Royal floor designer Victoria has confirmed that 1,170 jobs have been cut as turnover declines

Royal flooring manufacturer Victoria has cut 1,170 jobs, representing 16 percent of its workforce, as the London-listed group continues to struggle with weak demand.

Geoff Wilding, the group’s chairman, acknowledged on Wednesday that there had been “a lot of noise” around his company in recent months, amid falling revenues and a fraud warning from the accountant.

The AIM-listed group, which dates back to 1895 and holds a Royal Warrant, said revenues for fiscal 2024 would be lower than in the previous financial year, with no “imminent” recovery in demand in sight is.

Victoria Shares fell 9.22 percent or 22.50p to 221.50p on Wednesday, after falling more than 60 percent in the past year.

Wilding said: “There has been a lot of noise around Victoria over the last six months.

‘To their great credit, operational management has simply put its heads down and moved forward with the integration projects designed to maximize available synergies within the Group and optimize cash flow generation in a challenging macro environment.

‘The pace and accuracy of this work has increased over the past 90 days, with increased costs in the current year but a clear impact on future revenues and cash flow.

‘We emphasize that we do not expect an immediate improvement in demand for floors. However, we are confident in the impact on earnings and cash flow of management’s actions and are confident that demand will inevitably return to long-term averages.”

Victoria said consumer demand remains “soft” in Europe, where the company generates almost 40 percent of its annual sales, while it continues to operate under “moderate but stable” conditions in the United Kingdom and Australia.

The company reported improved demand in the US, but cost pressures such as wage inflation have paid off.

Operating margin is expected to improve by 250 to 350 basis points this year, “thanks to productivity gains.”

In September, accountants Grant Thornton said there were ‘risk factors for fraud’ and ‘potential irregularities’ relating to certain transactions at subsidiary Hanover Flooring.

Victoria said “the board has taken immediate action to comprehensively address the issues.”

In November, Victoria said it made a loss of £19.2 million for the six months to the end of September, after posting a profit of £53.1 million in the same period a year earlier.

It blamed high input costs and weak demand as sales fell 16.6 percent to £643.4 million.

Under the brand Victoria Carpets, the company has been working for the Royals for years and supplies the carpet that was used for Prince William’s wedding to Kate Middleton in 2011.