Victoria PLC (AIM:VCP)'s share price plunged by nearly a fifth this morning after the company reported a decline in underlying revenue and operating profit and fell into a pre-tax loss in the first half.
The flooring manufacturer made a pre-tax loss of £19.2 million in the first half of fiscal 2024, compared to a profit of £53.1 million a year earlier, as it reported weak demand for ceramic tiles.
Geoff Wilding, executive chairman of Victoria, said the company’s board now expects market headwinds to more than offset the £20 million underlying earnings benefit from its reorganisation programme.
"The remainder of the year continues to look more challenging with ongoing lower demand maintaining pressure on top line sales, alongside inflation edging up raw material input costs,” Wilding said in the interim statement.
The company said the relocation of its manufacturing to modernised UK factories improved its margin despite weak demand for ceramic tiles.
It reported a “challenging outlook” for the period, which was attributed to increasing costs and lower demand.
This translated into a decline in earnings per share, which fell to 13.48 pence in the first half on an adjusted diluted basis, down from 17.87p.
Its underlying revenue fell to £643.4 million, down from £771.5 million a year earlier. Operating profit fell to £54.3 million, down from £61.1 million.
Victoria also said today that Zachary Sternberg is leaving the board, after five years as a non-executive director.
“Our H1 performance was in line with management expectations with softer demand offset by higher margins beginning to come through from the reorganisation programme started 18 months ago,” Wilding said in a statement.
"A key contributing factor to this margin improvement, and as described in the reorganisation projects, was the relocation of significant manufacturing to our modernised UK factories, delivering much-enhanced productivity, lower logistics costs and improved customer service.”
Victoria’s share price fell from about 302p per share at closing yesterday to a nadir of about 245.31p in early trading.