Victoria PLC

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

 

Audited results

for the year ended 28 March 2026

 

Strong operational improvements despite challenging end-markets in FY2026, with growth and improved profitability in Q1 FY2027

 

Victoria, the international designer, manufacturer, and distributor of innovative flooring, today publishes its annual results for year ended 28 March 2026. The Annual Report & Accounts for the financial year ended 28 March 2026 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.

 

 

FY2026 Financial and Operational highlights

	Year ended 28 March 2026	Year ended 29 March 2025
		(restated)
Underlying revenue	£1,045.5m	£1,115.2m
Underlying revenue growth	-6.3%	-9.1%
Underlying EBITDA1	£92.3m	£113.7m
Underlying EBITDA margin	8.8%	10.2%
Underlying EBITDA (Pre IFRS-16)	£58.3m	£81.0m
Underlying EBITDA (Pre-IFRS-16) margin	5.6%	7.3%
Underlying operating profit1	£7.3m	£29.5m
Statutory operating loss	(£153.3m)	(£225.4m)
Underlying (loss)/ profit before tax1	(£62.0m)	(£11.5m)
Statutory net loss after tax	(£326.3m)	(£275.8m)
Underlying free cash flow2	(£14.7m)	(£36.2m)
Net debt, including IFRS 16 lease debt3	£1,063.2m	£897.9m
Net debt / EBITDA	11.5x	7.9x
Earnings / (loss) per share:
- Basic	(284.12p)	(242.03p)
- Diluted adjusted1	(13.59p)	(5.18p)

 

Summary

·    Victoria made significant operational progress in FY2026, further integrating the business, executing cost saving initiatives and commissioning more efficient production capacity despite the continuation of a challenging trading environment.

·    The business successfully refinanced all of its material debt maturing in 2026 in August 2025, and on 8 July 2026 announced the refinancing of its bonds maturing in March 2028 and KED Victoria Holdings LLC's ('KED Victoria') holding of Preferred Shares to significantly strengthen the financial position of Victoria.

·   Collectively, this refinancing is expected to extend our 2028 debt maturities to 2031, providing runway for our operational recovery and, upon completion, is expected to significantly reduce our balance sheet liabilities (primarily, our senior secured debt and preferred equity liabilities, by approximately £300m) and ongoing finance costs, including PIK dividends, by approximately £34m (including approximately £5m annual cash cost). Completion of these transaction remains subject to, among other things, the consent solicitation process described above.

·    On 23 July 2026, the Company announced holders representing over 90% of its bonds maturing in March 2028 have acceded to the Transaction Support Agreement, meeting the necessary threshold required to implement it by way of a consent solicitation.

·    Market conditions in H2 were much weaker than anticipated, however, Q1 FY2027 trading has been encouraging, demonstrating growth in volumes and revenue.

 

Key financial highlights

·   The Group demonstrated pricing resilience, with underlying revenue declining 6% despite a 9% reduction in volume with a markedly softer second-half trading environment.

·   Ongoing operational improvements and improved average selling prices mitigated the impact of lower volumes, resulting in a post-IFRS 16 EBITDA margin of 8.8% (FY2025 10.2%).

·    The Group recognised a statutory reported operating loss of £153.3m and statutory net loss after tax of £326.3m in the period, which were primarily driven by exceptional costs relating to: non-cash cost from the impairment of intangible and tangible assets; one-off costs relating to the refinancing of the Group's senior debt; the provision taken in respect of the Rugs reorganisation; and finance costs related to preferred equity.

 

 

Key operational highlights

·   UK & Europe Soft Flooring secured market share gains and operational improvements in the UK business, which were temporarily masked by the impact of the reorganisation of the European rugs business. This reorganisation is now well advanced, with completion expected in Q3 FY2027.

·    UK & Europe Ceramic Tiles had a challenging year with revenue and margins under pressure due to weak market conditions. In Italy, production has been consolidated with one site exited in March 2026 which will generate savings throughout FY2027, and in Spain, the new, more efficient V4 production line became operational at the end of Q3.

·    Australia delivered year on year growth in revenue and EBITDA, supported by market share gains, tight cost discipline and the launch of a new value brand, Wonderlay. Closer collaboration between our three Australian business units has also commenced with a new holding structure implemented.

·    North America performance was impacted by tough trading continuing from FY2025. Repositioning the CALI business model from B2C to B2B during FY2026 alongside other self-help initiatives launched at the start of FY2027 position the division for improved performance.

 

Current trading and outlook

 

·   Q1 FY2027 demonstrated growth in volumes, up c.3%, and revenue, up c.7%, with profitability ahead of Q1 FY2026 despite price and cost volatility caused by the Iran conflict.

·  Market share gains in the UK and Australia are expected to continue due to competitors struggling/withdrawing, and new client wins in the US are expected to benefit the balance of the year.

·   The Board remains conscious of macroeconomic factors outside of its control and therefore we currently expect to deliver at least £115m EBITDA in FY2027. This guidance reflects top line growth from market share gains, expected temporary margin dilution due to higher input prices from the Iran conflict, and lower starting volumes delaying the full benefit of certain EBITDA improvement initiatives in FY2027.

·    Reducing leverage is a Board priority through improved earnings and via the sale of surplus and non-core assets and applying free cash flow towards the debt. Net proceeds of approximately £70m are expected from property assets identified for sale and will be executed through the balance of FY2027 and FY2028.

·    Whilst the market remains suppressed, the factors behind subdued demand are considered cyclical rather than structural. Whilst we do not control the speed of recovery, management is prioritising the continued delivery of EBITDA improvement initiatives within our control and strengthening our competitive position relative to our peers.

 

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

"We believe Victoria is well placed to benefit as conditions improve. Victoria is adapting and each 5% increase in volume is expected to contribute approximately £20 million to Victoria's operating profit.  Pre-IFRS16 EBITDA margins are currently less than half of the ten-year average which highlights the significant recovery potential of the Group.

 

We have a detailed plan to improve earnings and cash flow and are laser-focused on its execution to restore Victoria's decade-long reputation as an exceptional creator of shareholder value."

 

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, and Alec Pratt, Chief Financial Officer will provide a live presentation relating to the annual results via the Investor Meet Company platform on Friday 24 July at 13:30 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 Alec Pratt, Chief Financial Officer		www.victoriaplc.com/investors-welcome Via Edelman Smithfield PR
Singer Capital Markets (Nominated Adviser and Joint Broker) Shaun Dobson, James Fischer				+44 (0)20 7496 3095
Berenberg (Joint Broker) Ben Wright, Harry Nicholas, Tom Ballard			+44 (0)20 3207 7800
Edelman Smithfield (Investor Relations) Alex Simmons			+44 (0)7970 174 353 or [email protected]

 

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 5,000 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.

 

Forward-looking statements

 

This announcement may contain certain forward-looking statements with respect to Victoria's expectations and plans, strategy, management's objectives, future performance, production, reserves, costs, revenues and other trend information. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. In particular, statements regarding the anticipated consent solicitation, the proposed write-down and restructuring of the 2028 Notes, the terms of the second priority notes and other consideration, and the related equity transaction are forward-looking and are subject to the risk that the consent solicitation, any scheme of arrangement, or the wider transaction may not complete, may not complete within the anticipated timetable, or may complete on terms different from those described in this announcement. Nothing in this announcement should be construed as a profit forecast. Past share performance cannot be relied upon as a guide to future performance.

 

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, subscribe for or otherwise acquire, or to sell, transfer or otherwise dispose of, any securities or the solicitation of any vote, approval or consent in any jurisdiction, whether pursuant to this announcement or otherwise. This announcement does not constitute a consent solicitation statement, and any consent solicitation in respect of the 2028 Notes will only be made pursuant to a separate consent solicitation statement to be distributed to eligible holders of the 2028 Notes.

 

The release, publication or distribution of this announcement in, into or from jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

 

 

 

 

 

 

 

 

 

 

 

Victoria PLC

 

Chairman's Statement

 

The last four years have not been fun. The flooring sector across all our markets was hit by a perfect storm of plummeting consumer demand due to macro-economic events, sky-rocketing input costs, and irrational competitors in certain markets. The impact on Victoria was exacerbated by looming debt maturities.

 

Furthermore, there have been a few false dawns, which led us to underestimate the duration and depth of the sector downturn, and we failed to adapt sufficiently quickly to protect earnings.

 

So, what reasons do we have for optimism about the future?

 

Firstly, in Q2 of the financial year we successfully refinanced the 2026 bonds on favourable terms. This has been followed by obtaining the required support for the refinancing transaction announced earlier this month, which, once implemented, will significantly strengthen Victoria's balance sheet and extend our debt maturities to provide the business with sufficient runway to complete execution of the operational performance improvements that are already well underway.

 

Secondly, we are confident that the factors behind the subdued demand of recent years are not structural. Demand is dependent on a variety of factors, the most significant including housing transactions (not necessarily new build construction which constitutes less than 10% of the flooring market), consumer confidence, discretionary spending power, and mortgage rates. Many are inter-related and recovery of the housing/macro may take some time. Therefore, although market share gains are being achieved in several key geographies, earnings growth and cash generation is primarily about effective integration delivering cost savings and productivity improvement. We are now consciously treating the current environment as the 'new normal' and aggressively adapting the business to drive margins, whilst preserving capacity to rapidly react to the demand recovery and take advantage of operational leverage when cyclical recovery does arrive.

