Victoria's pre-tax profits comfortably ahead of expectations

AIM-listed flooring group Victoria has said that its underlying pre-tax profits will be "comfortably" ahead of current consensus expectations for the full-year to 1 April, when reported later this year.

According to Stockopedia, Victoria's net profit for FY17 is expected to be around £20.6m, with FY18 coming in at £27.7m, from revenues of £318m and £378m respectively. 

The Group says it has benefitted from operational synergies following the integration of recent acquisitions in the UK and Australia, which have positively impacted gross profit margins and overheads throughout the current financial year.

The company added that its ongoing operational improvements were expected to continue to deliver "very good organic earnings growth" during the next 12 months.

"Victoria has invested a significant amount of time and energy during the past year identifying further suitable acquisition opportunities within Victoria's existing markets and, importantly, Europe."

The firm's banks are reportedly supportive of its acquisition strategy, and there is considerable headroom in existing debt facilities. The Board said it is confident another year of significant, earnings-accretive acquisition growth as well as underlying organic growth.

Victoria's joint broker finnCap said today's update was positive news considering its FY17E underlying PBT forecast had already reflected 54% YoY growth. finnCap said it was leaving FY18E estimates unchanged but saw scope for a small upgrade (c5%) to earnings at the FY17E preliminary results:

"Victoria trades on 15.5x consensus FY18E earnings (before any upgrade) which, for a company forecast to generate 3- year EPS CAGR of 30%, looks good value, in our opinion."

Whitman Howard said it was not changing any of our forecasts at this time, but given the strong share price performance vs. its price target of 462p, the firm said it was putting its price target and recommendation under review until the full results.