Retirement benefit obligations		(4.0)	(8.4)
Provisions		(19.6)	(21.0)
Total non-current liabilities		(1,151.7)	(1,189.1)
Total liabilities		(1,603.1)	(1,651.7)
Net liabilities		(273.1)	(22.2)
Equity
Share capital		6.3	6.3
Retained earnings		(292.2)	(27.4)
Foreign exchange reserve		(38.4)	(20.8)
Hyperinflation foreign exchange reserve		35.7	7.5
Other reserves		15.5	12.2
Total equity		(273.1)	(22.2)

 

 

Consolidated Statement of Changes in Equity

For the 52 weeks ended 29 March 2025

 

	Share capital	Retained earnings	Foreign exchange reserve	Hyper-inflation foreign exchange reserve	Other reserves	Total equity
	£m	£m	£m	£m	£m	£m
At 1 April 2023	6.3	85.7	1.0	16.5	9.5	119.0
Loss for the period to 30 March 2024	-	(108.0)	-	-	-	(108.0)
Other comprehensive expense for the period	-	(1.9)	-	-	-	(1.9)
Retranslation of overseas subsidiaries	-	-	(21.8)	(9.0)	-	(30.8)
Total comprehensive loss	-	(109.9)	(21.8)	(9.0)	-	(140.7)
Buy back of ordinary shares	-	(3.2)	-	-	-	(3.2)
Share-based payment charge	-	-	-	-	2.7	2.7
Transactions with owners	-	(3.2)	-	-	2.7	(0.5)
At 30 March 2024	6.3	(27.4)	(20.8)	7.5	12.2	(22.2)
Loss for the period to 29 March 2025	-	(264.2)	-	-	-	(264.2)
Other comprehensive expense for the period	-	0.5	-	-	-	0.5
Retranslation of overseas subsidiaries	-	-	(15.4)	34.6	-	19.2
Subsidiary disposal - reclassification of translation reserves	-	-	(2.2)	(6.4)	-	(8.6)
Total comprehensive loss	-	(263.7)	(17.6)	28.2	-	(253.1)
Buy back of ordinary shares	-	(1.1)	-	-	-	(1.1)
Share-based payment charge	-	-	-	-	3.3	3.3
Transactions with owners	-	(1.1)	-	-	3.3	2.2
At 29 March 2025	6.3	(292.2)	(38.4)	35.7	15.5	(273.1)

 

 

Consolidated Statement of Cash Flows

For the 52 weeks ended 29 March 2025

	52 weeks ended	52 weeks ended
	29 March 2025	30 March 2024
	£m	£m
Cash flows from operating activities
Operating loss	(225.4)	(64.8)
Adjustments for:
Depreciation and amortisation of IT software	95.7	95.5
Amortisation of acquired intangibles	31.6	38.5
Hyperinflation impact	(0.2)	(13.2)
Acquisition-related performance plan charge	0.4	6.7
Acquisition-related performance plan payment	(6.8)	(10.8)
Amortisation of government grants	(1.9)	(0.9)
(Profit) / loss on disposal of investments, property, plant and equipment and acquired intangibles	3.9	(2.1)
Impairment charges	186.4	72.5
Share incentive plan charge	3.5	2.7
Defined benefit pension	(0.5)	0.1
Net cash flow from operating activities before movements in working capital, tax and interest payments	86.7	124.2
Change in inventories	(5.1)	14.1
Change in trade and other receivables	1.6	22.8
Change in trade and other payables	(21.8)	(48.3)
Change in provisions	(10.3)	(11.7)
Cash generated by continuing operations before tax and interest payments	51.1	101.1
Interest paid on loans and notes	(32.7)	(29.7)
Interest relating to right-of-use lease assets	(8.2)	(6.6)
Income taxes paid	(1.7)	(2.3)
Net cash inflow from continuing operating activities	8.5	62.5
Net cash flow from discontinued operations	(10.7)	(8.2)
Investing activities
Purchases of property, plant and equipment	(74.9)	(57.8)
Purchases of intangible assets	(2.3)	(4.0)
Repayments of subsidiary loans	-	-
Proceeds on disposal of property, plant and equipment	7.3	28.5
Deferred consideration and earn-out payments	(4.3)	(4.1)
Proceeds on disposal of real estate via sale and leaseback	30.4	-
Proceeds on disposal of business, net of cash	3.3	-
Acquisition of subsidiaries net of cash acquired	(1.3)	-
Cash flow from other investing activities	1.1	-
Net cash used in continuing investing activities	(40.7)	(37.4)
Investing activities cash flow from discontinued operations	8.7	(0.7)
Financing activities
Proceeds from debt	89.2	36.7
Repayment of debt	(48.5)	(33.4)
Buy back of ordinary shares	(1.1)	(3.2)
Payments under right-of-use lease obligations	(31.4)	(28.2)
Cash flow from other financing activities	1.5	(9.9)
Net cash generated / (used) in continuing financing activities	9.7	(38.0)
Financing activities cash flow from discontinued operations	7.2	21.0
Net decrease in cash and cash equivalents	(17.3)	(0.8)
Cash and cash equivalents at beginning of period	87.2	90.4
Effect of foreign exchange rate changes	(1.6)	(2.4)
Cash and cash equivalents at end of period	68.3	87.2
Comprising:
Cash and cash equivalents	77.6	94.8
Bank overdrafts	(9.3)	(7.6)
	68.3	87.2

