TIDMVIC
RNS Number : 2660A
Victorian Plumbing Group plc
23 May 2023
Victorian Plumbing Group PLC
HALF year results for the SIX MONTHSED 31 mARCH 2023
Further trading momentum and market share gains; strong cash
generation and robust balance sheet
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
2023 ('H1 2023').
H1 2023 H1 2022 Change
--------------------------- ---------- ---------- -------
Revenue GBP146.8m GBP133.9m 10%
Gross profit(1) GBP66.8m GBP58.5m 14%
Gross profit margin(2) 46% 44% 2%pts
Adjusted EBITDA(3) GBP9.9m GBP6.7m 48%
Adjusted EBITDA margin(4) 7% 5% 2%pts
Operating profit GBP5.5m GBP2.9m 90%
Adjusted diluted EPS(5) 1.9p 1.2p 58%
Statutory diluted EPS 1.3p 0.6p 117%
Interim dividend 0.45p Nil 0.45p
Net cash GBP40.9m GBP33.7m 21%
--------------------------- ---------- ---------- -------
Financial highlights
-- Strong H1 revenue, up 10% year-on-year to GBP146.8m (H1 2022:
GBP133.9m)
-- Improved gross profit(1) up 14% year-on-year to GBP66.8m; gross
profit margin(2) increased 2ppts to 46% (H1 2022: 44%)
-- Adjusted EBITDA(3) increased by 48% year-on-year to GBP9.9m
(H1 2022: GBP6.7m); adjusted EBITDA margin(4) increased 2ppts
to 7% (H1 2022: 5%)
-- Net cash GBP40.9m (H1 2022: GBP33.7m, FY 2022: GBP45.5m), reflecting
strong cash conversion and the payment of GBP9.1m of dividends
in H1 2023 (H1 2022: GBPnil)
-- Adjusted diluted EPS(5) of 1.9 pence per share (H1 2022: 1.2
pence per share), reflecting a 58% increase
-- Interim dividend of 0.45p per share declared (H1 2022: GBPnil)
Operational and strategic highlights
-- Total orders(8) for the six months ended 31 March 2023 was
482,000, a 6% increase on last year (H1 2022: 453,000) and
a 13% increase on H2 2022 (at 427,000), reflecting further
market share gains, with the Group having become the UK's number
one bathroom retailer in FY 2022(12)
-- Average order value(10) for the first half was up 3% to GBP305
(H1 2022: GBP296)
-- Marketing spend as a % of revenue for the six months has reduced
from 30% to 28% reflecting favourable market dynamics
-- Customer satisfaction increased with an average Trustpilot
TrustScore(11) of 'Excellent' at 4.5 (H1 2022: 4.4)
Investing in operational capacity:
-- Signed a 20-year lease for a new, 544,000 square foot, purpose-built
UK distribution centre in Lancashire, close to our existing
locations; on track to open in the second half of next year
-- This will support the Group's strategic expansion and will
enable consolidation of a number of the Group's existing sites,
although some existing facilities will be retained to enable
further adjacent category expansion
Investing in technology:
-- Website re-platform completed in December 2022 without any
issues or down time, enabling further improvement to the customer
journey through H2
-- Continued development and testing of our new Trade app, to
enhance efficiency and engagement for Trade ahead of a wider
roll out later in the year
Progressing growth opportunities in 'Trade' and 'Adjacent
categories':
-- Trade revenue for H1 2023 grew by 20% to GBP29.6m (H1 2022:
GBP24.6m), representing 20% of total revenue (H1 2022: 18%)
-- Combined adjacent category revenues (Tiles and Lighting) increased
in H1 2023 by 54% to GBP3.7m (H1 2022: GBP2.4m)
Current trading and outlook
Consumer demand in April and the early part of May remained
robust, with order volume led growth and continued increase in our
market share. Gross margin continues to improve as the tailwinds
from shipping and foreign exchange movements begin to cycle
through.
We remain mindful that our customers still face a series of
inflation related headwinds, however, with our resilient trading
and market-leading proposition we remain confident in delivering
expectations for the full year.
Mark Radcliffe, Founder and Chief Executive Officer of Victorian
Plumbing Group plc, said:
"Momentum from our strong delivery in the latter part of FY22
has built into the first half of this financial year. We have
further increased our market share, building on our position as the
UK's No. 1 bathroom retailer, through our strategy and unique
business model, which have remained constant since IPO. We are
proud of our investment in a wide range of products, knowing
customer choice is ever more important when considered against
cost-of-living pressures. We continue to offer good product
availability, underpinned by careful inventory management.
"Our new UK distribution centre will represent another key
milestone and, together with on-going investment in technology,
this will enable further growth in the core bathroom category as
well as strategic expansion in adjacent categories.
"Victorian Plumbing's robust business momentum, high cash
generation and strong balance sheet supports the announcement of
our first interim dividend."
Analyst and investor webinar
A webinar for analysts and investors will be held today, 23 May
2023, at 08.30am 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
Daniel Barton, Chief Financial Officer
FTI Consulting (Financial PR) +44 20 3727 1000
Alex Beagley, Eleanor Purdon, Harriet Jackson, VictorianPlumbing@fticonsulting.com
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 specialist
bathroom retailer, offering a wide range of over 32,000 products to
B2C and Trade customers. Victorian Plumbing offers its customers a
one-stop shop solution for the entire bathroom with more than 130
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 550 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
Units H1 2023 H1 2022 Change
----------------------------------- ------ -------- -------- --------
Income statement
----------------------------------- ------ -------- -------- --------
Revenue GBPm 146.8 133.9 10%
----------------------------------- ------ -------- -------- --------
Gross profit(1) GBPm 66.8 58.5 14%
----------------------------------- ------ -------- -------- --------
Gross profit margin(2) % 46% 44% 2%pts
----------------------------------- ------ -------- -------- --------
Adjusted EBITDA(3) GBPm 9.9 6.7 48%
----------------------------------- ------ -------- -------- --------
Adjusted EBITDA margin(4) % 7% 5% 2%pts
----------------------------------- ------ -------- -------- --------
Profit before tax GBPm 5.6 2.7 107%
----------------------------------- ------ -------- -------- --------
Earnings per share
----------------------------------- ------ -------- -------- --------
Adjusted diluted EPS(5) pence 1.9 1.2 58%
----------------------------------- ------ -------- -------- --------
Statutory diluted EPS pence 1.3 0.6 117%
----------------------------------- ------ -------- -------- --------
Cash flow
----------------------------------- ------ -------- -------- --------
Free cash flow(6) GBPm 6.5 1.4 364%
----------------------------------- ------ -------- -------- --------
Operating cash conversion(7) % 66% 21% 45%pts
----------------------------------- ------ -------- -------- --------
Net cash and cash equivalents GBPm 40.9 33.7 21%
----------------------------------- ------ -------- -------- --------
Key performance indicators
----------------------------------- ------ -------- -------- --------
Total orders(8) '000 482 453 6%
----------------------------------- ------ -------- -------- --------
Active customers(9) '000 352 339 4%
----------------------------------- ------ -------- -------- --------
Average order value(10) GBP 305 296 3%
----------------------------------- ------ -------- -------- --------
TrustPilot TrustScore (11) /5 4.5 4.4 2%
----------------------------------- ------ -------- -------- --------
Marketing spend as a % of revenue % 28% 30% (2%pts)
----------------------------------- ------ -------- -------- --------
Trade revenue as a % of total % 20% 18% 2%pts
----------------------------------- ------ -------- -------- --------
(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 defined as operating profit before
depreciation, amortisation, exceptional items and IFRS 2
share-based payments.
