Victorian Plumbing – positive AGM Update illustrates ongoing growth, shares at 91.5p are well worth adding to growth portfolios, TP 132p

25.02.2025

The AGM Trading Update issued this morning by the AIM-quoted Victorian Plumbing (LON:VIC) was quite positive.

Did you know that the UK market for bathroom and bathroom accessories last year was worth £1.7bn?

This company, which is a leader in that marketplace, is gradually showing significant improvements in its business, with its shares offering a good upside.

The Business

Victorian Plumbing, which is based in Leyland, employs over 600 staff across several locations in Lancashire, Manchester and Birmingham.

The £322m capitalised group is the UK's leading bathroom retailer, offering a wide range of over 36,000 products to business-to-consumer and trade customers.

The business provides a one-stop shop solution for the entire bathroom with more than 150 own and third-party brands, across a wide spectrum of price points.

Its product design and supply chain strengths are complemented by its creative and brand-focused marketing strategy to drive significant and growing traffic to its platforms.

The market is highly competitive, with Victorian Plumbing being the largest retailer in the bathroom market, followed by B&Q, Wickes, and Homebase.

Today’s AGM Trading Update

It noted that despite continuing UK consumer uncertainty, the Board continues to remain confident in delivering profit in line with full-year market expectations.

The successful transition to its new semi-automated distribution centre, completed in December 2024, has enabled the Group to make further progress in its strategic growth areas:

During January, the group’s next-day delivery service cut-off timing moved from midday to 3pm, which is an improved service that benefits its trade customers in particular.

Later that month the Group launched a free tile sample offering, which enables all customers to select up to three sample tiles via express checkout to be delivered free of charge; and

Last week, the Group launched a third-party digital trade credit offering that is available to qualifying trade customers.

Early indications suggest that this improved offering has been well received by the Group’s customers.

The rate of revenue growth improved for January - and it is anticipated to have increased further again in February.

Overall, revenue for the Period is anticipated to be up 5% year-on-year, demonstrating the early success of the strategic growth initiatives and the enhanced capabilities that its new distribution centre offers.

Gross profit margin improvement continues in line with the previous financial year as sales of its own brand range continue to grow as a proportion of the overall Group.

The Group reports that its three growth horizons continue to build momentum, with Tiles and Décor expected to grow by 30% in the Period.

Management states that it will continue to prioritise expansion category and trade growth alongside its efficient marketing strategy in its core bathroom business.

The Equity

There are some 327m shares in issue.

The larger holders include CEO Mark Radcliffe (47.56%), Martin Stewart (2.94%), Kayne Anderson Rudnick Investment Management (2.93%), BlackRock Investment Management (2.75%), and Amati Global Investors (2.54%).

Broker’s Views

Analyst Karl Burns, at Canaccord Genuity Capital Markets, rates the group’s shares as a Buy, with a 132p Price Objective.

Following today’s AGM Update he has lowered slightly his recently issued estimates for the group.

He believes that 2025 is likely to be the start of a transformational period for the company, as revenue growth accelerates and margins improve.

While short-term macro headwinds could dampen growth, the business remains exceptionally well positioned and the tough macro environment is likely to impact the competition more, opening up opportunity for further market share gains.

Burns now looks for the current year to end September 2025 look for sales of £314.0m (£295.7m), with adjusted pre-tax profits of £25.2m (£23.1m), lifting earnings to 5.8p (5.3p) and a dividend of 1.8p (1.6p) per share.

For the coming year to end-September 2026, he sees £348.2m in revenues, £30.3m profits, 6.9p earnings and a 2.1p per share dividend.

He concludes his latest note by stating that:

“We remain confident around the growth opportunity ahead of the company, with huge runway, with Victorian Plumbing holding sub 1% market share within Tiles & Decor.

We believe by offering an extensive range and stock availability within the category, combined with its proven marketing expertise and strong balance sheet, the company will successfully build market share, while expansion of the Trade category further supplements this growth.”

My View

With expanding sales and profits, this group’s shares at 91.50p are well worth adding to growth portfolios.