Victoria floored after downbeat message

Carpet maker Victoria dropped almost 15 per cent after it said tough markets gave it little visibility going forward, with its Australian markets a particular cause for concern.

The firm said it hoped to break even in the first half but overall group sales would be down on the equivalent period last year.

It said the final quarter of the calendar year was typically the strongest selling season in both of the group's core markets.

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However, a lack of sales visibility in volatile market conditions meant that it was too early to forecast with any degree of certainty whether the current poor conditions in the UK and especially in Australia were set to continue.

The trading update noted trading conditions in the UK and Ireland remained extremely tough during the first half, with both weak consumer sentiment and the impact of the Jubilee and Olympics reducing footfall on the High Street.

Despite this, Victoria said it had continued to gain market share in the UK with sales significantly ahead of the corresponding period last year.

It was the company's Australian markets that were the chief area of concern.

The firm had already reported revenues in Australia in the first quarter were 10.9% down on the previous year as the Australian economy continued to slow.

"In August and September, which are generally considered to be the start of a strong seasonal run into Christmas summer holiday period, there has been no sign of an uplift in sales; rather the market appears to be deteriorating further," Victoria said.

"There has been a particular decline in sales of wool and wool-rich carpets, which has necessitated short-time working at both of the Group's woollen spinning mills in Australia."

The company said it was taking steps to mitigate the reduction in the sale of wool carpet ranges and continued to actively promote wool carpets with the aim of underpinning production at the Australian spinning mills.

The company's shares were down 14.7% to 232.5p by 1145 on Monday.

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