(4) Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of revenue.
(5) Diluted EPS has been calculated as per note 8. Adjusted
diluted EPS is defined as adjusted net income divided by the
weighted average number of shares for diluted EPS. Adjusted net
income is defined as net income before exceptional items and IFRS 2
share-based payment and after adjusting for the tax impact of those
items.
(6) Free cash flow is cash generated from operating activities
before exceptional items and taxation less capital expenditure and
cash flows relating to leases.
(7) Operating cash conversion is free cash flow as a percentage of adjusted EBITDA.
(8) Total orders is defined as the total number of orders
dispatched to customers in the period.
(9) Active customers are the number of unique customers who placed an order in the period.
(10) Average order value ('AOV') is defined as revenue divided by total orders in the period.
(11) The average Trustpilot rating is defined as the monthly
average of all ratings made through Trustpilot.
(12) Mintel UK Bathrooms & Bathrooms Accessories Report 2022.
(13) Internally conducted research.
Summary of operating performance for the six months ended 31
March 2023
Revenue of GBP146.8m for H1 2023 was up by 10% (H1 2022:
GBP133.9m) driven by both increased total orders (up 6%) and
increased AOV (up 3%) across both Consumer and Trade, with 7% and
20% growth respectively during the six- month period.
Our unrivalled SKU range and strong availability of product
continues to be attractive to our customers and positively sets us
apart from the competition. Adjusted EBITDA increased to GBP9.9m
(H1 2022: GBP6.7m) and adjusted EBITDA margin increased to 7% (H1
2022: 5%).
Sales of our own branded product range, which attract higher
margins, increased by 1ppt to 76% (H1 2022: 75%). This has been
driving continued improvement in gross profit, which improved by
2ppts to 46% (H1 2022: 44%). In addition, reduced shipping costs
and favourable foreign exchange rates have also improved gross
margin.
Through H1 2023 we invested in a new and bold creative brand
campaign, 'Boss Your Bathroom' which was well received by consumers
and is reflected in Victorian Plumbing's brand awareness increasing
to 64%(13) (H1 2022: 63%), against a backdrop of declines amongst
the competition. Despite this incremental investment in our brand,
our overall digital performance-based marketing spend decreased on
the equivalent half year by 2ppts to 28% of revenue (H1 2022: 30%)
and we continue to successfully grow our market share.
Active customers, defined as the number of unique customers who
placed an order in the period, increased by 4% to 352,000 (H1 2022:
339,000) with conversion improvement also leading to increased
total orders of 6% following the successful re-platforming of our
website in December 2022. SimilarWeb data indicates that our share
of visits across the total competitor set was 38% with our nearest
competitor at just 18%.
Whilst concerns remain over the volatile macroeconomic
environment and its potential impact on consumers, our resilient
trading and market-leading proposition supports our confidence in
our ability to deliver our strategy in the long term and meet
expectations.
Our strategic focus
Our strategy remains unchanged from IPO and covers three growth
horizons: core B2C, Trade and adjacent products.
1. Core B2C
Our core market is retailing bathroom products and accessories
to consumers in the UK through our market-leading online platform.
As an e-commerce retailer, we continue to benefit from the ongoing
structural shift in consumer buying behaviour from offline to
online and there is still some way to go before this transition
reaches maturity. Online sales of bathroom products and accessories
remains at only 31% of the total UK market according to Mintel. We
expect our addressable market across all categories to grow even
further in the coming years.
We are particularly well placed to continue to gain further
market share through these structural tailwinds and by taking share
from traditional offline physical retailers, as well as other
online competitors, leveraging our market and brand position and
our strong balance sheet. The successful re-platforming of our
website will enable the business to capture further market share in
both our core and adjacent markets.
In the medium term, and once we have captured more of the
existing UK addressable market, there is a potential further
opportunity to translate our domestic success into carefully
selected international markets.
2. Trade
Our second growth horizon focuses on the B2B opportunity to
retail bathroom products and accessories to Trade customers. In the
first half, 20% (H1 2022: 18%) of our revenue came from Trade
accounts, compared with an estimated 30-40% of the market. The
Victorian Plumbing brand has historically been mainly consumer
focused. By broadening our marketing approach, expanding our focus
to provide relevant products to Trade customers, and by providing
the best platform to browse and order - tailored for Trade
customers' needs - we believe we can make further meaningful market
share gains in this area.
We are also working with a select cohort of trusted Trade
customers in a proof-of-concept phase to develop our Trade app
ahead of a wider roll out later in the year. This exciting new
offering should improve tradespeople's purchasing experiences and
help drive more profitable growth.
3. Adjacent products
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. We continue to
make good progress in pursuing this growth horizon, and in H1 FY23
we expanded these adjacent product ranges with revenue growth at
52% for tiles and 70% for lighting. Increasing the prominence of
adjacent product ranges on our website before the end of the year,
following the successful re-platforming, will allow consumers to
use Victorian Plumbing for everything they need to furnish their
bathrooms.