NOTES

 

1. Segmental information                                                                                                                                                                           

 

The Group is organised into four operating segments: soft flooring products in UK & Europe; ceramic tiles in UK & Europe; flooring products in Australia; and flooring products in North America. The Executive Board (which is collectively the Chief Operating Decision Maker) regularly reviews financial information for each of these operating segments in order to assess their performance and make decisions around strategy and resource allocation at this level.

 

The UK & Europe Soft Flooring segment comprises legal entities primarily in the UK, Republic of Ireland, the Netherlands and Belgium (including manufacturing entities in Turkey and a distribution entity in North America), whose operations involve the manufacture and distribution of carpets, rugs, flooring underlay, artificial grass, LVT, and associated accessories. The UK & Europe Ceramic Tiles segment comprises legal entities primarily in Spain, Italy, UK and France, whose operations involve the manufacture and distribution of wall and floor ceramic tiles. The Australia segment comprises legal entities in Australia, whose operations involve the manufacture and distribution of carpets, flooring underlay and LVT. The North America segment comprises legal entities in the USA, whose operations involve the distribution of hard flooring, LVT and ceramic tiles.

 

Whilst additional information has been provided in the operational review on sub-segment activities, discrete financial information on these activities is not regularly reported to the CODM for assessing performance or allocating resources.

 

No operating segments have been aggregated into reportable segments.

 

Both underlying operating profit and reported operating profit are reported to the Executive Board on a segmental basis.

 

Transactions between the reportable segments are made on an arm length's basis. The reportable segments exclude the results of non revenue generating holding companies, including Victoria PLC. These entities' results have been included as unallocated central expenses in the tables below.                                                                                                                                                                                           

                                                                                                                               

 

	52 weeks ended 29 March 2025
	UK & Europe Soft Flooring	UK & Europe Ceramic Tiles	Australia	North America	Unallocated central expenses	Total
	£m	£m	£m	£m	£m	£m
Income statement
Revenue	584.2	280.2	103.7	150.0	-	1,118.1
Underlying operating profit / (loss)	18.9	7.7	8.6	2.1	(7.8)	29.5
Non-underlying operating items	(21.7)	(15.6)	(1.6)	(4.4)	(3.5)	(46.8)
Exceptional operating items	(92.4)	(105.8)	(0.2)	(0.8)	(8.9)	(208.1)
Operating (loss) / profit	(95.2)	(113.7)	6.8	(3.1)	(20.2)	(225.4)
Underlying net finance costs						(41.0)
Non-underlying finance costs						(0.4)
Loss before tax						(266.8)
Tax credit						27.2
Loss after tax from continuing operations						(239.6)
Loss from discontinued operations						(24.8)
Loss for the period						(264.4)

 

	52 weeks ended 30 March 2024
	UK & Europe Soft Flooring	UK & Europe Ceramic Tiles	Australia	North America	Unallocated central expenses	Total
	£m	£m	£m	£m	£m	£m
Income statement
Revenue	643.9	320.8	106.1	163.3	-	1,234.1
Underlying operating profit / (loss)	34.6	31.3	8.7	6.8	(8.4)	73.0
Non-underlying operating items	(12.0)	(22.3)	(1.6)	(5.6)	(3.4)	(44.9)
Exceptional operating items	(16.5)	(30.3)	-	(43.3)	(2.8)	(92.9)
Operating profit / (loss)	6.1	(21.3)	7.1	(42.1)	(14.6)	(64.8)
Underlying net finance costs						(41.9)
Non-underlying finance costs						(10.2)
Loss before tax						(116.9)
Tax credit						21.2
Loss after tax from continuing operations						(95.7)
Loss from discontinued operations						(12.3)
Loss for the period						(108.0)

