Victoria Plc · LSE:VCP
Victoria — H1 FY2010 Earnings Presentation
34 slides from Victoria's earnings presentation, Nov 9, 2009
Slide 1: Half-year Results
Half-year Results For six months ended 3 October 2009 9 November 2009
Slide 2: Agenda
Alan Bullock, Group Managing Director • Introduction Ian Davies, Group Finance Director • Financial results Alan Bullock • Operational review • Outlook Question and answer session • Appendix 1: Results tables • Appendix 2: Fast facts 2
Slide 3: Ian Davies, Group Finance Director
Ian Davies Group Finance Director 3
Slide 4: H1 FY10 results summary
H1 FY10 H1 FY09 Change Revenue £30.17m £32.71m (7.8)% Operating profit £0.52m £1.64m (68.2)% Profit before tax £0.20m £1.28m (84.3)% Operating margin 1.7% 5.0% (3.3)% Basic earnings per 1.86p 13.02p (85.7)% share Interim dividend 2.6p 4.0p (35.0)% 4
Slide 5: Operating profit bridge H1 FY09 to H1 FY10
H1 FY10 H1 FY09 Operating Sales Volume Gross Margin Overheads Plc costs Operating Forex Profit +/ - +/ - +/ - +/ - Profit 1,800 (167) 1,600 (446) 1,639 1,400 1,200 (513) 1,000 £'000 28 (816) 90 44 800 165 600 180 522 400 289 29 200 0 H1 09 Volume Volume Volume Margin Margin Margin Overhead Overhead
Slide 6: Revenue and operating profit by half-year
Revenue Operating profit 35.0 3.0 32.9 32.7 30.2 2.6 29.4 30.0 28.8 2.5 25.0 2.0 20.0 1.6 1.6 £'m £'m 1.5 15.0 1.0 10.0 0.6 0.5 5.0 0.5 - 0.0 H1 08 H2 08 H1 09 H2 09 H1 10 H1 08 H2 08 H1 09 H2 09 H1 10 6
Slide 7: Capital expenditure, depreciation and fixed assets
Capital Expenditure and Depreciation Group overall net assets of 4000 6.0% £34.8m at 3 October 2009 3500 5.0% 3000 2500 4.0% Tangible fixed assets of £'000 £27.2m % 2000 3.0% 1500 2.0% 1000 500 1.0% 0 0.0% FY05 FY06 FY07 FY08 FY09 H1 10 Capex Depreciation Capex % of sales Tangible Fixed Assets b
Slide 8: Operating cash flow and net debt
Operating Cash Flow H1 FY10 8.0 200% £’m 7.0 175% 6.0 150% Operating profit 0.52 5.0 125% Depreciation & non-cash 1.32 £'m 4.0 100% 3.0 75% items 2.0 50% 1.0 25% Foreign exchange 1.23 0.0 0% FY06 FY07 FY08 FY09 H1 10 Working capital 0.49 EBITDA Operating Cash Flow Operating Cash Flow Conversion % In
Slide 9: Net debt and facilities
H1 FY10 Net debt decreased by £1.96m from £11.43m at year end to £9.47m at the £’m half-year Net Debt at 3 October 2009 9.47 Net debt to EBITDA of 2.50 Facilities at 3 October 2009 18.27 Headroom 8.80 Continued focus on working capital management Facilities v Borrowings H1Capital expenditure
Slide 10: Financial summary
Group revenue was £30.2m, down by 7.8%. On a constant currency basis, revenue was down 11.6%, benefiting from a strengthening of the Australian Dollar The UK and Australia divisions were profitable. The Irish division recorded an operating loss of £0.28m, with economic and market conditions in I
Slide 11: Alan Bullock, Group Managing Director
Alan Bullock Group Managing Director 11
Slide 12: UK: economic and market conditions still challenging
“Economic and market conditions still challenging” 10% Market background 6% Residential markets may now have bottomed out 16% Contract market enters into recession Investment in contract and export 63% markets continued 5% Vertical integration of woollen spinning Independent retailers Wholes
Slide 13: UK profitability
Profitability Earlier moves to control costs benefit bottom-line • Factory workforce restructure completed • Benefits of thermal splicing now being delivered • Labour efficiency at all time high • Continued investment in both contract and export markets development Operating profit improves 5.5%
Slide 14: Ireland: dire state of the Irish economy impacts market
“Dire state of the Irish economy impacts market” Market background Irish economic conditions remain dire Market estimated to be down by as much as 60% Total lack of market visibility Sales performance Ireland represents 5.5% of Group revenue Revenue fell by 50.6% from £3.39m to £1.67m (55.
