Despite boosting revenue, online bathroom retailer Victorian Plumbing saw its profits take a considerable hit in 2024, which it says were down to the “exceptional costs” associated with buying rival Victoria Plum.
In its newly released year-end results, which cover up to the end of September 2024, gross profit for the retailer was up by 10% over the previous year, rising from £134.6m in 2023 to £147.8m in 2024. Despite the challenges in the wider market, Victorian Plumbing also saw revenue increase to £295.7m, a rise of 4%.
The online retailer also said its trade revenue grew by almost 15% throughout 2024, rising from £59.5m to £67.3m. In addition, Victorian Plumbing said this business represented 23% of its total revenue throughout the year.
However, operating profits at the retailer plummeted by almost 30%, dropping from £15.3m down to £11.2m in 2024. According to the company, the sudden downturn comes “after exceptional costs of £8.2m associated with the warehouse transformation and the acquisition and closure of Victoria Plum”.
Victorian Plumbing acquired its long-time, similarly-named rival Victoria Plum, in May 2024, in a deal reported to be worth £22.5m. Despite the hefty price tag associated with the transaction, Victorian Plumbing said the deal “refleced the significant strategic value to the Company of the Victoria Plum brand and its associated intellectual property”. In August last year, shortly after the deal closed, Victorian Plumbing announced its intention to close Victoria Plum around the end of 2024.
In the latest trading results, Victorian Plumbing said the acquisition contributed revenue of £14.7m to the company, although it incurred an adjusted pre-tax profit loss of £2.2m during the last four and a half months of the year.
Victorian Plumbing also provided an update on the state of the closure, saying that it had now shuttered Victoria Plum and its operations in Doncaster. In November 2024, all website traffic from the closed retailer now redirects to Victorian Plumbing’s own website, and all remaining inventory from Victoria Plum will be transferred from the Doncaster site by the end of January 2025.
According to Victorian Plumbing, its gross profit margin has continued to improve following the Victoria Plum closure, which is being further boosted by the opening of a new 544,000 sq ft distribution centre in Lancashire, which was fully operational by the end of December.
Mark Radcliffe, founder and CEO of Victorian Plumbing, reflected on the incredibly significant year for the retailer, commenting: “2024 has been a year of transformation against a subdued trading backdrop and continued uncertainty in UK consumer behaviour. Despite this, our clearly defined strategy and unique business model have resulted in increased order volumes and resilient average order values, with customers continuing to appreciate the choice of great value products that we offer across our ranges.
“We have successfully delivered on two strategic priorities, firstly completing our warehouse transformation on time and in line with budget and, secondly, to accelerate growth through the acquisition of our namesake Victoria Plum, which reduces considerable brand marketing confusion for our customers.
“As a highly cash generative business with a strong balance sheet, we continue to invest in the business; across people, technology and infrastructure. Our new purpose-built 544,000 square feet distribution centre, now fully operational, will enable further growth in the core bathroom category, as well as unlocking strategic category expansion. We are confident that Victorian Plumbing’s profitable growth strategy will continue to deliver long-term value to all stakeholders.”