 

Thirdly, we believe Victoria is well placed to benefit as conditions improve. Although it is a miserable experience going through these extremely challenging trading conditions, the good news is that something positive follows in their wake. The adversity separates the wheat from the chaff, the businesses with a genuine reason to exist from those without it, and those who can "handle hard well" from those who cannot. (Indeed, we have seen meaningful capacity go out of the industry in the last 12 months and anticipate further reduction in the near-term). Victoria is adapting and each 5% increase in volume is expected to contribute approximately £20 million to Victoria's operating profit.  Pre-IFRS16 EBITDA margins are currently less than half of the ten year average which highlights the significant recovery potential of the Group.

 

(£ million -  continuing)	FY17	FY18	FY19	FY20	FY21	FY22	FY23	FY24	FY25	FY26
Underlying Revenue	330.4	417.5	566.8	621.5	662.3	1,009.2	1,397.0	1,226.4	1,115.2	1,045.5
Underlying EBITDA - Pre IFRS16 1,2	45.7	64.7	96.3	107.2	112.0	140.4	161.7	128.7	81.0	58.3
% margin	13.8	15.5	17.0	17.2	16.9	13.9	11.6	10.5	7.3	5.6
Underlying EBITDA - Post IFRS 16				118.0	127.4	159.5	185.8	159.0	113.7	92.3
% margin				19.0	19.2	15.8	13.3	13.0	10.2	8.8

 

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 £92.3 million (FY2025: £113.7m) and underlying EBIT of £7.3 million (FY2025: £29.5m). The Financial Review covers non-underlying items in detail, following which the IFRS reported operating loss was £153.3 million (FY2025: loss £225.4m), and additionally covers financial items and tax.

 

 

FY2026 OPERATIONAL REVIEW

Overview

 

Although we expect demand to recover over time - with cyclical consumer markets typically reverting towards the mean - management isn't waiting for the macro environment to turn. They have an unambiguous mandate: cut costs deeper, accelerate productivity gains, grow sales harder, and do all faster than originally planned. The goal is simple - win, no matter the conditions.

 

To ensure the goal is reached we have made a number of changes in recent months in key management positions with the appointment of experienced industry operators with a bias for action and a willingness to accept extreme ownership of their results - taking full accountability for the outcomes of everything in their world irrespective of what comes at them.

 

After four years of severe macroeconomic pressure, characterised by elevated input costs and materially weaker demand, our view is that trading conditions have broadly stabilised. However, the Board and management remain focused on the factors within our control.

 

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 financial performance.

 

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

 

	FY26	FY25	Growth
Volumes (sqm)	108.5 million	123.0 million	-11.8%
Underlying Revenue	£551.3 million	£581.2 million	-5.1%
Underlying EBITDA	£50.3 million	£64.3 million	-21.7%
Underlying EBITDA margin	9.1%	11.1%	-194bps
Underlying EBIT	£5.0 million	£18.9 million	-73.7%
Underlying EBIT margin	0.9%	3.3%	-235bps

 

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

 

The UK is the largest market for our soft flooring products (primarily carpet and underlay) and the business there has seen solid market share gains during FY2026. Our UK carpets operation is fully integrated, with two factories (one focused on wool, the other on synthetic carpet) manufacturing for all our brands and the finest logistics operation in the sector ensuring smooth delivery of product to our customers. In a flat market we have leveraged our leading capability and strong inventory position to secure additional volume and customers, and this has continued into FY2027 as major competitors have continued to struggle. The full integration of our UK underlay activities continues to progress and is expected to deliver operating efficiencies in due course. As we recently announced, Steve Byrne, has rejoined the Group as Chief Executive UK Flooring, leading both UK Carpets and Underlay divisions which will further improve coordination between them.

 

The improvements in the UK business have, however, been temporarily masked by the impact of the essential reorganisation of our European rugs business. The performance of our rugs business is outlined below.

 

Rugs business - Balta reorganisation weighed on FY2026, project completion now expected in Q3 FY2027

 

	FY26	FY25	Growth
Volumes (sqm)	40.7 million	50.4 million	-19.3%
Underlying Revenue	£180.8 million	£205.9 million	-12.2%
Underlying EBITDA	£0.9 million	£10.4 million	-91.6%
Underlying EBITDA margin	0.5%	5.1%	-457bps
Underlying EBIT	(£10.1) million	(£1.9) million	441.2%
Underlying EBIT margin	-5.6%	-0.9%	-468bps

 

During FY2026 management began the major project of relocating Balta's rug production from Belgium to Turkey, where the company has two modern, certified, and low-cost factories. It is a very substantial undertaking with 25 weaving looms being physically relocated, and around 500 employees are being made redundant in Belgium, to be replaced by fewer than 300 workers in Turkey. However, the upside is expected to be very material, with lower production costs projected to improve margins and increase the international competitiveness of Balta's rugs.

 

Whilst we have of course minimised the disruption of the move, inevitably it has had a transient impact on both output and productivity, and the effect can be seen in the overall division's results. Nevertheless, at the time of writing execution is well-advanced, with completion expected in Q3 of this financial year and consequently the financial benefits to materially benefit FY2028. This transition has been a significant investment for the Group of approximately €50m in total but will position the division well for the future. The first of three property sales to fund the transition completed in July 2026 for gross proceeds of €34.4m, and the two remaining properties are currently being marketed.

 

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

 

	FY26	FY25	Growth
Volumes (sqm)	30.6 million	32.6 million	-6.1%
Underlying Revenue	£258.5 million	£280.2 million	-7.8%
Underlying EBITDA	£25.8 million	£34.9 million	-26.1%
Underlying EBITDA margin	10.0%	12.5%	-248bps
Underlying EBIT	(£1.9) million	£7.7 million	-125.4%
Underlying EBIT margin	-0.8%	2.7%	-349bps

 

In line with the wider sector, the ceramics division had another challenging year, with revenue and margins under pressure due to weak market conditions. In addition, the high operational leverage inherent in ceramics production - where kilns must run continuously regardless of volume - meant that lower volumes had a disproportionate impact on earnings.

 

In comparing the last two years' results, remember that FY2026 did not benefit from the prior year's favourable £10.0 million gas hedging benefit, which masked significant operational improvements, particularly in our Italian operations. During the year, we exited low-margin and unprofitable sales, which contributed to lower volumes, and delivered headcount savings. One site was also exited in March 2026, which will generate cost savings throughout FY2027. Aged stock impairments in an element of our Italian business also reduced profitability in H2 by £2.1m, alongside poor performance in our Italian DIY focussed operations in H2.

 

 

In Spain the new, more efficient, V4 production line became operational at the end of Q3 FY2026 and formally entered service towards the end of Q4 FY2026. Due to the subdued trading environment management is accelerating saturation of the new line by reallocating production from our oldest, least-efficient line, which will eventually be mothballed. The efficiency of this line is expected to materially impact earnings once operating at full capacity.

 

 

Australia - Resilient performance and positive outlook

 

	FY26	FY25	Growth
Volumes (sqm)	23.2 million	22.7 million	2.0%
Underlying Revenue	£104.3 million	£103.7 million	0.6%
Underlying EBITDA	£15.6 million	£14.0 million	11.5%
Underlying EBITDA margin	14.9%	13.5%	+146bps
Underlying EBIT	£10.0 million	£8.6 million	16.8%
Underlying EBIT margin	9.6%	8.3%	+133bps

 

Revenue and earnings in Australia continued to grow and market share gains and tight cost discipline delivered an 11.5% improvement in EBITDA in FY2026 and strong margin of 14.9%.

 

Our underlay business launched a new value-brand, Wonderlay, in the year and we are pleased with its performance. The new brand is helping grow market share strongly and this has continued into FY2027.

 

The Australian management team have been with us for a long time and have deep operational know-how. Their experience and ambition has been supplemented during the year with a single board overseeing the entire division, skills, a new holding structure, and aligned incentives which were put in place towards the end of FY2026 to enable closer collaboration between the three operational business units.

 

Transitioning to a consistent ERP system over the next year will provide the base for further cost efficiencies and operational integration, which is now being actively pursued.

 

North America - Resilient positioning in a challenging market

 

	FY26	FY25	Growth
Volumes (sqm)	6.4 million	6.7 million	-3.5%
Underlying Revenue	£131.4 million	£150.0 million	-12.4%
Underlying EBITDA	£3.3 million	£7.5 million	-55.7%
Underlying EBITDA margin	2.5%	5.0%	-248bps
Underlying EBIT	(£2.6) million	£2.1 million	-225.5%
Underlying EBIT margin	-2.0%	1.4%	-342bps

 

Tough trading conditions through FY2025 continued throughout FY2026. Elevated mortgage rates, holding in the region of 6%, kept U.S. housing turnover at historically depressed levels and led to sustained and intense industry-wide promotional activity as flooring suppliers strived to generate demand. As a result, divisional revenue and profitability fell year-on-year.

 

On tariffs more broadly, the regime we flagged last year was in force for most of the period. Management diversified the sourcing base, secured vendor concessions, and took selective pricing action to recover residual cost but nevertheless tariffs weighed on earnings.

