Breakeven Is Near for Victoria PLC (LON:VCP)

With the business potentially at an important milestone, we thought we'd take a closer look at Victoria PLC's (LON:VCP) future prospects. Victoria PLC designs, manufactures, and distributes flooring products primarily in the United Kingdom, Italy, Belgium, Spain, Australia, the Netherlands, Turkey, France, Ireland, Portugal, and the United States. The UK£157m market-cap company announced a latest loss of UK£108m on 30 March 2024 for its most recent financial year result. The most pressing concern for investors is Victoria's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Victoria

Consensus from 2 of the British Consumer Durables analysts is that Victoria is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of UK£28m in 2025. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 86% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Victoria's upcoming projects, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Victoria is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Victoria, so if you are interested in understanding the company at a deeper level, take a look at Victoria's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Valuation: What is Victoria worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Victoria is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Victoria’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.