Victoria (LSE:VCP), ahead of today's AGM, says that whilst the market environment continues to be challenging, it has had an encouraging start to the year as a result of increased focus and management actions.
The flooring designer, manufacturer and distributor's comments come as Headlam, one of its largest UK competitors and a customer for manufactured products, is in administration.
Victoria said it currently carries no credit exposure to Headlam and that its own UK business continues to perform strongly.
Meanwhile, in regard to its productivity upgrades, the firm's V4 ceramics line in Spain was completed over the summer, and Balta's rug weaving equipment has been fully relocated from Belgium to Turkey. Both projects are expected to lift efficiency and output through the rest of the year, supporting stronger performance in the 2028 financial year broadly in line with expectations.
Energy, diesel and input costs have risen further since Victoria's full-year results were announced on July, it noted, and it said the board is taking further action to mitigate the impact.
Refinancing of the company's 2028 bonds and preferred equity remains on track for completion in the fourth quarter, with documentation expected to be finalised and posted in mid-September, at which point the Board will provide a trading update.
News Intelligence what this means for the company
Victoria flagged Headlam's administration as a rival and customer but stated it carries no credit exposure to the failing competitor. The company is pressing ahead with refinancing of its 2028 bonds and preferred equity, expected to complete in Q4 2026, and reported that productivity upgrades in Spain and production relocation to Turkey are on track to support 2028 performance, though rising energy and input costs are forcing further mitigation action.
Headlam's collapse removes a competitor and may create market share opportunities in UK flooring distribution, but Victoria's own refinancing success remains the critical near-term test. The company faces headwinds from cost inflation even as operational efficiency projects come online.
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