Victoria PLC

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

 

Half-year Report

for the six months ended 27 September 2025

 

Strong progress in cost savings, successful refinancing and positioning the business for recovery

 

Victoria PLC (LSE: VCP), the international designers, manufacturers and distributors of innovative flooring, announces its half-year report for the six months ended 27 September 2025, which are in line with the trading update of 6 November.

 

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Continuing operations1	26 weeks ended 27 September 2025	26 weeks ended 28 September 2024
Underlying revenue	£528.7m	£568.8m
Underlying EBITDA1	£53.5m	£50.2m
Underlying EBITDA (Pre IFRS-16)	£36.1m	£34.6m
Underlying operating profit1	£11.4m	£7.7m
Statutory operating loss	(£44.7m)	(£140.8m)
Underlying loss before tax1	(£15.4m)	(£13.6m)
Statutory net loss after tax	(£139.4m)	(£141.7m)
Underlying free cash flow2	(£8.1m)	(£13.8m)
Net debt, including IFRS16 lease liabilities3	£1,003.9m	£857.1m
Net debt / underlying EBITDA	8.6x	7.4x
Earnings / (loss) per share
- Basic	(121.62p)	(124.58p)
- Diluted adjusted2	(3.12p)	(5.01p)

 

¹ Underlying performance is stated before exceptional and non-underlying items. In addition, underlying loss 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 is the sum of the financial liabilities, shown before preferred equity, less cash.

 

Summary

·    Against a backdrop of mixed macroeconomic conditions and softer consumer demand across key markets, the Group has delivered a resilient performance characterised by strict cost discipline and significant margin expansion.

·    Ongoing improvement in average selling prices mitigated lower volumes as demand across Victoria's markets continues to track 20-25% below the long-term trend. Eventual normalisation of demand implies a volume uplift of more than 25% from current levels over time, but in the interim management continues to execute internal initiatives to drive earnings.

·    The Board remains cautious about the near-term outlook due to the various factors highlighted in the trading statement on 6^th November and the disruption within the legacy Belgian operations, as production is relocated to Turkey temporarily impacting rug shipments. 

 

Key Financial Highlights

·    Revenue trends: Revenue showed an improving trend through the period, narrowing from a c. 11% decline in Q1, to a c. 2% decline in Q2.

·    Margin expansion: Underlying EBITDA margin expanded by more than 120bps to 10.1%.

·    Operational efficiency: Excluding the impact of the Rugs division (currently undergoing restructuring), and prior year hedging variances, the underlying margin improvement was approximately 390bps.

·    Earnings: Underlying EBITDA improved to £53.5m (H1 FY25: £50.2m), demonstrating the effectiveness of the Group's strategic efficiency programmes.

·    The Group recognised a statutory reported operating loss of £44.7m and statutory net loss after tax of £139.4m in the period, which were primarily driven by exceptional costs relating to: the provision taken in respect of the Rugs reorganisation; and one-off costs relating to the refinancing of the Group's senior debt.

 

Key Operational Highlights

·    Our UK carpets and hard flooring business continues to gain market share and trade well ahead of last year despite softer trading in the run up to the delayed Budget.

·    The Australian businesses continue to perform strongly with further gains anticipated as the integration project underway within this division further reduces costs.

·    Other markets - particularly France and Germany - remain weak, impacting ceramics volumes (and, to a lesser extent, the artificial grass business), although the effects have been partially offset by growth in volumes in Spain and Portugal. Similarly, the US division has suffered from soft consumer discretionary spending and delayed construction activity following the US government shutdown.

·    Management actions already taken this year have been significant in driving margin improvements, although ongoing weaker volumes are now expected to result in underlying EBITDA being broadly in line with FY25, despite lower revenues, excluding the one-off costs in our Rugs business as it transitions manufacturing capacity from Belgium to Turkey.

·    Further cost savings through the balance of the year and into FY27 are being targeted.

·    Management's immediate focus remains on delivering the EBITDA improvement initiatives outlined at the recent full year results (which, when completed, are expected to deliver £70m annual EBITDA improvements vs FY25), generating cash to deleverage the balance sheet, and rebuilding the Company's credit rating.

