Victorian Plumbing Group Plc · LSE:VIC
Victorian Plumbing — H1 2024 Earnings Presentation
30 slides from Victorian Plumbing's earnings presentation, May 28, 2024
Slide 1: Half Year Results Presentation
> 2 Victorian Plumbing Group plc HALF YEAR RESULTS PRESENTATION SIX MONTHS ENDED 31 MARCH 2024 victorian 28 MAY 2024 plumbing.coux
Slide 2: Agenda
AGENDA Review of financials Continued investment Acquisition of Victoria Plum Current trading & outlook Mark Radcliffe, CEO Dan Barton, CFO Q&A 2
Slide 3: Review of Financials
REVIEW OF FINANCIALS
Slide 4: Own brand shift and lower shipping costs lift gross margin to 50%
CONTINUED CONSUMER SHIFT TOWARDS OWN BRAND PRODUCTS COMBINED WITH REDUCED SHIPPING COSTS TO INCREASE GROSS PROFIT MARGIN TO 50%, DRIVING A 33% INCREASE IN ADJUSTED EBITDA. Order growth of 2%, against a subdued H1 2024 H1 2023 YoY YoY trading backdrop. Revenue down 1% - flat £m £m LFL when allowing f
Slide 5: Order growth of 2% delivering revenue of £144.6m
ORDER GROWTH OF 2% DELIVERING REVENUE OF £144.6M IN A CHALLENGING MACROECONOMIC ENVIRONMENT. 160.0 600 486 482 494 146.8 453 +2% 144.6 +41% +6% 140.7 500 (7%) 140.0 133.9 345 20.9 29.6 400 +22% 32.3 15% 20% 22% '000 24.6 300 120.0 18% 200 100.0 96.0 100 13.6 - 14% H1 2020 H1 2021 H1 2022 H1 2023 H1
Slide 6: Growing trade customer base and 9% growth in trade revenue
MAXIMISING OUR GROWING TRADE CUSTOMER BASE AND DELIVERING 9% GROWTH IN TRADE REVENUE. 35.0 22% 20% 30.0 Increased order volumes 18% driving revenue growth. 25.0 15% Bolstered dedicated trade 14% team to maximise revenue 20.0 potential. £m 32.3 We’re a one-stop solution 15.0 29.6 +9% +20% for our tra
Slide 7: Own brand product margin now 79% of total revenue
CONTINUED BENEFIT FROM OWN BRAND PRODUCT MARGIN, NOW REPRESENTING 79% OF TOTAL REVENUE: +2%PTS VS. H1 2023 AND +1%PT VS. H2 2023. 160.0 70% 146.8 144.6 60% 54% 55% 140.7 49% 51% Gross profit margin 140.0 133.9 50% 48% 33.7 30.1 33.7 40% 23% 21% 120.0 24% 34.4 30% 26% 20% 100.0 96.0 10% 24.0 0% 80.0
Slide 8: 19% growth in expansion categories delivering £5.6m revenue
19% GROWTH IN EXPANSION CATEGORIES DELIVERING £5.6M REVENUE. 6.0 5.6 +19% 4.7 5.0 +57% 2.2 1.0 +120% 4.0 +67% 3.0 2.8 +7% 3.0 +75% 0.5 0.6 +150% +20% 2.0 3.7 1.6 +54% 3.4 (8%) 0.2 2.3 2.4 1.0 +64% +4% 1.4 - H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 Tiles and lighting Décor 8
Slide 9: Gross profit margin increased by 4%pts to 50%
GROSS PROFIT MARGIN INCREASED BY 4%PTS TO 50%, DELIVERING 8% GROWTH IN GROSS PROFIT TO £72.3M. 52% 90.0 50% 49% 50% 80.0 46% 50% 44% 49% 49% 43% 70.0 48% 48% 60.0 Gross profit margin 46% 46% 50.0 45% 45% £m 44% 40.0 44% 72.3 69.0 66.8 43% +8% +69% 58.5 +13% 30.0 (15%) 42% 40.8 20.0 +34% 40% 40% 10.0
Slide 10: Increased brand marketing enables entry into future new markets
