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Highlights

  • Victoria shares fell 12.33% on 23 February 2026 following its FY2026 trading update.
  • Q3 revenue decline narrowed to around 3% year-on-year, improving from a 7% drop in H1.
  • Rugs division transition to Turkey weighed on volumes, accounting for over half of Q3 revenue decline.
  • Board now expects FY2026 post-IFRS16 EBITDA of approximately GBP 95 million, below prior market expectations.
  • Q4 revenue is projected to come in roughly 5% lower than FY2025 amid weak January trading.
  • Refinancing discussions and cash initiatives, including property sales and working capital improvements, remain underway.

Victoria PLC (LSE:VCP) shares fell sharply during the morning session on 23 February 2026, declining 12.33% to GBX 22.88. Over the past year, the stock has declined 79.93%, with the latest drop following the release of the group’s FY2026 trading update, which highlighted softer revenue trends and a more cautious near-term outlook.

Revenue Trends Show Partial Improvement in Q3

The international flooring designer and manufacturer reported that year-on-year revenue performance improved in Q3 compared to the first half of the year. Revenue declined by approximately 3% in Q3, compared with a roughly 7% fall in H1.

A significant portion of the Q3 decline stemmed from lower shipment volumes within the Rugs division, as manufacturing shifts from Belgium to Turkey. Management indicated that this transition accounted for more than half of the revenue shortfall in the quarter. Excluding Rugs, Q3 revenue was down by around 1.5% year-on-year.

Despite these pressures, the group noted continued market share gains and new customer wins in its UK Carpets segment, alongside particularly strong trading in Australia, which helped partially offset weakness elsewhere.

Weaker January Impacts Q4 Expectations

Trading conditions deteriorated in the first half of January, driven by subdued consumer confidence and reduced retail footfall across key regions including Western Europe, North America and the UK. These trends were linked to ongoing geopolitical uncertainties affecting demand.

Although trading has improved in recent weeks, the board now expects Q4 revenue to fall short of previous guidance and to be approximately 5% below FY2025 levels.

As a consequence, Victoria anticipates post-IFRS16 EBITDA of approximately GBP 95 million for FY2026. This compares with prior market expectations of around GBP 110.7 million in post-IFRS16 EBITDA and GBP 1,064 million in revenue.

EBITDA Improvement Measures Underway

Management reiterated that delivering EBITDA enhancement initiatives remains a near-term priority.

  • The new V4 ceramics production line in Spain has commenced initial sales in Q4 and is expected to support growth and margin improvement in the Spanish ceramics division through FY2027 and beyond.
  • The relocation of Rugs manufacturing to Turkey is progressing as planned, though shipping disruptions have exceeded initial expectations.
  • Integration of the UK Underlay businesses and Australian operations, announced at the half-year stage, is on track for completion before the end of March.

While lower volumes create a reduced starting base for FY2027, the company stated that currently identified EBITDA improvement programmes remain on schedule. Additional efficiency measures have also been identified across divisions and will be detailed as part of the ongoing budgeting process.

The board emphasised the need to adapt to a structurally lower volume environment and enhance operational efficiency to remain competitive in both domestic and international markets. Enhanced governance and more rigorous tracking of performance initiatives are also being introduced, with further details to follow.

Capital Structure and Cash Management Focus

Victoria continues to prioritise strengthening its capital structure and is actively engaging with capital providers to advance refinancing plans, including addressing its 2028 senior secured notes.

Cash-focused initiatives outlined at the half-year results are progressing. Targeted property disposals are advancing well, and further potential asset sales have been identified. Efforts to reduce overdue receivables and lower inventory levels are beginning to show positive results, while divisions are also working with suppliers to optimise payment terms and improve working capital efficiency.

Investor Takeaway

While Q3 showed relative improvement compared to H1, weaker January trading and softer Q4 expectations weighed on sentiment. Lower projected EBITDA for FY2026, combined with ongoing refinancing discussions, appear to have unsettled investors, contributing to the sharp share price reaction.

Looking ahead, execution of EBITDA improvement initiatives, successful refinancing progress, and stabilisation in end-market demand will likely remain key factors influencing performance.

FAQs

  1. Why did Victoria PLC’s share price fall?

The decline followed a trading update indicating weaker-than-expected Q4 revenue and lower projected FY2026 EBITDA versus market expectations.

  1. What impacted Victoria’s Q3 performance?

Lower shipment volumes in the Rugs division due to manufacturing relocation, along with subdued consumer demand in key markets, weighed on revenue.

  1. What is Victoria’s FY2026 EBITDA guidance?

The company expects post-IFRS16 EBITDA of approximately GBP 95 million for FY2026.