REG - Vic Plumbing - Half Year Results
23/05/2023 07:00
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RNS Number : 2660A Victorian Plumbing Group plc 23 May 2023
Victorian Plumbing Group PLC
HALF year results for the SIX MONTHS ENDED 31 mARCH 2023
Further trading momentum and market share gains; strong cash generation and
robust balance sheet
Victorian Plumbing Group plc ('Victorian Plumbing', 'the Group'), the UK's
leading online specialist bathroom retailer, announces its half year results
for the six months ended 31 March 2023 ('H1 2023').
H1 2023 H1 2022 Change
Revenue £146.8m £133.9m 10%
Gross profit((1)) £66.8m £58.5m 14%
Gross profit margin((2)) 46% 44% 2%pts
Adjusted EBITDA((3)) £9.9m £6.7m 48%
Adjusted EBITDA margin((4)) 7% 5% 2%pts
Operating profit £5.5m £2.9m 90%
Adjusted diluted EPS((5)) 1.9p 1.2p 58%
Statutory diluted EPS 1.3p 0.6p 117%
Interim dividend 0.45p Nil 0.45p
Net cash £40.9m £33.7m 21%
Financial highlights
● Strong H1 revenue, up 10% year-on-year to £146.8m (H1 2022: £133.9m)
● Improved gross profit((1)) up 14% year-on-year to £66.8m; gross profit
margin((2)) increased 2ppts to 46% (H1 2022: 44%)
● Adjusted EBITDA((3)) increased by 48% year-on-year to £9.9m (H1 2022:
£6.7m); adjusted EBITDA margin((4)) increased 2ppts to 7% (H1 2022: 5%)
● Net cash £40.9m (H1 2022: £33.7m, FY 2022: £45.5m), reflecting strong cash
conversion and the payment of £9.1m of dividends in H1 2023 (H1 2022: £nil)
● Adjusted diluted EPS((5)) of 1.9 pence per share (H1 2022: 1.2 pence per
share), reflecting a 58% increase
● Interim dividend of 0.45p per share declared (H1 2022: £nil)
Operational and strategic highlights
● Total orders((8)) for the six months ended 31 March 2023 was 482,000, a 6%
increase on last year (H1 2022: 453,000) and a 13% increase on H2 2022 (at
427,000), reflecting further market share gains, with the Group having become
the UK's number one bathroom retailer in FY 2022((12))
● Average order value((10)) for the first half was up 3% to £305 (H1 2022:
£296)
● Marketing spend as a % of revenue for the six months has reduced from 30% to
28% reflecting favourable market dynamics
● Customer satisfaction increased with an average Trustpilot TrustScore((11)) of
'Excellent' at 4.5 (H1 2022: 4.4)
Investing in operational capacity:
● Signed a 20-year lease for a new, 544,000 square foot, purpose-built UK
distribution centre in Lancashire, close to our existing locations; on track
to open in the second half of next year
● This will support the Group's strategic expansion and will enable
consolidation of a number of the Group's existing sites, although some
existing facilities will be retained to enable further adjacent category
expansion
Investing in technology:
● Website re-platform completed in December 2022 without any issues or down
time, enabling further improvement to the customer journey through H2
● Continued development and testing of our new Trade app, to enhance efficiency
and engagement for Trade ahead of a wider roll out later in the year
Progressing growth opportunities in 'Trade' and 'Adjacent categories':
● Trade revenue for H1 2023 grew by 20% to £29.6m (H1 2022: £24.6m),
representing 20% of total revenue (H1 2022: 18%)
● Combined adjacent category revenues (Tiles and Lighting) increased in H1 2023
by 54% to £3.7m (H1 2022: £2.4m)
Current trading and outlook
Consumer demand in April and the early part of May remained robust, with order
volume led growth and continued increase in our market share. Gross margin
continues to improve as the tailwinds from shipping and foreign exchange
movements begin to cycle through.
We remain mindful that our customers still face a series of inflation related
headwinds, however, with our resilient trading and market-leading proposition
we remain confident in delivering expectations for the full year.
Mark Radcliffe, Founder and Chief Executive Officer of Victorian Plumbing
Group plc, said:
"Momentum from our strong delivery in the latter part of FY22 has built into
the first half of this financial year. We have further increased our market
share, building on our position as the UK's No. 1 bathroom retailer, through
our strategy and unique business model, which have remained constant since
IPO. We are proud of our investment in a wide range of products, knowing
customer choice is ever more important when considered against cost-of-living
pressures. We continue to offer good product availability, underpinned by
careful inventory management.