 

Against this backdrop, management progressed a fundamental transformation of the CALI business model rather than relying on incremental cost control. During the year the division completed its transition from a business-to-consumer to a business-to-business model, regionalised its sales force, consolidated its distribution footprint, and exited high-cost, low-margin activities.

 

The next phase of self-help, launched at the start of FY2027, targets unit economics directly, through a simplified all-in pricing model that embeds freight recovery into product pricing, supported by minimum order quantities and profit-based sales incentives. The impact to date is encouraging and will benefit the majority of FY2027.

 

Our IWT business continues to roll out its geographic expansion into Tennessee and Texas from its historical core market in Florida.

 

Management remains vigilant for impacts of continued tariff and macroeconomic disruption but believes the combination of the completed transformation alongside the recent initiatives will be the more material driver of the division's recovery in the year ahead.

 

CASH FLOW & LIQUIDITY

 

Cash flow for the year reflected ongoing investment in capex and exceptional costs to execute cost savings. Free Cash Flow of £(72.0) million after movements in working capital, tax, interest payments, capex, and all exceptional costs.

 

	2016	2017	2018	2019	2020		2021		2022		2023		2024		2025		2026
IFRS Reported EBITDA	30.4	43.1	53.5	72.5	60.3		120.3		134.1		85.0		69.0		(98.4)		(36.8)
Adj EBITDA	32.3	45.7	64.7	96.3	118.0		127.4		159.5		185.8		159.0		113.7		92.3
Adj EBITDA (pre IFRS-16)	32.3	45.7	64.7	96.3	107.2		112.0		140.4		161.7		128.7		81.0		58.3
FCF1	15.3	22.5	12.5	8.9	32.2		30.2		20.1		48.2		12.9		(51.6)		(72.0)
FCF post pref2	15.3	22.5	12.5	8.9	32.2		27.6		10.6		(67.0)		(4.6)		(79.4)		(98.4)

 

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.

 

Despite the challenging conditions we have continued to invest in our factories to gain competitiveness and visitors are invariably impressed. Capex investment is expected to be broadly £55 million in FY2027 - similar to the FY2026 spend - reflecting the Group's ongoing focus on disciplined capital allocation and cash generation. To provide shareholders with greater transparency, the table below presents a five-year breakdown of capital expenditure, distinguishing between growth and maintenance spending. This historical context helps clarify the Group's underlying maintenance capex requirements:

 

 

 

Capex	FY22	FY23	FY24	FY25	FY26
	£m	£m**	£m**	£m	£m
Maintenance	40.9	45.5	42.3	46.9	40.1
Expansionary / Reorganisational*	12.4	54.1	19.2	30.3	16.0
Total	53.3	99.6	61.5	77.2	56.1
Maintenance Capex as a percentage of revenue	4.0%	3.1%	3.4%	4.2%	3.8%

 

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

**The step-up in FY2023 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.

 

LEVERAGE

The Board recognises that the Group's leverage is elevated and reducing leverage is a clear priority for the Board.

 

The recently announced refinancing, once implemented, is expected to materially improve the Group's balance sheet and reported leverage ratio including the preferred equity. Further progress will be made by both growing the denominator through improved earnings and decreasing the numerator via the sale of surplus and non-core assets and applying free cash flow towards the debt. In particular, certain property assets have been identified for sale and will be executed through the balance of FY2027 and FY2028, with cumulative proceeds expected to be at least £70m.

 

DIVIDENDS

 

The Company does not intend to pay dividends in the medium term.

 

CONCLUSION

 

This Review is shorter than in previous years. We have a solid plan to improve earnings and cash flow and are laser-focussed on its execution in order to restore Victoria's decade-long reputation as an exceptional creator of shareholder value. It is time to deliver on Benjamin Franklin's line, "Well done is better than well said."

 

 

Geoffrey Wilding
Executive Chairman

                                   

24 July 2026

Financial Review

 

HIGHLIGHTS

 

FY2026 saw the continuation of a challenging trading environment as end markets continued to adapt to higher interest rates across our key geographies. Management's immediate focus remains on delivering EBITDA improvement initiatives within our control, and to continue to strengthen our competitive position relative to our peers.

 

Volumes and revenue declined across the Group with Rugs volumes notably weaker as the business transitions its manufacturing activities from Belgium to Turkey. Overall volumes for the year were 8.8% down on FY2025, with H2 unexpectedly weaker than H1 due to poor weather and challenging macro conditions including the Iran conflict.

 

Underlying Revenue for the Group was therefore 6% down year-on-year at £1,045.5m and Underlying EBITDA declined to £92.3m as the impact of operational gearing from lower volumes more than offset EBITDA improvement initiatives executed through the year.

 

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 Executive Chairman's 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 £7.3 million) to the IFRS statutory performance of £153.3 million operating loss and, ultimately, £326.3 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.

 

	2026			2025
	Underlying performance	Non- underlying items	Reported numbers	Underlying performance	Non- underlying items	Reported numbers
	£m	£m	£m	£m	£m	£m
Revenue	1,045.5	3.3	1,048.8	1,115.2	2.9	1,118.1
Gross profit / (loss)	334.6	(19.5)	315.1	361.0	(24.9)	336.1
Margin %	32.0%			32.4%
Amortisation of acquired intangibles	-	(21.6)	(21.6)	-	(31.5)	(31.5)
Other operating expenses	(327.3)	(119.5)	(446.8)	(331.5)	(198.5)	(530.0)
Operating profit / (loss)	7.3	(160.6)	(153.3)	29.5	(254.9)	(225.4)
Margin %	0.7%			2.6%
Add back depreciation & amortisation	84.9			84.3
Underlying EBITDA	92.3			113.7
Margin %	8.8%			10.2%
Preferred equity items	-	(50.5)	(50.5)	-	(35.2)	(35.2)
Other finance costs	(69.3)	(62.3)	(131.6)	(41.0)	(1.4)	(42.4)
(Loss) / profit before tax	(62.0)	(273.4)	(335.4)	(11.5)	(291.5)	(303.0)
(Loss) / profit after tax	(59.7)	(266.6)	(326.3)	(12.1)	(263.7)	(275.8)
EPS basic	(51.98p)		(284.12p)	(10.62p)		(242.03p)
EPS diluted	(13.59p)		(284.12p)	(5.18p)		(242.03p)

 

The Group incurred £160.6m non-underlying operating losses incurred consisting of £133.3 million of exceptional operating costs during the year, primarily non-cash cost resulting from the impairment of intangible and tangible assets. In addition, the Group incurred £21.6 million of amortisation of acquired intangibles (primarily customer relationships and brand names) and other non-underlying items of £5.7 million (primarily the accounting impact of non-cash share incentive plan charges and hyperinflation accounting). Further details are provided later in this Financial Review.

 

 

FINANCING

 

Debt financing and facilities

 

The Group has historically financed its operations through a combination of listed senior secured notes and a super senior revolving credit facility.

 

During Q2 FY2026. the Group successfully completed a refinancing transaction addressing its near term maturities. The debt prior to the refinancing consisted of circa €489 million of notes with a fixed coupon of 3.625% and maturity of August 2026, and €250 million of notes with a fixed coupon of 3.75% and maturity of March 2028 along with a £150 million Revolving Credit Facility with a maturity date of February 2026.

 

Circa €480 million of the 2026 notes were exchanged into a new tranche of senior secured notes due 2029 (the "New 1PNs") The residual balance of the 2026 notes had the maturity extended to 31 August 2031 and the coupon amended to 1%.

 

Of the €250 million 2028 notes, €83 million were converted into New 1PNs. The remaining €167 million 2028 Notes remain outstanding as at the balance sheet date.

 

The premium and fees associated with the New 1PNs totalled €47 million.

 

In total, €609 million of New 1PNs were issued (from the 2026 and 2028 tranches combined). The New

1PNs carry a 9.875% coupon per annum. For the first two interest periods, the Group may elect to pay

either the full coupon in cash or a combination of 1% in cash with the balance capitalised as PIK (the

"PIK Toggle"). Thereafter, the coupon will be fully settled in cash. The first full cash coupon will be due in February 2027.

 

 

The Existing RCF (£150 million, maturing February 2026) was repaid in full. The Group entered into a new

super-senior facility agreement comprising:

 

·    An £75 million term loan, maturing 26 February 2030, bearing interest at EURIBOR + 6.0%, fully drawn at closing.

·    A £55 million revolving facility, also maturing 26 February 2030, bearing interest at SONIA (GBP) / EURIBOR (EUR) + 6.0%, with a 1% upfront fee on drawn amounts and a 1% unused commitment fee if undrawn after three months.

 

The Transaction extended the Group's maturity profile, refinanced the 2026 Notes in advance of their near-term maturity, strengthened liquidity through new super senior facilities, and provided flexibility through the PIK toggle feature of the New 1PNs.

 

Other debt facilities in the Group represent 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 £108.2 million, as shown below in the Net Debt section of this Financial Review.

 

July 2026 refinancing transactions

 

The proposed refinancing transactions, announced in July 2026, are anticipated to address the 2028 senior secured notes maturity (and springing covenant, which brings forward the maturity on the super senior credit facility and first priority senior secured notes to December 2027 if the 2028 notes are outstanding at that time).  Further details of the anticipated transactions have been disclosed in the Company's announcement on 8 July 2026. The transaction also addresses the potential dilution impact of KED's right to convert the preferred equity into ordinary equity as of November 2026. Completion is reliant on the majority of ordinary equity holders voting in favour of certain resolutions along with 2028 senior secured noteholders consenting to the proposed transaction. On 23 July 2026, the Company announced holders representing over 90% of its bonds maturing in March 2028 have acceded to the Transaction Support Agreement, meeting the necessary threshold required to implement it by way of a consent solicitation.

