LONDON: Victoria PLC, (LSE: VCP) the international designers, manufacturers and distributors of innovative flooring, has sold Graniser, the Group’s ceramic tile manufacturer based in Izmir, Turkey.

Total consideration paid by the buyer, Mr Hasan Akgün, was €36.8 million (£30.9m) paid as to €10.0 million (£8.4 m) cash on completion, plus the assumption of €26.8 million (c. £22.5m) of net debt.

A long-term supply agreement for the supply of Victoria Group-specific ceramic tiles at manufactured-cost pricing, which is expected to positively impact Victoria’s earnings.

Graniser has been negatively impacted by recent instability in several of its key markets, and for the 12 months ended 30 March 2024, Graniser generated audited underlying revenues of TL994.8 million (c. £30.1m2) and underlying EBITDA of TL13.4 million (c. £0.9m2). Net assets as per the Group’s accounts was TL632.4 million (£13.7m2).

Mr Akgün is the CEO of Duratiles, and a member of the highly respected Akgün family, who established Akgün Group in 1925. The Akgün Group operates in construction materials, automotive, insurance, logistics and oil sectors across Turkey and internationally. Whilst remaining family-owned, it is now one of the largest companies in Turkey with 5,000 employees and 17 factories.

Victoria’s original investment case for the acquisition of Graniser was the diversification of the Group’s ceramic tiles manufacturing footprint into a lower energy, labour, and raw material price environment. With the long-term manufactured-cost supply agreement this thesis remains wholly intact with the sale of the business – but with the advantage of freeing up capital for deployment elsewhere in the balance sheet.

Philippe Hamers, Group Chief Executive of Victoria, commented: “Having experienced a difficult demand environment recently, the sale of Graniser to, and partnership with, Mr Akgün will provide Victoria’s ceramic tiles business continued access to cost-effective tiles whilst contributing towards the deleveraging of the Group’s balance sheet by reducing leverage by approximately 0.5 times.

“For the avoidance of doubt, the sale of Graniser will have no impact on our other Turkish businesses, which employ 900 people extruding synthetic fibre for our soft flooring factories, and manufacturing rugs for export to Europe and the United States, and remain an important part of the Group.”