Supply chain normalisation
Whilst we have not been immune to the widely reported global
supply challenges of recent years, the deep and trusted
relationships we have built with our global suppliers over our 20
years of trading have enabled us to navigate these challenges well
and secure sufficient inventory across a broad range to satisfy
customer demand. This supply chain advantage, together with our
strong balance sheet, has allowed us to be bold when attracting
consumers to site, safe in the knowledge that we have available
stock to satisfy orders.
Equally, the local experts and partners who we work with on the
ground in China ensure that we are always aware of any potential
supply issues that may arise, giving us time to pivot to
alternatives as and when needed. This, alongside the work they do
on auditing our suppliers' factories, gives us confidence in the
availability of products together with maintaining quality and
reliability.
New UK distribution centre
Our new 20-year leased, 544,000 square foot, UK distribution
centre in Leyland, Lancashire, which is due to become operational
in the second half of FY24, will create space and capacity for
growth in line with our longer-term strategy. We anticipate
spending c.GBP26m of capex, including GBP7m in this financial year
and the remaining GBP19m in the first half of FY24. Associated
allowable tax deductions will save c.GBP6m of Corporation Tax,
spread as GBP2m in this financial year and the remaining GBP4m in
FY24. After a period of double running, which covers the period of
operational transition, we anticipate no additional pre-tax cash
outflow for rental expense. The move away from short-term leases to
a longer term-lease will result in some re-categorisation in the
income statement due to IFRS 16 lease accounting.
Seamless customer journey
Our customers' experience with Victorian Plumbing throughout
their buying journey is of paramount importance to us. We are
extremely proud that we continue to be ranked "Excellent" by
TrustPilot and have increased our average rating in the year to 4.5
(H1 2022: 4.4) out of 5.
Development of our proprietary technology platform
The systems that drive the performance of the business are
primarily bespoke platforms that we continue to invest in, innovate
and improve each year. Our growing technology and infrastructure
team help to facilitate this continual development to ensure we
remain best in class across e-commerce retail platforms.
We successfully completed the website re-platforming to improve
its functionality and scalability in December 2022 and are now
working to develop an improved front end website, to deliver
enhanced search functionality, better product categorisation and
other features that will improve customer conversion and deliver
growth.
Our focus has also moved to the launch of an app that will
enable our Trade consumers to browse and purchase products
efficiently. We are working with several of our trusted Trade
consumers in a proof-of-concept phase ahead of a wider roll out
later in the year.
ESG
Taking responsibility is one of our core values, and we are
clear that every one of us has a role to play in making a positive
difference to the environment and the communities in which we
operate.
In our first full year post IPO, we adopted an ESG strategy
which is centred around three focus areas: environmental
sustainability, diversity & inclusion, and governance &
ethics.
Our new UK distribution centre will enable us to build on the
successes we have made in recent years - in particular with respect
to our environmental sustainability as we look to offer more
electric vehicle charging for employee travel to work and assess
the potential for solar panels to generate our own energy needs. We
continue to work with suppliers to reduce the levels of plastic
packaging and have been working with a third party to provide a
baseline assessment of Scope 3 emissions from which we can
establish a strategy for moving towards net zero. We also
anticipate that recommendations from our in-year Phase 3 ESOS audit
will help us to drive improvements to our environmental
sustainability.
Other ESG areas that we have made progress on during the first
half include the hiring of HR and data protection specific roles
and the establishment of a charity committee that recognises the
importance we have to play in the local communities in which we
operate, as well as the roll out of further flexibility and
enhancements to the benefits packages available to our
employees.
Our people
As a Board, we continue to be impressed by the commitment and
capability of our employees - collectively, their innovation and
hard work have been the driving force behind the growth and success
experienced by the Group over recent years. We are proud of the
values-led, principles-driven culture that is deep-rooted
throughout Victorian Plumbing, and it is this culture that
underpins our ability to adapt to change and respond positively to
challenges.
Over the last 24 months we have placed significant emphasis on
listening to feedback from colleagues through many different forums
and have worked hard to make our benefits and rewards package one
that both attracts and retains the best talent.
The response from our regular employee engagement surveys
suggests that the work done to date is having a positive impact,
and we remain committed to building on the recent progress to
further improve our people experience and help fuel our future
growth. Employee engagement targets now feature as part of the
Executive management incentive targets for FY 2023.
We would like to thank our employees, customers, suppliers and
other stakeholders for their continued support. Whilst we are
mindful of the current macroeconomic conditions that our customers
are battling against, we remain confident in our ability to
continue to execute our strategic plan, underpinned by our strong
financial position, to take further market share and consolidate
our position as the UK's No.1 bathroom retailer.
Financial review
The performance of the Group continued to be strong through H1
2023 with continuing momentum in both profit and cash
generation.
H1 2023 H1 2022 Change %
GBPm GBPm
------------------------------- ---------- ---------- -----------
Revenue 146.8 133.9 10%
Cost of sales (80.0) (75.4) (6%)
------------------------------- ---------- ---------- -----------
Gross profit 66.8 58.5 14%
Underlying costs (56.9) (51.8) (10%)
Adjusted EBITDA 9.9 6.7 48%
Depreciation and amortisation (1.8) (1.7) (6%)
Interest 0.1 (0.2) 150%
------------------------------- ---------- ---------- -----------
Adjusted PBT 8.2 4.8 71%
Share-based payments (2.2) (2.1) 5%
Exceptional items (0.4) - n.m
------------------------------- ---------- ---------- -----------
Statutory PBT 5.6 2.7 107%
------------------------------- ---------- ---------- -----------
Revenue
In the six months to 31 March 2023, revenue was up 10% on the
previous year at GBP146.8m (H1 2022: GBP133.9m) as consumer demand
for our products remains robust.
Total orders in the period increased by 6% to 482,000 (H1 2022:
453,000) and average order value increased by 3% to GBP305 (H1
2022: GBP296). Order increases indicate further market share gains
reflective of our unrelenting approach to online marketing and a
continued shift towards consumers buying from online channels. AOV
increase is a result of continued price increases, albeit the
growth has been at a slower rate than in previous periods as
supplier inflationary dynamics have normalised and we are conscious
of the impact of cost-of-living pressures on the consumer.
