TIDMVIC
RNS Number : 6825L
Victorian Plumbing Group plc
17 May 2022
Embargoed until 7:00am, 17 May 2022
Victorian Plumbing Group PLC
HALF year results for the SIX MONTHSED 31 mARCH 2022
Victorian Plumbing Group plc ('Victorian Plumbing', 'the
Group'), the UK's leading online specialist bathroom retailer,
announces its half year results for the six months ended 31 March
2022 ('H1 2022')
Six-months to 31 March 2022 Six-months to 31 March 2021 Six-months to 31 March 2020 H1 2022 H1 2022
(unaudited) (audited) (unaudited) Year-on-year Two-year
% growth %*
----------- ----------------------------- ---------------------------- ---------------------------- -------------- -----------
Revenue GBP133.9m GBP140.7m GBP96.0m (5%) 39%
Gross
profit(1) GBP58.5m GBP69.0m GBP40.8m (15%) 43%
Gross
profit
margin(2) 44% 49% 43% (5%pts) 1%pts
Adjusted
EBITDA(3) GBP6.7m GBP20.1m GBP8.8m (67%) (24%)
Adjusted
EBITDA
margin(4) 5% 14% 9% (9%pts) (4%pts)
Operating
profit GBP2.9m GBP14.6m GBP7.7m (80%) (62%)
Net cash GBP33.7m GBP22.3m GBP4.7m 51% 617%
Adjusted
basic
earnings
per
share(10) 1.4p 5.6p 2.4p (75%) (42%)
----------- ----------------------------- ---------------------------- ---------------------------- -------------- -----------
* Two-year growth included to contextualise the effect of
Covid-19 upon trading.
Financial results
-- Revenue growth of 39% on a two-year basis, reflecting a
significant increase in our customer base and consumer appreciation
of our customer proposition, product range and availability
-- Revenue was down 5% year-on-year to GBP133.9m (H1 2021:
GBP140.7m), lapping a tough comparable period resulting from market
outperformance during Covid-19 related lockdowns
-- As expected, gross profit margin(2) decreased by five
percentage points to 44% (H1 2021: 49%). This decrease was largely
due to continued supply chain pressures and our careful approach to
managing price rises during a period of inflationary cost
pressures. Gross profit(1) of GBP58.5m was up 43% on a two-year
basis and down 15% year-on-year
-- Adjusted EBITDA(3) reduced by 67% year-on-year to GBP6.7m (H1
2021: GBP20.1m) and adjusted EBITDA margin(4) reduced by nine
percentage points to 5% (H1 2021: 14%). The decline in adjusted
EBITDA margin reflects both the reduction in gross profit margin
and a strategic increase in marketing activity which has enabled us
to take market share
-- Net cash GBP33.7m (H1 2021: GBP22.3m). Cash conversion(6) of
21% (H1 2021: 85%) reflecting an investment in stock, to mitigate
ongoing global supply chain risks
-- Adjusted basic earnings per share(5) was 1.4 pence per share (H1 2021: 5.6 pence per share)
Operational and strategic highlights
Over the past 18 months we have managed a step change in the
scale of our business and have done so whilst continuing to offer
consumers the widest choice of products and availability, at
competitive prices:
-- Total orders(7) for the six months ended 31 March 2022 were
453,000, a 31% increase from pre-pandemic levels (H1 2020:
345,000), and just 7% down from H1 2021 during which the UK was
under severe Covid-19 restrictions (H1 2021: 486,000)
-- Average order value(8) up 2% to GBP296 (H1 2021: GBP289)
-- We have increased our customer satisfaction with an average
Trustpilot TrustScore(9) of 4.4 (H1 2021: 4.3)
We have invested in our technology platform, which will enable
us to drive future growth:
-- Work continues on the development and testing of our website
re-platform. This will give us the opportunity to enhance our
customer journey over the coming months
-- Work also continues on the development and testing of our new
Trade app., to enhance efficiency and engagement for Trade
customers
We are also making good progress in our strategic areas of
'Trade' and 'Adjacent categories':
-- Trade revenue grew by 18% to GBP24.6m (H1 2021: GBP20.9m),
representing 18% of total revenue (H1 2021: 15%). During H1 2022,
we launched our first ever targeted trade radio campaign
-- We have increased our tile range by 38% since September 2021
and increased the number of products in our lighting range to 753
(Sept 2021: 502)
Outlook
Revenues in H1 2022 were in line with recent guidance and
reflect the lower demand compared to the same period last year when
the UK was in a lockdown environment. The Group focused on
increasing market share and invested more heavily in marketing in
the early part of H1 2022 to successfully drive market share gains.
That marketing spend has now normalised as planned.
The Group expects to deliver modest year-on-year revenue growth
through the second half, as previously guided in the AGM statement
on 24 February 2022. There are well reported ongoing inflationary
cost pressures and we remain acutely aware that our customers are
also managing these pressures. The Group will therefore continue
its careful approach to price rises through the second half of the
financial year.
Mark Radcliffe, Founder and Chief Executive Officer of Victorian
Plumbing Group plc, said:
"Victorian Plumbing remains the go-to online retailer for
consumers who are looking for bathroom products. Our market-leading
proposition and our innovative and proactive approach to marketing
have enabled us to continue growing our market share, even against
a challenging market backdrop.
"Following a nine-month period during which the economy was
opening up after Covid-19 restrictions and discretionary spending
has been more focused on leisure activities, our relentless focus
on investing in quality and innovation has resulted in revenue
growing 39% on a two-year basis.
"I am pleased with the progress we have made with our
technological developments, and I am excited about the
opportunities presented by our new website. This new platform will
enable us to further penetrate our core market and provide the best
possible base for us to further expand our trade and adjacent
product areas.
"We continue to be focused on our long-term goals. We are making
good progress on all of our strategic initiatives and are confident
in the future growth prospects of the Group . "
Analyst and investor webinar
A webinar for analysts and investors will be held today, 17 May
2022, at 9.00am BST. If you wish to join the webinar, please
contact FTI Consulting via: VictorianPlumbing@fticonsulting.com
.
For further information please contact:
Victorian Plumbing Group plc via FTI Consulting
Mark Radcliffe, Chief Executive Officer +44 20 3727 1000
Paul Meehan, Chief Financial Officer
FTI Consulting (Financial PR) +44 20 3727 1000
Alex Beagley VictorianPlumbing@fticonsulting.com
Eleanor Purdon
Sam Macpherson
Amy Goldup
Houlihan Lokey UK Limited (Nominated Adviser
and Financial Adviser)
Sam Fuller
Tim Richardson +44 20 7484 4040
About Victorian Plumbing
Victorian Plumbing is the UK's leading online retailer of
bathroom products and accessories, offering a wide range of over
24,000 products to B2C and trade customers. Victorian Plumbing
offers its customers a one-stop shop solution for the entire
bathroom with more than 125 own and third-party brands across a
wide spectrum of price points.
The Group's product design and supply chain strengths are
complemented by its creative and brand-focused marketing strategy,
which predominantly focuses on online channels to drive significant
and growing traffic to its website.
Headquartered in Skelmersdale, Lancashire, the Group employs
over 500 staff across seven locations in Skelmersdale, Manchester
and Birmingham.
For more information, please visit
https://www.victorianplumbingplc.com/about-us/
Cautionary statement
This announcement of half year results does not constitute or
form part of and should not be construed as an invitation to
underwrite, subscribe for, or otherwise acquire or dispose of any
Victorian Plumbing Group plc (the "Company") shares or other
securities in any jurisdiction nor is it an inducement to enter
into investment activity nor should it form the basis of or be
relied on in connection with any contract or commitment or
investment decision whatsoever. It does not constitute a
recommendation regarding any securities. Past performance,
including the price at which the Company's securities have been
bought or sold in the past, is no guide to future performance and
persons needing advice should consult an independent financial
advisor. This announcement may include statements that are, or may
be deemed to be, "forward-looking statements" (including words such
as "believe", "expect", "estimate", "intend", "anticipate" and
words of similar meaning). By their nature, forward-looking
statements involve risk and uncertainty since they relate to future
events and circumstances, and actual results may, and often do,
differ materially from any forward-looking statements. Any
forward-looking statements in this announcement reflect
management's view with respect to future events as at the date of
this announcement. Save as required by applicable law, the Company
undertakes no obligation to publicly revise any forward-looking
statements in this announcement, whether following any change in
its expectations or to reflect events or circumstances after the
date of this announcement.