"Our new UK distribution centre will represent another key milestone and,
together with on-going investment in technology, this will enable further
growth in the core bathroom category as well as strategic expansion in
adjacent categories.
"Victorian Plumbing's robust business momentum, high cash generation and
strong balance sheet supports the announcement of our first interim dividend."
Analyst and investor webinar
A webinar for analysts and investors will be held today, 23 May 2023, at
08.30am BST. If you wish to join the webinar, please contact FTI Consulting
via: VictorianPlumbing@fticonsulting.com
(mailto:VictorianPlumbing@fticonsulting.com) .
For further information please contact:
Victorian Plumbing Group plc via FTI Consulting
Mark Radcliffe, Chief Executive Officer +44 20 3727 1000
Daniel Barton, Chief Financial Officer
FTI Consulting (Financial PR) +44 20 3727 1000
Alex Beagley, Eleanor Purdon, Harriet Jackson, Amy Goldup VictorianPlumbing@fticonsulting.com
(mailto:VictorianPlumbing@fticonsulting.com)
Houlihan Lokey UK Limited (Nominated Adviser and Financial Adviser) +44 20 7484 4040
Sam Fuller, Tim Richardson
About Victorian Plumbing
Victorian Plumbing is the UK's leading online specialist bathroom retailer,
offering a wide range of over 32,000 products to B2C and Trade customers.
Victorian Plumbing offers its customers a one-stop shop solution for the
entire bathroom with more than 130 own and third-party brands across a wide
spectrum of price points.
The Group's product design and supply chain strengths are complemented by its
creative and brand-focused marketing strategy, which predominantly focuses on
online channels to drive significant and growing traffic to its website.
Headquartered in Skelmersdale, Lancashire, the Group employs over 550 staff
across seven locations in Skelmersdale, Manchester and Birmingham.
For more information, please visit
https://www.victorianplumbingplc.com/about-us/
(https://www.victorianplumbingplc.com/about-us/)
Cautionary statement
This announcement of half year results does not constitute or form part of and
should not be construed as an invitation to underwrite, subscribe for, or
otherwise acquire or dispose of any Victorian Plumbing Group plc (the
"Company") shares or other securities in any jurisdiction nor is it an
inducement to enter into investment activity nor should it form the basis of
or be relied on in connection with any contract or commitment or investment
decision whatsoever. It does not constitute a recommendation regarding any
securities. Past performance, including the price at which the Company's
securities have been bought or sold in the past, is no guide to future
performance and persons needing advice should consult an independent financial
advisor. This announcement may include statements that are, or may be deemed
to be, "forward-looking statements" (including words such as "believe",
"expect", "estimate", "intend", "anticipate" and words of similar meaning). By
their nature, forward-looking statements involve risk and uncertainty since
they relate to future events and circumstances, and actual results may, and
often do, differ materially from any forward-looking statements. Any
forward-looking statements in this announcement reflect management's view with
respect to future events as at the date of this announcement. Save as required
by applicable law, the Company undertakes no obligation to publicly revise any
forward-looking statements in this announcement, whether following any change
in its expectations or to reflect events or circumstances after the date of
this announcement.
Summary of performance
Units H1 2023 H1 2022 Change
Income statement
Revenue £m 146.8 133.9 10%
Gross profit((1)) £m 66.8 58.5 14%
Gross profit margin((2)) % 46% 44% 2%pts
Adjusted EBITDA((3)) £m 9.9 6.7 48%
Adjusted EBITDA margin((4)) % 7% 5% 2%pts
Profit before tax £m 5.6 2.7 107%
Earnings per share
Adjusted diluted EPS((5)) pence 1.9 1.2 58%
Statutory diluted EPS pence 1.3 0.6 117%
Cash flow
Free cash flow((6)) £m 6.5 1.4 364%
Operating cash conversion((7)) % 66% 21% 45%pts
Net cash and cash equivalents £m 40.9 33.7 21%
Key performance indicators
Total orders((8)) '000 482 453 6%
Active customers((9)) '000 352 339 4%
Average order value((10)) £ 305 296 3%
TrustPilot TrustScore ((11)) /5 4.5 4.4 2%
Marketing spend as a % of revenue % 28% 30% (2%pts)
Trade revenue as a % of total % 20% 18% 2%pts
(1) Gross profit is defined as revenue less cost of sales. Cost
of sales includes all direct costs incurred in purchasing products for resale
along with packaging, distribution and transaction costs.
(2) Gross profit margin is defined as gross profit as a
percentage of revenue.
(3) Adjusted EBITDA is defined as operating profit before
depreciation, amortisation, exceptional items and IFRS 2 share-based payments.