Consumer channel revenue represented 80% (H1 2022: 82%) of
overall revenue and grew by 7% vs. a 9% decline in the first half
of the last financial year. Trade channel revenue represented 20%
(H1 2022: 18%) of overall revenue and grew by 20% vs. 18% in the
first half of the last financial year.
Gross profit and gross profit margins
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
(which include mark to market movements on forward currency
contractual arrangements in line with our treasury policy).
The strength of the Group's supplier relationships and the
agility of our team ensured continued robust sourcing processes and
good product availability. Furthermore, the pricing power of the
Group, particularly on own brand products, allowed us to increase
prices throughout H1 albeit at a slower rate compared to previous
years considering the challenging consumer demand dynamic.
Gross profit increased by 14% to GBP66.8m (H1 2022: GBP58.5m)
and gross profit margin improved by 2ppts from 44% to 46%. This
improvement was due to reduced shipping costs and a stabilisation
of product related costs together with improving foreign exchange
rates.
Gross margin from own brand products increased to 51% (H1 2022:
49%), whilst gross margin from third-party products remained stable
at 29%.
Underlying costs
Underlying costs, which we define as administrative expenses
before depreciation and amortisation, exceptional items and
share-based payments, increased by 10% to GBP56.9m (H1 2022:
GBP51.8m).
H1 2023 H1 2022 Change %
GBPm GBPm
--------------------------------------------- ---------- ---------- -----------
Marketing costs 41.7 40.2 (4%)
People costs excluding share-based payments 9.4 8.0 (18%)
Property costs and other overheads 5.8 3.6 (61%)
Underlying costs 56.9 51.8 (10%)
--------------------------------------------- ---------- ---------- -----------
Growing our brand awareness and increasing traffic to our site
remains a focus for the Group. Marketing costs increased by 4% to
GBP41.7m (H1 2022: GBP40.2m). Marketing costs as a percentage of
revenue reduced from 30% to 28% reflective of our improving brand
awareness and less competitive pressure. External indicators and
order volume growth across all product categories suggest that we
continue to take market share because of our unrelenting approach
to marketing.
People costs, excluding share-based payments but including costs
relating to agency staff, increased by 18% to GBP9.4m (H1 2022:
GBP8.0m). This is slightly higher than anticipated owing to
continuing inflationary pressures, and our commitment to attracting
and retaining talent.
Property costs and other overheads increased by 61% to GBP5.8m
(H1 2022: GBP3.6m). The majority of this increase was as a result
of the Group increasing its warehouse capacity on a more expensive
short-term basis to support the growth of the business, together
with some annualisation of plc related roles hired during the
previous financial year.
Adjusted EBITDA
Significant items of income and expense that do not relate to
the trading of the Group are disclosed separately. Share-based
payment charges are an example of such items.
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.
H1 2023 H1 2022 Change %
GBPm GBPm
------------------------------- ---------- ---------- -----------
Operating profit 5.5 2.9 90%
Share-based payments 2.2 2.1 5%
Exceptional items 0.4 - n.m
------------------------------- ---------- ---------- -----------
Adjusted operating profit 8.1 5.0 62%
Depreciation and amortisation 1.8 1.7 6%
Adjusted EBITDA 9.9 6.7 48%
------------------------------- ---------- ---------- -----------
Adjusted EBITDA increased by 48% to GBP9.9m (H1 2022: GBP6.7m)
and adjusted EBITDA margin increased by 2ppts to 7% (H1 2022:
5%).
Exceptional items
Total expenses incurred in H1 2023 of GBP0.4m related to legal
and other costs associated with acquiring the lease on new
warehouse premises during the period.
Share-based payments
The Group incurred share-based payment charges (including
associated NI) of GBP2.2m (H1 2022: GBP2.1m). Share-based payment
charges for the period include GBP1.3m (H1 2022: GBP1.8m) for
schemes relating to the Group's IPO in June 2021, along with
GBP0.9m (H1 2022: GBP0.3m) for ongoing schemes put in place post
IPO.
Depreciation and amortisation
Depreciation and amortisation increased marginally by GBP0.1m to
GBP1.8m (H1 2022: GBP1.7m). The Group continues to invest in its
platform and bespoke inventory management systems, with GBP1.3m
capitalised during H1 2023 (H1 2022: GBP1.3m).
Finance income
Finance income of GBP0.1m during the period compares to a
finance expense of GBP0.2m in H1 2022 due to cash being placed on
deposit to take advantage of recent interest rate rises.
Taxation
The Group tax charge of GBP1.4m (H1 2022: GBP0.7m) represents an
effective tax rate of 25% (H1 2022: 25%) which is higher than the
standard rate of UK tax of 22% for the period due to share-based
payments and non-deductible exceptional costs.
Earnings per share
Diluted earnings per share ('EPS') from continuing operations
was 1.3 pence per share (H1 2022: 0.6 pence per share).
The adjusted diluted EPS from continuing operations was 1.9
pence per share (H1 2022: 1.2 pence per share). The table shows the
effect on the Group's diluted EPS of the exceptional items and
share-based payments (net of tax).
H1 2023 H1 2022 Change %
GBPm GBPm
----------------------------------------------------------------------- ---------- ---------- -----------
Profit for EPS 4.2 2.0 110%
Exceptional items 0.4 - n.m
Share-based payments (including associated NI) 2.2 2.1 5%
Tax effect (0.5) (0.4) 25%
----------------------------------------------------------------------- ---------- ---------- -----------
Adjusted profit for EPS 6.3 3.7 70%
----------------------------------------------------------------------- ---------- ---------- -----------
Weighted average number of ordinary shares for diluted EPS (millions) 323.0 321.2 1%
----------------------------------------------------------------------- ---------- ---------- -----------
Adjusted diluted EPS (pence) 1.9 1.2 58%
----------------------------------------------------------------------- ---------- ---------- -----------
Cash flow and net cash
H1 2023 H1 2022
GBPm GBPm
----------------------------- -------- --------
Adjusted EBITDA 9.9 6.7
Movement in working capital (1.3) (3.2)
Capital expenditure (1.5) (1.5)
Lease payments - principal (0.5) (0.5)
Lease payments - interest (0.1) (0.1)
----------------------------- -------- --------
Free cash flow 6.5 1.4
Operating cash conversion 66% 21%
Changes in working capital resulted in a cash outflow of GBP1.3m
(H1 2022: GBP3.2m). This year-on-year improvement reflects
effective stock management. Given the nature of our stock we
continue to incur low levels of obsolescence and our proprietary
knowledge over two decades of trading benefits us in low levels of
returns and damages.
