The rug has been pulled from un­der car­pets group Vic­to­ria

Price cuts are hurt­ing profit mar­gins, caus­ing the share price to col­lapse

Shares - - BIG NEWS -

HIGH-FLY­ING FLOOR cov­er­ings maker Vic­to­ria (VCP:AIM) has shocked the mar­ket with a very neg­a­tive trad­ing up­date which has trig­gered a 31% slump in its share price to 418p.

Op­er­at­ing mar­gins at the car­pets dis­trib­u­tor-to-floor­ing un­der­lay group are track­ing be­low ex­pec­ta­tions as it cuts prices to cap­ture share in a chal­leng­ing mar­ket.

The com­pany has also flagged pric­ing pres­sures in hard floor­ing and a slow­down in Aus­tralia, speak­ing for just shy of 20% of over­all sales.

Chair­man Ge­off Wild­ing still ex­pects mar­gins to ‘sig­nif­i­cantly ex­ceed the prior year due to or­ganic growth and prod­uct mix ef­fects from pre­vi­ous ac­qui­si­tions’ and also plans to re­cover the mar­gin in­vest­ment in stages over the next 12 months.

We’re told by the com­pany’s ad­vis­ers that an­a­lysts won’t pub­lish any new earn­ings fore­casts un­til a fi­nanc­ing ini­tia­tive has com­pleted. Vic­to­ria in­tends to of­fer €450m in se­nior se­cured notes to re­pay its ex­ist­ing se­nior bank fa­cil­ity.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.