Victoria, Balta Group, & UK Soft Flooring
Former Purchasing Director at Balta Group
inpractise.com/articles/victoria-balta-and-uk-soft-flooring
Why is this interview interesting?
- UK carpets are a commodity, price competitive, and all manufacturers can replicate products easily
- Majority of UK yarn is sourced from Turkey and in short supply
- Balta UK (now Victoria) makes their own yarns so less at risk
- Victoria gets scaled Turkish woven manufacturing assets; could also move tufted manufacturing to Turkey in long-run
- Balta deal seems cheap on the surface but requires operational improvements
Victoria Plc
Why is this company interesting?
Victoria PLC is a UK-listed flooring manufacturing roll-up that is owned and operated by Geoff Wilding who took control as Chairman in 2012. The company owns soft and hard flooring manufacturing businesses that distribute products to the largest European and UK retailers.
The flooring industry is resilient with a stable replacement market and the top two players in Europe only account for ~15% of industry volume. Flooring manufacturers are typically highly cash generative due to attractive working capital profile, long-life fixed assets that have relatively low technological risk, and a stable end market.
Since 2014, Victoria has made over 20 acquisitions that are integrated into the group’s operations. Victoria uses debt and preferred equity from Koch to finance acquisitions that cost ~5-7x EBITDA. Nearly 40% of the shares outstanding are held by management and two longer-term shareholders. Geoff Wilding still owns nearly 20% of the business.
Written in December 2021.
Victoria, Balta Group, & UK Soft Flooring(March 17, 2022)
Jan Krona
Former Purchasing Director at Balta Group
Interview Transcript
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