Victoria Flooring has issued a particularly down beat assessment of the flooring market they operate in highlighting an extended period of decline that has forced them to take cost cutting measures.
The group said in expects EBITDA for the first half to be £50m, significantly lower than the £64.9m recorded in H2 2024.
Falling profitability is the result of slow sales across the industry. Victoria estimates volumes across the entire industry are down 20% – 25%.
To combat falling volumes, the company have implemented measures including streamlining procurement, relocating some manufacturing facilitate, and reorganising production of ceramics.
Despite macro influences playing a heavy part in first half trade, the company is confident the second half should see signs of improvement driven by increased mortgage approvals and rising transactions.
“The flooring sector is experiencing the most severe and longest decline in demand in the last 30 years. During this period, we have focussed on optimising productivity and reducing operational costs whilst maintaining the same potential production capacity,” said Chief Executive, Philippe Hamers.
“These actions will have a very material positive impact on earnings and cash flow as demand normalises with the anticipated improvement in the macro-economic environment and increase in housing transactions, a key driver of demand. Clearly the recovery continues to draw closer, although it is difficult to pinpoint precisely when it will begin. However, we remain prepared for growth when the time arrives, which will be delivered without any significant capex spend.”
Victoria Flooring shares were down 2% at the time of writing.