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Victorian Plumbing Sees Half-Year Revenue Decline

Victorian Plumbing Green Button 725 x 500

Victorian Plumbing Group plc, the UK's leading online specialist bathroom retailer, announces its half year results for the six months ended 31 March 2022.

 

Six-months to 31 March 2022

(unaudited)

Six-months to 31 March 2021

(audited)

Six-months to 31 March 2020

(unaudited)

H1 2022

Year-on-year

%

H1 2022

Two-year

growth %*

Revenue

£133.9m

£140.7m

£96.0m

(5%)

39%

Gross profit1

£58.5m

£69.0m

£40.8m

(15%)

43%

Gross profit margin2

44%

49%

43%

(5%pts)

1%pts

Adjusted EBITDA3

£6.7m

£20.1m

£8.8m

(67%)

(24%)

Adjusted EBITDA margin4

5%

14%

9%

(9%pts)

(4%pts)

Operating profit

£2.9m

£14.6m

£7.7m

(80%)

(62%)

Net cash

£33.7m

£22.3m

£4.7m

51%

617%

Adjusted basic earnings per share10

1.4p

5.6p

2.4p

(75%)

(42%)

* Two-year growth included to contextualise the effect of Covid-19 upon trading.

Financial results

  • Revenue growth of 39% on a two-year basis, reflecting a significant increase in our customer base and consumer appreciation of our customer proposition, product range and availability

  • Revenue was down 5% year-on-year to £133.9m (H1 2021: £140.7m), lapping a tough comparable period resulting from market outperformance during Covid-19 related lockdowns

  • As expected, gross profit margin2 decreased by five percentage points to 44% (H1 2021: 49%). This decrease was largely due to continued supply chain pressures and our careful approach to managing price rises during a period of inflationary cost pressures. Gross profit1 of £58.5m was up 43% on a two-year basis and down 15% year-on-year

  • Adjusted EBITDA3 reduced by 67% year-on-year to £6.7m (H1 2021: £20.1m) and adjusted EBITDA margin4 reduced by nine percentage points to 5% (H1 2021: 14%). The decline in adjusted EBITDA margin reflects both the reduction in gross profit margin and a strategic increase in marketing activity which has enabled us to take market share

  • Net cash £33.7m (H1 2021: £22.3m). Cash conversion6 of 21% (H1 2021: 85%) reflecting an investment in stock, to mitigate ongoing global supply chain risks

  • Adjusted basic earnings per share5 was 1.4 pence per share (H1 2021: 5.6 pence per share)

Operational and strategic highlights

Over the past 18 months we have managed a step change in the scale of our business and have done so whilst continuing to offer consumers the widest choice of products and availability, at competitive prices:

  • Total orders7 for the six months ended 31 March 2022 were 453,000, a 31% increase from pre-pandemic levels (H1 2020: 345,000), and just 7% down from H1 2021 during which the UK was under severe Covid-19 restrictions (H1 2021: 486,000)

  • Average order value8 up 2% to £296 (H1 2021: £289)

  • We have increased our customer satisfaction with an average Trustpilot TrustScore9 of 4.4 (H1 2021: 4.3)

We have invested in our technology platform, which will enable us to drive future growth:

  • Work continues on the development and testing of our website re-platform. This will give us the opportunity to enhance our customer journey over the coming months

  • Work also continues on the development and testing of our new Trade app., to enhance efficiency and engagement for Trade customers

  • We are also making good progress in our strategic areas of 'Trade' and 'Adjacent categories':

  • Trade revenue grew by 18% to £24.6m (H1 2021: £20.9m), representing 18% of total revenue (H1 2021: 15%). During H1 2022, we launched our first ever targeted trade radio campaign

  • We have increased our tile range by 38% since September 2021 and increased the number of products in our lighting range to 753 (Sept 2021: 502)

Outlook

Revenues in H1 2022 were in line with recent guidance and reflect the lower demand compared to the same period last year when the UK was in a lockdown environment. The Group focused on increasing market share and invested more heavily in marketing in the early part of H1 2022 to successfully drive market share gains. That marketing spend has now normalised as planned.

The Group expects to deliver modest year-on-year revenue growth through the second half, as previously guided in the AGM statement on 24 February 2022. There are well reported ongoing inflationary cost pressures and we remain acutely aware that our customers are also managing these pressures. The Group will therefore continue its careful approach to price rises through the second half of the financial year.

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

"Victorian Plumbing remains the go-to online retailer for consumers who are looking for bathroom products. Our market-leading proposition and our innovative and proactive approach to marketing have enabled us to continue growing our market share, even against a challenging market backdrop.

"Following a nine-month period during which the economy was opening up after Covid-19 restrictions and discretionary spending has been more focused on leisure activities, our relentless focus on investing in quality and innovation has resulted in revenue growing 39% on a two-year basis.

"I am pleased with the progress we have made with our technological developments, and I am excited about the opportunities presented by our new website. This new platform will enable us to further penetrate our core market and provide the best possible base for us to further expand our trade and adjacent product areas.

"We continue to be focused on our long-term goals. We are making good progress on all of our strategic initiatives and are confident in the future growth prospects of the Group."

Source : Victorian Plumbing

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17 May 2022

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