Victoria PLC (AIM: VCP) – dispelling the doubters with another positive update
The high flying carpet manufacturer has issued a positive trading update on the financial year ending 2nd April 2016. The update confirms that Group profits before tax and exceptional items will be materially ahead of current consensus market expectations. Estimates were previously for pre-tax profit of £15.1m and eps of 71.10p and “materially ahead” generally implies at least 10%.
The trading update confirmed that recent acquisitions have now been fully integrated and the associated operational synergies have resulted in improved gross profit margins, which the Board anticipates will continue to accrue into 2017. The big concern was the debt load and management have reassured in this respect with improved cash generation resulting in a material reduction in Group net debt and the net debt to EBITDA ratio since the interim results.
They remain in discussions about the purchase of Lano Carpets.
As the rating demands, broker upgrades will now be issued