Shares in Victoria PLC (LON:VCP) plunged in early deals Monday after the firm’s profit forecast for the 2019 fiscal year dropped below market estimates.
In a trading update, the flooring specialist said its expected underlying pre-tax profits for the full year to be 35%-39% higher than the £40.8mln reported last year.
READ: Victoria shares crash after margin weakness warning
This would make the top end of the forecast to around £56.7mln, well below market estimates of £67mln. Meanwhile, underlying earnings (EBITDA) for the year were expected to be between £95mln-£97mln, up from £64.7mln the previous year.
Victoria added that it had also continued with its strategy of cutting prices to gain market share, a move that previously attracted investor ire in November when it warned full year margins would be down by between 1-1.5 percentage points compared to consensus market forecasts.
The company said “almost all” of its actions taken to increase margins had been successfully completed and that it expected the strategy to “materially enhance earnings” in the 2020 fiscal year.
However, the group added that the strategy had come “at a short-term cost” and that it had had to absorb “substantial” increases in raw materials prices and some large on-off costs associated with the consolidation of its UK logistics operations.
Shares were down 14% at 372.5p.