Victorian Plumbing, an online bathroom retailer, reported a significant drop in profits for 2024 despite achieving higher revenue. The company attributed the decline to the "exceptional costs" linked to its acquisition and subsequent closure of rival Victoria Plum.
Photo: Victorian Plumbing.
Year-end results for the period ending September 2024 revealed a 10% increase in gross profit, rising from £134.6 million in 2023 to £147.8 million in 2024. Revenue also grew by 4% to £295.7 million. Trade revenue saw notable growth, climbing by almost 15% to £67.3 million, representing 23% of the company's total revenue.
However, operating profit fell sharply by nearly 30%, from £15.3 million to £11.2 million. Victorian Plumbing cited costs of £8.2 million related to its warehouse transformation and the acquisition of Victoria Plum as key factors in the decline.
The acquisition of Victoria Plum in May 2024, valued at £22.5 million, was described by Victorian Plumbing as strategically significant. The company highlighted the value of Victoria Plum's brand and intellectual property. Shortly after the deal, Victorian Plumbing announced its decision to close Victoria Plum by the end of the year.
The newly acquired business contributed £14.7 million in revenue during the last four and a half months of the year but posted an adjusted pre-tax loss of £2.2 million. Victorian Plumbing confirmed that Victoria Plum's operations in Doncaster have now ceased, with all website traffic redirected to Victorian Plumbing's site. Remaining inventory from the Doncaster facility is expected to be relocated by the end of January 2025.
Mark Radcliffe, founder and CEO of Victorian Plumbing, described 2024 as a transformative year. He noted the company had successfully delivered two key priorities: completing its warehouse transformation on time and accelerating growth through the acquisition of Victoria Plum. He stated that this move eliminated 'considerable brand marketing confusion' for customers.
The closure of Victoria Plum and the opening of Victorian Plumbing's new 544,000 sq ft distribution centre in Lancashire, operational by December, have contributed to improved gross profit margins. Radcliffe emphasised that the company's strategy remains focused on long-term profitable growth, supported by investments in people, technology, and infrastructure.
Despite challenges in the market and ongoing uncertainty in consumer behaviour, Radcliffe expressed confidence in the company's ability to deliver value. He said, 'Our clearly defined strategy and unique business model have resulted in increased order volumes and resilient average order values. Customers continue to appreciate the choice of great value products we offer across our ranges.'
Source: www.kbbreview.com