(4) Adjusted EBITDA margin is defined as adjusted EBITDA as a
percentage of revenue.
(5) Diluted EPS has been calculated as per note 8. Adjusted
diluted EPS is defined as adjusted net income divided by the weighted average
number of shares for diluted EPS. Adjusted net income is defined as net income
before exceptional items and IFRS 2 share-based payment and after adjusting
for the tax impact of those items.
(6) Free cash flow is cash generated from operating activities
before exceptional items and taxation less capital expenditure and cash flows
relating to leases.
(7) Operating cash conversion is free cash flow as a percentage
of adjusted EBITDA.
(8) Total orders is defined as the total number of orders
dispatched to customers in the period.
(9) Active customers are the number of unique customers who
placed an order in the period.
(10) Average order value ('AOV') is defined as revenue divided by
total orders in the period.
(11) The average Trustpilot rating is defined as the monthly average
of all ratings made through Trustpilot.
(12) Mintel UK Bathrooms & Bathrooms Accessories Report 2022.
(13) Internally conducted research.
Summary of operating performance for the six months ended 31 March 2023
Revenue of £146.8m for H1 2023 was up by 10% (H1 2022: £133.9m) driven by
both increased total orders (up 6%) and increased AOV (up 3%) across both
Consumer and Trade, with 7% and 20% growth respectively during the six- month
period.
Our unrivalled SKU range and strong availability of product continues to be
attractive to our customers and positively sets us apart from the competition.
Adjusted EBITDA increased to £9.9m (H1 2022: £6.7m) and adjusted EBITDA
margin increased to 7% (H1 2022: 5%).
Sales of our own branded product range, which attract higher margins,
increased by 1ppt to 76% (H1 2022: 75%). This has been driving continued
improvement in gross profit, which improved by 2ppts to 46% (H1 2022: 44%). In
addition, reduced shipping costs and favourable foreign exchange rates have
also improved gross margin.
Through H1 2023 we invested in a new and bold creative brand campaign, 'Boss
Your Bathroom' which was well received by consumers and is reflected in
Victorian Plumbing's brand awareness increasing to 64%((13)) (H1 2022: 63%),
against a backdrop of declines amongst the competition. Despite this
incremental investment in our brand, our overall digital performance-based
marketing spend decreased on the equivalent half year by 2ppts to 28% of
revenue (H1 2022: 30%) and we continue to successfully grow our market share.
Active customers, defined as the number of unique customers who placed an
order in the period, increased by 4% to 352,000 (H1 2022: 339,000) with
conversion improvement also leading to increased total orders of 6% following
the successful re-platforming of our website in December 2022. SimilarWeb data
indicates that our share of visits across the total competitor set was 38%
with our nearest competitor at just 18%.
Whilst concerns remain over the volatile macroeconomic environment and its
potential impact on consumers, our resilient trading and market-leading
proposition supports our confidence in our ability to deliver our strategy in
the long term and meet expectations.
Our strategic focus
Our strategy remains unchanged from IPO and covers three growth horizons: core
B2C, Trade and adjacent products.
1. Core B2C
Our core market is retailing bathroom products and accessories to consumers in
the UK through our market-leading online platform. As an e-commerce retailer,
we continue to benefit from the ongoing structural shift in consumer buying
behaviour from offline to online and there is still some way to go before this
transition reaches maturity. Online sales of bathroom products and accessories
remains at only 31% of the total UK market according to Mintel. We expect
our addressable market across all categories to grow even further in the
coming years.
We are particularly well placed to continue to gain further market share
through these structural tailwinds and by taking share from traditional
offline physical retailers, as well as other online competitors, leveraging
our market and brand position and our strong balance sheet. The successful
re-platforming of our website will enable the business to capture further
market share in both our core and adjacent markets.
In the medium term, and once we have captured more of the existing UK
addressable market, there is a potential further opportunity to translate our
domestic success into carefully selected international markets.
2. Trade
Our second growth horizon focuses on the B2B opportunity to retail bathroom
products and accessories to Trade customers. In the first half, 20% (H1 2022:
18%) of our revenue came from Trade accounts, compared with an estimated
30-40% of the market. The Victorian Plumbing brand has historically been
mainly consumer focused. By broadening our marketing approach, expanding our
focus to provide relevant products to Trade customers, and by providing the
best platform to browse and order - tailored for Trade customers' needs - we
believe we can make further meaningful market share gains in this area.
We are also working with a select cohort of trusted Trade customers in a
proof-of-concept phase to develop our Trade app ahead of a wider roll out
later in the year. This exciting new offering should improve tradespeople's
purchasing experiences and help drive more profitable growth.
