Victorian Plumbing confident despite fall in average order value

27th Feb 2024 08:14

(Sharecast News) - Bathroom retailer Victorian Plumbing said in a trading update on Tuesday that it had seen a 3% reduction in average order value in the first 21 weeks of the financial year.

The AIM-traded firm said the decrease stemmed from customers' continued inclination towards seeking value, translating into a higher proportion of purchases of the company's own brand products.

Despite the shift in purchasing behaviour and against an unchanged market backdrop, Victorian Plumbing said it was maintaining its strategy of market share expansion.

The group achieved a 4% year-on-year increase in order volume, effectively offsetting the decline in average order value.

As a result, year-to-date revenue growth stood at 1%.

The board said the upward trajectory in the sales of own-brand products had also bolstered its gross margin.

Coupled with stable marketing spend efficiency, Victorian Plumbing said it was optimistic about meeting full-year adjusted EBITDA expectations, aligned with market consensus.

"As planned, we are making significant progress towards the opening of our new distribution centre, which will address current capacity constraints, unlock growth potential and create efficiencies," the board said in its statement.

"One-third of the warehouse fit-out is now complete, with the expectation that we will be fully operational in the second half of 2024, on schedule and within budget.

"We continue to focus on our long-term goals, notably in gaining market share, and we are making good progress across our strategic growth areas."

Victorian Plumbing said it would report its interim results for the six months ending 31 March on 28 May.

At 0914 GMT, shares in Victorian Plumbing were up 0.61% at 82.5p.

Reporting by Josh White for Sharecast.com.