Revenue rises, operating profit falls at Victorian Plumbing
By Josh White
Date: Wednesday 15 Jan 2025
(Sharecast News) - Victorian Plumbing Group reported improved revenue but lower operating profit for the year ended 30 September on Wednesday, amid a challenging market environment.
The AIM-traded firm said revenue increased 4% to £295.7m, with like-for-like revenue dipping 1%, outperforming the wider repair, maintenance, and improvement (RMI) market.
It achieved record order volumes exceeding one million for the first time, offset by a 5% decline in average order value as customers increasingly favoured own-brand products.
Gross profit rose 10% to £147.8m, with margins reaching 50% - the highest since the company's 2021 listing.
Adjusted EBITDA climbed 14% to £27.2m, while adjusted profit before tax grew 14% to £23.1m.
However, operating profit fell 27% to £11.2m due to £8.2m in exceptional costs linked to the warehouse transformation and the acquisition and closure of Victoria Plum.
The acquisition of Victoria Plum contributed £14.7m to revenue, but recorded an adjusted EBITDA loss of £2.2m.
Following its August closure, operations were integrated into Victorian Plumbing, with inventory transfers completed by January.
The group said it had successfully transitioned to a 544,000-square-foot distribution centre in Leyland, Lancashire, which now handled all of its orders.
Trade revenue increased 13% to £67.3m, supported by enhancements to the Victorian Plumbing app, while revenue from tiles and décor grew 23% to £12.4m.
The group said it invested in marketing, technology, and customer service, achieving a Trustpilot rating of 4.6 out of 5.0.
Looking ahead, Victorian Plumbing said it expected to deliver profits in line with market expectations for 2025.
The group said it was planning to focus on expanding categories, leveraging its new infrastructure, and increasing marketing efforts to drive growth.
Despite macroeconomic challenges, first-quarter revenue rose 3% year-on-year, with improved performance in December following the warehouse transition.
"We have successfully delivered on two strategic priorities, firstly completing our warehouse transformation on time and in line with budget and, secondly, to accelerate growth through the acquisition of our namesake Victoria Plum, which reduces considerable brand marketing confusion for our customers," said founder and chief executive officer Mark Radcliffe.
"2024 has been a year of transformation against a subdued trading backdrop and continued uncertainty in UK consumer behaviour.
"Despite this, our clearly defined strategy and unique business model have resulted in increased order volumes and resilient average order values, with customers continuing to appreciate the choice of great value products that we offer across our ranges."
Radcliffe said that as a "highly cash-generative business" with a strong balance sheet, the company was continuing to invest in the business - across people, technology and infrastructure.
"Our new purpose-built 544,000 square feet distribution centre, now fully operational, will enable further growth in the core bathroom category, as well as unlocking strategic category expansion.
"We are confident that Victorian Plumbing's profitable growth strategy will continue to deliver long-term value to all stakeholders."
At 1210 GMT, shares in Victorian Plumbing were down 1.46% at 94.6p.
Reporting by Josh White for Sharecast.com.
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