3. Adjacent products
Finally, our third horizon focuses on adjacent products that consumers look
for when renovating a bathroom. Given our position in the bathroom product and
accessories market, we have an exciting opportunity to expand our reach into
products that often come later in the buying journey, such as tiles and
lighting. We continue to make good progress in pursuing this growth horizon,
and in H1 FY23 we expanded these adjacent product ranges with revenue growth
at 52% for tiles and 70% for lighting. Increasing the prominence of adjacent
product ranges on our website before the end of the year, following the
successful re-platforming, will allow consumers to use Victorian Plumbing for
everything they need to furnish their bathrooms.
Supply chain normalisation
Whilst we have not been immune to the widely reported global supply challenges
of recent years, the deep and trusted relationships we have built with our
global suppliers over our 20 years of trading have enabled us to navigate
these challenges well and secure sufficient inventory across a broad range to
satisfy customer demand. This supply chain advantage, together with our strong
balance sheet, has allowed us to be bold when attracting consumers to site,
safe in the knowledge that we have available stock to satisfy orders.
Equally, the local experts and partners who we work with on the ground in
China ensure that we are always aware of any potential supply issues that may
arise, giving us time to pivot to alternatives as and when needed. This,
alongside the work they do on auditing our suppliers' factories, gives us
confidence in the availability of products together with maintaining quality
and reliability.
New UK distribution centre
Our new 20-year leased, 544,000 square foot, UK distribution centre in
Leyland, Lancashire, which is due to become operational in the second half of
FY24, will create space and capacity for growth in line with our longer-term
strategy. We anticipate spending c.£26m of capex, including £7m in this
financial year and the remaining £19m in the first half of FY24. Associated
allowable tax deductions will save c.£6m of Corporation Tax, spread as £2m
in this financial year and the remaining £4m in FY24. After a period of
double running, which covers the period of operational transition, we
anticipate no additional pre-tax cash outflow for rental expense. The move
away from short-term leases to a longer term-lease will result in some
re-categorisation in the income statement due to IFRS 16 lease accounting.
Seamless customer journey
Our customers' experience with Victorian Plumbing throughout their buying
journey is of paramount importance to us. We are extremely proud that we
continue to be ranked "Excellent" by TrustPilot and have increased our average
rating in the year to 4.5 (H1 2022: 4.4) out of 5.
Development of our proprietary technology platform
The systems that drive the performance of the business are primarily bespoke
platforms that we continue to invest in, innovate and improve each year. Our
growing technology and infrastructure team help to facilitate this continual
development to ensure we remain best in class across e-commerce retail
platforms.
We successfully completed the website re-platforming to improve its
functionality and scalability in December 2022 and are now working to develop
an improved front end website, to deliver enhanced search functionality,
better product categorisation and other features that will improve customer
conversion and deliver growth.
Our focus has also moved to the launch of an app that will enable our Trade
consumers to browse and purchase products efficiently. We are working with
several of our trusted Trade consumers in a proof-of-concept phase ahead of a
wider roll out later in the year.
ESG
Taking responsibility is one of our core values, and we are clear that every
one of us has a role to play in making a positive difference to the
environment and the communities in which we operate.
In our first full year post IPO, we adopted an ESG strategy which is centred
around three focus areas: environmental sustainability, diversity &
inclusion, and governance & ethics.
Our new UK distribution centre will enable us to build on the successes we
have made in recent years - in particular with respect to our environmental
sustainability as we look to offer more electric vehicle charging for employee
travel to work and assess the potential for solar panels to generate our own
energy needs. We continue to work with suppliers to reduce the levels of
plastic packaging and have been working with a third party to provide a
baseline assessment of Scope 3 emissions from which we can establish a
strategy for moving towards net zero. We also anticipate that recommendations
from our in-year Phase 3 ESOS audit will help us to drive improvements to our
environmental sustainability.
Other ESG areas that we have made progress on during the first half include
the hiring of HR and data protection specific roles and the establishment of a
charity committee that recognises the importance we have to play in the local
communities in which we operate, as well as the roll out of further
flexibility and enhancements to the benefits packages available to our
employees.
Our people
As a Board, we continue to be impressed by the commitment and capability of
our employees - collectively, their innovation and hard work have been the
driving force behind the growth and success experienced by the Group over
recent years. We are proud of the values-led, principles-driven culture that
is deep-rooted throughout Victorian Plumbing, and it is this culture that
underpins our ability to adapt to change and respond positively to challenges.
