Victorian Plumbing shares fall after warning on margins due to inflationary pressures
Shares in Victorian Plumbing, the Skelmersdale-based online bathroom retailer, plunged more than 10% when the markets opened today after it warned that it expects to take a hit on its gross profit margin and adjusted EBITDA margin as a result of inflationary pressures.
When the stock exchange opened trading, its shares fell by 10.88% to 73.08p per share.
The group, which listed on the London Stock Exchange last June, provided an update on its current trading this morning.
It said it has continued to trade in line with the dynamic set out in the announcement of its full year results and trading update on December 9, 2021, saying its relative trading performance has been encouraging against a backdrop of lower customer demand.
It revealed that revenue for the four months ended January 31, 2022, was down three per cent year-on-year, but up 38% on the same period two years ago, while marketing spend has now started to normalise.
But, it said, as the group looks to the second half of its financial year, it notes the comparative period performance for revenue eases and so expects to return to having modest year-on-year growth through the second half of fiscal year 2022.
And it also warned that it is prey to ongoing inflationary cost pressures.
The statement said: “We are acutely aware that our customers are also managing inflationary pressures and will adopt a careful approach to price rises, which means we are choosing to temporarily absorb some additional costs.
“We, therefore, expect both gross profit margin and adjusted EBITDA margin to be slightly lower than previously anticipated.”
The statement added: “We remain confident in our ability to continue to take market share and in our long term growth plans.”
In December last year senior figures in the group, including chief executive Mark Radcliffe, increased their shareholding in the business following a 40% fall in the value of the stock.
It followed an announcement in which the UK’s biggest online bathroom products seller cautioned investors of flatter earnings in the year ahead.