Victorian Plumbing Posts 10% H1 Revenue Increase

• Further trading momentum and market share gains; strong cash generation and robust balance sheet

Victorian Plumbing Group plc, the UK's leading online specialist bathroom retailer, announces its half year results for the six months ended 31 March 2023 ('H1 2023').

Financial highlights

• Strong H1 revenue, up 10% year-on-year to £146.8m (H1 2022: £133.9m)
  
  
• Improved gross profit(1) up 14% year-on-year to £66.8m; gross profit margin(2) increased 2ppts to 46% (H1 2022: 44%)
  
  
• Adjusted EBITDA(3) increased by 48% year-on-year to £9.9m (H1 2022: £6.7m); adjusted EBITDA margin(4) increased 2ppts to 7% (H1 2022: 5%)
  
  
• Net cash £40.9m (H1 2022: £33.7m, FY 2022: £45.5m), reflecting strong cash conversion and the payment of £9.1m of dividends in H1 2023 (H1 2022: £nil)

• Adjusted diluted EPS(5) of 1.9 pence per share (H1 2022: 1.2 pence per share), reflecting a 58% increase
  
  
• Interim dividend of 0.45p per share declared (H1 2022: £nil)

Operational and strategic highlights

• Total orders(8) for the six months ended 31 March 2023 was 482,000, a 6% increase on last year (H1 2022: 453,000) and a 13% increase on H2 2022 (at 427,000), reflecting further market share gains, with the Group having become the UK's number one bathroom retailer in FY 2022(12) 
  
  
• Average order value(10) for the first half was up 3% to £305 (H1 2022: £296)
  
  
• Marketing spend as a % of revenue for the six months has reduced from 30% to 28% reflecting favourable market dynamics
  
  
• Customer satisfaction increased with an average Trustpilot TrustScore(11) of 'Excellent' at 4.5 (H1 2022: 4.4)

Investing in operational capacity:

• Signed a 20-year lease for a new, 544,000 square foot, purpose-built UK distribution centre in Lancashire, close to our existing locations; on track to open in the second half of next year
  
  
• This will support the Group's strategic expansion and will enable consolidation of a number of the Group's existing sites, although some existing facilities will be retained to enable further adjacent category expansion

Investing in technology:

• Website re-platform completed in December 2022 without any issues or down time, enabling further improvement to the customer journey through H2
  
  
• Continued development and testing of our new Trade app, to enhance efficiency and engagement for Trade ahead of a wider roll out later in the year 

Progressing growth opportunities in 'Trade' and 'Adjacent categories':

• Trade revenue for H1 2023 grew by 20% to £29.6m (H1 2022: £24.6m), representing 20% of total revenue (H1 2022: 18%)
  
  
• Combined adjacent category revenues (Tiles and Lighting) increased in H1 2023 by 54% to £3.7m (H1 2022: £2.4m)

Current trading and outlook

Consumer demand in April and the early part of May remained robust, with order volume led growth and continued increase in our market share. Gross margin continues to improve as the tailwinds from shipping and foreign exchange movements begin to cycle through.

We remain mindful that our customers still face a series of inflation related headwinds, however, with our resilient trading and market-leading proposition we remain confident in delivering expectations for the full year. 

Mark Radcliffe, Founder and Chief Executive Officer of Victorian Plumbing Group plc, said:

"Momentum from our strong delivery in the latter part of FY22 has built into the first half of this financial year. We have further increased our market share, building on our position as the UK's No. 1 bathroom retailer, through our strategy and unique business model, which have remained constant since IPO. We are proud of our investment in a wide range of products, knowing customer choice is ever more important when considered against cost-of-living pressures. We continue to offer good product availability, underpinned by careful inventory management.

"Our new UK distribution centre will represent another key milestone and, together with on-going investment in technology, this will enable further growth in the core bathroom category as well as strategic expansion in adjacent categories.

"Victorian Plumbing's robust business momentum, high cash generation and strong balance sheet supports the announcement of our first interim dividend."

Source : Victorian Plumbing

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.