Summary of performance
H1 2022 H1 2022
H1 2022 H1 2021 H1 2020 Year-on-year Two-year
Units (unaudited) (audited) (unaudited) % growth %*
----------------------------------- ------- -------------- ------------ ------------- -------------- -----------
Income statement
Revenue GBPm 133.9 140.7 96.0 (5%) 39%
Gross profit(1) GBPm 58.5 69.0 40.8 (15%) 43%
Gross profit margin(2) % 44% 49% 43% (5%pts) 1%pts
Adjusted EBITDA(3) GBPm 6.7 20.1 8.8 (67%) (24%)
Adjusted EBITDA margin(4) % 5% 14% 9% (9%pts) (4%pts)
Profit before tax GBPm 2.7 14.5 7.6 (81%) (64%)
----------------------------------- ------- -------------- ------------ ------------- -------------- -----------
Earnings per share
Basic earnings per share(5) pence 0.7 4.4 2.4 (84%) (71%)
Adjusted basic earnings per
share(10) pence 1.4 5.6 2.4 (75%) (42%)
----------------------------------- ------- -------------- ------------ ------------- -------------- -----------
Cash flow
Free cash flow(11) GBPm 1.4 17.0 7.9 (92%) (82%)
Cash conversion(6) % 21% 85% 90% (64%pts) (69%pts)
Net cash and cash equivalents GBPm 33.7 22.3 4.7 51% 617%
----------------------------------- ------- -------------- ------------ ------------- -------------- -----------
Key performance indicators
Total orders(7) '000 453 486 345 (7%) 31%
Active customers(12) '000 339 367 265 (8%) 28%
Average order value(8) GBP 296 289 278 2% 6%
TrustPilot TrustScore (9) /5 4.4 4.3 4.6 2% (4%)
Marketing spend as a % of revenue % 30% 27% 27% (3%pts) (3%pts)
----------------------------------- ------- -------------- ------------ ------------- -------------- -----------
* Two-year growth included to contextualise the short-term
effect of Covid-19 upon trading.
(1) Gross profit is defined as revenue less cost of sales. Cost
of sales includes all direct costs incurred in purchasing products
for resale along with packaging, distribution and transaction
costs.
(2) Gross profit margin is defined as Gross profit as a percentage of revenue.
(3) Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA is
operating profit before depreciation, amortisation, exceptional
items and IFRS 2 share-based payments along with associated
national insurance.
(4) Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of revenue.
(5) Basic EPS has been calculated for the comparative periods
using the weighted average number of shares in issue immediately
prior to the IPO in June 2021.
(6) Cash conversion is operating cash flow as a percentage of adjusted EBITDA.
(7) Total orders is defined as the total number of orders
dispatched to customers in the period.
(8) Average order value is defined as revenue divided by total orders in the period.
(9) The Trustpilot TrustScore is defined as the overall
measurement of reviewer satisfaction, based on all the service and
location reviews the business receives.
(10) Adjusted basic earnings per share is defined as adjusted
net income divided by the weighted average number of shares for
basic EPS. Adjusted net income is defined as net income before
exceptional items and IFRS 2 share-based payment charges and
associated NI and after adjusting for the tax impact of those
items.
(11) Free cash flow is cash generated from operating activities
before exceptional items and taxation less capital expenditure and
cash flows relating to leases.
(12) Active customers is the number of unique customers who placed an order in the period.
Summary of operating performance for the six months ended 31
March 2022
We have maintained the step change in scale gained through the
previous financial year with a resilient sales performance through
H1 2022 against a backdrop of lower customer demand following the
end of the UK's Covid-19 lockdown restrictions.
Revenue of GBP133.9m for H1 2022 was down by 5% (H1 2021:
GBP140.7m) as we annualised the toughest pandemic-impacted
comparatives. Revenue remains strong on a two-year basis, up 39%
(H1 2020: GBP96.0m) demonstrating that market share gains made
through the pandemic are here to stay. Adjusted EBITDA decreased to
GBP6.7m (H1 2021: GBP20.1m; H1 2020: GBP8.8m) and adjusted EBITDA
margin decreased to 5% (H1 2021: 14%; H1 2020: 9%).
Our commitment to growing our market share is unwavering.
Through H1 2022 we invested more in our brand and our digital
performance-based marketing to successfully grow our market share.
Our bold brand creative continues to be well received by consumers
and is reflected in the awareness of the Victorian Plumbing brand
at 63% (2021: 64%)(1) .
Audience, defined as the number of unique visitors visiting our
platform measured through Google Analytics, remains 40% ahead of
pre-pandemic levels (H1 2020: 1.95 million). Although our audience
reduced slightly (6%) to 2.72 million on average each month (H1
2021: 2.89 million), this level of unique visitors was 1.9 times
larger than our nearest competitor according to Similarweb (H1
2021: 1.9 times).
Total orders amounted to 453,000 in H1 2022; a 7% decline
year-on-year (H1 2021: 486,000) but up 31% on a two-year basis.
Average order value increased by 2% to GBP296 year-on-year, and by
6% on a two-year basis (H1 2021: GBP289; H1 2020: GBP278).
Providing the largest choice of quality products
Customers can use our platform to browse an extensive choice of
quality products across a wide range of price points, meaning
Victorian Plumbing offers customers a one-stop solution for
bathrooms. Throughout H1 2022, consumers could choose from over
24,000 products, across more than 125 own and third-party
brands.
The Victorian Plumbing website is the only place that customers
can purchase products from our stable of own brands. We have over
20 brands that include products designed by our in-house
development team and these continue to be extremely popular with
consumers. In H1 2022, 75% of revenue (H1 2021: 76%) was generated
from own brand products.
The experience that customers have with us is always front of
mind. We continue to be ranked 'Excellent' by Trustpilot, and have
increased our TrustScore to 4.4 stars (H1 2021: 4.3) across over
150,000 reviews.
A strong supply chain challenged by inflation
One of our primary objectives is to provide our customers with a
wide choice of immediately available products. We held an increased
level of stock through the first half of the year to combat
disruption caused to our supply chain, most notably the
unpredictability of transit time for stock to arrive from the Far
East. We believe this investment helped us to outperform our
competitors through the period.
As expected, rising costs throughout the supply chain from
product, inbound shipping and outbound distribution have adversely
impacted our gross profit margin by 5 percentage points in the
first half of the year.
Our strategic focus
Our strategy has been developed with reference to three
commercial growth horizons covering: core B2C, Trade, and Adjacent
products.
Our core market is retailing bathroom products and accessories
to consumers in the UK through our online platform. The level of
consumer demand for bathroom products has fallen from the highs of
2021, but the pandemic has driven some structural changes that
provide good opportunities for growth. We are well placed to
continue to gain market share in the short term through both these
structural tailwinds and by taking share from traditional physical
retailers and other online competitors by leveraging our market and
brand position.
In the medium term, we remain encouraged that, with strategic
planning and execution, there is a valuable further opportunity to
translate our domestic success into carefully selected
international market expansion.
Our second horizon focuses on the opportunity to retail bathroom
products and accessories to Trade customers, an area in which we
are currently underpenetrated. In H1 2022 revenue generated from
trade accounts increased by 18% to GBP24.6m (H1 2021: GBP20.9m),
representing 18% of our total revenue. We are progressing well with
the development of our dedicated mobile app for Trade
customers.
Finally, our third horizon focuses on adjacent products that
consumers look for when renovating a bathroom. Given our position
in the bathroom product and accessories market, we have an exciting
opportunity to expand our reach into products that often come later
in the buying journey, such as tiles and lighting. Expanding these
adjacent product ranges and increasing their prominence on our
website will allow consumers to use Victorian Plumbing for
everything they need to complete their bathrooms. During the
period, we expanded our design team to give ourselves capacity to
design additional tile ranges and increased the product choice in
tiles by 38% since September 2021.
ESG
"Taking responsibility" is one of our core values, and we are
focused on making a positive difference to our communities and the
wider environment in which we operate.
The UK government has a target to become net carbon zero by 2050
and Victorian Plumbing has a role to play in reaching this goal.
There are two strands to our commitments around the environment,
which are: to help consumers make more sustainable choices; and to
work towards achieving net zero carbon emissions. During the first
half of the year we started collating data on our scope 3
emissions, which is the next step as we work towards defining our
net zero carbon strategy.
(1) YouGov prompted brand awareness - February 2022. Comparative as of February 2021
Financial review
The performance of the Group was robust through H1 2022 against
a backdrop of lower customer demand and given that we are comparing
against a prior year period during which the UK was under severe
Covid-19 restrictions.
