Victorian Plumbing Reports Strong Sales And Profit

• Increased revenue, continued market share gains and strong growth in profits

Victorian Plumbing Group plc, the UK's leading bathroom retailer¹, announces its audited full year results for the year ended 30 September 2023, highlighting the significant progress made against its strategic priorities.

Financial highlights

• Revenue up 6% on last year to £285.1 million (2022: £269.4 million).

o  Order volume grew by 6% to 932,000 and average order value ("AOV")⁹ remained flat in the same period.

• Gross profit up 11% on last year at £134.6 million (2022: £121.0 million).

o  Gross profit margin increased in H2 2023 to 49% (H1 2023: 46%), with 2023 full year gross profit margin of 47% (2022: 45%).

o  Profitability has improved year-on-year, driven by product mix shifting towards Victorian Plumbing own brand ranges as well as by reduced shipping costs and favourable foreign exchange movements.

• Adjusted EBITDA of £23.8 million up on last year by 22% (2022: £19.5 million) with adjusted EBITDA margin progression, from 7% last year to 8% in 2023.
  
  
• Operating profit of £15.3 million up on last year by 26% (2022: £12.1 million).
  
  
• Adjusted PBT of £20.3 million up on last year by 29% (2022: £15.7 million) with adjusted PBT margin¹⁰ progression, from 6% last year to 7% in 2023.
  
  
• Robust, debt-free balance sheet with closing net cash position of £46.4 million (2022: £45.5 million).
  
  
• Free cash flow¹¹ of £16.1 million (2022: £14.3 million) and operating cash conversion of 68% (2022: 73%).
  
  
• Proposed final ordinary dividend of 0.95p, giving a total ordinary dividend of 1.40p for the year (2022: 1.10p) while maintaining a robust balance sheet with a strong net cash position as we invest in the business. 

Operational and strategic highlights

• Retained our position as the UK's number one bathroom retailer, testament to the strength of our brand, our extensive range and availability.
  
  
• Marketing spend as a percentage of revenue reduced from 28.3% last year to 27.8% and brand awareness score¹⁷ improved to 64% (2022: 60%) following the launch of our new creative 'Boss Your Bathroom' concept in December 2022.

o  Launched a three-year partnership with Bolton Wanderers Football Club as their title and front of shirt sponsor from the 2023/24 season.

• Further progress in our strategic growth areas of 'trade' and 'expansion categories':

o  Trade revenue grew 13% to £59.5 million (2022: £52.8 million), representing 21% of total revenue (2022: 20%). Our Victorian Plumbing app, designed with both trade and consumer in mind, was released successfully in October 2023 and should drive further engagement.

o  Tiles and lighting revenue grew by 35% to £7.3 million (2022: £5.4 million) and the upcoming increase in warehouse space will facilitate further growth in these, and other, expansion categories.

• Investment in our technology platform to drive future growth:

o  Successful website re-platforming completed in December 2022, enabling our expansion categories to be more prominent on the website and improving search functionality using bespoke developed AI technology.

• The lease on our new 544,000 square feet purpose-built distribution centre in Leyland, Lancashire, achieved legal completion in October 2023. The warehouse development remains on time and within budget, with the expectation that the new distribution centre will be operational on schedule in 2024.
  
  
• Trustpilot rating¹² of 'Excellent' maintaining a sector-leading average score of 4.5 out of 5.0 (2022: 4.5).

Board change

• On 1 April 2023, Daniel Barton replaced Paul Meehan as the Group's Chief Financial Officer.

Current trading and outlook

• Albeit early in the year and against a volatile consumer backdrop, the Group has had a positive start to the current year with continued revenue growth and gross profit margin progression versus the comparative period last year.
  
  
• The opening of our new distribution centre in 2024 will remove space constraints, unlock growth potential and create efficiency; all of which will support the delivery of the medium-term outlook.
  
  
• We continue to focus on our long-term goals and are making good progress across our strategic growth areas. Underpinned by our market share gains in recent years, we are confident in the future growth prospects of the Group. 

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

"We have further strengthened our position in the market and maintained our position as the number one UK bathroom retailer.

"This has been a year of continued delivery of our growth plans. 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.

"As a highly cash generative business with a strong balance sheet, we continue to invest in the business - across people, technology and infrastructure. Our new purpose-built 544,000 square feet distribution centre, once operational, will enable further growth in the core bathroom category, as well as unlocking further strategic category expansion. We are confident that Victorian Plumbing's profitable growth strategy will continue to deliver long-term value to all stakeholders."

Source : Victorian Plumbing PLC

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