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

Flooring manufacturer Royal Victoria has cut 1,170 jobs, equivalent to 16 per cent of its workforce, as the London-listed group continues to suffer from weak demand.

Geoff Wilding, the group’s chairman, acknowledged on Wednesday that 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 fiscal 2024 would be lower than the previous financial year, with no “imminent” recovery in demand in sight.

Victoria shares fell 4.14 per cent or 10.10 pence to 233.90 pence on Wednesday, having fallen more than 58 per cent in the last year.

Wilding said: ‘There has been a lot of noise around Victoria in the last six months.

‘To its credit, operational management simply put its head down and forged ahead with integration projects designed to maximize the synergies available within the Group and optimize cash generation in a challenging macro environment.

‘The pace and rigor of this work has accelerated over the past 90 days, with increased cost incurred in the current year but a clear impact on future earnings and cash flow.

‘We emphasize that we do not expect any immediate improvement in land demand. However, we are confident in the impact of management’s actions on earnings and cash flow and are confident that demand will inevitably revert to the long-term average.

Victoria said consumer demand remained “weak” in Europe, where it makes almost 40 per cent of its annual revenue, while it continued to operate under “moderate but stable” conditions in the UK and Australia.

The company reported improving demand in the US, but cost pressures such as wage inflation are weighing on its results.

Operating margin is expected to improve this year by 250 to 350 basis points, “due to productivity gains.”

In September, auditor Grant Thornton said there were “fraud risk factors” as well as “possible irregularities” in certain transactions by subsidiary Hanover Flooring.

Victoria said “the board immediately acted to comprehensively address” the issues.

In November, Victoria said it had posted a loss of £19.2 million for the six months to the end of September, after making a profit of £53.1 million in the same period a year earlier.

It blamed high input costs and weak demand as sales fell 16.6 per cent to £643.4 million.

Under its Victoria Carpets brand, the firm has been working for the Royal Family for years, supplying the carpet used for Prince William’s wedding to Kate Middleton in 2011.