 

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).  The balance sheet carrying value of the liability at year end is £393.5 million, with the host instrument valued at £393.1 million (effective interest rate method based on the terminal value assessment) and the fair value of the equity warrants of £0.4 million. The redemption value at the year end was £368.9 million. During the period, there was a adjustment in valuation approach required, resulting in a balance sheet liability value more closely linked to the redemption value and also a prior period adjustment, for which further details are provided in Note 7. Through the refinancing transactions described above, there will be further changes to the accounting treatment in FY2027 and recognition of new financial liabilities in respect of the instruments.

 

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 since the financial policy around these items has remained unchanged, for consistency.

 

The Group incurred £133.3 million of exceptional costs during the year (FY2025: £208.1 million).  Exceptional items are one-offs that will not continue or repeat in the future, for example reorganisation costs, that will not arise again on the same business and would disappear if the Group adopted a purely organic strategy.

 

	2026	2025
Exceptional items	£'m	£'m
Acquisition and disposal related costs	(0.4)	(0.9)
Reorganisation, refinancing and other costs	(20.8)	(15.8)
Gain on disposal of assets and investments	3.7	1.9
Loss on disposal of subsidiaries	-	(6.9)
Exceptional impairment charge Exceptional provision charges	(85.6) (30.2)	(186.4) -
Total exceptional items	(133.3)	(208.1)

 

The 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 and prospective acquisitions.

 

·    Reorganisation, refinancing and other costs - these consist of costs in relation to reorganisation projects across the business.

 

·    Gain on disposal of assets and investments - this relates to disposal of non-core assets.

 

·    Exceptional impairment charge - An exceptional impairment charge of £6.9m was applied for specific assets no longer in use within 'UK & Europe - Ceramic Tiles (Italy)' CGU, split between £2.4m of fixed assets and £4.5m of other non-current assets. Furthermore, the estimated recoverable amount of the CGU was below the carrying value of assets due to the weak demand environment. Given the goodwill has been fully impaired, a further impairment charge of £25.0m was applied against intangible fixed assets (£3.5m) and tangible fixed assets (£21.5m).

 

Within 'UK & Europe - Ceramic Tiles (Spain)' CGU, the estimated recoverable amount of the CGU was below the carrying value of assets due to the weak demand environment. Given the goodwill has been fully impaired, a further impairment charge of £32.7m was applied against intangible fixed assets. The impairment recognised has been limited by reference to the CGU's fair value less costs to sell.

 

Within 'UK & Europe - Artificial Grass' CGU, the estimated recoverable amount of the CGU was below the carrying value of assets due to the weak demand environment, as a result the goodwill has been impaired by £18.0m.

 

A £3.0m impairment was recognised on the goodwill relating to Ezi Floor (in the 'UK & Europe - Soft flooring (Carpets and Underlay) CGU' CGU), following its integration within the broader UK underlay business.

 

In FY2025, exceptional impairment charge occurred in the 'UK & Europe - Soft flooring (Rugs)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets 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 in FY2025 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 £80.0m. As no goodwill attaches to this CGU, the impairment charge was applied against intangible fixed assets (£50.3m) and tangible fixed assets (£29.7m). Also in FY2025, exceptional impairment charge occurred in the 'UK & Europe - Ceramic Tiles (Italy)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets due to the weak demand environment and the goodwill has been fully impaired.

 

·    Exceptional provision charge - Exceptional provision charge for moving Rugs operations from Belgium to Turkey.

 

·    The other prior year items are described in more detail in Note 7.

 

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.

 

	2026	2025
Non-underlying operating items	£'m	£'m
Acquisition-related performance plans	6.3	(0.4)
Non-cash share incentive plan charge	(1.9)	(3.5)
Amortisation of acquired intangibles (excluding hyperinflation)	(21.6)	(31.5)
Depreciation of fair value uplift to acquisition property, plant and machinery	(3.0)	(5.7)
Hyperinflation depreciation adjustment	(6.9)	(5.8)
Hyperinflation monetary gain	6.0	12.8
Other hyperinflation adjustments (excluding depreciation and monetary gain)	(6.2)	(12.7)
	(27.3)	(46.8)

 

Non-underlying items in the year:

 

·    Acquisition-related performance plans - 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 and any settlement differences have been taken to the Income Statement.

 

·    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

 

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:

 

	2026	2025
Hyperinflation adjustment summary	£'m	£'m
Revenue	3.3	2.9
Cost of sales	(16.0)	(19.4)
Operating costs	5.4	10.8
EBIT	(7.2)	(5.6)
EBITDA	(0.3)	0.1
Finance costs	(1.2)	0.4
Profit/(loss) before tax	(8.4)	(5.2)
Deferred tax	0.9	(1.3)
Profit/(loss) for the period from continuing operations	(7.5)	(6.5)
Other comprehensive income - CTA (Cumulative continuing operations)	39.2	29.1

 

In FY2026 the Turkish Lira depreciated less 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. The movement in the publicly available official price index (TurkStat) for the was 31% (FY2025: 38%).

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.

 

	2026	2025
		(restated)
Non-underlying financial costs	£'m	£'m
Finance items related to preferred equity	(50.5)	(35.2)
Acquisition related items	0.1	1.5
Gain on bond repurchase	5.3	-
Fair value adjustment to notes redemption option / amortisation inception derivative	0.4	1.2
Mark to market adjustments and gains on foreign exchange forward contracts	4.6	0.5
Translation difference on foreign currency loans	(14.3)	(5.0)
Other financial expenses (hyperinflation)	(1.2)	0.4
One-off refinancing costs	(57.2)	-
Other non-underlying	(62.4)	(2.9)
	(112.8)	(36.6)

 

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.

 

	2026	2025
		(restated)
Finance items related to preferred equity	£m	£m
Amortised cost of host instrument	(53.2)	(44.6)
Fair value movement on associated equity warrants	2.7	9.4
Fair value movement on embedded redemption option	-	-
Total	(50.5)	(35.2)

 

·    Gain on bond repurchase - The Company generated a gain on bonds repurchased as the purchase price was lower than the carrying amount.

 

·    Fair value adjustment to notes redemption option - On the new notes the embedded early repayment option was valued at £nil at period end. Attached to the 2026 senior notes was an early repayment option which, on inception, was recognised as an embedded derivative asset at a fair value of £4.3m. This asset was 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 £0.4m was recognised in the period up to extinguishment (FY2025: £1.2m). The embedded derivatives were valued at £nil fair value 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 ratesand commodity prices 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 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.

 

·    One-off refinancing costs - as part of the debt refinancing, the Group incurred cash refinancing costs (£19.1m), loss on disposal of the old bonds (£41.4m) and FV adjustment gain on the 2031 bonds of £3.3m.

 

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	2026	2025
		(restated)
	£'m	£'m
Underlying operating profit	7.3	29.5
Reported operating loss	(153.3)	(225.4)
Underlying (loss) / profit before tax	(62.0)	(11.5)
Reported loss before tax	(335.4)	(303.0)

 

Reported operating loss (earnings before interest and taxation) of £153.3 million (FY2025: £225.4 million). After removing the exceptional and non-underlying items described above, underlying operating profit was £7.3 million (FY2025: £29.5 million).

 

Reported loss before tax increased to £335.4 million (FY2025: £303.0 million (restated)).  After removing the exceptional and non-underlying items described above, underlying loss before tax was £62.0 million (FY2025: Loss of £11.5 million).

 

TAXATION

 

The reported tax credit on continuing operations in the year of £9.1 million (FY2025: £27.2 million) was distorted by the impact of the exceptional and non-underlying costs, which contributed to a tax credit of £6.8 million. On an underlying basis and removing the effect of prior year items, the tax credit for the year was £3.9 million (FY2025: £3.0 million) against an adjusted loss before tax of £62.1 million (FY2025: Loss of £11.5 million). This results in an underlying effective current year tax rate of 6.3% (FY2025: 26.2%).

 

EARNINGS PER SHARE

 

The Group delivered a basic loss per share of 284.12p (FY2025: 242.03p (restated)) 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 (13.59)p (FY2025: (5.18)p). 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	2026	2025
		(restated)
Reported basic loss per share	(284.12p)	(242.03p)
Diluted adjusted (loss) / earnings per share	(13.59p)	5.18p

 

OPERATING CASH FLOW

 

Cash flow from operating activities before interest, tax and exceptional items was £66.4 million which represents a conversion of 114% of underlying EBITDA (pre-IFRS 16).

 

Operating and free cash flow	2026	2025
	£'m	£'m
Underlying operating profit	7.3	29.5
Add back: underlying depreciation & amortisation	85.0	84.2
Underlying EBITDA	92.3	113.7
Payments under right-of-use lease obligations (including interest)	(40.9)	(39.6)
Non-cash items	(2.6)	(3.7)
Movement in working capital	17.6	(25.3)
Operating cash flow before interest, tax and capex	66.4	45.1
% conversion against underlying operating profit	910%	153%
% conversion against underlying EBITDA (pre-IFRS 16)	114%	56%
Interest paid	(32.9)	(32.7)
Corporation tax paid	(8.1)	(1.7)
Capital expenditure - replacement / maintenance	(40.1)	(46.9)
Free cash flow before exceptional items	(14.7)	(36.2)

 

Pre-exceptional free cash flow of the Group - after interest, tax and net replacement capex - was an outflow of £14.7 million having been impacted by lower earnings and an investment in working capital.