Six-months to 31 Six-months to 31 Six-months to 31
March 2022 GBPm March 2021 GBPm March 2020 GBPm H1 2022 H1 2022
(unaudited) (audited) (unaudited) Year-on-year Two-year
% growth %
---------------------- -------------------- -------------------- -------------------- --------------- -----------
Revenue 133.9 140.7 96.0 (5%) 39%
Cost of sales (75.4) (71.7) (55.2) (5%) (37%)
---------------------- -------------------- -------------------- -------------------- --------------- -----------
Gross profit 58.5 69.0 40.8 (15%) 43%
Underlying costs (51.8) (48.9) (32.0) (6%) (62%)
Adjusted EBITDA 6.7 20.1 8.8 (67%) (24%)
Depreciation and
amortisation (1.7) (1.4) (1.1) (21%) (55%)
Share-based payments (2.1) (3.5) - 40% n.m
Exceptional items - (0.6) - n.m n.m
---------------------- -------------------- -------------------- -------------------- --------------- -----------
Operating profit 2.9 14.6 7.7 (80%) (62%)
---------------------- -------------------- -------------------- -------------------- --------------- -----------
Revenue
Revenue for H1 2022 was GBP133.9m, which represents an increase
of 39% compared to pre-pandemic performance (H1 2020: GBP96.0m). We
have been able to consolidate our share of the bathroom market,
with revenue down just 5% year-on-year despite a reduction in
customer demand.
Total orders in the period decreased by 7% year-on-year to
453,000 (H1 2021: 486,000) but remained 31% up on a two-year basis.
Average order value ('AOV') increased by 2% to GBP296 (H1 2021:
GBP289). This increase resulted from price uplifts which occurred
during the second half of last financial year. With cost-of-living
pressures building for consumers we have been cautious about
increasing prices on our products through the first half.
Gross profit and gross profit margin
Gross profit reduced by 15% to GBP58.5m (H1 2021 GBP69.0m) but
remained 43% up on a two-year basis (H1 2020: GBP40.8m). Gross
margin for H1 2022 reduced by five percentage points from
exceptional levels seen last year to 44% (H1 2021: 49%; H1 2020:
43%). We define gross profit as revenue less cost of sales. Cost of
sales includes all direct costs incurred in purchasing products for
resale along with packaging, distribution and transaction
costs.
Year-on-year cost of sales increased by 5% to GBP75.4 million
(H1 2021: GBP71.7m) despite a reduction in total orders. Throughout
H1 2022 we have seen significant cost increases relating to
shipping, distribution, packaging and, to a lesser extent, raw
materials. The strength of the Group's supplier relationships and
the proactiveness of our purchasing team have ensured good product
availability for consumers. Nonetheless this cost inflation coupled
with a period of lower consumer demand has impacted our gross
margin and is likely to continue to do so for the remainder of the
year.
Gross margin from own brand products, which represent 75% of
revenue (H1 2021: 76%) decreased to 49% (H1 2021: 54%), whilst
gross margin from third-party products decreased to 29% for the
period (H1 2021: 31%).
Underlying costs
Underlying costs, which we define as administrative expenses
before depreciation and amortisation, exceptional items and
share-based payments, increased by 6% to GBP51.8m (H1 2021:
GBP48.9m) and were up 63% on a two-year basis (H1 2020: 32.0m).
Six-months to 31 Six-months to 31 Six-months to 31
March 2022 GBPm March 2021 GBPm March 2020 GBPm H1 2022 H1 2022
(unaudited) (audited) (unaudited) Year-on-year Two-year
% growth %
--------------------- -------------------- -------------------- --------------------- --------------- -----------
Marketing costs 40.2 38.4 25.8 (5%) (56%)
People costs
excluding
share-based
payments 8.0 6.6 4.2 (21%) (90%)
Property costs 2.5 2.1 1.2 (19%) (108%)
Other overheads 1.1 1.8 0.8 39% (38%)
Underlying costs 51.8 48.9 32.0 (6%) (62%)
--------------------- -------------------- -------------------- --------------------- --------------- -----------
Marketing costs increased by 5% to GBP40.2m which was equivalent
to 30% of revenue (H1 2021: 27%; H1 2020: 27%). During H1 2022 the
Group invested more in marketing and successfully grew market share
in a market that was seeing a reduction in customer demand compared
to the prior year.
People costs, excluding share-based payments but including costs
relating to agency staff and contractors, increased by 21% to
GBP8.0m (H1 2021: GBP6.6m; H1 2020: GBP4.2m). Total full-time
equivalent employees ('FTEs') increased by 9% year-on-year to 568
(H1 2021: 520), with the majority of the increase being in our
technology team as we develop our platform. The average cost per
FTE increased by 8% through a small change in staff mix and through
salary inflation in our warehouse and customer service teams.
Property costs increased by 19% to GBP2.5m and were 108% up on
two years ago. Property costs include short term agreements for
warehouse space (outside the scope of IFRS16) along with rates for
all of the Group's properties. The year-on-year increase relates to
short term warehouse space, the cost of which continues to increase
given the demand in the market. Other overheads of GBP1.1m were 39%
lower than the prior year, largely due to GBP0.6m of exceptional
costs relating to the IPO which were incurred in H1 2021.
Adjusted EBITDA
Significant items of income and expense that do not relate to
the trading of the Group are disclosed separately. Examples of such
items are exceptional items and share-based payment charges, as
these primarily relate to the changing ownership of the Group.
The table below provides a reconciliation from operating profit
to adjusted EBITDA, which is a non-GAAP metric used by the Group to
assess the operating performance.
Six-months to 31 Six-months to 31 Six-months to 31
March 2022 GBPm March 2021 GBPm March 2020 GBPm H1 2022 H1 2022
(unaudited) (audited) (unaudited) Year-on-year Two-year
% growth %
---------------------- -------------------- -------------------- -------------------- --------------- -----------
Operating profit 2.9 14.6 7.7 (80%) (62%)
Share-based payments 2.1 3.5 - 40% n.m
Exceptional items - 0.6 - n.m n.m
---------------------- -------------------- -------------------- -------------------- --------------- -----------
Adjusted operating
profit 5.0 18.7 7.7 (73%) (35%)
Depreciation and
amortisation 1.7 1.4 1.1 (21%) (55%)
Adjusted EBITDA 6.7 20.1 8.8 (67%) (24%)
---------------------- -------------------- -------------------- -------------------- --------------- -----------
Adjusted EBITDA for H1 2022 totalled GBP6.7m (H1 2021: GBP20.1m;
H1 2020: GBP8.8m) with adjusted EBITDA margin of 5% (H1 2021: 14%;
H1 2020: 9%).
Share-based payments
The Group incurred share-based payment charges (including
associated NI) of GBP2.1m (H1 2021: GBP3.5m). Share-based payment
charges for the year include GBP1.9m for schemes relating to the
Group's IPO in June 2021, along with GBP0.3m for ongoing schemes
put in place post IPO.
Depreciation and amortisation
Depreciation and amortisation increased by GBP0.3m to GBP1.7m
(H1 2021: GBP1.4m; H1 2020: GBP1.1m). The Group continues to invest
in its platform and bespoke inventory management systems, with
GBP1.3m capitalised during H1 2022 (H1 2021: GBP0.8m).
Operating profit
Operating profit decreased by 80% to GBP2.9m (H1 2021: GBP14.6m;
H1 2020: GBP7.7m). Operating profit margin decreased by eight
percentage points to 2% (H1 2021: 10%; H1 2020: 8%).
Profit before taxation
Profit before taxation for the period was GBP2.7m (H1 2021:
GBP14.5m; H1 2020: GBP7.6m). This decrease resulting from the
operating profit performance while net finance costs amounted to
GBP0.2m (H1 2021: GBP0.1m; H1 2020: GBP0.1m).
Taxation
The Group tax charge of GBP0.7m (H1 2021: GBP2.9m; H1 2020:
GBP1.3m) represents an effective tax rate of 25% (H1 2021: 20%; H1
2020: 17%).
Earnings per share
Basic earnings per share ('EPS') from continuing operations,
which is calculated for both the current and comparative year based
upon the weighted average number of shares in issue immediately
prior to the IPO, was 0.7 pence per share (H1 2021: 4.4 pence per
share; H1 2020: 2.4 pence per share).
The adjusted basic earnings per share from continuing operations
was 1.4 pence per share (H1 2021: 5.6 pence per share; H1 2020: 2.4
pence per share). The table shows the effect on the Group's basic
earnings per share of the exceptional items and share-based
payments.
