Victoria plc: we will need a bigger boat

You probably wouldn’t expect the chairman of a British carpet company to own a 200ft long superyacht, complete with a transparent grand piano on board.

But again, Victoria plc is no ordinary carpet manufacturer.

At first glance, the company named by Aim appears to be a reputable British manufacturer with royal connections. The Kidderminster-based company is over 120 years old, holds a royal warrant and provided the red carpet for Prince William and Catherine Middleton’s wedding in 2011.

Victoria’s current incarnation really began the following year, however. In 2012, Geoff Wilding, a former New Zealand investment banker, took over as CEO of the West Midlands carpet maker after a bitter six-month battle in the boardroom. Wilding then embarked on an acquisition spree – or “carpet rolling”, if you like the obvious puns – buying over 20 other flooring companies around the world in just under a decade.

The shareholders who supported the Kiwi from the beginning were generously rewarded. Under Wilding’s stewardship, Victoria’s market capitalization grew from just £15m to £1.4bn.

The company’s investor relations web page leaves no doubt as to who is responsible for its stock market success. For years, he not only carried a black and white portrait of Wilding, but also a calculator showing the return investors would have made if they had bought shares in Victoria the day he became president.

Victoria Investor Relations Page

This acquisition-fueled surge in share price has long drawn the attention of short sellers and skeptics.

In 2018, The Analyst – the stock research outlet known for its short, timely recommendations on companies such as NMC Health and THG – published a series of negative reports probing Victoria’s acquisitions and Wilding’s business case.

Later that year, Victoria had to cancel its first scheduled bond deal, after its stock cratered nearly 40% in a week. Wilding said at the time that the company’s unclear communications to shareholders had “left an open target for those with less than pure motives to spread outrageous untruths,” in a not-so-veiled dig at his critics.

Victoria quickly regained her footing, successfully tapping into the bond market in 2019 and then gaining support from Koch Industries the following year. The sprawling US conglomerate purchased newly issued preferred stock alongside a large share of the flooring company’s common stock. In the summer of 2021, Victoria’s market capitalization was back above the £1 billion mark.

Things started to unravel again this year, however, as the market soured on leveraged companies. Victoria’s share price has fallen almost 70% since the start of the year, while its bond yields have soared into double digits in recent weeks.

Line chart of a £250m bond maturing in 2028 showing Victoria bond yields soaring

Wilding’s company has also caught the eye of short sellers, with Iceberg Research releasing a report earlier this week exploring the structure of several of its acquisitions. Victoria has not publicly commented on the report, but stock markets largely ignored its findings, with shares of the company actually ending the day up almost 9%.

But there was one aspect mentioned briefly in the report that FT Alphaville thought would be fun to delve into: Geoff Wilding’s penchant for big boats.

Wilding’s Resilience

Over the years, Wilding has peppered quotes from Warren Buffett and Charlie Munger in his letters to shareholders, while making it clear that their returns are his number one priority.

Since taking the reins, Victoria has also adopted a “mission statement” which bluntly expresses this objective in rather literal terms: “to create wealth for our shareholders”.

Victoria has certainly created a lot of wealth for one shareholder in particular: Geoff Wilding.

Shortly after becoming chairman, the New Zealander struck a controversial contract for difference deal with the board that landed him a windfall a few years later. After paying just £20,000 to mint the CFD, Wilding received 7 million newly issued Victoria shares in July 2014, giving him a (later reduced) 49% stake in the company. By the end of the year, this stake was worth over £30 million.

Shortly after Christmas 2014, Wilding incorporated a Maltese company to venture into the quintessential toy of the rich: a superyacht.

Maltese Business Register Document

Resilience Charters Limited – whose Maltese company register says Wilding is the beneficial owner – took possession of the 50m-long vessel shortly thereafter, renaming the six-year-old superyacht ‘Resilience’.

Owning a used superyacht is one thing, but the true mark of a successful carpet mogul is buying a brand new, custom-built boat.

In September 2017, Italian shipbuilder ISA announced that it had sold a new-build yacht codenamed Project Rocco, a 65m vessel scheduled for delivery in spring 2021. ISA’s Technical Director, Gianpaolo Lapenna, noted at the time that “the owner was deeply involved in the design phase with his technical team and this yacht is truly ‘his’ in every way.

By now you have probably guessed the identity of the “owner”. The Maltese Companies Register again shows Wilding to be the beneficial owner of Project Rocco Limited, which was incorporated shortly before the ISA announcement.

Maltese Business Register Document

Shipping records show Wilding sold her original boat in early 2020, which her new owner renamed Arbema. The following year, ISA delivered the Rocco project, which Wilding dubbed Resilience, the same name as his former yacht.

It’s here:

Geoff Wilding’s 65m superyacht Resilience © Iprod

And here is a promotional video marking its launch in July 2021:

If FT Alphaville readers are interested in chartering the vessel, it can be yours for just €550,000 per week (plus expenses). The YachtCharterFleet website lists amenities which include two swimming pools, an outdoor cinema and a “toy box overflowing with the latest water sports accessories”. The photo gallery shows that it even has a transparent grand piano on board.

Needless to say this is not a cheap boat. Marine data service VesselsValue told FT Alphaville its market value is more than $56 million.

How could Wilding afford such a well-equipped ship?

The 58-year-old businessman has had successful ventures before, selling a stake in New Zealand-based group Pacific Print to private equity in 2005.

But between August 2015 and August 2018 he also sold Victoria shares for over £70m, as well as taking out a margin loan on part of his stake through JPMorgan (he then bought for £4.9m). sterling of shares at the end of 2018). Not bad for a guy who initially built his stake in the business by handing over just £20,000 to hit a CFD.

The Maltese Companies Register also shows that the shares of Project Rocco Limited were pledged to the HSBC branch in Guernsey at the end of last year.

Maltese Business Register Document

Victoria plc told FT Alphaville that Wilding never drew on JPMorgan’s loan facility. The company declined to comment on further matters.

FT Alphaville is unsure which side will ultimately benefit from the battle over Victoria: its short sellers, like Coltrane Asset Management, or its big shareholders, like the Spruce House Partnership.

One thing is certain, however: Geoff Wilding has already made a lot of money.

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