 

The underlying movement in working capital was an inflow of £17.6 million. This inflow was all realised in H2 and driven by a reduction in inventory and a more disciplined approach on debtors and payables.

 

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 28 March 2026, the Group's net debt position (excluding preferred equity) was £1,063.2 million (29 March 2025: £897.9 million), and key drivers of this are laid out below.

 

Our £16.0 million growth capital expenditure this year reflects a deliberate strategy to invest through the cycle. There was a large contingent payout in the year covering the majority of the £12.5 million outlay, which was the last material earn-out liability retained by the Group. Exceptional cash costs totalled £41.2 million which includes £22.3 million refinancing costs (inclusive of £3.2 million prepaid finance costs) and net of proceeds of property sale shares of £3.2 million and fixed asset disposal proceeds of £6.6 million.

 

There was a further increase is net debt which was predominately driven by loss on refinanced bonds of £41.4 million, PIK interest on new 1PNs of £26.4 million, retranslation FX on debt of £28 million. This increase was partially offset by ROU liability reduction of £4.0 million and bond repurchase of £6.9 million.

 

The Group's year end net leverage ratio (excluding preferred equity) was 11.5x (FY2025: 7.9x). The leverage increase is primarily driven by the reduced earnings in the year.

 

Free cash flow to movement in net debt	2026	2025
	£'m	£'m
Free cash flow before exceptional items (see above)	(14.7)	(36.2)
Exceptional reorganisation cash cost	(28.6)	(26.1)
Refinancing costs paid (including prepaid finance costs)	(22.3)	-
Bond repurchase - cash paid	(1.6)	-
Capital expenditure - expansionary / reorganisation	(16.0)	(30.3)
Discontinued operations		17.9
Proceeds from fixed asset and subsidiary disposals	9.6	41.0
M&A expenditure including deferred / contingent consideration and related fees	(12.5)	(13.3)
Buy back of ordinary shares	-	(1.1)
Non-cash right-of-use liability movements	4.0	(26.1)
Translation differences on foreign currency cash and loans and other non-cash movements within debt	(83.2)	16.3
Total movement in net debt	(165.3)	(57.9)
Opening net debt	(897.9)	(840.0)
Net debt before preferred equity	(1,063.2)	(897.9)

 

 

	Net debt	2026	2025
			(restate)
		£'m	£'m
	Net cash and cash equivalents	67.6	56.6
	Super senior RCF1	(128.5)	(44.2)
Senior secured notes1		(704.9)	(624.0)
	Bank loans and other facilities	(50.7)	(50.7)
	Obligations under right-of-use leases	(189.2)	(189.8)
	Factoring and receivables financing facilities	(57.5)	(45.8)
	Net debt before preferred equity	(1,063.2)	(897.9)
	Net leverage ratio (net debt / EBITDA)	11.5x	7.9x
	Preferred equity, associated warrants and embedded derivatives	(393.5)	(343.0)
	Statutory net debt (net of prepaid finance costs)	(1,456.7)	(1,240.9)

 

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.

 

IFRS 18 'Presentation and Disclosure in Financial Statements' will replace IAS 1 'Presentation of Financial Statements', effective for annual periods beginning after 1 January 2027. The Group is currently assessing the impact on its Consolidated Financial Statements, particularly with respect to the structure of the Consolidated Income Statement, the additional management-defined performance measures and the aggregation/disaggregation of the information within the notes.

 

From a preliminary high-level assessment, adoption of IFRS 18 is unlikely to have a material impact to net profit. However, the grouping of income and expense items into new categories could potentially result in minor changes to operating profit within the Consolidated Income Statement.

 

No forthcoming new international accounting standards are expected to have a material impact on the financial statements of the Group.

 

GOING CONCERN

 

The financial statements have been prepared on a going concern basis. In determining the appropriate basis of preparation of the financial statements the Directors are required to consider whether the Group and Company can continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. The Directors have assessed the period to the end of July 2027.

 

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Review. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Review.

 

As at 28 March 2026, the Group had circa £67.6m of cash (net of overdraft) on balance sheet, and circa £1,131m of financial debt, comprising:

-     £129m of super senior credit facility;

-     £705m of senior secured notes; and

-     £297m other local credit facilities and right-of-use lease liabilities (which were not fully drawn as at the year-end).

There are no maintenance covenants pertaining to the Group's senior debt and no material covenants on subsidiary-level borrowings around the Group.

 

The proposed refinancing transaction is anticipated to address the 2028 senior secured notes maturity (and springing covenant, which brings forward the maturity on the super senior credit facility and first priority senior secured notes to December 2027 if the 2028 notes are outstanding at that time).  Further details of the anticipated transaction can be found in the Company's announcement on 8 July 2026.  The transaction also addresses the potential dilution impact of KED's right to convert the preferred equity into ordinary equity as of November 2026.  Completion is reliant on the majority of ordinary equity holders voting in favour of certain resolutions and 2028 senior secured noteholders consenting to the proposed transaction. On 23 July 2026, the Company announced holders representing over 90% of its bonds maturing in March 2028 have acceded to the Transaction Support Agreement, meeting the necessary threshold required to implement it by way of a consent solicitation.

 

The forecast cash flows for the going concern period are dependent on asset sale proceeds to fund reorganisation projects, principally the exceptional cash costs in Belgium, which are described within the Chairman's Statement.  These asset sale processes, totalling circa £63m are diverse and cover a number of assets across the UK, Spain, Italy and Belgium.  These are not yet contractually committed and therefore the timing of completion and precise disposal proceeds are not certain.

 

The Group operates a highly diversified set of financing arrangements across different geographies, which includes approximately 50 local lenders.  These facilities include receivables financing, revolving credit facilities, capex or real estate loans and other cash borrowing facilities.  Given the breadth of these arrangements, the Group is continually renewing or refinancing individual facilities as they fall due.  Of the currently borrowed amounts, circa £18m are due to mature during the coming 12 months, and circa £64m are uncommitted.  Therefore, although the Group expects to maintain its current borrowing capacity, a significant amount is not contractually committed and therefore not certain to be maintained.

 

As a result of the financing transactions not having completed at the time of the approval of the annual report and accounts, together with the reliance on asset sale proceeds and the renewal or replacement of uncommitted local credit facilities, which are not entirely in the Directors' control, 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 refinancing transactions represent an appropriate and achievable plan to address the Group's funding requirements, and is confident on securing proceeds from asset disposals in a timely manner and that uncommitted local borrowing facilities will be renewed or replaced in the ordinary course of business, although the successful completion and timing of these transactions cannot be guaranteed.

 

Going concern assessment

The Group's cash position, net of overdrafts, as at 28 March 2026 was £67.6m (FY2025: £56.6m), and it maintains additional liquidity through local financing lines.  The Group expects to generate positive operating cash flows in the forecast period to 31 July 2027.

 

In assessing the Group as a going concern, a cash flow forecast through to 31 July 2027 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 where accounting standards permit this.  The capital structure factored into the going concern assessment is based on the successful completion of the anticipated refinancing transactions as the Directors are confident that the transactions will complete successfully.

 

To take into account the current uncertainty in consumer demand, a plausible downside scenario was modelled, sensitising revenues by circa £36m, resulting in a reduction in EBITDA of circa £12m across the forecast period, versus the base forecast to ensure that even in a downside scenario, sufficient liquidity was maintained through the forecast period.  As a result of lower volumes, an inflow of working capital would be expected, largely offsetting the cash impact in the short term. This downside scenario did not result in a change in our view that the business remains a going concern.

 

In both cases, sufficient liquidity is forecast to be maintained through the period of assessment.

 

A reverse stress-test scenario was modelled, purely for the purposes of sensitising earnings such that liquidity is fully exhausted within the period of assessment.  With all other assumptions held equal, the required sensitivity to arrive at the point where liquidity is exhausted would be a greater than £300m shortfall in revenue versus the base case over the period from 1 July 2026 to 31 July 2027, resulting in a reduction in EBITDA of circa £112m versus the base case and a reduction in operating cash flows by the same amount.  The scenario maintains the capital structure assumptions as the base and downside cases, isolating the quantum of operating cash flow reduction in order to break liquidity.  Further mitigating actions as set out below, 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 given the historical performance of the business, even during periods of significant market weakness, has not fallen to a point where losses are recognised at EBITDA level over a prolonged period.

 

Asset sale proceeds, predominantly relating to real estate assets, are anticipated to be circa £63m through the period.  These assets and sale processes are diverse and covers a number of assets across the UK, Spain, Italy and Belgium.

 

The Group operates a highly diversified set of financing arrangements across different geographies, which includes approximately 50 lenders.  These facilities include receivables financing, revolving credit facilities, capex or real estate loans and other cash borrowing facilities.  Given the breadth of these arrangements, the Group is continually renewing or refinancing individual facilities as they fall due.  The value of borrowed amounts due to mature during the assessment period is circa £18m, and circa £64m of the current borrowings relates to uncommitted credit lines.

