Flooring manufacturer, Victoria, reported a net loss of £326.3m for the year to March, as the company absorbed impairment charges, refinancing costs and restructuring expenses while navigating weak markets.

On top of the wider loss, up from £275.8m a year earlier, earnings fell 18.8% to £92.3m, with the earnings margin narrowing to 8.8% from 10.2% a year earlier.

Victoria said its reported operating loss of £153.3m and net loss after tax were primarily driven by non-cash asset impairment charges, one-off refinancing costs, the reorganisation of its rugs business and finance costs linked to preferred equity rather than underlying trading.

Revenue fell 6% to £1.05bn as volumes declined 9%.

The company, based in Kidderminster, also said there was progress in strengthening its balance sheet after refinancing debt maturing in 2026 and securing support for a wider refinancing that extends major bond maturities from 2028 to 2031, reduces liabilities by around £300m and is expected to lower annual financing costs by about £34m.

Trading has improved since the year-end, with first-quarter revenue rising around 7% and volumes increasing about 3%, while profitability was ahead of the same period last year despite disruption from higher input costs linked to the Iran conflict.

Shares fell around 6% in early trading as investors focused on the larger-than-expected loss, higher debt levels and weaker earnings despite signs of an improving outlook.

Victoria expects to deliver earnings of at least £115m in FY2027, supported by market share gains in the UK and Australia, new customer wins in the US and ongoing operational improvements, although it cautioned that macroeconomic conditions remain challenging.

Its brands such as Westex Carpets have held royal warrants or supplied products to royal household properties over the years.

Geoff Wilding, executive chairman, said: "We believe Victoria is well placed to benefit as conditions improve. Victoria is adapting and each 5% increase in volume is expected to contribute approximately £20m to Victoria's operating profit. Pre-IFRS16 EBITDA margins are currently less than half of the ten-year average which highlights the significant recovery potential of the group.

"We have a detailed plan to improve earnings and cash flow and are laser-focused on its execution to restore Victoria's decade-long reputation as an exceptional creator of shareholder value."

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