Capital expenditure of GBP1.5m (H1 2022: GBP1.5m) included
GBP1.2m (H1 2022: GBP1.1m) of capitalised salaries relating to
development of the Group's platform and bespoke inventory
management systems.
At the period end the Group had net cash of GBP40.9m (H1 2022:
GBP33.7m).
Events after the reporting period
There have been no material events to report after the end of
the reporting period.
Dividend
Victorian Plumbing has a robust balance sheet, generates
significant operating cashflow and the underlying priority is to
reinvest into the business and drive further profitable growth.
Recognising that most growth opportunities do not require
significant capital other than warehouse optimisation, and
reflecting confidence in the Group's ongoing strength, future
growth prospects and cash generation, the Board implemented a
dividend policy with an aim to maintain a dividend cover ratio of
c. 3.0-3.5x in December 2022. The policy includes the consideration
that the Board may from time to time conclude that it has surplus
cash, at which point it will consider further returns to
shareholders.
The Board has declared an interim dividend of 0.45 pence per
share (H1 2022: nil) which is a total cash distribution to
shareholders of GBP1.5m. The dividend will be paid on 7 July 2023
to shareholders on the register of members at the close of business
on 9 June 2023.
Mark Radcliffe Daniel Barton
Chief Executive Officer Chief Financial
Officer
23 May 2023 23 May 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 31 MARCH 2023
Six months Six months
to 31 March 2023 to 31 March 2022 Year to 30 September 2022
Note GBPm GBPm GBPm
------------------------------------------- ----- ------------------ ------------------ --------------------------
Revenue 146.8 133.9 269.4
Cost of sales (80.0) (75.4) (148.4)
------------------------------------------- ----- ------------------ ------------------ --------------------------
Gross profit 66.8 58.5 121.0
Administrative expenses before separately
disclosed items 4 (58.7) (53.9) (105.0)
Other operating income - 0.4 -
------------------------------------------- ----- ------------------ ------------------ --------------------------
Adjusted operating profit 8.1 5.0 16.0
Separately disclosed items:
Share-based payments (2.2) (2.1) (3.9)
Exceptional items 5 (0.4) - -
Operating profit 5.5 2.9 12.1
Finance costs (0.1) (0.2) (0.3)
Finance income 0.2 - -
------------------------------------------- ----- ------------------ ------------------ --------------------------
Profit before tax 5.6 2.7 11.8
Income tax expense 6 (1.4) (0.7) (2.6)
------------------------------------------- ----- ------------------ ------------------ --------------------------
Profit for the period 4.2 2.0 9.2
------------------------------------------- ----- ------------------ ------------------ --------------------------
Basic earnings per share (pence) 8 1.5 0.7 3.3
Diluted earnings per share (pence) 8 1.3 0.6 2.9
Adjusted basic earnings per share (pence) 8 2.2 1.4 4.5
Adjusted diluted earnings per share
(pence) 8 1.9 1.2 3.9
------------------------------------------- ----- ------------------ ------------------ --------------------------
All amounts relate to continuing operations.
There are no items to be recognised in the statement of other
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 2023
Six months to 31 March Six months to 31 March
2023 2022 Year to 30 September 2022
Note GBPm GBPm GBPm
--------------------------- ----- -------------------------- -------------------------- --------------------------
Assets
Non-current assets
Intangible assets 9 3.5 3.1 3.3
Property, plant and
equipment 10 1.3 1.6 1.4
Right-of-use assets 11 4.1 4.9 4.5
Derivative financial
instruments - - 0.7
Deferred tax asset 0.3 - 0.1
9.2 9.6 10.0
Current assets
Inventories 36.0 35.3 33.9
Trade and other
receivables 12 5.2 4.4 5.1
Tax recoverable 0.2 0.5 -
Cash and cash equivalents 40.9 33.7 45.5
--------------------------- ----- -------------------------- -------------------------- --------------------------
82.3 73.9 84.5
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total assets 91.5 83.5 94.5
--------------------------- ----- -------------------------- -------------------------- --------------------------
Equity and liabilities
Equity attributable to the
owners of the Company
Share capital 16 0.3 0.3 0.3
Share premium 11.2 11.2 11.2
Deferred share capital 0.1 0.1 0.1
Capital reorganisation
reserve (320.6) (320.6) (320.6)
Retained earnings 350.3 344.0 353.0
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total equity 41.3 35.0 44.0
--------------------------- ----- -------------------------- -------------------------- --------------------------
Liabilities
Non-current liabilities
Lease liabilities 14 3.8 4.5 4.1
Derivative financial 0.1 - -
instruments
Deferred taxation - 0.1 -
liability
--------------------------- ----- -------------------------- -------------------------- --------------------------
3.9 4.6 4.1
Current liabilities
Trade and other payables 13 39.2 36.7 37.9
Contract liabilities 6.2 6.1 7.1
Lease liabilities 14 0.7 0.9 0.9
Provisions 0.2 0.2 0.2
Corporation tax - - 0.3
46.3 43.9 46.4
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total liabilities 50.2 48.5 50.5
--------------------------- ----- -------------------------- -------------------------- --------------------------
Total equity and
liabilities 91.5 83.5 94.5
--------------------------- ----- -------------------------- -------------------------- --------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 31 MARCH 2023
Capital
reorganisation Deferred share Retained
Share capital Share premium reserve capital earnings Total equity
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 1
October 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 - - - - 2.2 2.2
Total
transactions
with owners
recognised
directly in
equity - - - - 2.2 2.2
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 31
March 2022 0.3 11.2 (320.6) 0.1 344.00 35.0
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Comprehensive
income
Profit for the
period - - - - 7.2 7.2
Transactions
with owners
Employee share
schemes - value
of employee
services - - - - 1.7 1.7
Tax impact of
employee share
schemes - - - - 0.1 0.1
Total
transactions
with owners
recognised
directly in
equity - - - - 1.8 1.8
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 30
September 2022 0.3 11.2 (320.6) 0.1 353.0 44.0
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Comprehensive
income
Profit for the
period - - - - 4.2 4.2
Transactions
with owners
Dividends paid - - - - (9.1) (9.1)
Employee share
schemes - value
of employee
services - - - - 2.2 2.2
Total
transactions
with owners
recognised
directly in
equity - - - - (6.9) (6.9)
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 31
March 2023 0.3 11.2 (320.6) 0.1 350.3 41.3
