Royal flooring designer Victoria confirms 1,170 job cuts as gross sales dwindle

Royal flooring maker Victoria has minimize 1,170 jobs, equating to 16 per cent of its workforce, because the London-listed group continues to endure weak demand. 

Geoff Wilding, the group’s chairman, acknowledged on Wednesday there had been a ‘lot of noise’ round his firm in latest months, amid falling revenues and an auditor’s fraud warning. 

The AIM-listed group, which dates again to 1895 and holds a Royal Warrant, mentioned income for the 2024 fiscal 12 months can be decrease than within the earlier monetary 12 months, with no ‘imminent’ restoration in demand in sight. 

Losses: Victoria provided carpet for the marriage of Prince William to Kate Middleton

Victoria shares fell 9.22 per cent or 22.50p to 221.50p on Wednesday, having fallen over 60 per cent within the final 12 months. 

Wilding, mentioned: ‘There has been quite a lot of noise round Victoria within the final six months. 

‘To their monumental credit score, operational administration merely put their heads down and cast forward with the combination tasks designed to maximise the obtainable synergies inside the Group and optimise money technology in a difficult macro-environment.

‘The tempo and rigour of this work has accelerated within the final 90 days, with a bigger price incurred within the present 12 months however a transparent affect on future earnings and money circulation.

‘We emphasise that we’re not anticipating some quick enchancment in flooring demand. However, we’re assured of the affect on earnings and cashflow of administration’s actions and are sure demand will inevitability revert to the long-term imply.’

Victoria mentioned client demand continued to be ‘comfortable’ in Europe, the place it derives practically 40 per cent of its annual income, whereas it continued to function in ‘subdued however steady’ circumstances within the UK and Australia. 

The agency reported improved demand within the US, however price pressures akin to wage inflation are hitting its backside line.

Operating margin is ready to enhance this 12 months by 250 to 350 foundation factors, ‘as a result of productiveness features’.

In September, auditors Grant Thornton mentioned there have been ‘risk factors of fraud’ in addition to ‘potential irregularities’ concerning sure transactions at subsidiary Hanover Flooring.

Victoria mentioned ‘the board immediately moved to comprehensively address’ points.

In November, Victoria mentioned it booked a £19.2million loss for the six months to the tip of September, having made income of £53.1million in the identical interval a 12 months earlier.

It blamed excessive enter prices and subdued demand as gross sales fell 16.6 per cent to £643.4million.

Under its Victoria Carpets model, the agency has labored for the Royals for years, supplying the carpet used for the marriage of Prince William to Kate Middleton in 2011.