Royal floor maker Victoria has cut 1,170 jobs, equating to 16 per cent of its workforce, as the London-listed group continues to suffer weak demand.
Geoff Wilding, the group’s chairman, acknowledged on Wednesday there had been a ‘lot of noise’ around his company in recent months, amid falling revenues and an auditor’s fraud warning.
The AIM-listed group, which dates back to 1895 and holds a Royal Warrant, said revenue for the 2024 fiscal year would be lower than in the previous financial year, with no ‘imminent’ recovery in demand in sight.
Losses: Victoria supplied carpet for the wedding of Prince William to Kate Middleton
Victoria shares fell 4.14 per cent or 10.10p to 233.90p on Wednesday, having fallen over 58 per cent in the last year.
Wilding, said: ‘There has been a lot of noise around Victoria in the last six months.
‘To their enormous credit, operational management simply put their heads down and forged ahead with the integration projects designed to maximise the available synergies within the Group and optimise cash generation in a challenging macro-environment.
‘The pace and rigour of this work has accelerated in the last 90 days, with a larger cost incurred in the current year but a clear impact on future earnings and cash flow.
‘We emphasise that we are not expecting some immediate improvement in flooring demand. However, we are confident of the impact on earnings and cashflow of management’s actions and are certain demand will inevitability revert to the long-term mean.’
Victoria said consumer demand continued to be ‘soft’ in Europe, where it derives nearly 40 per cent of its annual revenue, while it continued to operate in ‘subdued but stable’ conditions in the UK and Australia.
The firm reported improved demand in the US, but cost pressures such as wage inflation are hitting its bottom line.
Operating margin is set to improve this year by 250 to 350 basis points, ‘due to productivity gains’.
In September, auditors Grant Thornton said there were ‘risk factors of fraud’ as well as ‘potential irregularities’ regarding certain transactions at subsidiary Hanover Flooring.
Victoria said ‘the board immediately moved to comprehensively address’ issues.
In November, Victoria said it booked a £19.2million loss for the six months to the end of September, having made profits of £53.1million in the same period a year earlier.
It blamed high input costs and subdued demand as sales fell 16.6 per cent to £643.4million.
Under its Victoria Carpets brand, the firm has worked for the Royals for years, supplying the carpet used for the wedding of Prince William to Kate Middleton in 2011.