Six-months to 31 Six-months to 31 Six-months to 31
March 2022 GBPm March 2021 GBPm March 2020 GBPm H1 2022 H1 2022
(unaudited) (audited) (unaudited) Year-on-year Two-year
% growth %
----------------------- ------------------- -------------------- -------------------- --------------- -----------
Profit for EPS 2.0 11.6 6.3 (83%) (68%)
Share-based payments
(including associated
NI) 2.1 3.5 - 40% n.m
Exceptional items - 0.6 - n.m n.m
Tax effect (0.4) (0.8) - 50% n.m
----------------------- ------------------- -------------------- -------------------- --------------- -----------
Adjusted profit for
EPS 3.7 14.9 6.3 (75%) (41%)
----------------------- ------------------- -------------------- -------------------- --------------- -----------
Weighted average
number of ordinary
shares for basic EPS
(millions) 273.5 265.6 265.6 3% 3%
----------------------- ------------------- -------------------- -------------------- --------------- -----------
Adjusted earnings per
share (pence) 1.4 5.6 2.4 (75%) (42%)
----------------------- ------------------- -------------------- -------------------- --------------- -----------
Cash flow and net cash
Six-months to 31 March 2022 Six-months to 31 March 2021 Six-months to 31 March 2020
(unaudited) (audited) (unaudited) H1 2022 H1 2022
Year-on-year Two-year
% growth %
------------- ----------------------------- ---------------------------- ---------------------------- --------------- -----------
Adjusted
EBITDA 6.7 20.1 8.8 (67%) (24%)
Movement in
working
capital* (3.2) (0.7) 0.5 (357%) (740%)
Capital
expenditure (1.5) (1.9) (1.0) 21% (50%)
Lease
payments -
principal (0.5) (0.4) (0.3) (25%) (67%)
Lease
payments -
interest (0.1) (0.1) (0.1) - -
------------- ----------------------------- ---------------------------- ---------------------------- --------------- -----------
Free cash
flow 1.4 17.0 7.9 (92%) (82%)
------------- ----------------------------- ---------------------------- ---------------------------- --------------- -----------
Cash
conversion 21% 85% 90% (64%pts) (69%pts)
------------- ----------------------------- ---------------------------- ---------------------------- --------------- -----------
* Movement in working capital excludes national insurance
relating to share-based payments which are excluded from Adjusted
EBITDA
Changes in working capital resulted in a cash outflow of GBP3.2
million in the period. Global supply chains continued to be
disrupted in H1 2022 and we made the decision to increase our stock
holding to decrease the risk of stock-outs, therefore providing a
better and more dependable experience for customers. This increase
in stock holding across the period resulted in a working capital
outflow of GBP2.9 million.
Capital expenditure of GBP1.5m (H1 2021: GBP1.9m; H1 2020:
GBP1.0m) included GBP1.1m of capitalised salaries relating to
development of the Group's platform and bespoke inventory
management systems (H1 2021: GBP0.5m; H1 2020: GBP0.2m). At the
period end the Group had net cash of GBP33.7m (H1 2021: GBP22.3m;
H1 2020: GBP4.7m).
Events after the reporting period
There have been no material events to report after the end of
the reporting period.
Dividend
No interim dividend has been declared. The current intention of
the Board is to pay a dividend in relation to the financial year
ending 30 September 2022.
Mark Radcliffe Paul Meehan
Chief Executive Officer Chief Financial Officer
17 May 2022 17 May 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 31 MARCH 2022
Six months to 31
Six months to 31 March 2022 March 2021 Year to 30 September 2021
Note GBPm GBPm GBPm
---------------------------------- ----- ---------------------------- ----------------- --------------------------
Revenue 4 133.9 140.7 268.8
Cost of sales (75.4) (71.7) (138.3)
---------------------------------- ----- ---------------------------- ----------------- --------------------------
Gross profit 58.5 69.0 130.5
Administrative expenses before
separately disclosed items 5 (53.9) (50.3) (93.4)
Other operating income 0.4 - -
---------------------------------- ----- ---------------------------- ----------------- --------------------------
Adjusted operating profit 5.0 18.7 37.1
Separately disclosed items:
Share-based payments 20 (2.1) (3.5) (7.7)
Exceptional items 6 - (0.6) (9.4)
Operating profit 2.9 14.6 20.0
Finance costs 7 (0.2) (0.1) (0.3)
---------------------------------- ----- ---------------------------- ----------------- --------------------------
Profit before tax 2.7 14.5 19.7
Income tax expense 8 (0.7) (2.9) (5.4)
---------------------------------- ----- ---------------------------- ----------------- --------------------------
Profit for the period 2.0 11.6 14.3
---------------------------------- ----- ---------------------------- ----------------- --------------------------
Basic earnings per share (pence) 10 0.7 4.4 5.3
Diluted earnings per share
(pence) 10 0.6 4.4 4.5
---------------------------------- ----- ---------------------------- ----------------- --------------------------
All amounts relate to continuing operations.
There are no items to be recognised in the statement of
comprehensive income and hence, the Group has not presented a
separate statement of other comprehensive income.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2022
Six months to 31 March Six months to 31 March
2022 2021 Year to 30 September 2021
Note GBPm GBPm GBPm
--------------------------- ----- -------------------------- -------------------------- --------------------------
Assets
Non-current assets
Intangible assets 11 3.1 2.5 2.7
Property, plant and
equipment 12 1.6 1.7 1.7
Right-of-use assets 13 4.9 5.7 5.3
9.6 9.9 9.7
Current assets
Inventories 35.3 26.0 32.4
Trade and other
receivables 14 4.4 9.4 4.9
Tax recoverable 0.5 1.7 1.0
Cash and cash equivalents 33.7 22.3 32.7
--------------------------- ----- -------------------------- -------------------------- --------------------------
73.9 59.4 71.0
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total assets 83.5 69.3 80.7
--------------------------- ----- -------------------------- -------------------------- --------------------------
Equity and liabilities
Equity attributable to the
owners of the Company
Share capital 18 0.3 - 0.3
Share premium 11.2 - 11.2
Deferred share capital 0.1 - 0.1
Capital reorganisation
reserve (320.6) - (320.6)
Retained earnings 344.0 24.8 339.8
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total equity 35.0 24.8 30.8
--------------------------- ----- -------------------------- -------------------------- --------------------------
Liabilities
Non-current liabilities
Lease liabilities 7,16 4.5 5.5 4.9
Deferred taxation
liability 0.1 (0.7) 0.1
--------------------------- ----- -------------------------- -------------------------- --------------------------
4.6 4.8 5.0
Current liabilities
Trade and other payables 15 36.7 29.7 36.0
Contract liabilities 6.1 8.5 7.9
Lease liabilities 7,16 0.9 0.7 0.9
Derivative financial - 0.6 -
instruments
Provisions 0.2 0.2 0.1
43.9 39.7 44.9
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total liabilities 48.5 44.5 49.9
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total equity and
liabilities 83.5 69.3 80.7
--------------------------- ----- -------------------------- -------------------------- --------------------------
The financial statements were approved by the Board of Directors
on 17 May 2022 and authorised for issue.
Paul Meehan
Chief Financial Officer
Victorian Plumbing Group plc
Registered number: 13379554
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 31 MARCH 2022
Capital
reorganisation Deferred share Retained
Share capital Share premium reserve capital earnings Total equity
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 1
October 2020 - - - - 13.0 13.0
Comprehensive
income
Profit for the
period - - - - 11.6 11.6
Transactions
with owners
Dividends paid
(note 9) - - - - (2.9) (2.9)
Employee share
schemes - value
of employee
services (note
20) - - - - 2.8 2.8
Tax impact of
employee share
schemes - - - - 0.3 0.3
Balance at 31
March 2021 - - - - 24.8 24.8
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Comprehensive
income
Profit for the
period - - - - 2.7 2.7
Transactions
with owners
Dividends paid
(note 9) - - - - (12.0) (12.0)
Employee share
schemes - value
of employee
services (note
20) - - - - 3.7 3.7
Tax impact of
employee share
schemes - - - - 0.4 0.4
Capital
transaction -
Group
restructure,
share-for-share
exchange and
issue of
Victorian
Plumbing
Group plc
shares (note
18) 0.3 11.2 (320.6) 0.1 320.2 11.2
Balance at 30
September 2021 0.3 11.2 (320.6) 0.1 339.8 30.8
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Comprehensive
income
Profit for the
period - - - - 2.0 2.0
Transactions
with owners
Employee share
schemes - value
of employee
services (note
20) - - - - 2.2 2.2
Balance at 31
March 2022 0.3 11.2 (320.6) 0.1 344.0 35.0
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 31 MARCH 2022
Six months Six months Year to
to 31 March to 31 March 30 September
2022 2021 2021
Note GBPm GBPm GBPm
----------------------------------- ----- ------------- ------------- --------------
Cash flows from operating
activities
Cash generated from operating
activities before exceptional
operating items 3.5 19.5 36.9
Cash outflow from exceptional
operating items (0.1) (0.1) (9.1)
----------------------------------- ----- ------------- ------------- --------------
Cash generated from operating
activities 21 3.4 19.4 27.8
Income tax paid (0.2) (2.8) (3.4)
----------------------------------- ----- ------------- ------------- --------------
Net cash generated from operating
activities 3.2 16.6 24.4
Cash flows from investing
activities
Purchase of intangible assets 11 (1.3) (0.8) (1.8)
Purchase of property, plant
and equipment 12 (0.2) (1.1) (1.4)
Amounts received in respect
of related party loans - 0.5 5.9
Net cash (used in)/generated
by investing activities (1.5) (1.4) 2.7
Cash flows from financing
activities
Dividends paid 9 - (2.9) (14.9)
Finance arrangement fees 7 (0.1) - (0.1)
Proceeds from the issue of
shares, net of costs 18 - - 11.2
Payment of interest portion
of lease liabilities 7,16 (0.1) (0.1) (0.3)
Payment of principal portion
of lease liabilities 16 (0.5) (0.4) (0.8)
----------------------------------- ----- ------------- ------------- --------------
Net cash used in financing
activities (0.7) (3.4) (4.9)
Net increase in cash and cash
equivalents 1.0 11.8 22.2
Cash and cash equivalents at
the beginning of the period 32.7 10.5 10.5
Cash and cash equivalents at
the end of the period 33.7 22.3 32.7
----------------------------------- ----- ------------- ------------- --------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Basis of preparation
Victorian Plumbing Group plc is a public limited company which
is listed on the Alternative Investment Market ('AIM') of the
London Stock Exchange and is domiciled and incorporated in the
United Kingdom under the Companies Act 2006.
