Victorian Plumbing Group (VIC) H2 2024 earnings summary

Executive summary

• Achieved group revenue of £295.7m, up 4% year-over-year, with order volume exceeding 1 million for the first time and adjusted EBITDA up 14% to £27.2m, in line with market expectations.

• Trade segment revenue grew 8% to £64.0m, now 23% of total revenue; tiles, decor, and lighting categories delivered 23% growth to £12.4m, with a five-year CAGR of 28%.

• Completed acquisition and closure of Victoria Plum, removing brand confusion, streamlining operations, and enabling more efficient marketing investment.

• New 544,000 sq ft Lancashire warehouse completed, unlocking capacity constraints, supporting future growth, and enabling automation and efficiency gains.

• Operational improvements and technology investments, including automation and in-house AI, are expected to drive future efficiency and growth.

Financial highlights

• Gross profit rose 10% to nearly £150m, with gross margin up 3 percentage points to 50%.

• Adjusted EBITDA increased 14% to £27.2m (9% margin), in line with expectations; underlying adjusted EBITDA was £29.4m excluding Victoria Plum losses.

• Adjusted EPS grew 13% to 5.3p.

• Proposed full-year dividend up 15% to 1.61p, with EPS covering dividend by 3.3x.

• Free cash flow increased 16% to £18.6m, with robust conversion and closing cash of £11.2m after major investments.

Outlook and guidance

• FY25 guidance assumes no change in UK consumer backdrop; gross margin expected to remain near current levels, with some offset from wage and insurance cost increases.

• Confident in delivering profit in line with four-year market expectations.

• Q1 2025 revenue up 3% year-over-year; December saw high single-digit growth as marketing normalized post-warehouse transition.

• Expansion categories and trade will be prioritized for growth, with increased marketing spend expected to drive volume.