Victorian Plumbing upbeat for full year despite 'subdued' market

Victorian Plumbing reported a dip in first-half revenues on Tuesday, on the back of a "subdued" trading environment.

The bathroom retailer, which last week snapped up online rival Victoria Plum in a £22.5m deal, said revenues in the six months to 31 March eased 1% to £144.6m.

Once adjusted for the impact of Easter timing, sales were flat on a like-for-like basis.

Total orders increased 2% to 494,000, which Victorian Plumbing said reflected market share gains in an otherwise "subdued trading environment".

But average order value (AOV) fell 4% to £293, as more customers switched to own-brand products.

However, along with lower shipping costs, that helped support the gross margin, and operating profits strengthened 27% to £7m, while adjusted earnings before interest, tax, depreciation and amortisation jumped 33% to £13.2m.

Looking to the rest of the year, Victorian Plumbing said demand for big ticket discretionary items remained unchanged. It added that underlying revenues in April and the start of May were in line with trends in the seen in the first half, with order volume growth offset by lower AOVs.

However, the AIM-listed firm continued: "The decline in AOV has shown early signs of levelling off, indicative of a slowdown in the shift by consumers to buy more of our own brand product range.

"Additionally, comparative shipping costs tailwinds have diminished over recent weeks, with both factors stabilising gross margin."

Founder and chief executive Mark Radcliffe called the first half performance "robust", noting: "We have embarked upon a year of transformational change with significant investment in our people, technology and operations.

"Our new distribution centre, once operational, will remove space constraints, enabling us to deliver on our strategy plans in expansion categories and our trade proposition."

Victorian Plumbing said full-year adjusted EBITDA was expected to be "broadly" in line with current consensus, with Victoria Plum not expected to be EPS accretive until the 2025 full year.