Its registered office is 22 Grimrod Place, Skelmersdale,
Lancashire, WN8 9UU.
These condensed consolidated interim financial statements
('interim financial statements') were approved by the Board for
issue on 17 May 2022, and have been prepared as at, and for the six
months ended, 31 March 2022. The comparative financial information
presented has been prepared as at, and for the six months ended, 31
March 2021.
These interim financial statements do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006. The interim financial statements for the half year ended 31
March 2022 are neither audited nor reviewed by the Company's
auditors. The interim financial statements for the half year ended
31 March 2021 were audited as part of the Group's admission to the
AIM in June 2021. The consolidated financial statements of the
Group as at, and for the year ended, 30 September 2021 are
available on request from the Company's registered office and via
the Company's website. The report of the auditors on those accounts
was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under Section 498 of the
Companies Act 2006.
These interim financial statements have been prepared in
accordance with IAS 34, "Interim Financial Reporting" issued by the
IASB and adopted for use in the UK. They do not include all of the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 30 September
2021, which were prepared in accordance with international
Financial Reporting Standards (IFRSs) in conformity with the
requirements of the Companies Act 2006.
Going concern
The Group's ability to continue as a going concern is dependent
on maintaining adequate levels of resources to continue to operate
for the foreseeable future. When assessing the going concern of the
Group, the Directors have reviewed the year to date financial
results, as well as detailed financial forecasts for the period of
12 months to 31 May 2023. The assumptions used in the financial
forecasts are based on the Group's historical performance and
management's extensive experience of the industry. Taking into
consideration the wider economic environment, the forecasts have
been assessed and stress tested to ensure that a robust assessment
of the Group's working capital and cash requirements has been
performed.
Li quidity and financing
At 31 March 2022, the Group held instantly accessible cash and
cash equivalents of GBP33.7 million. The Group also has access to a
revolving credit facility of GBP10.0 million with HSBC which was
undrawn at 31 March 2022 and does not expire until June 2024. There
is a sufficient level of liquidity/financing headroom post stress
testing across the going concern forecast period to 31 May 2023, as
outlined in more detail below.
Approach to stress testing
The going concern analysis reflected the actual trading to March
2022, as well as detailed financial forecasts for the period up to
31 May 2023. The Group has taken a measured approach to its
forecasting. The Group has balanced the expected trading conditions
with opportunities available in a growing market which is
transitioning online.
The Group has prepared a series of severe-but-plausible downside
scenarios, and a worst case being the combination of them all. The
combined worst case scenario still results in sufficient cash
forecast to be held throughout the period to 31 May 2023 to cover
the Group's liabilities as they fall due, without utilisation of
the Group's revolving credit facilities.
The Group has sufficient liquidity headroom through the forecast
period. The Directors therefore have reasonable expectation that
the Group has the financial resources to enable it to continue in
operational existence for the period to 31 May 2023. Accordingly,
the Directors conclude it is appropriate that these interim
consolidated financial statements be prepared on a going concern
basis.
2. Accounting policies, estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including the
expectations of future events that are believed to be reasonable
under the circumstances.
In preparing these interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
for the year ended 30 September 2021.
3. Segmental information
IFRS 8 'Operating Segments' requires the Group to determine its
operating segments based on information which is provided
internally. Based on the internal reporting information and
management structures within the group, it has been determined that
there is only one operating segment, being the Group, as the
information reported includes operating results at a consolidated
Group level only (the 'Operating group'). There is also considered
to be only one reporting segment, which is the Group, the results
of which are shown in the consolidated statement of comprehensive
income.
Management has determined that there is one operating and
reporting segment based on the reports reviewed by the Senior
Leadership Team ('SLT') which is the chief operating decision-maker
('CODM'). The SLT is made up of the Executive Directors and Key
Management and is responsible for the strategic decision-making of
the Group.
Adjusted EBITDA
Operating costs, comprising administrative expenses, are managed
on a Group basis. The SLT measures the overall performance of the
Operating group by reference to the following non-GAAP measure:
-- Adjusted EBITDA, which is EBITDA (earnings before interest,
tax, depreciation and amortisation) less exceptional items and IFRS
2 charges in respect of share-based payments along with associated
national insurance.
This adjusted profit measure is applied by the SLT to understand
the earnings trends of the Operating group and is considered an
additional, useful measure under which to assess the true operating
performance of the Operating group.
In addition to annual bonuses which are linked to the Operating
group's financial performance, the Operating group has implemented
a number of longer-term share-based payment incentives linked to
changes in ownership of the Operating group rather than the
achievement of individual or Company specific financial performance
targets.
The Directors believe that these items and adjusted measures of
performance should be separately disclosed in order to assist in
the understanding of financial performance achieved by the
Operating group and for consistency with prior years.
Six
Six months months
to to
31 March 31 March
2022 2021
GBPm GBPm
------------------------------------------------ ----------- ----------
Operating profit 2.9 14.6
Depreciation of property, plant and equipment 0.3 0.2
Depreciation of right-of-use assets 0.5 0.4
Amortisation 0.9 0.8
Exceptional items - 0.6
Share-based payments (including associated NI) 2.1 3.5
------------------------------------------------- ----------- ----------
Adjusted EBITDA 6.7 20.1
------------------------------------------------- ----------- ----------
4. Revenue
An analysis of revenue by class of business is as follows:
Six
months Six months
to 31 March to 31 March
2022 2021
GBPm GBPm
---------- ------------- -------------
Online 133.2 140.5
Showroom 0.7 0.2
133.9 140.7
---------- ------------- -------------
All revenue arose within the United Kingdom.
5. Operating profit
Expenses by nature including exceptional items:
Six
months
to 31 March Six months
2022 to 31 March 2021
GBPm GBPm
----------------------------------------------------------------- ------------- ------------------
Employee costs (excluding share-based payments) 7.5 6.2
Share-based payments (including associated NI) 2.1 3.5
Agency and contractor costs 0.5 0.6
Marketing costs 40.2 38.4
Depreciation of property, plant and equipment (note 12) 0.3 0.2
Depreciation of right-of-use assets (note 13) 0.5 0.4
Amortisation charge (note 11) 0.9 0.8
(Gain)/loss on foreign exchange (0.2) 0.4
Other costs 4.2 3.9
------------------------------------------------------------------ ------------- ------------------
Total administrative expenses 56.0 54.4
Share-based payments (note 20) (2.1) (3.5)
Included within exceptional items (note 6) - (0.6)
------------------------------------------------------------------ ------------- ------------------
Total administrative expenses before separately disclosed items 53.9 50.3
------------------------------------------------------------------ ------------- ------------------
6. Exceptional items
Six
months Six months
to 31 March to 31 March
2022 2021
GBPm GBPm
----------- -------------- -------------
IPO costs - 0.6
------------ ------------- -------------
IPO costs relate to costs incurred in respect of the Group's
listing on AIM in June 2021.
7. Net finance costs
Six
Six months
months to 31
to 31 March March
2022 2021
GBPm GBPm
-------------------------------------- ------------- --------
Amortised debt issue costs 0.1 -
Interest charge on lease liabilities 0.1 0.1
0.2 0.1
-------------------------------------- ------------- --------
8. Taxation
Six
months Six months
to 31 March to 31 March
2022 2021
GBPm GBPm
------------------------------------------------ ------------- -------------
Corporation tax
Current tax on profits for the period 0.7 3.4
Total current tax 0.7 3.4
------------------------------------------------- ------------- -------------
Deferred tax
Origination and reversal of timing differences - (0.5)
Total deferred tax - (0.5)
------------------------------------------------- ------------- -------------
Taxation on profit 0.7 2.9
------------------------------------------------- ------------- -------------
Factors affecting tax charge for the period
The tax assessed for the period is higher (2021: higher) than
the standard rate of corporation tax in the UK of 19% (2021: 19%).