 

2. Exceptional and non-underlying items

 

	52 weeks ended 29 March 2025	52 weeks ended 30 March 2024
	£m	£m
Exceptional items
(a) Acquisition and disposal related costs	(0.9)	(1.0)
(b) Reorganisation, re-financing and other costs	(15.8)	(19.4)
(c) Gain on disposal of assets and investments	1.9	-
(d) Loss on disposal of subsidiaries	(6.9)	-
(e) Exceptional impairment charge	(186.4)	(72.6)
	(208.1)	(93.0)
Non-underlying operating items
(f) Acquisition-related performance plans	(0.4)	(6.7)
(g) Non-cash share incentive plan charge	(3.5)	(2.7)
(h) Amortisation of acquired intangibles (excluding hyperinflation)	(31.5)	(38.6)
(i) Unwind of fair value uplift to acquisition opening inventory	-	(0.6)
(j) Depreciation of fair value uplift to acquisition property, plant and machinery	(5.7)	(5.0)
(k) Hyperinflation depreciation adjustment	(5.8)	(4.3)
(l) Hyperinflation monetary gain / (loss)	12.8	23.2
(m) Other hyperinflation adjustments (excluding depreciation and monetary gain)	(12.7)	(10.1)
	(46.8)	(44.8)
Total	(254.9)	(137.8)
Representing functional categorisation of:
Revenue (see notes k,l,m)	2.9	7.7
Cost of sales (see notes j,k,l,m)	(27.8)	(26.1)
Distribution and administrative expenses	(230.1)	(119.5)
Other operating income (see notes k,l,m)	0.1	0.1
	(254.9)	(137.8)

 

(a)	One-off third-party professional fees in connection with prospecting and completing specific acquisitions and disposals during the period.
(b)	Various reorganisation and integration projects around the Group. Also some costs linked to re-financing.
(c)	Largely represents a gain relating to the sale and leaseback of a property in Belgium, whereby under IFRS 16, the majority of the gain on the disposal has been presented within the carrying value of the right-of-use asset.
(d)	Non-cash charge relating to the respective loss on disposal of Hanover Flooring during the period.
(e)	Exceptional impairment charge in the 'UK & Europe - Soft flooring (Rugs)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets by £87 million due to the weak demand environment.  As no goodwill attaches to this CGU, the impairment charge was applied against intangible fixed assets (£40.5m) and tangible fixed assets (£46.5m). Further weaker demand in the European ceramics industry has resulted in an impairment in the 'UK & Europe - Ceramic Tiles (Spain)' CGU where the carrying value of assets exceeded the recoverable amount of the CGU by £80 million.  As no goodwill attaches to this CGU, the impairment charge was applied against intangible fixed assets (£50.3m) and tangible fixed assets (£29.7m).  Exceptional impairment charge in the 'UK & Europe - Ceramic Tiles (Italy)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets by £14.6 million due to the weak demand environment and the goodwill has been fully impaired. Prior year exceptional goodwill impairment charge, reduced production in Spain, as a result of the integration programme within the ceramics division has resulted in a further impairment of £24.7 million being taken in the UK & Europe - Ceramics (Spain & Turkey) CGU, along with weaker demand in the US impacting Cali Bamboo resulting in an impairment of £42.5 million. The current period also includes a £4.8m impairment of a right-of-use building which is mostly unoccupied.
(f)	Charge relating to the accrual of expected liability under acquisition-related performance plans.
(g)	Non-cash, IFRS2 share-based payment charge in relation to the long-term management incentive plans.
(h)	Amortisation of intangible assets, primarily brands and customer relationships, recognised on consolidation as a result of business combinations.
(i)	One-off cost of sales charge reflecting the IFRS 3 fair value adjustment on inventory acquired on new business acquisitions, given this is not representative of the underlying performance of those businesses.
(j)	Cost of sales depreciation charge reflecting the IFRS 3 fair value adjustment on buildings and plant and machinery  acquired on new business acquisitions, given this is not representative of the underlying performance of those businesses.
(k,l,m)	Impact of hyperinflation indexation in the period. The hyperinflation impact in the period on revenue was £2.9m (2024: £7.7m income), cost of sales was £19.4m charge (2024: £20.5m (charge)) and admin expenses was £10.8m income (FY24: £21.6m income ).

