Victoria acquires Turkish ceramic tiles manufacturer and distributor

Flooring group Victoria has acquired Turkish mid-market ceramic tiles manufacturer and distributor Graniser for a total consideration of €8.4m.

Victoria said on Wednesday that the acquisition, which will be funded entirely from existing cash balances, would diversify its ceramic tiles manufacturing footprint into "a significantly lower" energy, labour and raw material price environment.

The AIM-listed group said targeted capex was expected to deliver a more than 75% increase in Graniser's earnings over the next three years.

Graniser and Victoria Ceramics were also said to be in line to benefit from exposure to each other's commercial markets, with the former providing further export potential to the Middle East, while the latter's ceramic tiles division, in particular its Italian operations, will open high-growth European DIY markets for Graniser.

Victoria also said the enlarged ceramic tile operations will leverage its existing brand and design strengths with product ranges manufactured in a low-cost environment to drive margins and top line growth.

In addition, to the €8.4m payment, Graniser has approximately €39.8m in net debt, including shareholder loans, which will be repaid on completion of the acquisition.

For the 12 months ended 31 December, Graniser generated audited revenues of €59.3m, while current normalised underlying earnings were approximately €9.0m.

As of 1100 GMT, Victoria shares were up 1.99% at 1,065.80p.