The differences are explained below:
Six
months Six months
to 31 March 2022 to 31 March 2021
GBPm GBPm
--------------------------------------------------------------------------- ------------------ ------------------
Profit before tax 2.7 14.5
---------------------------------------------------------------------------- ------------------ ------------------
Profit multiplied by standard rate of corporation tax in the UK of 19%
(2021: 19%) 0.5 2.8
Effects of:
Expenses not deductible for tax purposes - 0.1
Share options 0.2 -
Total tax charge for the period 0.7 2.9
---------------------------------------------------------------------------- ------------------ ------------------
Factors that may affect future tax charges
The rate of corporation tax in the UK throughout the period was
19%. Changes to the UK corporation tax rates were substantively
enacted as part of the Finance Act 2021 on 24 May 2021. The rate
applicable from 1 April 2023 will increase from 19% to 25%.
Deferred taxes at the reporting date have been measured using these
enacted tax rates.
Tax recoverable
Tax recoverable represents overpaid corporation tax and Section
455 tax which has been paid and is to be reclaimed.
9. Dividends
Six months
to 31 March
2022 Six months to 31 March 2021
GBPm GBPm
---------------- -------------- ----------------------------
Dividends paid - 2.9
----------------- ------------- ----------------------------
In previous years certain shareholders waived their right to
receive dividends and therefore the dividends paid were not based
on the total number of ordinary shares in issue at the time. No
dividends were paid to the shareholders of Victorian Plumbing Group
plc during the half year ended 31 March 2022.
10. Earnings per share
Basic and diluted earnings per share
Basic earnings per share ('EPS') is calculated by dividing the
profit for the period attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares
outstanding during the period.
Diluted EPS is calculated by dividing the profit attributable to
ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the period plus the
number of incremental ordinary shares, calculated using the
treasury stock method, that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares.
The following table reflects the income and share data used in
the EPS calculations:
Weighted average number of Total earnings
ordinary shares GBPm Pence per share
----------------------------------- ---------------------------------- ----------------- -----------------
Half year ended 31 March 2022
Basic EPS 273,509,210 2.0 0.7
Diluted EPS 321,186,798 2.0 0.6
Year ended 30 September 2021
Basic EPS 267,781,231 14.3 5.3
Diluted EPS 315,755,339 14.3 4.5
------------------------------------ ---------------------------------- ----------------- -----------------
Weighted average number of shares
------------------------------------ ---------------------------------- --------------------------------------
Number of ordinary shares in issue
at 30 September 2021 273,509,210
Weighted average number of shares
for basic EPS 273,509,210
Dilutive impact of unvested shares
in relation to restricted share
awards 47,677,589
Weighted average number of shares
for diluted EPS 321,186,798
------------------------------------ ---------------------------------- --------------------------------------
The average market value of the Group's shares for the purposes
of calculating the dilutive effect of share-based incentives was
based on quoted market prices for the period during which the
share-based incentives were outstanding.
Adjusted earnings per share ('Adjusted EPS')
Adjusted basic and diluted earnings per share figures are
calculated by dividing adjusted profit after tax for the period by
the weighted average number of shares in issue (as set out
above).
Six months to 31 March 2022 Six months to 31 March 2021
GBPm GBPm
--------------------------------------------- ---------------------------- ----------------------------
Profit for the period 2.0 11.6
Exceptional items - 0.6
Share-based payments 2.1 3.5
Tax effect (0.4) (0.8)
---------------------------------------------- ---------------------------- ----------------------------
Total adjusted profit for the period 3.7 14.9
---------------------------------------------- ---------------------------- ----------------------------
Adjusted basic earnings per share (pence) 1.4 5.6
Adjusted diluted earnings per share (pence) 1.2 5.6
---------------------------------------------- ---------------------------- ----------------------------
11. Intangible assets
Computer software
GBPm
-------------------------- ------------------
Cost
At 30 September 2020 5.7
Additions 0.8
--------------------------- ------------------
At 31 March 2021 6.5
Additions 1.0
--------------------------- ------------------
At 30 September 2021 7.5
Additions 1.3
At 31 March 2022 8.8
--------------------------- ------------------
Accumulated amortisation
At 30 September 2020 3.2
Charge for the period 0.8
--------------------------- ------------------
At 31 March 2021 4.0
Charge for the period 0.8
--------------------------- ------------------
At 30 September 2021 4.8
Charge for the period 0.9
At 31 March 2022 5.7
--------------------------- ------------------
Net book value
At 30 September 2020 2.5
At 31 March 2021 2.5
At 31 March 2022 3.1
--------------------------- ------------------
Computer software comprises both internal salaries and external
development capitalised in relation to the Group's bespoke
operational software. The Group capitalised internal salaries of
GBP1.1 million in the six months ended 31 March 2022 (H1 2021:
GBP0.5 million) for development of computer software.
For the six month period to 31 March 2022, the amortisation
charge of GBP0.9 million (H1 2021: GBP0.8 million) has been charged
to administrative expenses in the income statement.
12. Property, plant and equipment
Fixtures Office
Leasehold improvements Plant and machinery and fittings equipment Total
GBPm GBPm GBPm GBPm GBPm
-------------------------- ----------------------- -------------------- -------------- ----------- ------
Cost
At 30 September 2020 - 0.7 1.0 0.9 2.6
Additions - 0.6 0.2 0.3 1.1
-------------------------- ----------------------- -------------------- -------------- ----------- ------
At 31 March 2021 - 1.3 1.2 1.2 3.7
Additions 0.1 0.1 - 0.2 0.4
-------------------------- ----------------------- -------------------- -------------- ----------- ------
At 30 September 2021 0.1 1.4 1.2 1.4 4.1
Additions - 0.1 - 0.1 0.2
At 31 March 2022 0.1 1.5 1.2 1.5 4.3
-------------------------- ----------------------- -------------------- -------------- ----------- ------
Accumulated depreciation
At 30 September 2020 - 0.4 0.9 0.5 1.8
Charge for the period - 0.1 - 0.1 0.2
-------------------------- ----------------------- -------------------- -------------- ----------- ------
At 31 March 2021 - 0.5 0.9 0.6 2.0
Charge for the period - 0.2 0.1 0.1 0.4
-------------------------- ----------------------- -------------------- -------------- ----------- ------
At 30 September 2021 - 0.7 1.0 0.7 2.4
Charge for the period - 0.1 0.1 0.1 0.3
At 31 March 2022 - 0.8 1.1 0.8 2.7
-------------------------- ----------------------- -------------------- -------------- ----------- ------
Net book value
At 30 September 2020 - 0.3 0.1 0.4 0.8
At 31 March 2021 - 0.8 0.3 0.6 1.7
At 31 March 2022 0.1 0.7 0.1 0.7 1.6
-------------------------- ----------------------- -------------------- -------------- ----------- ------
13. Right-of-use assets
Right-of-use assets
GBPm
-------------------------- --------------------
Cost
At 30 September 2020 8.1
Additions 0.1
At 31 March 2021 8.2
Additions 0.5
Modifications (0.4)
Disposals (0.1)
--------------------------- --------------------
At 30 September 2021 8.2
Additions -
Modifications 0.1
At 31 March 2022 8.3
Accumulated depreciation
At 30 September 2020 2.1
Charge for the period 0.4
--------------------------- --------------------
At 31 March 2021 2.5
Charge for the period 0.5
On disposals (0.1)
--------------------------- --------------------
At 30 September 2021 2.9
Charge for the period 0.5
At 31 March 2022 3.4
--------------------------- --------------------
Net book value
At 30 September 2020 6.0
At 31 March 2021 5.7
At 31 March 2022 4.9
--------------------------- --------------------
During the period the Group renewed the lease on one of its
properties that had expired; this represents a modification under
IFRS 16. The right-of-use asset was increased by GBP0.1 million to
reflect the value of the asset after the modification and the
corresponding lease liability increased by GBP0.1 million.
14. Trade and other receivables
Six months ended 31 March 2022 Six months ended 31 March 2021
GBPm GBPm
--------------------------------- ------------------------------- -------------------------------
Trade receivables 2.2 1.9
Amounts owed by related parties - 5.4
Right-of-return asset 0.3 0.4
Accrued income 0.8 0.8
Prepayments 1.1 0.9
---------------------------------- ------------------------------- -------------------------------
4.4 9.4
--------------------------------- ------------------------------- -------------------------------
The Group provides against trade receivables using the
forward-looking expected credit loss model under IFRS 9. An
impairment analysis is performed at each reporting date. Trade
receivables, accrued income, amounts owed by related parties and
other receivables expected credit losses have been reviewed by
management and have been determined to have an immaterial impact on
these balances.