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 31 MARCH 2023
Six months Six months Year to
to 31 March to 31 March 30 September
2023 2022 2022
Note GBPm GBPm GBPm
----------------------------------- ----- ------------- ------------- --------------
Cash flows from operating
activities
Cash generated from operating
activities before exceptional
operating items 19 8.6 3.5 18.3
Cash outflow from exceptional
operating items (0.1) (0.1) -
----------------------------------- ----- ------------- ------------- --------------
Cash generated from operating
activities 8.5 3.4 18.3
Income tax paid (2.1) (0.2) (1.4)
----------------------------------- ----- ------------- ------------- --------------
Net cash generated from operating
activities 6.4 3.2 16.9
Cash flows from investing
activities
Purchase of intangible assets (1.3) (1.3) (2.6)
Purchase of property, plant
and equipment (0.2) (0.2) (0.3)
Net cash (used in)/generated
by investing activities (1.5) (1.5) (2.9)
Cash flows from financing
activities
Dividends paid (9.1) - -
Finance arrangement fees - (0.1) (0.1)
Finance income 0.2 - -
Payment of interest portion
of lease liabilities (0.1) (0.1) (0.2)
Payment of principal portion
of lease liabilities (0.5) (0.5) (0.9)
----------------------------------- ----- ------------- ------------- --------------
Net cash used in financing
activities (9.5) (0.7) (1.2)
Net (decrease)/increase in
cash and cash equivalents (4.6) 1.0 12.8
Cash and cash equivalents at
the beginning of the period 45.5 32.7 32.7
Cash and cash equivalents at
the end of the period 40.9 33.7 45.5
----------------------------------- ----- ------------- ------------- --------------
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 23 May 2023, and have been prepared as at, and for the six
months ended, 31 March 2023. The comparative financial information
presented has been prepared as at, and for the six months ended, 31
March 2022.
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 2023 are neither audited nor reviewed by the Company's
auditors. The consolidated financial statements of the Group as at,
and for the year ended, 30 September 2022 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
2022, which were prepared in accordance with International
Financial Reporting Standards (IFRSs) in conformity with the
requirements of the Companies Act 2006.
Going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the Group has adequate resources, in
light of the level of cash generation, to continue in operational
existence for at least twelve months from the date of approval of
the condensed consolidated interim financial information. For this
reason, they have adopted the going concern basis in preparing this
condensed consolidated interim financial information.
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 2022.
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 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 is a non-GAAP measure 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 months to 31 March Six months to 31 March
2023 2022
GBPm GBPm
------------------------------------------------ ----------------------- -----------------------
Operating profit 5.5 2.9
Amortisation 1.1 0.9
Depreciation of property, plant and equipment 0.3 0.3
Depreciation of right-of-use assets 0.4 0.5
Exceptional items 0.4 -
Share-based payments (including associated NI) 2.2 2.1
------------------------------------------------- ----------------------- -----------------------
Adjusted EBITDA 9.9 6.7
------------------------------------------------- ----------------------- -----------------------
4. Operating profit
Expenses by nature including exceptional items:
Six months to 31 March
2023 Six months to 31 March 2022
GBPm GBPm
------------------------------------------------------------ ----------------------- ----------------------------
Employee costs (excluding share-based payments) 8.7 7.5
Agency and contractor costs 0.7 0.5
Marketing costs 41.7 40.2
Property costs 3.1 2.5
Share-based payments (including associated NI) 2.2 2.1
Depreciation of property, plant and equipment 0.3 0.3
Depreciation of right-of-use assets 0.4 0.5
Amortisation charge 1.1 0.9
Gain on foreign exchange - (0.2)
Other costs 3.1 1.7
------------------------------------------------------------- ----------------------- ----------------------------
Total administrative expenses 61.3 56.0
Share-based payments (2.2) (2.1)
Included within exceptional items (0.4) -
------------------------------------------------------------ ----------------------- ----------------------------
Total administrative expenses before separately disclosed
items 58.7 53.9
------------------------------------------------------------- ----------------------- ----------------------------
5. Exceptional items
Six months to 31 March Six months to 31 March
2023 2022
GBPm GBPm
------------------------------- ----------------------- -----------------------
Warehouse transformation costs 0.4 -
------------------------------- ----------------------- -----------------------
Warehouse transformation costs relate to legal and other costs
associated with entering into a 20-year lease for a new, 544,000
square foot, purpose-built UK distribution centre in
Lancashire.
6. Taxation
Six months to 31 March Six months to 31 March
2023 2022
GBPm GBPm
------------------------------------------------ ----------------------- -----------------------
Corporation tax
Current tax on profits for the period 1.2 0.7
Total current tax 1.2 0.7
------------------------------------------------- ----------------------- -----------------------
Deferred tax
Origination and reversal of timing differences 0.2 -
Total deferred tax 0.2 -
------------------------------------------------ ----------------------- -----------------------
Taxation on profit 1.4 0.7
------------------------------------------------- ----------------------- -----------------------
Factors affecting tax charge for the period
The tax assessed for the period is higher (2022: higher) than
the standard rate of corporation tax in the UK of 22% (2022: 19%).
The differences are explained below:
Six months to 31 March 2023 Six months to 31 March 2022
GBPm GBPm
------------------------------------------------------- ---------------------------- ----------------------------
Profit before tax 5.6 2.7
-------------------------------------------------------- ---------------------------- ----------------------------
Profit multiplied by the blended standard rate of
corporation tax for the full year in the
UK of 22% (2022: 19%) 1.2 0.5
Effects of:
Expenses not deductible for tax purposes 0.1 -
Share options 0.1 0.2
Total tax charge for the period 1.4 0.7
-------------------------------------------------------- ---------------------------- ----------------------------
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.