 

There are additional mitigations available to the Group that have not been included in any of the scenario projections. Additional mitigations that are within the Group's control include:

·    Further working capital optimisation

·    Reduction of discretionary capex

·    Additional cost reductions, via the use of temporary unemployment initiatives available

·    Additional, or accelerated, asset disposals

·    Increasing the level of borrowing capacity at either super senior or local facility level

 

Having considered the work undertaken as described above, while there is uncertainty relating to the refinancing transaction and asset disposals, which are not wholly in the Company's control, the Directors are of the view that the Group is well placed to manage its business and liquidity 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 2026

 

Consolidated Income Statement

For the 52 weeks ended 28 March 2026

 

			52 weeks ended 28 March 2026			52 weeks ended 29 March 2025
						(restated)*
			Underlying performance	Non- underlying items	Reported numbers	Underlying performance	Non- underlying items	Reported numbers
		Notes	£m	£m	£m	£m	£m	£m
Revenue		1	1,045.5	3.3	1,048.8	1,115.2	2.9	1,118.1
Cost of sales			(710.9)	(22.8)	(733.7)	(754.2)	(27.8)	(782.0)
Gross profit			334.6	(19.5)	315.1	361.0	(24.9)	336.1
Sales and Marketing			(107.3)	(0.2)	(107.5)	(109.6)	(1.4)	(111.0)
Distribution			(105.0)	(0.3)	(105.3)	(101.3)	(0.4)	(101.7)
Administrative expenses			(121.2)	(141.5)	(262.7)	(126.8)	(228.3)	(355.1)
Other operating income			6.2	0.9	7.1	6.2	0.1	6.3
Operating profit / (loss)		1	7.3	(160.6)	(153.3)	29.5	(254.9)	(225.4)
Comprising:
Operating profit before non-underlying and exceptional items			7.3	-	7.3	29.5	-	29.5
Amortisation of acquired intangibles		2	-	(21.6)	(21.6)	-	(31.5)	(31.5)
Other non-underlying items		2	-	(5.7)	(5.7)	-	(15.3)	(15.3)
Exceptional impairment charge		2	-	(85.6)	(85.6)	-	(186.4)	(186.4)
Other exceptional items		-	-	(47.7)	(47.7)	-	(21.7)	(21.7)
Finance costs		3	(69.3)	(112.8)	(182.1)	(41.0)	(36.6)	(77.6)
Comprising:
Interest on loans and notes			(58.7)	-	(58.7)	(30.7)	-	(30.7)
Amortisation of prepaid finance costs for bank loans			(2.1)	-	(2.1)	(2.2)	-	(2.2)
Unwinding of discount on right-of-use lease liabilities			(8.4)	-	(8.4)	(7.9)	-	(7.9)
Preferred equity items		3	-	(50.5)	(50.5)	-	(35.2)	(35.2)
Other finance items		3	(0.1)	(62.3)	(62.4)	(0.2)	(1.4)	(1.6)
(Loss) / profit before tax			(62.0)	(273.4)	(335.4)	(11.5)	(291.5)	(303.0)
Taxation (charge) / credit			2.3	6.8	9.1	(0.6)	27.8	27.2
(Loss) / profit from continuing operations for the period			(59.7)	(266.6)	(326.3)	(12.1)	(263.8)	(275.8)
Discontinued operations
Loss from discontinued operations for the period			-	-	-	(6.3)	(18.5)	(24.8)
Total (loss) / profit for the period			(59.7)	(266.6)	(326.3)	(18.4)	(282.2)	(300.6)
Loss per share from continuing operations - pence	basic	4			(284.12)			(242.03)
	diluted	4			(284.12)			(242.03)
Loss per share from total operations - pence	basic	4			(284.12)			(263.79)
	diluted	4			(284.12)			(263.79)

 

* See Note 4 for further details regarding the prior year restatement

 

 

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 28 March 2026

 

	52 weeks ended 28 March 2026		52 weeks ended 29 March 2025
			(restated)
	£m		£m
Loss for the period	(326.3)		(300.6)
Other comprehensive income / (expense)
Items that will not be reclassified to profit or loss:
Actuarial gain / (loss) on defined benefit pension scheme	1.2		0.5
Items that will not be reclassified to profit or loss	1.2		0.5
Items that may be reclassified subsequently to profit or loss:
Hyperinflation foreign exchange adjustments	10.1		34.6
Retranslation of overseas subsidiaries	(3.2)		(15.4)
Subsidiary disposal - reclassification of translation reserves	-		(8.6)
Items that may be reclassified subsequently to profit or loss	6.9		10.6
Other comprehensive income / (expense)	8.1		11.1
Total comprehensive expense for the period attributable to the owners of the parent	(318.2)		(289.5)
Total comprehensive expense for the period attributable to the owners of the parent arises from:
Continuing operations	(318.2)		(271.7)
Discontinued operations	-		(17.8)
	(318.2)		(289.5)

 

Consolidated Balance Sheet

As at 28 March 2026

 

		28 March 2026	29 March 2025
			(restated)*
		£m	£m
Non-current assets
Goodwill		70.2	88.9
Intangible assets other than goodwill		57.4	111.5
Property, plant and equipment		316.1	344.4
Right-of-use lease assets		157.5	162.6
Investment property		0.2	0.2
Other investments		-	3.2
Trade and other non-current receivables		2.2	-
Deferred tax assets		11.2	8.9
Total non-current assets		614.8	719.7
Current assets
Inventories		302.3	303.7
Trade and other receivables		217.3	226.9
Current tax assets		0.6	2.1
Cash and cash equivalents		68.4	77.6
		7.5	-
Total current assets		596.1	610.3
Total assets		1,210.9	1,330.0
Current liabilities
Trade and other current payables		(256.5)	(272.7)
Current tax liabilities		(2.5)	(6.2)
Obligations under right-of-use leases - current		(30.8)	(30.0)
Other financial liabilities		(92.4)	(135.4)
Provisions		(29.3)	(7.1)
Total current liabilities		(411.5)	(451.4)
Non-current liabilities
Trade and other non-current payables		(6.9)	(8.1)
Obligations under right-of-use leases - non-current		(158.5)	(159.9)
Other non-current financial liabilities		(849.6)	(650.2)
Preferred equity		(393.1)	(339.9)
Preferred equity - contractually-linked warrants		(0.4)	(3.1)
Deferred tax liabilities		(14.5)	(24.3)
Retirement benefit obligations		(2.6)	(4.0)
Provisions		(20.8)	(19.6)
Total non-current liabilities		(1,446.4)	(1,209.1)
Total liabilities		(1,857.9)	(1,660.5)
Net liabilities		(647.0)	(330.5)
Equity
Share capital		6.3	6.3
Retained earnings		(674.6)	(349.6)
Foreign exchange reserve		(41.6)	(38.4)
Hyperinflation foreign exchange reserve		45.8	35.7
Other reserves		17.1	15.5
Total equity		(647.0)	(330.5)

 

* See Note 4 for further details regarding the prior year restatement

 

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 30 March 2024 on previous basis	6.3	(27.4)	(20.8)	7.5	12.2	(22.2)
Impact of restatement (Note 17)	-	(21.2)	-	-	-	(21.2)
At 30 March 2024 (restated)	6.3	(48.6)	(20.8)	7.5	12.2	(43.4)
Loss for the period to 29 March 2025	-	(300.6)	-	-	-	(300.6)
Other comprehensive expense for the period	-	0.5	-	-	-	0.5
Retranslation of overseas subsidiaries	-	-	(15.4)	34.6	-	19.2
Subsidiary disposal - reclassification of transaction reserves	-	-	(2.2)	(6.4)	-	(8.6)
Total comprehensive loss	-	(300.0)	17.6	28.2	-	(289.4)
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 (restated)	6.3	(349.6)	(38.4)	35.7	15.5	(330.6)
At 29 March 2025 on previous basis	6.3	(292.2)	(38.4)	35.7	15.5	(273.1)
Impact of restatement (Note 7)	-	(57.4)	-	-	-	(57.4)
At 29 March 2025 (restated)	6.3	(349.6)	(38.4)	35.7	15.5	(330.5)
Loss for the period to 28 March 2026	-	(326.2)	-	-	-	(326.2)
Other comprehensive expense for the period	-	1.2	-	-	-	1.2
Retranslation of overseas subsidiaries	-	-	(3.2)	10.1	-	6.9
Total comprehensive loss	-	(325.0)	(3.2)	10.1	-	(318.1)
Share-based payment charge	-	-	-	-	1.6	1.6
Transactions with owners	-	-	-	-	1.6	1.6
At 28 March 2026	6.3	(674.6)	(41.6)	45.8	17.1	(647.0)

 

 

Consolidated Statement of Cash Flows

For the 52 weeks ended 29 March 2025

	52 weeks ended	52 weeks ended
	28 March 2026	29 March 2025
	£m	£m
Cash flows from operating activities
Operating loss	(153.3)	(225.4)
Adjustments for:
Depreciation and amortisation of IT software	94.8	95.7
Amortisation of acquired intangibles	21.7	31.6
Hyperinflation impact	0.3	(0.2)
Acquisition-related performance plan charge	(6.3)	0.4
Acquisition-related performance plan payment	(11.3)	(6.8)
Amortisation of government grants	(1.6)	(1.9)
(Profit) / loss on disposal of investments, property, plant and equipment and acquired intangibles	(4.5)	3.9
Impairment charges	85.6	186.4
Share incentive plan charge	1.9	3.5
Defined benefit pension	(0.2)	(0.5)
Net cash flow from operating activities before movements in working capital, tax and interest payments	27.1	86.7
Change in inventories	5.3	(5.1)
Change in trade and other receivables	16.6	1.6
Change in trade and other payables	(4.3)	(21.8)
Change in provisions	22.4	(10.3)
Cash generated by continuing operations before tax and interest payments	67.1	51.1
Interest paid on loans and notes	(32.9)	(32.7)
Interest relating to right-of-use lease assets	(8.3)	(8.2)
Income taxes paid	(8.1)	(1.7)
Net cash inflow from continuing operating activities	17.8	8.5
Net cash flow from discontinued operations	-	(10.7)
Investing activities
Purchases of property, plant and equipment	(55.2)	(74.9)
Purchases of intangible assets	(1.0)	(2.3)
Repayments of subsidiary loans	-	-
Proceeds on disposal of property, plant and equipment	6.5	7.3
Deferred consideration and earn-out payments	(0.8)	(4.3)
Proceeds on disposal of real estate via sale and leaseback	3.2	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	0.8	1.1
Net cash used in continuing investing activities	(46.5)	(40.7)
Investing activities cash flow from discontinued operations	-	8.7
Financing activities
Proceeds from debt	206.4	89.2
Repayment of debt	(125.1)	(48.5)
Buy back of ordinary shares	-	(1.1)
Payments under right-of-use lease obligations	(32.6)	(31.4)
Bond refinancing	(19.1)	-
Payment of prepaid finance costs	(3.2)	(0.2)
Cash flow from other financing activities	0.9	1.7
Net cash generated / (used) in continuing financing activities	27.3	9.7
Financing activities cash flow from discontinued operations	-	7.2
Net decrease in cash and cash equivalents	(1.4)	(17.3)
Cash and cash equivalents at beginning of period	68.3	87.2
Effect of foreign exchange rate changes	0.7	(1.6)
Cash and cash equivalents at end of period	67.6	68.3
Comprising:
Cash and cash equivalents	68.4	77.6
Bank overdrafts	(0.8)	(9.3)
	67.6	68.3

 

 

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 28 March 2026
	UK & Europe Soft Flooring	UK & Europe Ceramic Tiles	Australia	North America	Unallocated central expenses	Total
	£m	£m	£m	£m	£m	£m
Income statement
Revenue	554.6	258.5	104.3	131.4	-	1,048.8
Underlying operating profit / (loss)	5.0	(1.9)	10.0	(2.6)	(3.2)	7.3
Non-underlying operating items	(15.4)	(4.7)	(1.1)	(4.2)	(1.9)	(27.3)
Exceptional operating items	(51.7)	(73.4)	-	(0.3)	(7.8)	(133.3)
Operating (loss) / profit	(62.1)	(80.0)	8.9	(7.1)	(12.9)	(153.3)
Underlying net finance costs						(69.3)
Non-underlying finance costs						(112.8)
Loss before tax						(335.4)
Tax credit						9.1
Loss after tax from continuing operations						(326.3)
Loss from discontinued operations						-
Loss for the period						(326.3)

 

	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 profit / (loss)	(95.2)	(113.7)	6.8	(3.1)	(20.2)	(225.4)
Underlying net finance costs						(41.0)
Non-underlying finance costs						(36.6)
Loss before tax						(303.0)
Tax credit						27.2
Loss after tax from continuing operations						(275.8)
Loss from discontinued operations						(24.8)
Loss for the period						(300.6)

 

2. Exceptional and non-underlying items

 

	52 weeks ended 28 March 2026	52 weeks ended 29 March 2025
	£m	£m
Exceptional items
(a) Acquisition and disposal related costs	(0.4)	(0.9)
(b) Reorganisation, refinancing and other costs	(20.8)	(15.8)
(c) Gain on disposal of assets and investments	3.7	1.9
(d) Loss on disposal of subsidiaries	-	(6.9)
(e) Exceptional impairment charge	(85.6)	(186.4)
(f) Exceptional provision charges	(30.2)	-
	(133.3)	(208.1)
Non-underlying operating items
(g) Acquisition-related performance plans	6.3	(0.4)
(h) Non-cash share incentive plan charge	(1.9)	(3.5)
(i) Amortisation of acquired intangibles (excluding hyperinflation)	(21.6)	(31.5)
(j) Depreciation of fair value uplift to acquisition property, plant and machinery	(3.0)	(5.7)
(k) Hyperinflation depreciation adjustment	(6.9)	(5.8)
(l) Hyperinflation monetary gain	6.0	12.8
(m) Other hyperinflation adjustments (excluding depreciation and monetary gain)	(6.2)	(12.7)
	(27.3)	(46.8)
Total	(160.6)	(254.9)
Representing functional categorisation of:
Revenue (see notes k,l,m)	3.3	2.9
Cost of sales (see notes j,k,l,m)	(22.8)	(27.8)
Distribution and administrative expenses	(141.9)	(230.1)
Other operating income (see notes k,l,m)	0.9	0.1
	(160.5)	(254.9)

 

(a)	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)	Primarily relates to gains on the disposal of properties in the UK and Belgium. The prior year total 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)	The prior year total related to a non-cash charge relating to the respective loss on disposal of Hanover Flooring during the prior year.
(e)	An exceptional impairment charge of £6.9m was applied for specific assets no longer in use within 'UK & Europe - Ceramic Tiles (Italy)' CGU, split between £2.4m of fixed assets and £4.5m of other non-current assets. Furthermore, the estimated recoverable amount of the CGU was below the carrying value of assets due to the weak demand environment. Given the goodwill has been fully impaired, a further impairment charge of £25.0m was applied against intangible fixed assets (£3.5m) and tangible fixed assets (£21.5m). Within 'UK & Europe - Ceramic Tiles (Spain)' CGU, the estimated recoverable amount of the CGU was below the carrying value of assets million due to the weak demand environment. Given the goodwill has been fully impaired, a further impairment charge of £32.7 million was applied against intangible fixed assets. The impairment recognised has been limited by reference to the CGU's fair value less costs to sell. Within 'UK & Europe - Artificial Grass' CGU, the estimated recoverable amount of the CGU was below the carrying value of assets million due to the weak demand environment, as a result the goodwill has been impaired by £18.0m. £3.0m impairment recognised on the goodwill relating to Ezi Floor (in the 'UK & Europe - Soft flooring (Carpets and Underlay)' CGU), following its integration within the broader UK underlay business. In the prior year, an exceptional impairment charge was recognised in the 'UK & Europe - Soft flooring (Rugs)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets 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).  An exceptional impairment charge was recognised in the 'UK & Europe - Ceramic Tiles (Italy)' CGU, where the estimated recoverable amount of the CGU was below the carrying value of assets  due to the weak demand environment and the goodwill has been fully impaired. The prior period also included a £4.8m impairment of a right-of-use building which is mostly unoccupied.
(f)	Of the total charge of £30.2m, the majority relates to an exceptional restructuring provision charge of £31.2m has been recognised in Balta Group, representing the relocation of manufacturing activities to Turkey. These liabilities include the expected remaining redundancy costs to be paid to the personnel members affected and fees paid to external parties to transition the people into new employment. This is partially offset by a £1.4m release which has also been recognised in Balta Group following a reassessment of an environmental provision.
(g)	The credit relates to a release of an expected liability under acquisition-related performance plans.
(h)	Non-cash, IFRS2 share-based payment charge in relation to the long-term management incentive plans.
(i)	Amortisation of intangible assets, primarily brands and customer relationships, recognised on consolidation as a result of business combinations.
(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 £3.3m (2025: £2.9m income), cost of sales was £16m charge (2025: £19.4m (charge)) and admin expenses was £5.4m income (2025: £10.8m income ).