15. Trade and other payables
Six months ended 31 March 2022 Six months ended 31 March 2021
GBPm GBPm
------------------------------------ ------------------------------- -------------------------------
Trade payables 25.2 19.4
Other taxation and social security 7.0 6.8
Refund liability 0.8 1.2
Other payables 1.1 0.9
Accruals 2.6 1.4
------------------------------------- ------------------------------- -------------------------------
36.7 29.7
------------------------------------ ------------------------------- -------------------------------
16. Lease liabilities
Lease liability
GBPm
---------------------- ----------------
At 30 September 2020 6.4
Additions 0.2
Interest expense 0.1
Lease payment (0.5)
----------------------- ----------------
At 31 March 2021 6.2
Additions 0.4
Modifications (0.4)
Interest expense 0.2
Lease payment (0.6)
----------------------- ----------------
At 30 September 2021 5.8
Modifications 0.1
Interest expense 0.1
Lease payment (0.6)
----------------------- ----------------
At 31 March 2022 5.4
----------------------- ----------------
During the period the Group renewed the lease on one of its
properties that had expired; this represents a modification under
IFRS 16. The right-of-use asset was increased by GBP0.1 million to
reflect the value of the asset after the modification and the
corresponding lease liability increased by GBP0.1 million.
The Group had total cash outflows for leases of GBP0.6 million
(H1 2021: GBP0.5 million). The Group also had non-cash additions to
right-of-use assets and lease liabilities of GBP0.1 million (H1
2021: GBP0.2 million).
Lease liabilities as at 31 March were classified as follows:
Six
months ended March
2022 Six months ended March 2021
GBPm GBPm
------------- -------------------- ----------------------------
Current 0.9 0.7
Non-current 4.5 5.5
Total 5.4 6.2
-------------- -------------------- ----------------------------
17. Borrowings
Six Six months ended
months ended 31 March 2022 31 March 2021
GBPm GBPm
---------------------------------------------- ---------------------------- -----------------
Amounts drawn under revolving credit facility - -
Unamortised debt issue costs (0.1) -
(0.1) -
---------------------------------------------- ---------------------------- -----------------
On 7 June 2021, the Group signed into a new Revolving Credit
Facility (the 'RCF'). The RCF has total commitments of GBP10
million and a termination date of June 2024. The facility is
secured by a debenture dated 7 June 2021. Interest on the RCF is
charged at SONIA plus a margin of between 2.3% and 2.8% depending
on the consolidated leverage of the Group. A commitment fee of 40%
of the margin applicable to the RCF is payable quarterly in arrears
on unutilised amounts of the RCF. There is no requirement to settle
all, or part, of the debt earlier than the termination date. At 31
March 2022 the Group had not utilised the RCF.
Unamortised debt issue costs of GBP0.1 million (H1 2021: GBPnil)
are included in prepayments (note 14).
18. Ordinary share capital
Six months ended 31 March 2022 Six months ended 31 March 2021
GBP GBP
------------------------------------------------- ------------------------------- -------------------------------
Allotted, called up and fully paid
325,062,985 ordinary shares of 0.1p (H1 2021:
GBPnil) 325,063 -
Nil ordinary shares of GBP1.00 (H1 2021: 800) - 800
Nil A ordinary shares of GBP0.10 (H1 2021: 845) - 85
-------------------------------------------------- ------------------------------- -------------------------------
325,063 885
------------------------------------------------- ------------------------------- -------------------------------
The share capital of the Group is represented by the share
capital of the parent company, Victorian Plumbing Group plc. The
Company was incorporated on 6 May 2021 to act as the holding
company of the Group. Prior to this the share capital of the Group
was represented by the share capital of the previous parent, VIPSO
Limited.
19. Own shares held
The Employee Share Option Trust purchases shares to fund the
Share Incentive Plan. At 30 September 2021, the trust held 635,504
(2020: nil) ordinary shares with a book value of GBP636 (2020:
GBPnil). The market value of these shares as at 30 September 2021
was GBP1.6 million (2020: GBPnil). During FY21 the ESOT purchased
635,504 shares of the Company at a cost of GBP636, representing
0.2% of issued share capital.
Number of shares GBP
-------------------------------------------------------- ----------------- ----
ESOT shares reserve
Own shares held at 30 September 2021 and 31 March 2022 635,504 636
--------------------------------------------------------- ----------------- ----
On 27 July 2021, Victorian Plumbing Group plc issued 635,504
ordinary shares of 0.1p each to eligible employees in connection
with the Share Incentive Plan ('SIP'). On the same date, the
ordinary shares were acquired by the Employee Share Option Trust
('ESOT') at nominal value.
20. Share-based payments
The Group operates four share plans being the Share Incentive
Plan ('SIP'), a Management Incentive Plan ('MIP'), a Deferred Bonus
Plan ('DBP') and a Long-Term Incentive Plan ('LTIP'). In addition,
both prior to and following Admission to AIM in June 2021, the
Group awarded shares to the Chairman and certain members of Key
Management which had restrictions placed against them that bring
the awards into the scope of IFRS 2.
All share-based incentives carry a service condition. Such
conditions are not taken into account in the fair value of the
service received. The fair value of services received in return for
share-based incentives is measured by reference to the fair value
of share-based incentives granted. The estimate of the fair value
of the share-based incentives is measured using the Black-Scholes
pricing model or Monte Carlo simulation, as appropriate for each
scheme.
Sensitivity analysis has been performed in assessing the fair
value of the share-based incentives. There are no changes to key
assumptions that are considered by the Directors to be reasonably
possible, which give rise to a material difference in the fair
value of the share-based incentives.
The total charge in the period was GBP2.1m (H1 2021: GBP3.5m)
with a Company charge of GBP1.0m (H1 2021: GBPnil). This included
associated national insurance ('NI') at 15.1% (H1 2021: 13.8%),
which management expects to be the prevailing rate when the awards
are exercised, and apprenticeship levy at 0.5%, based on the share
price at the reporting date.
Six months ended 31 March 2022 Six months ended 31 March 2021
GBPm GBPm
------------------------------------------------- ------------------------------- -------------------------------
Share Incentive Plan ('SIP') 0.2 -
A ordinary growth shares award - April 2020 - 0.3
Management incentive Plan award - December 2020 - 2.5
IPO restricted share awards 1.9 -
Deferred bonus plan - October 2021 0.1 -
Long term incentive plan - October 2021 - -
------------------------------------------------- ------------------------------- -------------------------------
Total IFRS 2 charge 2.2 2.8
National insurance and apprenticeship levy on
applicable schemes (0.1) 0.7
-------------------------------------------------- ------------------------------- -------------------------------
Total charge 2.1 3.5
-------------------------------------------------- ------------------------------- -------------------------------
During the period, the Directors in office in total had gains of
GBPnil (H1 2021: GBPnil) arising on the exercise of share-based
incentive awards.
Share Incentive Plan
The Group operates a Share Incentive Plan ('SIP') scheme that
was made available to all eligible employees following Admission to
AIM in June 2021. On 27 July 2021, all eligible employees were
awarded free shares valued at GBP3,600 each based on the closing
share price on 26 July 2021 of GBP2.67. A total of 635,504 shares
were awarded under the scheme, subject to a three-year service
period (the 'Vesting Period').
Six months ended 31 March 2022 Six months ended 31 March 2021
number number
------------------------------ ------------------------------- -------------------------------
Outstanding at 1 October 2021 576,732 -
Forfeited (100,155) -
------------------------------ ------------------------------- -------------------------------
Outstanding at 31 March 2022 476,577 -
------------------------------ ------------------------------- -------------------------------
The total charge in the period, included in operating profit, in
relation to these awards was GBP0.2m (H1 2021: GBPnil). The Company
charge for the period was GBPnil (H1 2021: GBPnil).
A ordinary shares
On 15 April 2020 (the 'grant date'), 845 A ordinary shares in
VIPSO Ltd, the former ultimate parent company, were issued at a
price of GBP0.10 per share which was the nominal value of the
shares. Of the 845 shares issued, 800 of the A ordinary shares were
issued to the existing shareholders by way of bonus issue so as not
to dilute their existing holding. These 800 shares are considered
outside the scope of IFRS 2, on the basis that these shareholders
do not receive any additional value for their shares.
The remaining 45 A ordinary shares were awarded to certain
members of Key Management (together the 'A ordinary shareholders').
