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Highlights:
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Victorian Plumbing Group PLC plans to close rival Victorian Plum after acquiring the business from its administrator following a legal dispute over the brand name.
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The closure of the Doncaster-based Victorian Plum is anticipated to be completed by the end of December, following consultations with its workforce.
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Victorian Plumbing reported a 4% increase in total sales for the year, with a shift to own-brand products leading to higher gross margins despite a decline in order value.
Victorian Plumbing Group PLC (LSE:VIC) has announced its decision to close rival Victorian Plum after acquiring the business from its administrator in July. This acquisition followed a prolonged legal battle concerning the use of the name. The company has finalized consultations with the workforce of Victorian Plum, and the closure of the Doncaster-based business is expected to be completed by the end of December.
Since its acquisition, Victorian Plum has contributed £15 million in revenue while incurring an underlying adjusted EBITDA loss of £2 million. Despite the challenges presented by this acquisition, Victorian Plumbing reported an overall sales increase of 4% for the year ending September 2024. However, when excluding the contributions from Plum, sales experienced a slight decline of 1%.
The company noted a 10% rise in volumes sold, attributed to a strategic shift towards its own brand products. While this transition resulted in a 5% decrease in the overall value of orders, it concurrently led to an increase in gross margins, which improved to 50% from 47%.
Victorian Plumbing has also successfully operationalized a new semi-automated distribution center located in Leyland, which is now responsible for processing half of all orders. Chief Executive Mark Radcliffe stated that this development has helped the company enhance profitability, as its higher-margin own-brand offerings continue to resonate well with customers.
The closure of Victorian Plum is seen as a significant opportunity for Victorian Plumbing to accelerate its growth trajectory and to further invest in branding and marketing efforts. Following this announcement, shares rose by 2% to 109p, reflecting market confidence in the company’s strategic direction and operational improvements.
