Floorings group Victoria moves to reassure investors after shares slide
Kidderminster-based floorings giant Victoria has moved to try and reassure investors about its finances in the wake of a share slump this week that has wiped around £260 million off its stock market value since Monday morning.
Its shares have fallen 35 per cent this week after the carpets and tiling business announced plans for a £400 million bond issue as it warned its profit margins would be up to 1.5 per cent below expectations as it lowered prices to win market share.
Victoria has seen its shares sliding since the summer, falling from a peak of 880p each down to just 390p when the market closed on Tuesday night.
The company has been continuing a takeover campaign over the last six years that has seen it expand to 20 sites across the UK, Australia, Spain, Italy, Belgium and the Netherlands. In the last year it has spent around £400 million buying tiling companies in Spain and Italy.
At the same time it has reorganised its manufacturing in the UK, shutting down carpet production in Kidderminster after moer than a century although the town remains its company headquarters.
On Monday it said it planned to offer 450 euros of senior secured notes due in 2023, to repay its existing senior bank facility.
But, in the wake of the sharp drop in its share price this week, the company moved to "address the misleading rumour and speculation surrounding the reasons for the bond and the negative sentiment expressed towards the company, and the consequent fall in price of the company's ordinary shares since the start of the week."
Victoria says it "continues to have a close and positive relationship with its lending banks, HSBC and Barclays," and is operating with 'significant headroom' with its borrowing facilities.
The banks had been supportive of both Victoria's strategy and performance over the last six years, said the company.
Victoria stressed that the bond issue would not increase its level of debt, but was to pay off its existing two-two year facility as it simplifies its capital structure and secures long-term financing.
The company added: "The potential bond issue is an entirely discretionary exercise, and a final decision will be made at the company's discretion in the coming days on whether to move ahead or retain the existing facilities."