In order to realise value from the shares awarded, a participant
must remain employed until an 'Exit' event is achieved. The equity
value on 'Exit' must also be in excess of the equity hurdle which
has been set at GBP130 million. The 'Exit' requirement is a
non-market performance vesting condition and the hurdle amount is
considered to be a market-based performance condition.
On 27 May 2021 the Group undertook a reorganisation, through
which the A ordinary shareholders exchanged their shares for an
equivalent value in Victorian Plumbing Group plc. After all of the
steps relating to the reorganisation were executed, the A ordinary
shareholders had exchanged their 45 A ordinary shares in VIPSO Ltd
for 7,222,969 ordinary shares in Victorian Plumbing Group plc. The
share-for-share exchange does not represent a modification of the
award under IFRS 2 as the value of the award, and the related
service and performance conditions, remained unchanged. On 11 June
2021 the A ordinary shareholders entered into a deed (the 'deed'),
which would become effective on Victorian Plumbing Group plc's
Admission to AIM, to modify the terms of the award. The performance
condition would no longer be relevant since an Exit event would
have already occurred. The service condition for the A ordinary
shareholders was modified so as to restrict the number of shares
that vest on Admission.
On 22 June 2021 Victorian Plumbing Group plc was admitted to
AIM, which was an Exit event under the terms of the award. On
Admission 1,059,369 shares vested. The deed agreed to by the A
ordinary shareholders took effect.
Six months ended 31 March 2022
Number
-------------------------------------------------------------- -------------------------------
Outstanding and unvested at 1 October 2021 and 31 March 2022 6,163,600
--------------------------------------------------------------- -------------------------------
The total charge in the period, included in operating profit, in
relation to these awards was GBPnil (H1 2021: GBP0.3m). The Company
charge for the period was GBPnil (H1 2021: GBPnil).
Management Incentive Plan
An Executive Director was awarded share options under a
management incentive plan ('MIP') prior to Admission.
On 2 December 2020, VIPSO Ltd (the former ultimate parent
company of the Group) awarded eight nil cost ordinary share options
and nine nil cost A ordinary share options under the MIP. All of
the options awarded were to vest on the earlier of an 'Exit' event
or three years from the date of grant. Options would be forfeited
if the employee leaves the Group before the options vest, unless
under exceptional circumstances.
On 27 May 2021 the Group undertook a reorganisation, through
which the options granted under the MIP were converted to be
options over ordinary shares and ordinary deferred shares in
Victorian Plumbing Group plc. After all the steps relating to the
reorganisation were executed, the participant of the MIP had
exchanged its eight ordinary shares and nine A ordinary shares in
VIPSO Ltd for 3,219,948 ordinary share options in Victorian
Plumbing Group plc. The exchange does not represent a modification
of the award under IFRS 2 as the value of the award, and the
related service and performance conditions remained unchanged.
On 11 June 2021 the MIP participant entered into a deed ('the
MIP deed'), which would become effective on Victorian Plumbing
Group plc's Admission to AIM, to modify the terms of the award. All
of the options would convert when the performance condition was
satisfied (i.e. on Admission) resulting in the participant being
awarded ordinary shares. However, 30% of the shares would remain
restricted and subject to a service condition (the 'restricted
shares').
On 22 June 2021 Victorian Plumbing Group plc was admitted to AIM
which was an Exit event under the terms of the award. The deed
agreed to by the MIP participants took effect.
On Admission the options converted to 3,219,948 ordinary shares
and 2,253,964, or 70%, of those shares vested at an average price
of GBP2.62.
Six months ended 31 March 2022
Number
-------------------------------------------------------------- -------------------------------
Outstanding and unvested at 1 October 2021 and 31 March 2022 965,984
--------------------------------------------------------------- -------------------------------
The weighted average market value per ordinary share for the
restricted shares awarded under the MIP that vested in the year was
GBP2.62.
The total charge in the period, included in operating profit, in
relation to these awards was GBPnil (H1 2021: GBP2.5m). The Company
charge for the period was GBPnil (H1 2021: GBPnil).
IPO restricted share awards
During FY21, the Chairman and certain members of Key Management
were granted restricted share awards. The restricted share awards
do not have a performance condition attached to them but the extent
to which they vest depends on a service condition being satisfied.
The restricted shares are forfeited if the employee leaves the
Group before the vesting date, unless under exceptional
circumstances.
Share price Fair value
at grant Employee Vesting Risk-free Dividend per
date contribution period rate yield Volatility restricted
Grant date GBP per share (years) % % % share
------------ ------------- ------------- -------------- -------------- -------------- ----------- -------------
22/06/2021 2.62 GBP0.001 5.0 - - - 2.62
22/06/2021 2.62 GBP0.001 4.0 - - - 2.62
10/08/2021 2.59 nil 2.1 - - - 2.59
------------ ------------- ------------- -------------- -------------- -------------- ----------- -------------
The number of restricted shares outstanding at 31 March 2022 was
as follows:
Six months ended 31 March 2022
Number
------------------------------------------- -------------------------------
Outstanding at 30 September 2021 3,442,858
Forfeited (38,168)
Outstanding and unvested at 31 March 2022 3,404,690
-------------------------------------------- -------------------------------
The total charge in the period, included in operating profit, in
relation to these awards was GBP1.9m (H1 2021: GBPnil). The Company
charge for the period was GBP1.0m (H1 2021: GBPnil).
Deferred Bonus Plan
The Group operates a Deferred Bonus Plan ('DBP') for the senior
leadership team and certain key employees. It is both a cash bonus
plan and a discretionary employee share plan under which a
proportion of a participant's annual bonus is deferred into an
award over shares. Awards under the plan are contingent on the
satisfaction of pre-set internal targets relating to financial and
operational objectives. A nil cost option will be granted following
determination of performance against targets, with 40% of the award
vesting immediately, 30% after 1 year and 30% after 2 years. Awards
are potentially forfeitable during that period should the employee
leave employment.
During the period the Group awarded 1,893,219 nil cost options
under the DBP scheme. The fair value of the award was determined to
be GBP1.02, being the average Market Value of a Share over the five
business days ending on 31 January 2022.
Six months ended 31 March 2022
Number
---------------------------------- -------------------------------
Outstanding at 30 September 2021 -
Options granted in the period 1,893,219
Outstanding at 31 March 2022 1,893,219
----------------------------------- -------------------------------
The total charge in the period, included in operating profit, in
relation to these awards was GBP0.1m (H1 2021: GBPnil). The Company
charge for the period was GBPnil (H1 2021: GBPnil).
Long Term Incentive Plan
The Group operates a Long-Term Incentive Plan Award ('LTIP') for
the CEO and CFO. The extent to which awards vest will depend upon
the satisfaction of the Group's financial and operational
performance in the financial year of the award date (the
"Performance Conditions").
The LTIP awards are subject to performance conditions based on
Adjusted EPS (75% of award) and absolute Total Shareholder Return
("TSR") (25% of award). Awards vest 3 years after grant subject to
EPS and Absolute TSR performance conditions, with a two-year
post-vesting holding period applying.
On 29 March 2022 the Group awarded 323,472 nil cost options
under the LTIP scheme. The fair value for the EPS element of the
award at GBP0.52 was based on the share price at the grant date.
The fair value of the TSR element was calculated using a Monte
Carlo simulation and has been fixed at GBP0.106.
Six months ended 31 March 2022
Number
---------------------------------- -------------------------------
Outstanding at 30 September 2021 -
Options granted in the period 323,472
Outstanding at 31 March 2022 323,472
----------------------------------- -------------------------------
21. Cash generated from operating activities
Six months ended 31 March 2022 Six months ended 31 March 2021
GBPm GBPm
------------------------------------------------- ------------------------------- -------------------------------
Cash flows from operating activities
Profit before taxation for the financial period 2.7 14.5
Adjustments for:
Amortisation of intangible assets (note 11) 0.9 0.8
Depreciation of property, plant and equipment
(note 12) 0.3 0.2
Depreciation of right-of-use assets (note 13) 0.5 0.4
Share-based payments (including NI) 2.1 3.5
Finance costs 0.2 0.1
Increase in inventories (2.9) (3.0)
Decrease in receivables 0.5 0.1
(Decrease)/Increase in payables (1.0) 2.8
Increase in provisions 0.1 -
------------------------------------------------- ------------------------------- -------------------------------
Cash generated from operating activities 3.4 19.4
-------------------------------------------------- ------------------------------- -------------------------------
22. Post balance sheet events
There have been no events between the half year-end date and the
date of this report which represent a reportable event after the
reporting period under IAS 10.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR QQLFFLELEBBX
(END) Dow Jones Newswires
May 17, 2022 02:00 ET (06:00 GMT)
Victorian Plumbing (LSE:VIC)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Victorian Plumbing (LSE:VIC)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