Over the last 24 months we have placed significant emphasis on listening to
feedback from colleagues through many different forums and have worked hard to
make our benefits and rewards package one that both attracts and retains the
best talent.
The response from our regular employee engagement surveys suggests that the
work done to date is having a positive impact, and we remain committed to
building on the recent progress to further improve our people experience and
help fuel our future growth. Employee engagement targets now feature as part
of the Executive management incentive targets for FY 2023.
We would like to thank our employees, customers, suppliers and other
stakeholders for their continued support. Whilst we are mindful of the current
macroeconomic conditions that our customers are battling against, we remain
confident in our ability to continue to execute our strategic plan,
underpinned by our strong financial position, to take further market share and
consolidate our position as the UK's No.1 bathroom retailer.
Financial review
The performance of the Group continued to be strong through H1 2023 with
continuing momentum in both profit and cash generation.
H1 2023 H1 2022 Change %
£m £m
Revenue 146.8 133.9 10%
Cost of sales (80.0) (75.4) (6%)
Gross profit 66.8 58.5 14%
Underlying costs (56.9) (51.8) (10%)
Adjusted EBITDA 9.9 6.7 48%
Depreciation and amortisation (1.8) (1.7) (6%)
Interest 0.1 (0.2) 150%
Adjusted PBT 8.2 4.8 71%
Share-based payments (2.2) (2.1) 5%
Exceptional items (0.4) - n.m
Statutory PBT 5.6 2.7 107%
Revenue
In the six months to 31 March 2023, revenue was up 10% on the previous year at
£146.8m (H1 2022: £133.9m) as consumer demand for our products remains
robust.
Total orders in the period increased by 6% to 482,000 (H1 2022: 453,000) and
average order value increased by 3% to £305 (H1 2022: £296). Order increases
indicate further market share gains reflective of our unrelenting approach to
online marketing and a continued shift towards consumers buying from online
channels. AOV increase is a result of continued price increases, albeit the
growth has been at a slower rate than in previous periods as supplier
inflationary dynamics have normalised and we are conscious of the impact of
cost-of-living pressures on the consumer.
Consumer channel revenue represented 80% (H1 2022: 82%) of overall revenue and
grew by 7% vs. a 9% decline in the first half of the last financial year.
Trade channel revenue represented 20% (H1 2022: 18%) of overall revenue and
grew by 20% vs. 18% in the first half of the last financial year.
Gross profit and gross profit margins
We define gross profit as revenue less cost of sales. Cost of sales includes
all direct costs incurred in purchasing products for resale along with
packaging, distribution and transaction costs (which include mark to market
movements on forward currency contractual arrangements in line with our
treasury policy).
The strength of the Group's supplier relationships and the agility of our
team ensured continued robust sourcing processes and good product
availability. Furthermore, the pricing power of the Group, particularly on own
brand products, allowed us to increase prices throughout H1 albeit at a slower
rate compared to previous years considering the challenging consumer demand
dynamic.
Gross profit increased by 14% to £66.8m (H1 2022: £58.5m) and gross profit
margin improved by 2ppts from 44% to 46%. This improvement was due to reduced
shipping costs and a stabilisation of product related costs together with
improving foreign exchange rates.
Gross margin from own brand products increased to 51% (H1 2022: 49%), whilst
gross margin from third-party products remained stable at 29%.
Underlying costs
Underlying costs, which we define as administrative expenses before
depreciation and amortisation, exceptional items and share-based payments,
increased by 10% to £56.9m (H1 2022: £51.8m).
H1 2023 H1 2022 Change %
£m £m
Marketing costs 41.7 40.2 (4%)
People costs excluding share-based payments 9.4 8.0 (18%)
Property costs and other overheads 5.8 3.6 (61%)
Underlying costs 56.9 51.8 (10%)
Growing our brand awareness and increasing traffic to our site remains a focus
for the Group. Marketing costs increased by 4% to £41.7m (H1 2022: £40.2m).
Marketing costs as a percentage of revenue reduced from 30% to 28% reflective
of our improving brand awareness and less competitive pressure. External
indicators and order volume growth across all product categories suggest that
we continue to take market share because of our unrelenting approach to
marketing.
People costs, excluding share-based payments but including costs relating to
agency staff, increased by 18% to £9.4m (H1 2022: £8.0m). This is slightly
higher than anticipated owing to continuing inflationary pressures, and our
commitment to attracting and retaining talent.
Property costs and other overheads increased by 61% to £5.8m (H1 2022:
£3.6m). The majority of this increase was as a result of the Group increasing
its warehouse capacity on a more expensive short-term basis to support the
growth of the business, together with some annualisation of plc related roles
hired during the previous financial year.
Adjusted EBITDA
Significant items of income and expense that do not relate to the trading of
the Group are disclosed separately. Share-based payment charges are an example
of such items.
The table below provides a reconciliation from operating profit to adjusted
EBITDA, which is a non-GAAP metric used by the Group to assess the operating
performance.
H1 2023 H1 2022 Change %
£m £m
Operating profit 5.5 2.9 90%
Share-based payments 2.2 2.1 5%
Exceptional items 0.4 - n.m
Adjusted operating profit 8.1 5.0 62%
Depreciation and amortisation 1.8 1.7 6%
Adjusted EBITDA 9.9 6.7 48%
Adjusted EBITDA increased by 48% to £9.9m (H1 2022: £6.7m) and adjusted
EBITDA margin increased by 2ppts to 7% (H1 2022: 5%).
Exceptional items
Total expenses incurred in H1 2023 of £0.4m related to legal and other costs
associated with acquiring the lease on new warehouse premises during the
period.
Share-based payments
The Group incurred share-based payment charges (including associated NI) of
£2.2m (H1 2022: £2.1m). Share-based payment charges for the period include
£1.3m (H1 2022: £1.8m) for schemes relating to the Group's IPO in June 2021,
along with £0.9m (H1 2022: £0.3m) for ongoing schemes put in place post IPO.
Depreciation and amortisation
Depreciation and amortisation increased marginally by £0.1m to £1.8m (H1
2022: £1.7m). The Group continues to invest in its platform and bespoke
inventory management systems, with £1.3m capitalised during H1 2023 (H1 2022:
£1.3m).
Finance income
Finance income of £0.1m during the period compares to a finance expense of
£0.2m in H1 2022 due to cash being placed on deposit to take advantage of
recent interest rate rises.
Taxation
The Group tax charge of £1.4m (H1 2022: £0.7m) represents an effective tax
rate of 25% (H1 2022: 25%) which is higher than the standard rate of UK tax of
22% for the period due to share-based payments and non-deductible exceptional
costs.
Earnings per share
Diluted earnings per share ('EPS') from continuing operations was 1.3 pence
per share (H1 2022: 0.6 pence per share).
The adjusted diluted EPS from continuing operations was 1.9 pence per share
(H1 2022: 1.2 pence per share). The table shows the effect on the Group's
diluted EPS of the exceptional items and share-based payments (net of tax).
H1 2023 H1 2022 Change %
£m £m
Profit for EPS 4.2 2.0 110%
Exceptional items 0.4 - n.m
Share-based payments (including associated NI) 2.2 2.1 5%
Tax effect (0.5) (0.4) 25%
Adjusted profit for EPS 6.3 3.7 70%
Weighted average number of ordinary shares for diluted EPS (millions) 323.0 321.2 1%
Adjusted diluted EPS (pence) 1.9 1.2 58%
Cash flow and net cash
H1 2023 H1 2022
£m £m
Adjusted EBITDA 9.9 6.7
Movement in working capital (1.3) (3.2)
Capital expenditure (1.5) (1.5)
Lease payments - principal (0.5) (0.5)
Lease payments - interest (0.1) (0.1)
Free cash flow 6.5 1.4
Operating cash conversion 66% 21%
Changes in working capital resulted in a cash outflow of £1.3m (H1 2022:
£3.2m). This year-on-year improvement reflects effective stock management.
Given the nature of our stock we continue to incur low levels of obsolescence
and our proprietary knowledge over two decades of trading benefits us in low
levels of returns and damages.
Capital expenditure of £1.5m (H1 2022: £1.5m) included £1.2m (H1 2022:
£1.1m) of capitalised salaries relating to development of the Group's
platform and bespoke inventory management systems.
At the period end the Group had net cash of £40.9m (H1 2022: £33.7m).
Events after the reporting period
There have been no material events to report after the end of the reporting
period.
Dividend
Victorian Plumbing has a robust balance sheet, generates significant operating
cashflow and the underlying priority is to reinvest into the business and
drive further profitable growth. Recognising that most growth opportunities do
not require significant capital other than warehouse optimisation, and
reflecting confidence in the Group's ongoing strength, future growth prospects
and cash generation, the Board implemented a dividend policy with an aim to
maintain a dividend cover ratio of c. 3.0-3.5x in December 2022. The policy
includes the consideration that the Board may from time to time conclude that
it has surplus cash, at which point it will consider further returns to
shareholders.