Slide 15: Australia: economy narrowly avoids recession
“Australian economy narrowly avoids recession” Market background Australian economy forecast to achieve GDP growth of 0.5% in calendar year 2009 * Weak consumer demand Highly competitive trading environment Signs just emerging of market improvement Sales performance Australia represents 57
Slide 16: Australia profitability
Profitability Continued defence of market share during period Margin affected by the under utilisation of woollen spinning capacity Operating profit down by 44.6% in H1 from £1.67m to £0.93m Profit before tax down by 50.4% from £1.50m to £0.74m in H1 New product introductions start to impr
Slide 17: Canada: North American economy remains weak
“North American economy remains weak” Market background Both residential and contract markets remain weak Outlook in near term uncertain Sales performance Revenue was down by 25.9% in H1 from C$5.04m to C$3.73m Nature’s Carpet® sales still inhibited by the recession in the US Profitability •
Slide 18: Alan Bullock, Group Managing Director
Alan Bullock Group Managing Director 18
Slide 19: Outlook: UK and Ireland
“The Board remains confident the Group will continue to weather the economic conditions well ” UK No help anticipated from the economy or market recovery until late into 2010 New product introductions should help underpin sales in H2 Business already “right-sized” for the current economic clim
Slide 20: Outlook: Australia, Canada and summary
Australia First signs of market improvement gives optimism for H2 performance Introductions of new products to continue to help margin improvement Current strength of Australian Dollar benefits the Group Canada Short term outlook lacks any real visibility Recent management changes have sta
Slide 21: Forward-looking statements disclaimer
This presentation, which has been prepared by Victoria PLC (“the Company”), includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “
Slide 22: Victoria PLC
22 VICTORIA PLC
Slide 23: Appendix 1: Results tables
23 VICTORIA PLC
Slide 24: Revenue and operating profit by division
Revenue Operating profit H1 H1 Change H1 H1 Change FY10 FY09 FY10 FY09 % % £’m £’m £’m £’m United 11.10 12.44 (10.8) 0.15 0.15 5.5 Kingdom Ireland 1.67 3.39 (50.6) (0.28) 0.14 (304.3) Australia 17.40 16.88 3.0 0.93 1.67 (44.6) Central - - - (0.27) (0.32) 13.8 Costs Group 30.17 32.71 (7.8) 0.52 1.64
Slide 25: Summarised balance sheet
H1 FY10 FY09 £’m £’m Intangibles, investments and deferred tax asset 2.36 2.34 Property, plant & equipment 27.19 26.43 Non-current assets 29.55 28.77 Current assets 31.63 29.06 Current liabilities (17.70) (14.85) Non-current liabilities (8.70) (10.41) Net assets 34.78 32.57 25
Slide 26: Cash flow and movement in net debt
H1 FY10 FY09 £’m £’m Operating profit 0.52 2.23 Depreciation & non-cash items 1.32 2.38 Foreign exchange 1.23 0.34 Working capital 0.49 (2.33) Interest (0.29 ) (0.74) Tax (0.02) (0.99) Cash from operating activities 3.25 0.89 Capital expenditure (0.19) (3.41) Dividends (0.28) (1.25) Foreign exchange
Slide 27: Earnings per share and dividends
H1 FY10 H1 FY09 FY09 Earnings per share: Basic adjusted EPS 1.86p 13.02p 15.01p Diluted adjusted EPS 1.62p 13.02p 13.97p Dividends: - Interim 2.6p 4.0p 4.0p - Final n/a n/a 4.0p 27
Slide 28: Exchange rates
Spot rate Average exchange rates Period-end exchange rates at 2 Nov 2009 H1 FY10 H1 FY09 % H1 FY10 H1 FY09 % Euro 1.1318 1.2643 (10.5) 1.0883 1.2619 (13.8) 1.1059 Australian Dollar 1.9927 2.1252 (6.2) 1.8339 2.2216 (17.5) 1.8176 Canadian Dollar 1.7912 1.9836 (9.7) 1.7199 1.9080 (9.9) 1.7672 28
Slide 29: Glossary of terms
Capex Capital expenditure EBITDA Earnings before interest, tax, depreciation and amortisation EPS Earnings per share FY09 Financial year ended 4 April 2009 FY10 Financial year ending 3 April 2010 GDP Gross domestic product H1 / H2 First half / Second half of the financial year H1 FY09 First half of
Slide 30: Appendix 2: Fast facts
30 VICTORIA PLC
Slide 31: Victoria PLC company overview
Victoria PLC is a successful and well established international manufacturer and distributor of carpets and Listed on London Stock Exchange: VCP floorcoverings to the mid to high end markets in the UK, with 6.94 million shares in issue. Australia, Ireland and Canada. Delivering high quality, design-
Slide 32: The Board and time line
The Board Time Line Alexander Anton 1895 Victoria Carpets is founded in Victoria Street, Kirkcaldy, Chairman, Non-Executive Appointed Chairman of the Scotland. Board of Victoria PLC in December 2007 1954 First overseas manufacturing plant established in Dandenong, Alan Bullock a suburb of Melbourne
Slide 33: Operating businesses: Australia, Ireland, UK, Canada
Australia Ireland Established 1954, Victoria Carpets Pty. Ltd. has The Irish business consists of two brands: Munster grown to become the second largest Australian Carpets and Navan Carpets carpet manufacturer Munster Carpets specialises in the supply of high-end The company's manufacturing
Slide 34: Enquiries
Enquiries: Victoria PLC Citigate Dewe Rogerson Alan Bullock, Group Managing Director Fiona Tooley, Director Mobile: +44 (0) 7785 325701 Mobile: +44 (0) 7785 703523 Ian Davies, Group Finance Director Keith Gabriel, Senior Account Manager Mobile: +44 (0) 7770 638791 Mobile: +44(0) 7770 788624 Office: