Admin Deals: Victorian Plumbing Admins Unlock Assets

It’s been just over a year since Victorian Plumbing completed the biggest ever listing on London’s Aim, raising £297.5m in an initial round that valued the online seller of bathroom products at around £850 million.

Much of its valuation has since gone down the drain. The company’s shares are currently trading around 53p, an 80% decline from its listing price of 262p in June 2021.

Its half-year results for the six months to March were by no means terrible – turnover of £134m was 5% lower than a tough comparator last year, but 39 % ahead of its pre-pandemic trading period. Its net profit however collapsed, with profit before tax down 81% to £2.7m and free cash flow generation of £1.4m, down 92% then that the company was increasing inventory to alleviate supply chain issues.

Victorian Plumbing got its start when valuations were much higher, especially for anything tech-adjacent – ​​the company praised its “proprietary technology platform and data-driven ecosystem” as part of its prospectus. The first valuation of 262p was equivalent to around 49x last year’s earnings per share, indicating that some investors saw it as a high-growth tech play. So the market-wide revaluation of these companies hasn’t done it any favors, nor has the unraveling of the post-pandemic DIY boom, as cost-of-living pressures weaken discretionary spending on big-ticket items like the new bathrooms.

So how much could be read in sales by chairman Philip Bowcock and chief financial officer Paul Meehan of £72,900 and £40,500 of shares, respectively? Both were subject to a 12-month lock-up period, which provided a first opportunity to cash in shares. And the amounts are relatively small – Bowcock was less than 10% of his stake and Meehan less than 5% of his.

However, the sale of shares of a company of which you are a director, which has lost so much of their value over the past 12 months, is hardly an indicator that an immediate rebound is thought to be on the maps.

Supreme owner sees through dark days

Shares of consumables retailer Supreme took a hit this month as it warned investors that revenue and profits in its current fiscal year will fall short of expectations. Customers in its lighting division, which sells branded bulbs and accessories, had excess inventory, he said.

Although its lighting arm only accounted for 21% of its £131million turnover when it first performed as a public company, it is one of the most profitable divisions in Supreme. It generated 25% gross profit before foreign exchange charges for the year ending March and a gross margin of 31%, compared with less than 10% for its larger battery division.

Lighting sales fell about 25% in the weeks leading up to its July 5 earnings announcement as some customers halted orders altogether until they ran out of stock. Property broker Berenberg slashed its profit per share forecast for the current financial year by a third to 9.53p, sending its share price down 32% in one day to 86p.

Supreme also revised its dividend policy, halving its payout ratio from 50% to 25%, as it believes it can generate better returns from acquisitions.

In June it bought vaping brand Liberty Flights for £7.75m and at its annual presentation chief financial officer Suzanne Smith said its current pipeline of potential deals was “busier and more exciting than it has been”.

“There are a lot of things we want to explore and we want to have the means to be able to do that,” she added.

Shares bottomed on July 7 at 71p before a rally attended by chief executive Sandy Chadha, buying 500,000 shares at 83.2p on July 12. This raised his stake in the company, founded by his father in 1975, above 57 percent. hundred.

Shares of Supreme have continued to rally to 94p but remain below the 134p placement price they were pegged to for its initial public offering last year.