 

Geoff Wilding, Executive Chairman of Victoria PLC commented:

"This financial year has seen us working on dual tracks: addressing the Group balance sheet and executing internal initiatives to improve earnings.

 

The refinancing process has been more extended than originally expected and reflects both the complexity of the capital structure and the point of the cycle. Refinancing the 2028 bonds remains a key objective for the business, and management continue to engage with all its capital providers to provide a solution that is advantageous to the Company/all stakeholders.

 

Despite the macro environment headwinds, all the internal initiatives we announced earlier this year are on schedule and additional savings have been identified. Consequently, in the short term, and even with historically low demand, margins have begun to recover. And in the medium term, as demand normalises, we are confident Victoria's revenue will grow and with the higher operational leverage now inherent in the business due to our initiatives we anticipate earnings increasing sharply with a clear path to mid-to-high teen EBITDA margins."

 

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 half-year report via the Investor Meet Company platform today (Wednesday 17 December 2025) at 13:00 GMT.

 

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: https://www.investormeetcompany.com/victoria-plc/register-investor.

 

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 Smithfield (Joint Investor Relations) Alex Simmons		+44 (0)7970 174 353 or [email protected]
Walbrook PR (Media & Investor Relations) Paul McManus / Joe Walker	+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, 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 more than 5,000 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.

 

 

BUSINESS REVIEW

 

H1, Financial Year1	2026	2025	2024	2023	2022	2021
Underlying Revenue	£528.7m	£568.8m	£624.6m	£771.5m	£489.0m	£305.5m
Underlying EBITDA	£53.5m	£50.2m	£92.7m	£100.1m	£84.5m	£52.4m
Margin	10.1%	8.8%	14.8%	13.0%	17.3%	17.2%

 

Against a mixed macroeconomic backdrop, the Group delivered a resilient performance characterized by strict cost discipline and margin expansion. While H1 revenue was 7% lower year-on-year, trading momentum improved significantly through the period, narrowing from an 11% decline in Q1 to just 2% in Q2.

 

Crucially, targeted efficiency savings more than offset lower volumes. Underlying EBITDA increased to £53.5m (H1 FY25: £50.2m), driving a 120bps margin improvement to 10.1%. Excluding prior-year hedging impacts and the Rugs division (currently undergoing major restructuring), the underlying EBITDA margin improvement was approximately 390bps. This demonstrates the speed and impact of the Group's efficiency programme, and further savings are being targeted.

 

Operational progress remains on track. The Rugs reorganisation is proceeding with the social plan agreed and the transfer of production equipment underway, while in Spain the new V4 production line has been commissioned which will deliver a step-change in earnings due to its scale and efficiency. Further details are provided in the Strategic Initiatives section below.

 

Financially, the Group successfully refinanced its 2026 notes and SSRCF. The comprehensive refinancing enhances liquidity and underscores strong support from our lending partners.

 

The Group also continued to strengthen controls and governance across the organisation through the launch of a refreshed compliance and internal audit programme, revised monthly divisional and board reporting, and ongoing roll out of a new delegation of authorities' framework.

 

PROGRESS ON EBITDA IMPROVEMENT INITIATIVES

 

All EBITDA improvement initiatives required to deliver the targeted £20m savings in FY26 are now complete. Additional savings have been delivered ahead of guidance and will support further margin improvement over the remainder of the financial year.

 

Key initiatives targeted to drive improvement in underlying EBITDA in FY27 and FY28 have also progressed in line with expectations.

 

Spanish Ceramics (V4 Line): The new V4 line was commissioned on schedule in November and is in production. This €30m strategic investment creates a highly automated facility with a production cost meaningfully below that of our existing lines (and those of many competitors) and is expected to generate circa €15m annualized EBITDA at full capacity. Combined with our focus on cost control and portfolio optimization, this asset is positioned to significantly enhance the medium-term profitability of the Spanish Ceramics business.

 

Rugs Division Reorganisation (Belgium to Turkey): The relocation of production is underway following the conclusion of labour negotiations. While critical functions (management, design, distribution) remain in Belgium, the industrial transfer to Turkey began in October 2025.

-      Operations: Two transferred looms are already operational in Turkey; the remaining 22 are in transit or awaiting dismantling. Full asset transfer is targeted for July 2026.

