Victoria has delivered record FY22 revenues and EBITDA, exceeding the minimum £970m and £155m indicated in April’s trading update. L4L revenue growth, against a Covid weakened comparative, was 19.2%, split equally between volume and price. Given the inflationary cost environment and supply chain constraints this is a highly creditable performance that demonstrates both pricing power and operational strength. The Group also made a number of enhancing acquisitions in FY22 (including the Rugs and UK Carpets division of Balta that completed post year-end) adding £65m of EBITDA at a 5.7x EV/EBITDA multiple (pre-synergies). Whilst overall revenue and earnings in Q1 FY23 are in-line with management expectations, outperformance in some markets has supported softer demand elsewhere. We have reduced our EBIT forecasts by 3% to reflect greater caution over the outlook, noting that FY23E progress is driven by annualised acquisition effects and synergies that are a key management focus. Our TP moves to 685p from 1000p, based on the 5-year average EV/EBITDA multiple.
