Wilding: Brexit future is bright despite ‘hyper-ventilating commentators and hysterical wittering’
Geoff Wilding, Victoria executive chairman says the flooring group will have a positive Brexit future after hitting out at ‘hyper-ventilating commentators and hysterical luvvie wittering.’
‘The ludicrous over-reaction to the outcome of the EU referendum complete with hyper-ventilating commentators and hysterical luvvie wittering has become more balanced recently. Although there will inevitably be further ups and downs over the months ahead, I expect the UK’s decision to leave the EU to be positive for the group’s competitiveness in the foreseeable future.
‘There are several reasons for this: More than half the carpet sold in the UK is manufactured in Europe, primarily Belgium and the Netherlands. Therefore although a weaker pound may increase some of our raw material costs slightly, it also makes this imported product materially more expensive and, as a result, offers Victoria the opportunity to grow its market share, particularly with larger retailers and some of the buying groups who currently source a significant portion of their product offering from the Continent.
‘General treasury risk for the group is also limited. We have only a small amount of non- sterling denominated debt, which is naturally hedged against the Australian business earnings. We always match our foreign currency liabilities to our income – we are flooring manufacturers, not currency traders.
‘The group exports a negligible amount of product to the EU. Approximately 20% of the Group's earnings come from its Australian operations and a weaker pound will result in higher profits when translated into GBP.
‘More generally, the UK business has seen positive trading since the start of the year. Possibly due to the changes in stamp duty, consumers appear to be choosing to invest more in their existing home rather than moving. There is no quicker or more dramatic way to improve the appearance and style of a home than upgrade the flooring.’