-      People: A new management structure is in place. The social plan involves a reduction of 496 roles in Belgium, with 168 exits completed by October-end.

-      Performance: The scale of this transfer has created temporary transitional friction with the legacy Belgian operations, placing short-term pressure on efficiency and operating results.

-      Financials: The reorganisation will have a cash cost of c.€50m (approx. 80% severance), largely offset by property disposals, including a sale-leaseback of a key Belgian distribution asset. A €40.9m provision has been recorded in the half-year accounts. Cash costs are projected at €10m (FY26), €30m (FY27), and €10m (FY28).

 

 

TARGETED CASHFLOW IMPROVEMENTS

 

The Board have reviewed and implemented various cash flow optimisation initiatives including capex efficiencies, working capital improvements and surplus / non-core asset sales, which will all contribute to improved liquidity over the next 18 months.

 

Capex

 

The Board confirms capital expenditure requirements will now be approximately £50-55m per annum in the near-term, which is a reduction from previous guidance of £60-65m per annum. This £10 million per annum saving is largely the product of recent investment together with the integration of business units and also reflects the investment in the asset base through the cycle. It comprises maintenance capex in the region of £40m per year, and following significant recent capital investments in the Group, expansion capex is expected to be limited to £10-15m per annum (excluding the one-off capex associated with moving rug production from Belgium to Turkey).

 

Working capital

 

The Board is targeting a total working capital improvement of £40m at constant volumes. This comprises of a reduction in overdue payments, inventory optimisation through SKU reduction and selective improvements in payables terms following the successful refinancing of our short-term maturities.

 

Surplus asset disposals

 

The Group is targeting at least £20m of proceeds from surplus disposals in addition to the Belgian properties being sold as part of the Rugs reorganisation. These are focused on smaller surplus assets across our UK and European businesses, so that proceeds may be retained under our current bond documentation. The Group continues to hold significant additional operational property assets in both Spain and Italy in particular.

 

OPERATIONAL REPORT BY DIVISION

 

UK & Europe Soft Flooring

 

	H1 FY261	H1 FY251
Volumes (sqm)	54.7 million sqm	60.1 million sqm
Underlying Revenue	£274.2 million	£284.8 million
Underlying EBITDA	£28.6 million	£25.5 million
Margin	10.4%	9.0%
Underlying EBIT	£6.3 million	£2.7 million
Margin	2.3%	0.9%

 

Performance in the period was mixed, characterized by strong margin expansion in our core UK business offset by transitional reorganisational headwinds in Rugs. Driven by the successful execution of our strategic initiatives, absolute profitability and margins improved for the division overall.

 

Core performance (excluding Rugs): The UK Carpets and Underlay business delivered a strong performance. H1 EBITDA (excluding Rugs) was £29.9m, representing a margin of 15.9% - a significant year-on-year improvement of 4.1 percentage points.

 

UK Trading & Integration: UK Carpets and Underlay revenue remained broadly flat despite a contraction in overall industry volumes, indicating market share gains. Integration within UK Carpets has progressed well, enhancing operational efficiency. Following the period end, we have also commenced the integration of our UK Underlay business which is expected to further improve productivity and performance.

 

The Grass business delivered a broadly flat performance compared with the prior year, which was a resilient outcome given the adverse weather conditions which suppressed demand during the peak season. The end market has also experienced volatility as the supply chain has reacted to the changes in the US tariff environment. This has presented opportunities for US growth, but increased competition within Europe from Far Eastern suppliers

 

Rugs Restructuring: As outlined in the EBITDA improvement initiatives section, the Rugs division is undergoing significant reorganization, including a strengthened management team. While restructuring is proceeding at pace, operational efficiency during this transitional phase has been impacted more than anticipated resulting in lower revenues and negative H1 EBITDA of c.£1.3m.