7. Dividends
Six months
to 31 March
2023
Pence per Six months to 31 March 2022
share Pence per share
------------------------------------------------------------------ ------------- ----------------------------
Final ordinary dividend recognised as distributions in the period 1.10 -
------------------------------------------------------------------ ------------- ----------------------------
Final special dividend recognised as distributions in the period 1.80 -
------------------------------------------------------------------ ------------- ----------------------------
Total dividends paid in the period 2.90 -
------------------------------------------------------------------ ------------- ----------------------------
Interim dividend declared 0.45 -
------------------------------------------------------------------ ------------- ----------------------------
Six months to 31 March
2023 Six months to 31 March 2022
GBPm GBPm
------------------------------------------------------------- ----------------------- ----------------------------
Final ordinary dividend recognised as distributions in the
period 3.6 -
------------------------------------------------------------- ----------------------- ----------------------------
Final special dividend recognised as distributions in the
period 5.5 -
------------------------------------------------------------- ----------------------- ----------------------------
Total dividends paid in the period 9.1 -
------------------------------------------------------------- ----------------------- ----------------------------
Interim dividend declared 1.5 -
------------------------------------------------------------- ----------------------- ----------------------------
The Board has approved an interim dividend of 0.45 pence per
share (H1 2022: GBPnil) which is a total cash distribution of
GBP1.5m and will be paid out of the Company's available
distributable reserves on 7 July 2023, to shareholders on the
register of members at 9 June 2023. In accordance with IAS 1,
dividends are recorded only when paid and are shown as a movement
in equity rather than as a charge to the Income Statement.
8. 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
weighted average number of ordinary shares 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 ordinary shares Total earnings
GBPm Pence per share
------------------------------- ------------------------------------------- --------------- ----------------
Half year ended 31 March 2023
Basic EPS 282,060,246 4.2 1.5
Diluted EPS 322,972,802 4.2 1.3
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 2022
Basic EPS 275,832,944 9.2 3.3
Diluted EPS 315,898,691 9.2 2.9
-------------------------------- ------------------------------------------- --------------- ----------------
Weighted average number of shares
--------------------------------------------------------------------------- ----------------------------------
Weighted average number of shares for basic EPS 282,060,246
Dilutive impact of unvested shares in relation to restricted share awards 40,912,556
Weighted average number of shares for diluted EPS 322,972,802
---------------------------------------------------------------------------- ----------------------------------
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 2023 Six months to 31 March 2022
GBPm GBPm
--------------------------------------------- ---------------------------- ----------------------------
Profit for the period 4.2 2.0
Exceptional items 0.4 -
Share-based payments 2.2 2.1
Tax effect (0.5) (0.4)
---------------------------------------------- ---------------------------- ----------------------------
Total adjusted profit for the period 6.3 3.7
---------------------------------------------- ---------------------------- ----------------------------
Adjusted basic earnings per share (pence) 2.2 1.4
Adjusted diluted earnings per share (pence) 1.9 1.2
---------------------------------------------- ---------------------------- ----------------------------
9. Intangible assets
Computer software
GBPm
-------------------------- ------------------
Cost
At 30 September 2021 7.5
Additions 1.3
--------------------------- ------------------
At 31 March 2022 8.8
Additions 1.3
--------------------------- ------------------
At 30 September 2022 10.1
Additions 1.3
At 31 March 2023 11.4
--------------------------- ------------------
Accumulated amortisation
At 30 September 2021 4.8
Charge for the period 0.9
--------------------------- ------------------
At 31 March 2022 5.7
Charge for the period 1.1
--------------------------- ------------------
At 30 September 2022 6.8
Charge for the period 1.1
At 31 March 2023 7.9
--------------------------- ------------------
Net book value
At 30 September 2021 2.7
At 31 March 2022 3.1
At 31 March 2023 3.5
--------------------------- ------------------
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
GBP1.2m in the six months ended 31 March 2023 (H1 2022: GBP1.1m)
for development of computer software.
For the six-month period to 31 March 2023, the amortisation
charge of GBP1.1m (H1 2022: GBP0.9m) has been charged to
administrative expenses in the income statement.
10. Property, plant and equipment
Fixtures Office
Leasehold improvements Plant and machinery and fittings equipment Total
GBPm GBPm GBPm GBPm GBPm
-------------------------- ----------------------- -------------------- -------------- ----------- ------
Cost
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
Additions - - - 0.1 0.1
Disposals - (0.1) (0.4) (0.1) (0.6)
-------------------------- ----------------------- -------------------- -------------- ----------- ------
At 30 September 2022 0.1 1.4 0.8 1.5 3.8
Additions - 0.1 - 0.1 0.2
At 31 March 2023 0.1 1.5 0.8 1.6 4.0
-------------------------- ----------------------- -------------------- -------------- ----------- ------
Accumulated depreciation
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
Charge for the period - 0.1 - 0.2 0.3
Disposals - (0.1) (0.4) (0.1) (0.6)
-------------------------- ----------------------- -------------------- -------------- ----------- ------
At 30 September 2022 - 0.8 0.7 0.9 2.4
Charge for the period - 0.1 0.1 0.1 0.3
At 31 March 2023 - 0.9 0.8 1.0 2.7
-------------------------- ----------------------- -------------------- -------------- ----------- ------
Net book value
At 30 September 2021 0.1 0.7 0.2 0.7 1.7
At 31 March 2022 0.1 0.7 0.1 0.7 1.6
At 31 March 2023 0.1 0.6 - 0.6 1.3
-------------------------- ----------------------- -------------------- -------------- ----------- ------
11. Right-of-use assets
Right-of-use assets
GBPm
---------------------------------------- --------------------
Cost
At 30 September 2021 8.2
Modifications 0.1
At 31 March 2022 and 30 September 2022 8.3
----------------------------------------- --------------------
At 31 March 2023 8.3
Accumulated depreciation
At 30 September 2021 2.9
Charge for the period 0.5
----------------------------------------- --------------------
At 31 March 2022 3.4
Charge for the period 0.4
----------------------------------------- --------------------
At 30 September 2022 3.8
Charge for the period 0.4
At 31 March 2023 4.2
----------------------------------------- --------------------
Net book value
At 30 September 2021 5.3
At 31 March 2022 4.9
At 31 March 2023 4.1
----------------------------------------- --------------------
The right of use asset and lease for the new 544,000 sq. ft UK
distribution centre in Lancashire will be recognised on the date of
Practical Completion.