 

3. Finance costs

 

		52 weeks ended 29 March 2025	52 weeks ended 30 March 2024
		£m	£m
Non-underlying finance items
(a) Finance items related to preferred equity		1.0	(5.4)
(b) Unwinding of present value of deferred and contingent earn-out liabilities		(0.2)	(0.5)
(c) Fair value adjustment to deferred consideration and contingent earnout		1.7	2.0
Acquisitions related		1.5	1.5
(d) Gain on bond repurchase		-	2.0
(e) Fair value adjustment to notes redemption option / amortisation inception derivative		1.2	1.2
(f) Mark to market adjustments and gains on foreign exchange forward contracts		0.5	(0.2)
(g) Translation difference on foreign currency loans and cash		(5.0)	(8.6)
(h) Hyperinflation - finance portion		0.4	(0.6)
(i) Defined benefit pension		-	(0.1)
Other non-underlying		(2.9)	(6.3)
		(0.4)	(10.2)

 

(a)	The net impact of items relating to preferred equity issued to Koch Equity Development during the current and prior periods.
(b)	Current period non-cash costs relating to the unwind of present value discounts applied to deferred consideration and contingent earn-outs on historical business acquisitions. Deferred consideration is measured at amortised cost, while contingent consideration is measured under IFRS 9 / 13 at fair value. Both are discounted for the time value of money.
(c)	Fair value reduction to contingent liability resulting in a change to the expected earnout due, resulting in a credit.
(d)	The Company generated a gain on bonds repurchased in the prior year as the purchase price was lower than the carrying amount. This happened as market interest rates had risen since the bonds were issued, reducing their market value.
(e)	Attached to the senior notes is an early repayment option which, on inception, was recognised as an embedded derivative asset at a fair value of £4.3m. The value of the senior debt liabilities recognised were increased by a corresponding amount at initial recognition, which then reduces to par at maturity using an effective interest rate method.
(f)	Non-cash fair value adjustments on foreign exchange forward contracts.
(g)	Net impact of exchange rate movements on third party and intercompany loans.
(h)	Other finance cost/income impact of hyperinflation.
(i)	Defined benefit pension change due to restructuring in the prior period related.
	See Financial Review for further details of these items.

 

4. Earnings per share

 

The calculation of the basic, adjusted and diluted earnings / (loss) per share is based on the following data:

 

	52 weeks ended 29 March 2025		52 weeks ended 30 March 2024
	Basic	Adjusted	Basic	Adjusted
	£m	£m	£m	£m
Loss attributable to ordinary equity holders of the parent entity	(239.6)	(239.6)	(95.7)	(95.7)
Exceptional and non-underlying items:
Exceptional items	-	208.1	-	93.0
Non-underlying items	-	47.2	-	55.0
Tax effect on adjusted items where applicable	-	(27.8)	-	(20.1)
(Loss) / earnings for the purpose of basic and adjusted earnings per share from continuing operations	(239.6)	(12.1)	(95.7)	32.2
Loss attributable to ordinary equity holders of the parent entity from discontinued operations	(24.8)	(6.3)	(12.3)	(0.4)
(Loss) / earnings for the purpose of basic and adjusted earnings per share	(264.4)	(18.4)	(108.0)	31.8

 

Weighted average number of shares

 

	52 weeks ended 29 March 2025	52 weeks ended 30 March 2024
	Number of shares	Number of shares
	(000's)	(000's)
Weighted average number of shares for the purpose of basic and adjusted earnings per share	113,954	115,046
Effect of dilutive potential ordinary shares:
Share options and warrants	1,350	1,621
Weighted average number of ordinary shares for the purposes of diluted earnings per share	115,304	116,667
Preferred equity and contractually-linked warrants	118,394	49,771
Weighted average number of ordinary shares for the purposes of diluted adjusted earnings per share	233,698	166,438

 

The potential dilutive effect of the share options has been calculated in accordance with IAS 33 using the average share price in the period.

