Victoria PLC (AIM:VCP) warned that full-year revenue would fall short of previous expectations after weak consumer confidence in January weighed on trading, sending its shares down 12% to 22.95p.
International flooring designer and manufacturer Victoria said fourth-quarter revenue was now expected to be about 5% below financial year 2025.
This follows a slowdown in the first half of January driven by weak footfall across Western Europe, North America and the UK.
Victoria said it now expected post-IFRS 16 earnings before interest, tax, depreciation and amortisation of about £95m for the year to the end of March 2026.
Market expectations prior to the announcement had been for revenue of £1.1 billion and post-IFRS 16 earnings before interest, tax, depreciation and amortisation of £110.7 million.
Year-on-year revenue in the third quarter declined by about 3%, an improvement on the roughly 7% fall reported in the first half.
Lower shipment volumes in the Rugs division, as manufacturing is transferred from Belgium to Turkey, accounted for more than half of the third-quarter revenue decline.
Excluding Rugs, third-quarter revenue fell by about 1.5% year on year.
Company directors said ongoing market share gains and customer wins in UK Carpets, as well as a strong performance in Australia, partly offset the decline.
Victoria said first sales from its new V4 ceramics line in Spain were being delivered in the fourth quarter and were expected to support growth and improved earnings in its Spanish ceramics business through financial year 2027 and beyond.
Relocation of Rugs manufacturing from Belgium to Turkey was progressing in line with expectations, although shipping disruptions had been greater than anticipated.
The initial stages of integrating the UK Underlay and Australian businesses, announced in the half-year results, are expected to be completed before the end of March.
Directors said that although a lower starting point on volume would reduce the outlook for 2027, previously disclosed earnings improvement initiatives remained on track and further improvements had been identified across divisions.
Management is implementing increased rigour in tracking improvements alongside broader governance changes, with further details to be provided in due course.
Victoria said it continued to engage with capital providers on refinancing plans, including its 2028 senior secured notes, as part of efforts to strengthen its capital structure.
Cash initiatives outlined at the half-year results are advancing, with initial targeted property sales progressing and additional potential disposals identified.
New processes to reduce overdue receivables and a stronger focus on lowering inventory are showing improvements, while divisions are working with suppliers to improve payment terms.