A profit warning from Victorian Plumbing Group sent its shares tumbling by almost half yesterday, less than six months after the online bathroom retailer was floated on the stock market.
It said that trading in the first two months of this financial year had been flat and that profit margins were being squeezed by supply chain challenges.
Shares in the retailer, which was listed at 262p in June, valuing the company at £850 million, slumped by as much as 45 per cent to 85½p, later closing at 91½p, down 63½p, or 40.1 per cent.
In its maiden results after the float, Victorian Plumbing lamented that consumers had spent more on leisure in October and November and less on big-ticket items such as bathrooms.
The stock surged by a fifth on the day it was listed, pushing its market value above £1 billion and enabling Mark Radcliffe, its founder and chief executive, to cash in £212 million of shares at the 262p issue price. The entrepreneur, 42, who started out selling mobile phone accessories on eBay, founded Victorian Plumbing in 2000 and has built a 14 per cent share of the £1.2 billion market for sanitary ware and accessories. It is the largest online player in the sector.
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The group warned investors at its full-year trading update in October that it had experienced “more subdued market conditions” during the summer as a result of the easing of restrictions, although it reported signs of improvement in September.
For the year to the end of September, it reported a 29 per cent increase in revenue to £268.8 million, with underlying earnings up 53 per cent to £40.1 million. Pre-tax profits after £9.4 million of initial public offering costs fell by 17 per cent to £19.7 million. Total orders were up 17 per cent to 906,000.
Radcliffe said that he and his boardroom colleagues “remain confident in the medium-term growth prospects”.
