Victoria plc: we’re going to 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 see-through grand piano onboard.

But, then again, Victoria plc is no ordinary carpet maker.

At first glance, the Aim-quoted company appears to be a storied British manufacturer with royal connections. The Kidderminster-based business is over 120 years old, holds a Royal Warrant and famously supplied the red carpet for the wedding of Prince William and Catherine Middleton in 2011.

The present incarnation of Victoria really began the following year, however. In 2012, Geoff Wilding, a former investment banker from New Zealand, took the helm as executive chairman of the West Midlands carpet maker after an acrid six-month boardroom battle. Wilding then embarked on an acquisition spree — or a “carpet roll-up”, if you like obvious puns — buying over 20 other flooring companies around the globe in little under a decade.

Shareholders who backed the Kiwi from the beginning were rewarded handsomely. Under Wilding’s stewardship, Victoria’s market capitalisation surged from just £15mn to as high as £1.4bn.

The company’s investor relations webpage leaves little doubt as to who’s responsible for its stock market success. For years, it has 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 Victoria shares on the day he became chairman.

That acquisition-fuelled run-up in the share price has long attracted scrutiny from short sellers and sceptics.

In 2018, The Analyst — the equity research shop known for well-timed short recommendations on companies such as NMC Health and THG — published a series of negative reports probing Victoria’s acquisitions and Wilding’s business record.

Later that year, Victoria had to call off its planned debut bond deal, after its stock cratered nearly 40 per cent in a week. Wilding said at the time that the company’s unclear communications to shareholders had “left an open goal for those with less than pure motives to spread outrageous untruths”, in a not-so-veiled dig at its critics.

Victoria soon regained its footing, successfully tapping the bond market in 2019 and then winning the support of Koch Industries the following year. The sprawling American conglomerate bought newly issued preference shares alongside a significant chunk of the flooring company’s common equity. By the summer of 2021, Victoria’s market capitalisation was back above the £1bn mark.

Things have started to unravel again this year, however, as the market soured on debt-laden businesses. Victoria’s share price has plunged nearly 70 per cent year-to-date, while its bond yields have soared to double-digits in recent weeks.

Wilding’s company has also attracted fresh scrutiny from short sellers, with Iceberg Research publishing a report earlier this week digging into the structure of several of its acquisitions. Victoria has not commented publicly on the report, but equity markets largely shrugged off its findings, with the company’s shares actually finishing the day nearly 9 per cent higher.

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

Wilding’s Resilience

Over the years, Wilding has sprinkled quotes from the likes of Warren Buffett and Charlie Munger throughout his missives to shareholders, while making clear that their returns are his number one priority.

Since he took the helm, Victoria has also adopted a “mission statement” that bluntly expresses this aim in rather literal terms: “to create wealth for our shareholders”.

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

Shortly after becoming chairman, the New Zealander struck a controversial contract-for-difference scheme with the board that handed him a windfall a couple of years later. Having paid just £20,000 to strike the CFD, Wilding received 7mn of newly issued Victoria shares in July 2014, handing him a 49 per cent stake (later reduced) in the company. By the end of the year, this stake was worth over £30mn.

Shortly after Christmas 2014, Wilding incorporated a Maltese company to splash out on the quintessential rich person’s toy: a superyacht.

Resilience Charters Limited — which the Maltese Business Register shows Wilding is the beneficial owner of — took ownership of a 50m-long vessel shortly afterwards, renaming the six-year old superyacht “Resilience”. 

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

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

By now you’ve probably guessed the identity of “the owner”. The Maltese Business Register again shows that Wilding is the beneficial owner of Project Rocco Limited, which was incorporated shortly before ISA’s announcement.

Shipping registries show that Wilding sold his original boat at the start of 2020, which its new owner renamed Arbema. The following year, ISA delivered Project Rocco, which Wilding christened Resilience, the same name as his previous yacht.

Here it is:

And here’s 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 a week (plus expenses). The website YachtCharterFleet lists amenities that include two swimming pools, an outdoor cinema and an “overflowing toy box with the latest water sports accessories”. The photo gallery shows that it even has a see-through grand piano onboard.

Needless to say, this is not a cheap boat. Maritime data service VesselsValue told FT Alphaville that its market value stands at over $56mn.

How did Wilding afford such a well-appointed vessel?

The 58-year old businessman has had previous successful ventures, selling a stake in New Zealand’s Pacific Print Group to private equity back in 2005.

But between August 2015 and August 2018 he also sold Victoria shares worth more than £70mn, as well as taking out a margin loan on part of his stake via JPMorgan (he then bought £4.9mn worth of shares in late 2018). Not bad for a guy who originally built his stake in the company by handing over just £20,000 to strike a CFD.

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

Victoria plc told FT Alphaville that Wilding had never drawn on the loan facility from JPMorgan. The company declined to comment on other matters.

FT Alphaville cannot be sure which side will ultimately profit from the tussle over Victoria: its short sellers, such as Coltrane Asset Management, or its large shareholders, such as the Spruce House Partnership.

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