 

3. Finance costs

 

		52 weeks ended 28 March 2026	52 weeks ended 29 March 2025
			(restated)
		£m	£m
Non-underlying finance items
(a) Finance items related to preferred equity		(50.5)	(35.2)
(b) Unwinding of present value of deferred and contingent earn-out liabilities		-	(0.2)
(c) Fair value adjustment to deferred consideration and contingent earnout		0.1	1.7
Acquisitions related		0.1	1.5
(d) Gain on bond repurchase		5.3	-
(e) Fair value adjustment to notes redemption option / amortisation inception derivative		0.4	1.2
(f) Mark to market adjustments and gains on foreign exchange forward contracts		-	0.5
(g) Fair value adjustment to hedge derivative		4.6	-
(h) Translation difference on foreign currency loans and cash		(14.3)	(5.0)
(i) Hyperinflation - finance portion		(1.2)	0.4
(j) One-off refinancing costs		(57.2)	-
Other non-underlying		(62.4)	(2.9)
		(112.8)	(36.6)

 

(a)	The net impact of items relating to preferred equity issued to Koch Equity Development during the current and prior periods.
(b)	Prior year 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 held at the start of the period was 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 would reduce to par at maturity using an effective interest rate method. Given the impact of the refinancing undertaken in the year (please see note (j) below), this embedded derivative has now been fully amortised and is no longer on the Group's balance sheet.
(f)	Non-cash fair value adjustments on foreign exchange forward contracts.
(g)	Non-cash fair value adjustments on hedge derivatives related to gas contracts.
(h)	Net impact of exchange rate movements on third party and intercompany loans.
(i) (j)	Other finance cost / income impact of hyperinflation. One-off transaction fees and exchange offer premia on new senior notes and super senior RCF, following a substantial modification under IFRS 9.
	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 28 March 2026		52 weeks ended 29 March 2025
	Basic	Adjusted	Basic	Adjusted
			(restated)	(restated)
	£m	£m	£m	£m
Loss attributable to ordinary equity holders of the parent entity	(326.3)	(326.3)	(275.8)	(275.8)
Exceptional and non-underlying items:
Exceptional items	-	133.3	-	208.1
Non-underlying items	-	140.1	-	83.4
Tax effect on adjusted items where applicable	-	(6.8)	-	(27.8)
(Loss) / earnings for the purpose of basic and adjusted earnings per share from continuing operations	(326.3)	(59.7)	(275.9)	(12.1)
Loss attributable to ordinary equity holders of the parent entity from discontinued operations	-	-	(24.8)	(6.3)
(Loss) / earnings for the purpose of basic and adjusted earnings per share	(326.3)	(59.7)	(300.6)	(18.4)

 

Weighted average number of shares

 

	52 weeks ended 28 March 2026	52 weeks ended 29 March 2025
	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	114,846	113,954
Effect of dilutive potential ordinary shares:
Share options and warrants	1,289	1,350
Weighted average number of ordinary shares for the purposes of diluted earnings per share	116,135	115,304
Preferred equity and contractually-linked warrants	323,135	118,394
Weighted average number of ordinary shares for the purposes of diluted adjusted earnings per share	439,270	233,698

 

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 28 March 2026	52 weeks ended 29 March 2025
		(restated)
	Pence	Pence
Earnings / loss per share from continuing operations
Basic loss per share	(284.12)	(242.03)
Diluted loss per share	(284.12)	(242.03)
Basic adjusted (loss) / earnings per share	(51.98)	(10.62)
Diluted adjusted (loss) / earnings per share	(13.59)	(5.18)
Loss per share from discontinued operations
Basic loss per share	-	(21.76)
Diluted loss per share	-	(21.76)
Earnings / loss per share
Basic loss per share	(284.12)	(263.79)
Diluted loss per share	(284.12)	(263.79)
Basic adjusted (loss) / earnings per share	(51.98)	(16.15)
Diluted adjusted (loss) / earnings per share	(13.59)	(7.87)

 

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

 

	2026		2025
	Average	Year end	Average	Year end
Australia - AUD	2.0259	1.9272	1.9629	2.0545
Europe - EUR	1.1539	1.1493	1.1906	1.1903
United States - USD	1.3440	1.3267	1.2792	1.2946
Turkey - TRY	55.9677	58.9590	44.0275	49.1910

 

6. Net Debt

 

Analysis of net debt

 

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

 

Group	At 29 March  2025 (restated)	Cash flow	Non-cash movement on inception of leasing contract expenditure	Disposals	Acquisitions	Other non-cash changes	Exchange movement	At 28 March 2026
	£m	£m	£m			£m	£m	£m
Cash and cash equivalents	77.6	(9.8)	-	-	-	-	0.7	68.4
Bank overdraft	(9.3)	8.5	-	-	-	-	-	(0.8)
Net cash and cash equivalents	68.3	(1.3)	-	-	-	-	0.7	67.6
Bank overdraft	(11.7)	11.7	-	-	-	-	-	-
Senior secured debt (gross of prepaid finance costs):
- due in less than one year	-	-	-	-	-	(6.4)	-	(6.4)
- due in more than one year	(627.0)	1.6	-	-	-	(50.7)	(22.8)	(698.9)
Bank loans and other facilities (gross of prepaid finance costs):
- Other bank loans and facilities due in less than one year	(115.0)	(94.6)	-	-	-	125.9	(2.4)	(86.1)
- Other bank loans and facilities due in more than one year	(26.2)	-	-	-	-	(126.2)	(0.3)	(152.8)
RCF total (>1 year)	-	-	-	-	-	(130.4)	-	(130.4)
Obligations under right-of-use leases:
- due in less than one year	(30.0)	40.9	(13.9)	-	-	(25.4)	(2.4)	(30.8)
- due in more than one year	(159.9)	-	-	-	-	2.7	(1.2)	(158.5)
Preferred equity (gross of prepaid finance costs)	(343.0)	-	-	-	-	(50.6)	-	(393.5)
Prepaid finance costs in
In relation to senior debt:
- due in less than one year	0.6	0.9	-	-	-	(1.3)	-	0.2
- due in more than one year	3.0	-	-		-	(2.8)	-	0.2
In relation to RCF / term loans
- Due in less than one year	-	2.3	-	-	-	(1.8)	-	0.5
- Due in more than one year	-	-	-	-	-	1.7	-	1.7
Financing liabilities	(1,309.1)	(37.1)	(13.9)	-	-	(134.9)	(29.2)	(1,524.4)
Net debt including right-of-use lease liabilities, issue premia, preferred equity and prepaid finance costs	(1,240.9)	(38.5)	(13.9)	-	-	(134.9)	(28.5)	(1,456.7)

 

7. Prior year restatement

 

During the current financial year, an error was identified in the accounting treatment which dated back to FY21. On the host instrument terminal value calculation the equity risk premium and Victoria's credit spread were updated each period and should have been held constant. The terminal value has been revised to only update for the LIBOR/SONIA forward curve at each reporting date.  This error resulted in the understatement of the preferred equity debt and the reported loss.

 

In accordance with IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, the comparative amounts for the prior period have been restated and the subsequent notes to the financial statements that have also been restated as a result. The error also affected the opening balance sheet as at 30 March 2024, and therefore, a third balance sheet as at that date has been presented as required by IAS 1.40A.

 

The effect of the restatement on the financial statements is summarised below:

 

 

 

 

 

	52 weeks ended 29 March 2025			52 weeks ended 30 March 2024
	Previously reported	Impact of restatement	Restated	Previously reported	Impact of restatement		Restated
	£m	£m	£m	£m	£m		£m
Preferred equity	(282.5)	(57.4)	(339.9)	(274.2)	(21.2)	(295.4)
Total non-current liabilities	(1,151.7)	(57.4)	(1,209.1)	(1,189.1)	(21.2)		(1,210.3)
Total liabilities	(1,603.1)	(57.4)	(1,660.5)	(1,651.7)	(21.2)		(1,672.9)
Net liabilities	(273.1)	(57.4)	(330.5)	(22.2)	(21.2)		(43.4)
Retained earnings	(292.2)	(57.5)	(349.6)	(27.4)	(21.2)		(48.6)
Total Equity	(273.1)	(57.5)	(330.5)	(22.2)	(21.2)		(43.4)
Reported loss for the year	(264.4)	(36.2)	(300.6)	(108.0)	(21.2)		(129.2)

 

 

 

8. Post Balance Sheet Event

 

Refinancing of preferred equity and senior secured debt

On 8 July 2026, the Company announced that it had entered into a transaction support agreement with KED Victoria Holdings LLC, Wood River Capital LLC and certain consenting holders of its Senior Secured Notes due in 2028.

 

The agreement provides for a comprehensive recapitalisation of the Group's balance sheet, comprising two inter-conditional elements. Under the notes transaction, Victoria's outstanding 2028 Notes will be written down to zero and released and cancelled, in consideration for which noteholders that consent to the transaction will receive second priority notes, new ordinary shares and accrued interest. Under the equity transaction, a substantial portion of the existing preferred equity held by KED Victoria will be released, cancelled, redesignated or exchanged for new ordinary shares, second priority notes and a contingent value right, with KED Victoria retaining a reduced amount of amended preferred equity.  It is intended that the notes transaction will be implemented primarily by way of a consent solicitation, with a scheme of arrangement under Part 26 of the Companies Act 2006 available as a fallback mechanism if the requisite level of noteholder consent is not obtained. On 23 July 2026, the Company announced holders representing over 90% of its bonds maturing in March 2028 have acceded to the Transaction Support Agreement, meeting the necessary threshold required to implement it by way of a consent solicitation.

 

The transaction is expected to materially simplify the Group's capital structure, extend debt maturities and align stakeholders in support of the Group's long-term strategy.

 

As the transaction support agreement was entered into after the reporting date, it represents a non-adjusting event for the Company at 28 March 2026 and, accordingly, no adjustments have been made to the amounts recognised in these financial statements.

 

Completion of sale and leaseback Belgium distribution centre

On 14 July 2026 the Group completed the €34.4 million sale and lease back of its Belgian distribution centre ('UK & Europe Rugs CGU') to Advantage Property Holding BV.

 

9. Basis of Preparation

 

This results announcement for the period ended 28 March 2026 was approved by the Board on 23 July 2026. Whilst the financial information included in this statement is derived from the Annual Report & Accounts for the period ended 28 March 2026 (including the comparatives for the period ended 29 March 2025), it does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.

 

The Annual Report & Accounts for the period ended 28 March 2026 (including the comparatives for the period ended 29 March 2025) were also approved and authorised for issue by the Board of Directors on 23 July 2026. 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 28 March 2026 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.