Victorian Plumbing [LON:VIC], the Merseyside-based bathroom supply company published a trading update earlier this week.
The AIM-listed retailer noted that it had been affected by the cost-of-living crisis, in that customers were being more cost-conscious and choosing more of Victorian’s own-brand products, as opposed to branded goods. Although this was good for Victorian, the company said that it had led to a 3% reduction in its average order value (with own-brand goods being cheaper than branded items).
That said, Victorian Plumbing did note that it was gaining market share.
Back in November the plumbing supply company had said that there was “a volatile consumer backdrop”, but that the year had got off to a strong start, and gross profits had increased over the full-year to the end of September by 11% to GBP134.6m, with revenue up 6% to GBP285.1m.
New distribution hub set to open
Part of its growth story in 2023 was tied to its investment in a new 544,000 square foot centralised distribution hub in Lancashire, which will open its doors this year, and the hope is that by removing bottlenecks and space constraints, that the firm would be able to “unlock [its] growth potential.” The new distribution hub has a 20-year lease.
The company was still bullish on its prospects for the current financial year, with its marketing strategy starting to make incremental gains, with order volumes up 4%, which the company said more than offset the reduction in average order value, which in the financial year to date has seen revenue grow by 1% so far, and on track to deliver on its full-year adjusted EBITDA in line with expectations.
The company started off in CEO Mark Radcliffe’s parent’s shed in 2000, as a result of his father’s hobby of restoring Victorian bathrooms. Radcliffe set up a website – after a previous career as an e-Bayer – and the business grew from there. It is now the country’s leading online retailer of bathroom products and accessories.
Is it time for Victorian Plumbing shares to recover?
Today Victorian Plumbing employs over 600 people, and listed on AIM In 2021, raising close to GBP300m and having a debut value of GBP850m jumping up to GBP1.4bn in the first day of trading. The company opened trading at 82.88p on Tuesday (27th February), and really hasn’t moved in a year.
However, the stock has ranged in price between 64.48p and 100p and has a market capitalisation of GBP267.6m. The share price has been in decline since listing, is it time for the company’s shares to recover?
Victorian Plumbing will report interim results for the six months ending 31st March 2024 on 28th May 2024.
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