 

The Group's earnings / (loss) per share are as follows:

 

 

	52 weeks ended 29 March 2025	52 weeks ended 30 March 2024
	Pence	Pence
Earnings / loss per share from continuing operations
Basic loss per share	(210.26)	(83.15)
Diluted loss per share	(210.26)	(83.15)
Basic adjusted (loss) / earnings per share	(10.62)	27.99
Diluted adjusted (loss) / earnings per share	(5.18)	19.35
Loss per share from discontinued operations
Basic loss per share	(21.76)	(10.70)
Diluted loss per share	(21.76)	(10.70)
Earnings / loss per share
Basic loss per share	(232.02)	(93.85)
Diluted loss per share	(232.02)	(93.85)
Basic adjusted (loss) / earnings per share	(16.15)	27.66
Diluted adjusted (loss) / earnings per share	(7.87)	19.12

 

Diluted earnings per share for the period is not adjusted for the impact of the potential future conversion of preferred equity due to this instrument having an anti-dilutive effect, whereby the positive impact of adding back the associated financial costs to earnings outweighs the dilutive impact of conversion/exercise. Diluted adjusted earnings per share does take into account the impact of this instrument as shown in the table above setting out the weighted average number of shares. Due to the loss incurred in the year, in calculating the diluted loss per share, the share options, warrants and preferred equity are considered to be non-dilutive.

 

5. Rates of exchange

 

	2025		2024
	Average	Year end	Average	Year end
Australia - AUD	1.9629	2.0545	1.9134	1.9369
Europe - EUR	1.1906	1.1903	1.1594	1.1690
United States - USD	1.2792	1.2946	1.2577	1.2626
Turkey - TRY	44.0275	49.1910	34.4101	40.8163

 

6. Net Debt

 

Analysis of net debt

 

Reconciliation of movements in the Group's net debt position:

 

Group	At 31 March  2024	Cash flow	Non-cash movement on inception of leasing contract expenditure	Disposals	Acquisitions	Other non-cash changes	Exchange movement	At 29 March 2025
	£m	£m	£m			£m	£m	£m
Cash and cash equivalents	94.8	(14.6)	-	(1.7)	0.8	-	(1.7)	77.6
Bank overdraft	(7.5)	(1.8)	-	-	-	-	0.1	(9.3)
Net cash and cash equivalents	87.2	(16.5)	-	(1.7)	0.8	-	(1.6)	68.3
Bank overdraft	(14.4)	2.7	-	-	-	-	-	(11.7)
Senior secured debt (gross of prepaid finance costs):
- due in less than one year	-	-	-	-	-	-	-	-
- due in more than one year	(639.6)	-	-	-	-	1.4	11.3	(627.0)
Bank loans and other facilities (gross of prepaid finance costs):
- Other bank loans and facilities due in less than one year	(72.4)	(51.4)	-	20.0	(0.7)	(11.9)	1.2	(115.0)
- Other bank loans and facilities due in more than one year	(38.8)	-	-	-	-	12.0	0.7	(26.2)
Net debt	(678.0)	(65.1)	-	18.3	0.1	1.5	11.5	(711.6)
Obligations under right-of-use leases:
- due in less than one year	(31.2)	39.8	(46.1)	1.4	-	5.4	0.7	(30.0)
- due in more than one year	(136.5)	-	-	-	-	(25.0)	1.6	(159.9)
Preferred equity (gross of prepaid finance costs)	(286.6)	-	-	-	-	1.0	-	(285.6)
Prepaid finance costs in relation to senior debt:
- due in less than one year	-	0.2	-	-	-	0.4	-	0.6
- due in more than one year	5.7	-	-		-	(2.6)	-	3.0
Financing liabilities	(1,213.8)	(8.8)	(46.1)	21.5	(0.7)	(19.3)	15.5	(1,251.8)
Net debt including right-of-use lease liabilities, issue premia, preferred equity and prepaid finance costs	(1,126.6)	(25.2)	(46.1)	19.8	0.1	(19.3)	13.9	(1,183.5)

 

7. Discontinued operations and subsidiary disposals

 

Discontinued operations

 

On 28 September 2024, the Group committed to a plan to dispose of B3 Ceramics Danismanlik ("Graniser") following the negative impact of instability in several of its key markets. Graniser is a specific business segment within the UK & Europe - Ceramic Tiles (Spain / Turkey CGU).

The sale of the Graniser discontinued operation completed on 18 November 2024; the buyer was Mr Hasan Akgün. Total consideration paid by Mr Hasan Akgün was €10.0 million (£8.3m) cash on completion.