The Board has declared an interim dividend of 0.45 pence per share (H1 2022:
nil) which is a total cash distribution to shareholders of £1.5m. The
dividend will be paid on 7 July 2023 to shareholders on the register of
members at the close of business on 9 June 2023.
Mark Radcliffe Daniel Barton
Chief Executive Officer Chief Financial Officer
23 May 2023 23 May 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 MARCH 2023
Note Six months Six months Year to 30 September 2022
to 31 March 2023 to 31 March 2022 £m
£m £m
Revenue 146.8 133.9 269.4
Cost of sales (80.0) (75.4) (148.4)
Gross profit 66.8 58.5 121.0
Administrative expenses before separately disclosed items 4 (58.7) (53.9) (105.0)
Other operating income - 0.4 -
Adjusted operating profit 8.1 5.0 16.0
Separately disclosed items:
Share-based payments (2.2) (2.1) (3.9)
Exceptional items 5 (0.4) - -
Operating profit 5.5 2.9 12.1
Finance costs (0.1) (0.2) (0.3)
Finance income 0.2 - -
Profit before tax 5.6 2.7 11.8
Income tax expense 6 (1.4) (0.7) (2.6)
Profit for the period 4.2 2.0 9.2
Basic earnings per share (pence) 8 1.5 0.7 3.3
Diluted earnings per share (pence) 8 1.3 0.6 2.9
Adjusted basic earnings per share (pence) 8 2.2 1.4 4.5
Adjusted diluted earnings per share (pence) 8 1.9 1.2 3.9
All amounts relate to continuing operations.
There are no items to be recognised in the statement of other comprehensive
income and hence the Group has not presented a separate statement of other
comprehensive income.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
Note Six months to 31 March 2023 Six months to 31 March 2022 Year to 30 September 2022
£m £m £m
Assets
Non-current assets
Intangible assets 9 3.5 3.1 3.3
Property, plant and equipment 10 1.3 1.6 1.4
Right-of-use assets 11 4.1 4.9 4.5
Derivative financial instruments - - 0.7
Deferred tax asset 0.3 - 0.1
9.2 9.6 10.0
Current assets
Inventories 36.0 35.3 33.9
Trade and other receivables 12 5.2 4.4 5.1
Tax recoverable 0.2 0.5 -
Cash and cash equivalents 40.9 33.7 45.5
82.3 73.9 84.5
Total assets 91.5 83.5 94.5
Equity and liabilities
Equity attributable to the owners of the Company
Share capital 16 0.3 0.3 0.3
Share premium 11.2 11.2 11.2
Deferred share capital 0.1 0.1 0.1
Capital reorganisation reserve (320.6) (320.6) (320.6)
Retained earnings 350.3 344.0 353.0
Total equity 41.3 35.0 44.0
Liabilities
Non-current liabilities
Lease liabilities 14 3.8 4.5 4.1
Derivative financial instruments 0.1 - -
Deferred taxation liability - 0.1 -
3.9 4.6 4.1
Current liabilities
Trade and other payables 13 39.2 36.7 37.9
Contract liabilities 6.2 6.1 7.1
Lease liabilities 14 0.7 0.9 0.9
Provisions 0.2 0.2 0.2
Corporation tax - - 0.3
46.3 43.9 46.4
Total liabilities 50.2 48.5 50.5
Total equity and liabilities 91.5 83.5 94.5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 MARCH 2023
Share capital Share premium Capital reorganisation reserve Deferred share capital Retained earnings Total equity
£m £m £m £m £m £m
Balance at 1 October 0.3 11.2 (320.6) 0.1 339.8 30.8
2021
Comprehensive income
Profit for the period - - - - 2.0 2.0
Transactions with owners
Employee share schemes - value of employee services - - - - 2.2 2.2
Total transactions with owners recognised directly in equity - - - - 2.2 2.2
Balance at 31 March 2022 0.3 11.2 (320.6) 0.1 344.00 35.0
Comprehensive income
Profit for the period - - - - 7.2 7.2
Transactions with owners
Employee share schemes - value of employee services - - - - 1.7 1.7
Tax impact of employee share schemes - - - - 0.1 0.1
Total transactions with owners recognised directly in equity - - - - 1.8 1.8
Balance at 30 September 2022 0.3 11.2 (320.6) 0.1 353.0 44.0
Comprehensive income
Profit for the period - - - - 4.2 4.2
Transactions with owners
Dividends paid - - - - (9.1) (9.1)
Employee share schemes - value of employee services - - - - 2.2 2.2
Total transactions with owners recognised directly in equity - - - - (6.9) (6.9)
Balance at 31 March 2023 0.3 11.2 (320.6) 0.1 350.3 41.3
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 MARCH 2023
Note Six months to 31 March 2023 Six months to 31 March 2022 Year to 30 September 2022
£m £m £m
Cash flows from operating activities
Cash generated from operating activities before exceptional operating items 19 8.6 3.5 18.3
Cash outflow from exceptional operating items (0.1) (0.1) -
Cash generated from operating activities 8.5 3.4 18.3
Income tax paid (2.1) (0.2) (1.4)
Net cash generated from operating activities 6.4 3.2 16.9
Cash flows from investing activities
Purchase of intangible assets (1.3) (1.3) (2.6)
Purchase of property, plant and equipment (0.2) (0.2) (0.3)
Net cash (used in)/generated by investing activities (1.5) (1.5) (2.9)
Cash flows from financing activities
Dividends paid (9.1) - -
Finance arrangement fees - (0.1) (0.1)
