Victoria nosedives as it moves into the red

Shares of floor coverings specialist Victoria tumbled after it swung into a half year loss as it battles against tough market conditions, high costs and intense competition in an oversupplied market.

The group, which issued a profit warning earlier this month, posted a pre-tax loss of £1.5m in the 26 weeks ended September 29th 2012 compared to a profit of £1.3m the year before. Group revenue fell 7.8% to £35.99m.

"Trading continues to be difficult in both the UK and Australia and confidence in the general economic and commercial environment remains fragile," Victoria said in a company statement.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

"Although the remainder of the current financial year will be challenging, we believe we have adopted an appropriate strategy for Victoria and look forward to reporting improved results."

Victoria believes, at best, it will break even, before exceptional items, for the full year as it pushes through a strategy to reverse the group's fortunes.

Exceptional items and provisions, following restructuring, are expected to materially impact the group's present net asset value, it warned.

Victoria, which has proposed a move to AIM, said net debt increased in the half-year to £8.35m from the year-end figure of £7.75m.

Shares of the group tumbled 4.9% to 192.50p at 10:40am in London.

CJ