As a result, the operations of Graniser have been classified as discontinued operations in accordance with IFRS 5. The results of the discontinued operations are summarised below:

 

 

		52 weeks ended 29 March 2025*
		Underlying performance	Non- underlying items	Reported numbers
Income statement - Graniser		£m	£m	£m
Revenue		16.1	0.8	16.9
Cost of sales		(16.5)	(3.2)	(19.7)
Gross profit		(0.4)	(2.4)	(2.8)
Distribution and administrative expenses		(2.7)	(21.0)	(23.7)
Operating loss		(3.1)	(23.4)	(26.5)
Finance costs		(4.8)	(2.5)	(7.3)
loss before tax		(7.9)	(25.9)	(33.8)
Taxation credit		1.6	0.2	1.8
Loss after tax		(6.3)	(25.7)	(32.0)
Gain on disposal of subsidiaries		-	7.2	7.2
Loss from discontinued operations for the period		(6.3)	(18.5)	(24.8)

 

		52 weeks ended 30 March 2024
		Underlying performance	Non- underlying items	Reported numbers
Income statement - Graniser		£m	£m	£m
Revenue		30.5	8.8	39.3
Cost of sales		(27.4)	(17.0)	(44.4)
Gross profit		3.1	(8.2)	(5.1)
Distribution and administrative expenses		(2.7)	20.6	17.9
Other operating income		0.1	-	0.1
Operating profit		0.5	12.4	12.9
Finance costs		(4.8)	(22.2)	(27.0)
loss before tax		(4.3)	(9.8)	(14.1)
Taxation credit / (charge)		3.6	(1.9)	1.7
Loss after tax		(0.7)	(11.7)	(12.4)
Loss from discontinued operations for the period		(0.7)	(11.7)	(12.4)

 

* The Graniser group results in the 52 weeks ended 29 March 2025 are only included here up to the 18 November 2024 - their date of disposal.

 

Details of the sale of the discontinued operations

 

			£m
Total disposal consideration, net of cash held			7.9
Carrying amount of net assets sold			(9.3)
Loss on sale before income tax and reclassification of foreign currency translation reserve			(1.4)
Reclassification of foreign currency translation reserve			8.6
Income tax expense on gain			-
Gain on sale after income tax			7.2

 

 

Assets and liabilities of discontinued operations

 

The carrying amount of assets and liabilities as at the date of sale were as follows:

 

			18 November 2024
			£m
Intangible assets other than goodwill			4.3
Property, plant and equipment			9.7
Right-of-use lease assets			2.6
Inventories			17.5
Trade and other receivables			11.4
Total assets			45.5
Trade and other current payables			(10.1)
Obligations under right-of-use leases - current			(0.7)
Other financial liabilities			(20.0)
Trade and other non-current payables			(0.1)
Obligations under right-of-use leases - non-current			(1.8)
Retirement benefit obligations			(3.5)
Total liabilities			(36.2)
Total net assets			9.3

 

 

7. Post Balance Sheet Event

 

Balta restructuring

Balta announced on June 12 2025 that, due to ongoing demand and cost pressures on its rug business, the continuation of large-scale woven rug production at Belgian locations has become financially unviable.
As a result, Balta intends to cease yarn production and the weaving and finishing of woven rugs at its sites in Sint-Eloois-Vijve and Sint-Baafs-Vijve.

The proposed restructuring is expected to result in the phased redundancy of 467 blue-collar and 62 white-collar employees over the next eighteen months, with select operations transferring to existing facilities in Turkey.
Lamination and finishing of tufted rugs will continue in Belgium, along with most administrative support functions. Additionally, the Sint-Baafs-Vijve facility will continue to function as a central distribution hub within Europe.

 

8. Basis of Preparation

 

This results announcement for the period ended 29 March 2025 was approved by the Board on 24 July 2025. Whilst the financial information included in this statement is derived from the Annual Report & Accounts for the period ended 29 March 2025 (including the comparatives for the period ended 30 March 2024), it does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.

 

The Annual Report & Accounts for the period ended 29 March 2025 (including the comparatives for the period ended 30 March 2024) were also approved and authorised for issue by the Board of Directors on 24 July 2025. The auditor has reported on those accounts; its report was (i) unmodified; and (ii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The auditor's report on those accounts includes a section setting out that there is a material uncertainty relating to events or conditions that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern. Notwithstanding this material uncertainty, the Directors consider it remains appropriate to continue to adopt the going concern basis in the preparation of the financial statements.

The Annual Report & Accounts for the period ended 29 March 2025 will be delivered to the registrar of companies and posted to shareholders in due course. Further copies will be available from the Company's Registered Office: Worcester Six Business Park, Worcester, Worcestershire, WR4 0AN or via the website: www.victoriaplc.com.