Victorian Plumbing LON:VIC, the AIM-listed, Merseyside-based bathroom supply company updated the market on its trading for the year to end-September today (15th October).
The company, ‘Britain’s number one bathroom retailer’, reported revenue for the financial year up by around 4% year-on-year. This is a fall of 1% and excludes the financial impact of the GBP22.5m acquisition of competitor AHK Designs in May. AHK traded publicly as Victoria Plum, ‘Britain’s number one online-only bathroom retailer’.
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In all, Victorian Plumbing expects its earnings and revenue to be in line with consensus. The equipment supply company reported revenues of GBP285.1m in FY23 which was up 5.8% from GBP269.4m y-o-y.
Victorian Plumbing said that robust customer demand had been consistent throughout the year. When combined with the positive cash contribution of Victoria Plum it saw further market share gains for the retailer and strong order growth of 10%, seven percentage points ahead of 2023. Victorian Plumbing completed more than one-million-and-twenty-thousand orders in the period, breaking through the one-million barrier after just missing that magic number in 2023.
Own-brand products selling well
A highlight, said chief executive Mark Radcliffe, was consumers’ positive response to Victorian Plumbing’s own-brand products. Although the rise in interest saw average order reduction decline by 5% y-o-y, this was made up for by higher gross margins which rose 300 basis points to 50% when compared to 2023.
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The acquisition of Victoria Plum, located on the other side of the country in Hull, went through in May. An apocryphal tale says that the founders of both retailers used to work together initially selling items on eBay from a backyard shed. They then followed Victorian Plumbing’s founder’s father’s hobby of restoring Victorian bathrooms and going into the bathroom trade. The partners fell out and went their separate ways and set up businesses in competition with one another. Whether that is true, it’s anyone’s guess. However Victoria Plum went into pre-pack administration in 2023, and Victorian Plumbing swooped in and acquired the online retailer six months later.
Today Radcliffe announced Victoria Plum would be no more. He said that despite it contributing GBP15m of revenue, the online retailer incurred a GBP2m EBITDA loss. The board has decided to close down Victoria Plum’s operations and shut its warehousing and distribution centre in Doncaster by the end of the year.
Victorian Plumbing’s new Lancashire hub
Instead, Victorian Plumbing is going to be using a new purpose-built, semi-automated 544,000 sq. ft. distribution centre in Lancashire which will furnish all of the group’s orders by the end of the year. As to how this all works out in terms of the company’s performance, investors will have to be patient. The prelims to end-September will now be published on 15th January 2025 whilst the company works through the ramifications of the acquisition and shuttering of Victoria Plum.
David Hughes, a retail sector analyst for broker Shore Capital, has Victorian Plumbing under coverage. He said: “Outside of this solid trading performance, there has been positive progress on operational matters. The acquisition of Victoria Plum is complete (picking up additional sales as well as removing the issue around brand confusion!) with the closure of the business and its operations expected to be completed by end of December 2024. Further, for its own operations, the new semi-automated distribution centre in Leyland is operational and currently managing 50% of orders, expected to be up to 100% also by the end of December. With these matters nearing completion, in our view, Victorian Plumbing looks well set up to deliver on future sales opportunities.”
The company opened trading today at 107p, up 35.5% over one-year and up 17.5% year-to-date. Shares ranged between 72p and 115p over a 52-week period. Victorian Plumbing has a market cap of GBP350m.