 

Rugs business - H1 FY26 financials

	H1 FY261	H1 FY251	FY25
Volumes (sqm)	20.5 million sqm	23.2 million sqm	50.4 million sqm
Underlying Revenue	£86.7 million	£94.5 million	£205.9million
Underlying EBITDA	£(1.3) million	£3.0 million	£10.4 million
Margin	(1.5)%	3.2%	5.1%
Underlying EBIT	£(6.8) million	£(3.3) million	£(1.9) million
Margin	(7.8)%	(3.5)%	(0.9)%

 

Outlook: In the UK, we expect positive revenue and margin growth in H2 compared to FY25, supported by pricing actions and our competitive manufacturing base. In Rugs, the Board expects H2 EBITDA to be broadly breakeven, with a return to profitability targeted for FY27.

 

UK & Europe Ceramic Tiles

	H1 FY261	H1 FY251
Volumes	15.9 million sqm	17.4 million sqm
Underlying Revenue	£134.7 million	£151.4 million
Underlying EBITDA	£17.1 million	£19.5 million
Margin	12.7%	12.9%
Underlying EBIT	£2.9 million	£5.7 million
Margin	2.2%	3.8%

 

Market conditions across the European ceramics industry remained mixed during the period, however, the year-on-year decline in revenue primarily reflects the Group's targeted bottom-slicing strategy where low margin sales were proactively reduced.

 

The total gas hedging benefit in FY25 was £10.0m which was split £6.7m in H1 and £3.3m in H2, meaning cost savings delivered will continue against a weaker comparative period in H2. Excluding the non-repeating FY25 benefit from the favourable gas hedging position in the prior period, margins for the division improved by 4.2ppts.

 

The Spanish domestic market has been particularly strong through FY2026 and is demonstrating growth which continues to be reflected in our forward order book. Operating margins are also on a positive trajectory and are significantly ahead of FY25, supported by the efficiency measures implemented across the business. Following the period end, the new V4 plant was commissioned and remains on track deliver an incremental €15m of EBITDA once at full capacity (further details in the EBITDA improvement initiatives section).

 

Within the Italian operations, substantial organisational improvements have been implemented following management changes in April, and there remain further opportunities to integrate activities and enhance performance across the businesses. The Italian domestic market remains stable, and competition in lower price points in Eastern Europe remains intense.

 

France is an important market for both our Spanish and Italian businesses, and collectively is our largest market outside of Spain and Italy. Performance in H1 and the near-term outlook has been impacted by the ongoing political uncertainty weighing on consumer confidence, however, there remains significant recovery potential over the medium term.

 

Australia

	H1 FY261	H1 FY251
Volumes	11.4 million sqm	11.8 million sqm
Underlying Revenue	£50.6 million	£54.7 million
Underlying EBITDA	£7.3 million	£7.2 million
Margin	14.4%	13.2%
Underlying EBIT	£4.6 million	£4.5 million
Margin	9.1%	8.2%

 

The Australian market remained stable during the period, with constant-currency revenues broadly in line with the prior year, while the weaker Australian dollar continued to limit revenue growth when reported in GBP.

 

The Group expects growth in H2, as domestic interest rate reductions from H1 flow through to support an uplift in building and real estate activity. Whilst currency headwinds will continue to temper reported revenue growth, underlying performance is encouraging.

 

Margins improved year on year, reflecting the operational efficiency actions implemented across the Australian operations.

 

During H1 local governance was strengthened with the addition of new board members, and the integration of the three Australian operating businesses under a single holding company is now underway. This will consolidate our already strong position in the Australian market and drive cost savings and provide an increased focus on growth over the medium term.

 

North America

	H1 FY261	H1 FY251
Volumes	3.4 million sqm	3.4 million sqm
Underlying Revenue	£69.2 million	£77.9 million
Underlying EBITDA	£3.5 million	£2.4 million
Margin	5.1%	3.1%
Underlying EBIT	£0.7 million	(£0.5) million
Margin	1.0%	(0.6)%

 

Revenues in our US distribution businesses were constrained by adverse translational foreign-exchange movements. The Group expects second-half revenues to be broadly flat in US-dollar terms, however, reported revenue will continue to reflect the weaker USD/GBP exchange rate.

 

High interest rates, low affordability and poor consumer confidence continues to suppress housing-market transaction volumes. Notwithstanding these conditions, the Group has managed the operational impact arising from tariffs effectively.

