- Bathroom retailer returns to growth

- Reports ‘strong start’ to 2023

- Declares maiden ordinary dividend and an additional special payment

While they remain 70% below 2021’s 262p initial public offering (IPO) price, shares in Victorian Plumbing (VIC:AIM) perked up 3.1% to 70.1p after the online taps, toilets, baths and basins seller’s results for the year ended 30 September beat downgraded estimates following a second half return to growth.

Victorian Plumbing also reported ‘a strong start’ to its new financial year and dismissed fears that supply chain constraints might derail its turnaround.

Global shipping costs are abating and the group insists its long term ties with global suppliers mean it can see off troubles before they impact deliveries.

Thanks to a stronger year end cash position, the retailer proposed a maiden ordinary final dividend of 1.1p as well as a special dividend of 1.7p.

SECOND HALF RECOVERY

Skelmersdale-headquartered Victorian Plumbing’s sales and pre-tax profits declined in a difficult first half as the cost-of-living crisis began to bite.

But the company recovered from a tough start to the year to generate growth in the second half, despite concerns that red hot inflation and the cost-of-living crisis could sink sales, thanks to its extensive and competitively priced choice of quality bathroom wares.

A testing first half left sales for the year broadly flat at £269.4 million, but 78% ahead of pre-Covid 2019, while annual pre-tax profits plunged 40% to £11.8 million.

Encouragingly, Victorian Plumbing highlighted ‘a strong start’ to full year 2023 with 10% sales growth to date, though management is ‘conscious of the current macroeconomic conditions’ and will ‘continue to monitor consumer behaviour and tailor our pricing and marketing approach accordingly’.

CEO Mark Radcliffe, who founded the company in his parents’ shed 20 years ago, said ‘we have returned to growth in the second half, increasing our market share and establishing our position as the UK’s No.1 bathroom retailer.

‘Our distinctive brand and extensive choice of quality bathroom products, including quality own-brand ranges and an unrivalled suite of third-party options, remain compelling drivers in attracting consumers to Victorian Plumbing, whilst the strength of our supply chain and our strategic investment in inventory means that the majority of our products have high availability.’

WHAT ARE ANALYSTS SAYING?

Broker Numis said: ‘A strong start to current year trading, particularly in margins, leaves our unchanged forecasts look increasingly well underpinned.

‘While mindful of cyclicality, share gains and balance sheet strength see Victorian plumbing well positioned to emerge a winner.’

Julie Palmer, partner at Begbies Traynor (BEG:AIM), pointed out: ‘Bathrooms are a necessity and customers are happy to spend on furnishing the smallest room in the house, as Victorian Plumbing’s full year results show.’

Palmer said confidence at the business is ‘strong enough that it is pumping up marketing spend to dominate the UK sector, in which it is already market leader. This confidence extends to dividends, with Victorian Plumbing feeling flush enough with cash to not only pay its maiden dividend, but also special payout.

‘The question is, can Victorian Plumbing keep it up? If demand continues it could find itself trying to meet customer demand.’

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