Victoria reports weaker first half, as expected

The AIM-traded company said underlying revenue for the six months ended 30 September fell to £643.4m from £771.5m a year earlier, while underlying EBITDA slipped to £95.8m from £100.1m.

Underlying operating profit slid to £54.3m from £61.1m, while operating profit tumbled to £33m from £82m as the firm swung to a loss before tax of £19.2m from a first-half profit of £53.1m in the 2023 financial year.

Net debt widened slightly to £670.6m from £651.4m, and the net debt-to-EBITDA ratio rose slightly to 3.8x from 3.4x.

Victoria reported a diluted loss per share of 19.61p, swinging from earnings of 36.69p a year earlier, while diluted adjusted earnings per share fell to 13.48p from 17.87p.

The company did note a 100 basis point increase in its underlying EBITDA margin, reaching 14.9%.

When adjusted for constant currency, its underlying EBITDA saw a 0.7% uptick.

A significant contributor to the margin enhancement during the period was the strategic decision to relocate a substantial portion of its manufacturing operations to modernised factories in the UK.

That, the board said, resulted in increased productivity, cost savings on logistics, and overall customer service enhancement.

“Our first half 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,” said executive chairman Geoff Wilding.

“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.”

Wilding said the rest of the year looked more challenging, with ongoing lower demand maintaining pressure on top-line sales, alongside inflation edging up raw material input costs.

“Accordingly, the board now expects the resulting impact of these headwinds to slightly more than offset the £20m EBITDA benefit from the previously-announced reorganisation programme.

“Nevertheless, thanks to the extensive reorganisation Victoria has undertaken over the last 24 months, the business is far better prepared to meet these challenges.”

At 1314 GMT, shares in Victoria were down 22.62% at 233.69p.

Reporting by Josh White for Sharecast.com.