 

Margins improved year on year, supported by the continued delivery of cost-saving initiatives and the repositioning of the commercial model in our CALI business towards its B2B sales channels and its product portfolio toward more premium product categories. While consumer-confidence indicators remain moderate, the Group maintains a strong focus on operational efficiency, and the margin trajectory for the US business remains positive.

 

¹ FY26 and FY25 performance is stated on a continuing and underlying basis: excluding discontinued operations; and before exceptional and non-underlying items.

 

FINANCING OVERVIEW

 

Financing update

 

In the period, the Group successfully refinanced its 2026 debt maturities. This released additional liquidity, extended the Group's maturity profile, and strengthened the Company's long-term capital structure.

 

Including replacement local facilities, the Group has raised more than £700m of financing in FY2026 across a variety of geographies and formats demonstrating its strong access to capital across its diversified lending base.

 

Whilst the Group no longer has any short-term maturities within its senior debts, to further improve the capital structure, the Board continues to progress refinancing plans for the benefit of all stakeholders including to address its 2028 Senior Secured Notes which comprise €167m.

 

Net debt including IFRS16 liabilities increased £106.0m in the period to £(1,003.9)m from £(897.9)m at year-end FY2025. This was primarily driven by the costs associated with the refinancing which totalled £58.7m - split between £17.3m refinancing costs, and £41.4m in exchange offer premia (which is the premium issued in new notes to holders participating in the completed exchange offer) - and foreign currency translation differences which were £32.3m in the period.

 

Net debt shown above is excluding the preferred equity, which is recognised under IFRS as a financial liability. At the September balance sheet date, the carrying value of the liability on the Group balance sheet is £289.4m, while the hypothetical redemption or conversion value at the balance sheet date would be circa £347m, which is the basis on which PIK dividends are accrued.

 

Operating cash flow before interest, tax and capex improved to £33.5 million for the half year ended 27 September (FY25: £31.7 million inflow). Working capital was flat during the period despite lower revenue, and represents an opportunity for improvement following the refinancing. Free cash flow pre-exceptional items improved versus the prior year, with an outflow of £8.1 million for the half year ended 27 September (FY25: £13.8 million outflow), with a reduction in replacement/maintenance capex partially offset by an increase in cash tax paid.

 

Cash, net of overdrafts, at the period end was £86.6 million, and Group liquidity remains sufficient, with approximately £100m of further undrawn debt capacity permissible under the Group's bond documentation.

 

Outlook

 

Despite the challenging conditions of the last 30 months, it is important to recall that the Group had more than a decade of strong success prior to this period and therefore we think it remains valuable to keep sight of Victoria's long-term trajectory, which continues to offer compelling prospects:

 

·    Our integration and cost reduction initiatives have strengthened our differentiation and expanded share in important territories. While these gains have been partially obscured by the temporary contraction of the overall market and heightened pricing competition, they remain real and meaningful.

 

·    During the period, we removed more than £20 million from our cost base, bringing total reductions to more than £30 million over the past 24 months, with a further £50 million in annualised EBITDA improvements currently being implemented. Although the tough trading backdrop has muted the visible financial benefit, these changes have continued to lower Victoria's fixed-cost burden and enhanced our operational leverage.

 

·    Flooring remains an essential component of every property and benefits from a persistent growth trend supported by a dependable replacement cycle. Although macroeconomic conditions may temporarily influence consumer spending, the fundamental drivers - such as the ongoing ageing of the housing stock, elevated levels of household formation, chronic housing shortages, rising design expectations, and new-build activity - support steadily increasing demand. As in previous downturns, we expect volumes and pricing to recover once interest rates ease and confidence returns.

 

·    Throughout our integration and cost-efficiency programmes, we have been deliberate in preserving full access to production capacity.

 

·    As a result, the Board believe Victoria is well positioned to scale up output rapidly when demand strengthens - doing so with greater efficiency than at any point in its history.

 

Finally, we remind investors that industry estimates are that flooring volumes across Victoria's core markets are some 20-25% below the long-term trend. Normalisation of demand would therefore imply a volume uplift of more than 25% from current levels. We express no firm view as to the timing of this recovery, only confidence that it will happen and that, in the meantime, we continue to execute internal initiatives to drive earnings.

 

Geoff Wilding

Executive Chairman

 

Philippe Hamers

Group Chief Executive