Victoria Plc - comment

Victoria’s AGM update is modestly positive for the bonds, with management reporting an encouraging start to FY27 and continued progress on the operational initiatives that should support EBITDA recovery. The V4 ceramics upgrade in Spain is now complete, while the relocation of Balta’s rug-weaving equipment from Belgium to Turkey is also finished. Both projects should improve efficiency and output through the remainder of the year, with the full benefit expected in FY28. The AGM statement had an upbeat tone, stating that the UK business is performing strongly, and Victoria could also benefit from opportunities arising from Headlam’s move into administration. However, the broader operating environment remains challenging, and energy, diesel, and input costs have increased further. More importantly from a credit perspective, the 2028 bond and preferred equity refinancing remains on track for completion in Q4, with documentation expected in mid-September.