12. Trade and other receivables
Six months ended 31 March 2023 Six months ended 31 March 2022
GBPm GBPm
----------------------- ------------------------------- -------------------------------
Trade receivables 2.0 2.2
Right-of-return asset 0.4 0.3
Accrued income 0.9 0.8
Prepayments 1.9 1.1
------------------------ ------------------------------- -------------------------------
5.2 4.4
----------------------- ------------------------------- -------------------------------
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 and other receivables expected credit
losses have been reviewed by management and have been determined to
have an immaterial impact on these balances.
13. Trade and other payables
Six months ended 31 March 2023 Six months ended 31 March 2022
GBPm GBPm
------------------------------------ ------------------------------- -------------------------------
Trade payables 25.2 25.2
Other taxation and social security 8.3 7.0
Refund liability 1.1 0.8
Other payables 1.3 1.1
Accruals 3.3 2.6
------------------------------------- ------------------------------- -------------------------------
39.2 36.7
------------------------------------ ------------------------------- -------------------------------
14. Lease liabilities
Lease liability
GBPm
---------------------- ----------------
At 30 September 2021 5.8
Modifications 0.1
Interest expense 0.1
Lease payment (0.6)
----------------------- ----------------
At 31 March 2022 5.4
Interest expense 0.1
Lease payment (0.5)
----------------------- ----------------
At 30 September 2022 5.0
Interest expense 0.1
Lease payment (0.6)
----------------------- ----------------
At 31 March 2023 4.5
----------------------- ----------------
The Group had total cash outflows for leases of GBP0.6m (H1
2022: GBP0.6m).
Lease liabilities as at 31 March were classified as follows:
Six months ended 31 March 2023 Six months ended 31 March 2022
GBPm GBPm
------------- ------------------------------- -------------------------------
Current 0.7 0.9
Non-current 3.8 4.5
Total 4.5 5.4
-------------- ------------------------------- -------------------------------
The right of use asset and lease for the new 544,000 sq. ft UK
distribution centre in Lancashire will be recognised on the date of
Practical Completion.
15. Borrowings
Six months ended 31 March 2023 Six months ended 31 March 2022
GBPm GBPm
----------------------------------------------- ------------------------------- -------------------------------
Amounts drawn under revolving credit facility - -
Unamortised debt issue costs (0.1) (0.1)
(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 GBP10m 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 2023 the Group had not utilised the RCF.
Unamortised debt issue costs of GBP0.1m (H1 2022: GBP0.1m) are
included in prepayments.
16. Ordinary share capital
Six months ended 31 March 2023 Six months ended 31 March 2022
GBP GBP
------------------------------------- ------------------------------- -------------------------------
Allotted, called up and fully paid
325,227,984 ordinary shares of 0.1p 325,228 325,063
325,228 325,063
------------------------------------- ------------------------------- -------------------------------
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.
17. Own shares held
The Employee Share Option Trust purchases shares to fund the
Share Incentive Plan. At 31 March 2023, the trust held 635,504 (H1
2022: 635,504) ordinary shares with a book value of GBP636 (H1
2022: GBP636). The market value of these shares as at 31 March 2023
was GBP0.5m (H1 2022: GBP0.3m).
Number of shares GBP
-------------------------------------------------------- ----------------- ----
ESOT shares reserve
Own shares held at 30 September 2022 and 31 March 2023 635,504 636
--------------------------------------------------------- ----------------- ----
18. Share-based payments
The Group operates four share plans being the Share Incentive
Plan ('SIP'), a Sharesave scheme ('SAYE'), 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 GBP2.2m (H1 2022: GBP2.1m).
This included associated national insurance ('NI') at 13.8% (H1
2022: 15.1%), 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 2023 Six months ended 31 March 2022
GBPm GBPm
------------------------------------------------- ------------------------------- -------------------------------
Share Incentive Plan ('SIP') 0.1 0.2
Sharesave schemes - -
Deferred bonus plans 0.5 0.1
Long term incentive plans 0.1 -
IPO restricted share awards 1.2 1.9
-------------------------------------------------- ------------------------------- -------------------------------
Total IFRS 2 charge 1.9 2.2
National insurance and apprenticeship levy on
applicable schemes 0.3 (0.1)
-------------------------------------------------- ------------------------------- -------------------------------
Total charge 2.2 2.1
-------------------------------------------------- ------------------------------- -------------------------------
19. Cash generated from operating activities
Six months ended 31 March 2023 Six months ended 31 March 2022
Cash flows from operating activities GBPm GBPm
------------------------------------------------- ------------------------------- -------------------------------
Profit before taxation for the financial period 5.6 2.7
Adjustments for:
Amortisation of intangible assets 1.1 0.9
Depreciation of property, plant and equipment 0.3 0.3
Depreciation of right-of-use assets 0.4 0.5
Exceptional costs 0.4 -
Share-based payments (including NI) 2.2 2.1
Net finance expense (0.1) 0.2
-------------------------------------------------- ------------------------------- -------------------------------
Adjusted EBITDA 9.9 6.7
Fair value profit on financial derivatives 0.8 (0.1)
Increase in inventories (2.1) (2.9)
(Increase)/decrease in receivables (0.1) 0.6
Decrease in payables 0.1 (0.9)
Increase in provisions - 0.1
-------------------------------------------------- ------------------------------- -------------------------------
Cash generated from operating activities before
exceptional operating items 8.6 3.5
-------------------------------------------------- ------------------------------- -------------------------------
Free cash flows Six months ended 31 March 2023 Six months ended 31 March 2022
GBPm GBPm
------------------------------------------------- ------------------------------- -------------------------------
Cash generated from operating activities before
exceptional operating items 8.6 3.5
Repayment of lease liabilities (0.6) (0.6)
Purchase of intangible assets (1.3) (1.3)
Purchase of property, plant and equipment (0.2) (0.2)
Free cash flows 6.5 1.4
-------------------------------------------------- ------------------------------- -------------------------------
Cash conversion 66% 21%
-------------------------------------------------- ------------------------------- -------------------------------
20. 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.
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END
IR EANSAASSDEFA
(END) Dow Jones Newswires
May 23, 2023 02:00 ET (06:00 GMT)
Victorian Plumbing (LSE:VIC)
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Victorian Plumbing (LSE:VIC)
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