INCREASED BRAND MARKETING ENABLES ENTRY INTO FUTURE NEW MARKETS. 45.0 H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 Online marketing 26.9% 27.3% 28.5% 26.3% 26.7% 40.0 3.1 4.0 2.0 Brand marketing 0.0% 0.0% 1.5% 2.1% 2.8% Total marketing 26.9% 27.3% 30.0% 28.4% 29.5% 35.0 30.0 25.0 Continued online marketi
Slide 11: National living wage rise increased employment costs
10% RISE IN NATIONAL LIVING WAGE INCREASED EMPLOYMENT COSTS, DRIVING GROWTH IN UNDERLYING COSTS. H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 60.0 Marketing 26.9% 27.3% 30.0% 28.4% 29.5% 6.0 People costs* 4.4% 4.8% 6.0% 6.4% 7.3% 5.8 Property & other overheads 2.1% 2.3% 3.1% 3.9% 4.1% 50.0 4.2 10.5 Under
Slide 12: 33% increase in adjusted EBITDA
33% INCREASE IN ADJUSTED EBITDA AND A 2%PT INCREASE IN ADJUSTED EBITDA MARGIN DRIVEN BY REDUCED SHIPPING COSTS AND A CONTINUED SHIFT TO OWN BRAND PRODUCTS. 25.0 14% 20.0 15.0 9% 9% £m 7% 20.1 10.0 +128% 5% 13.2 +33% 5.0 9.9 8.8 +48% +57% 6.7 (67%) - H1 2020 H1 2021 H1 2022 H1 2023 H1 2024 Adjusted E
Slide 13: Strong cash position benefits adjusted PBT
STRONG CASH POSITION BENEFITS ADJUSTED PBT, OFFSETTING HIGHER DEPRECIATION & AMORTISATION OF CAPITALISED DEVELOPMENT COSTS. 1.0 13% 20.0 0.5 0.5 0.3 - 15.0 8% (0.5) (1.4) (1.4) £m £m (1.7) (1.8) 10.0 (1.0) (2.0) 18.5 6% +156% (1.5) (0.1) (0.1) 4% 11.5 5.0 +40% (0.2) 8.2 (0.2) +71% (2.0) 4.8 (0.2) (7
Slide 14: Continued growth of adjusted EPS and increased DPS
CONTINUED GROWTH OF ADJUSTED EPS, WHICH POWERS UP AN INCREASED DPS WITH REDUCED COVER - A SIGN OF OUR CONFIDENCE IN THE BUSINESS. 3.0 2.5 2.0 Declared interim dividend Pence 1.5 2.7 increased 16% to 0.52 pence. 1.0 Progression on prior year with 1.9 3.3x dividend cover. 3.3 x 3.4 x cover cover 0.5 0
Slide 15: Strong cash generation, 32% increase in free cash flow
STRONG CASH GENERATION, WITH A 32% INCREASE IN FREE CASH FLOW TO £8.6M AND ROBUST OPERATING CASH CONVERSION OF 65%. H1 2024 H1 2023 YoY £m £m Closing net cash 36.1 40.9 (12%) Free cash flow 1 8.6 6.5 32% Operating cash conversion2 65% 66% (1%pt) Creditor days 63 days 57 days 11% Stock days 96 days 1
Slide 16: Continued Investment
CONTINUED INVESTMENT
Slide 17: We continue to invest to expand into new markets
WE CONTINUE TO INVEST TO EXPAND INTO NEW MARKETS AND IMPROVE THE CUSTOMER EXPERIENCE. • Developing creative campaigns before unlocking • Expansion of our Development team to: • Continuous development of our existing our space constraints. • Provide continuous improvements to the warehouse management
Slide 18: A reminder of the benefits
A REMINDER OF THE BENEFITS Enhances the customer experience (e.g. extended next day ordering). Space to expand the range in tiles & décor, heating and kitchen accessories. Replaces margin dilutive expensive short-term rental cost that impedes profitable growth. Facilitates scalability and increased
Slide 19: Warehouse fit-out and transition of stock underway on schedule
