Victorian Plumbing ends year in line after Victoria Plum acquisition

15th Oct 2024 11:02

(Sharecast News) - Victorian Plumbing Group reported a 4% increase in revenue for the financial year just ended on Tuesday, with adjusted EBITDA set to be in line with market expectations.

The AIM-traded firm said that on a like-for-like basis, excluding the impact of the acquisition of Victoria Plum, revenue declined 1% over the 12 months ended 30 September.

It said it achieved strong order growth of 10% year-on-year, delivering a record 1,021,000 orders, up from 932,000 in 2023.

On a like-for-like basis, order growth was 3%.

While the average order value fell by 5%, or 4% on a like-for-like basis, as customers shifted towards Victorian Plumbing's own-brand products, that was offset by a substantial 300 basis point improvement in gross margins, which rose to 50% from 47% a year earlier.

The company said the acquisition of Victoria Plum in May added about £15m in revenue, but incurred an adjusted EBITDA loss of £2m.

Following a consultation process, the board said the decision had been made to close Victoria Plum's operations in Doncaster - a process expected to finish by 31 December.

Victorian Plumbing said its new 544,000 square foot semi-automated distribution centre in Leyland, Lancashire, was now operational, handling over half of all daily orders, with a full transition expected by the end of the year.

"I am pleased with the group's performance in 2024, which has been a very busy year for Victorian Plumbing," said chief executive officer Mark Radcliffe.

"We have increased profitability, as our higher margin own brand proposition continues to resonate with customers and consolidated our leading position as the UK's number one bathroom retailer.

"At the same time, we have delivered a year of transformational change with significant investment in our people, technology and operations."

Radcliffe said the company's "state-of-the-art" new distribution centre was now operational, adding that it would remove previous capacity constraints and enable the firm to serve customers more efficiently and execute on its strategic growth plans in its expansion categories and trade proposition.

"Moreover, the recent decision to close Victoria Plum provides the group with a significant opportunity to accelerate growth and continue to further the investment in our brand and marketing.

"This positive momentum and the successful delivery of our warehouse transformation reaffirms confidence in our profitable growth strategy that is delivering long-term value for all stakeholders."

The group said it would release its preliminary results on 15 January, allowing time to manage the closure of Victoria Plum.

At 1034 BST, shares in Victorian Plumbing Group were up 2.26% at 109.42p.

Reporting by Josh White for Sharecast.com.