WAREHOUSE FIT-OUT AND TRANSITION OF STOCK UNDERWAY ON SCHEDULE. FY 2023 FY 2024 + Practical c.12 months Fit-out: £2m capex Lancashire BAU & end of completion warehouse spent in FY 2023 and transition double running double running £12.4m in FY 2024 so costs (c.£8m) far. £11.6m remaining. Legal comple
Slide 20: Acquisition: Victoria Plum
ACQUISITION VICTORIA PLUM
Slide 21: A well-established brand with a solid base of customers
A WELL-ESTABLISHED BRAND WITH A SOLID BASE OF CUSTOMERS, SUPPLIERS AND PRODUCT RANGES. Acquiring the Victoria Plum brand and intellectual property. Accelerating our growth in core bathroom products and accessories. Enhancing shareholder returns with potential to drive efficiencies within the Group.
Slide 22: Immediate post-completion phase
IN IMMEDIATE POST-COMPLETION PHASE – TAKING TIME TO ASSESS OPTIONS AVAILABLE TO THE GROUP. 29 September 17 May 2023 2024 Taking time to understand the AHK Designs Ltd acquired the Victorian Plumbing Limited business trade and assets of Victoria Plum acquires AHK Designs Ltd on cash (from Victoria Pl
Slide 23: Current Trading & Outlook
CURRENT TRADING & OUTLOOK
Slide 24: Current trading and outlook
As customers continue to seek value, demand for ‘big ticket’ discretionary items is unchanged. The Group has continued to take market share organically; LFL revenue in April and the early part of May 2024 has been in line with H1 2024 trends, with order volume growth offset by lower AOVs. The declin
Slide 25: Victorian Plumbing
victorian plumbing.ou
Slide 26: Appendices
APPENDICES
Slide 27: Income statement H1 2024
H1 2024 H1 2023 YoY YoY £m £m Revenue 144.6 146.8 (2.2) (1%) Cost of sales (72.3) (80.0) 7.7 10% Gross profit 72.3 66.8 5.5 8% Gross profit margin 50% 46% 4%pt Underlying costs (59.1) (56.9) (2.2) (4%) Adjusted EBITDA 13.2 9.9 3.3 33% Adjusted EBITDA margin 9% 7% 2%pt Depreciation and amortisation (
Slide 28: Balance sheet
H1 2024 H1 2023 FY23 £m £m £m Property, plant and equipment 16.3 1.3 4.9 Right-of-use assets 48.5 4.1 4.3 Other non-current assets 4.7 3.8 4.4 Non-current assets 69.5 9.2 13.6 Inventory 33.2 36.0 34.2 Cash 36.1 40.9 46.4 Other current assets 7.7 5.4 4.8 Current assets 77.0 82.3 85.4 Lease liabilitie
Slide 29: Cash flow statement
H1 2024 H1 2023 YoY £m £m Adjusted EBITDA 13.2 9.9 33% Movement in working capital (0.6) (1.3) 54% Cash generated from operating activities before exceptionals 12.6 8.6 47% Exceptional cash outflow (1.2) (0.1) (1,100%) Share based payment cash outflow (0.1) 0.0 N/A Cash generated from operating acti
Slide 30: Please read the following disclaimers
PLEASE READ THE FOLLOWING DISCLAIMERS WHEN USING THE INFORMATION IN THIS PRESENTATION. The information and opinions provided in this presentation are provided as of the date of this presentation. Certain statements in this presentation constitute forward looking statements (including beliefs or opin
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