Finance income 0.2 - -
Payment of interest portion of lease liabilities (0.1) (0.1) (0.2)
Payment of principal portion of lease liabilities (0.5) (0.5) (0.9)
Net cash used in financing activities (9.5) (0.7) (1.2)
Net (decrease)/increase in cash and cash equivalents (4.6) 1.0 12.8
Cash and cash equivalents at the beginning of the period 45.5 32.7 32.7
Cash and cash equivalents at the end of the period 40.9 33.7 45.5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
Basis of preparation
Victorian Plumbing Group plc is a public limited company which is listed on
the Alternative Investment Market ('AIM') of the London Stock Exchange and is
domiciled and incorporated in the United Kingdom under the Companies Act 2006.
Its registered office is 22 Grimrod Place, Skelmersdale, Lancashire, WN8 9UU.
These condensed consolidated interim financial statements ('interim financial
statements') were approved by the Board for issue on 23 May 2023, and have
been prepared as at, and for the six months ended, 31 March 2023. The
comparative financial information presented has been prepared as at, and for
the six months ended, 31 March 2022.
These interim financial statements do not constitute statutory accounts within
the meaning of Section 434 of the Companies Act 2006. The interim financial
statements for the half year ended 31 March 2023 are neither audited nor
reviewed by the Company's auditors. The consolidated financial statements of
the Group as at, and for the year ended, 30 September 2022 are available on
request from the Company's registered office and via the Company's website.
The report of the auditors on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement under
Section 498 of the Companies Act 2006.
These interim financial statements have been prepared in accordance with IAS
34, "Interim Financial Reporting" issued by the IASB and adopted for use in
the UK. They do not include all of the information required for full annual
financial statements and should be read in conjunction with the consolidated
financial statements of the Group as at and for the year ended 30 September
2022, which were prepared in accordance with International Financial Reporting
Standards (IFRSs) in conformity with the requirements of the Companies Act
2006.
Going concern
After making appropriate enquiries, the directors have a reasonable
expectation that the Group has adequate resources, in light of the level of
cash generation, to continue in operational existence for at least twelve
months from the date of approval of the condensed consolidated interim
financial information. For this reason, they have adopted the going concern
basis in preparing this condensed consolidated interim financial information.
2. Accounting policies, estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including the expectations of future events that
are believed to be reasonable under the circumstances.
In preparing these interim financial statements, the significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended 30 September 2022.
3. Segmental information
IFRS 8 'Operating Segments' requires the Group to determine its operating
segments based on information which is provided internally. Based on the
internal reporting information and management structures within the group, it
has been determined that there is only one operating segment, being the Group,
as the information reported includes operating results at a consolidated Group
level only (the 'Operating group'). There is also considered to be only one
reporting segment, which is the Group, the results of which are shown in the
consolidated statement of comprehensive income.
Management has determined that there is one operating and reporting segment
based on the reports reviewed by the Senior Leadership Team ('SLT') which is
the chief operating decision-maker ('CODM'). The SLT is made up of the
Executive Directors and Key Management and is responsible for the strategic
decision-making of the Group.
Adjusted EBITDA
Operating costs, comprising administrative expenses, are managed on a Group
basis. The SLT measures the overall performance of the Operating group by
reference to adjusted EBITDA, which is EBITDA (earnings before interest, tax,
depreciation and amortisation) less exceptional items and IFRS 2 charges in
respect of share-based payments along with associated national insurance.
This is a non-GAAP measure applied by the SLT to understand the earnings
trends of the Operating group and is considered an additional, useful measure
under which to assess the true operating performance of the Operating group.
In addition to annual bonuses which are linked to the Operating group's
financial performance, the Operating group has implemented a number of
longer-term share-based payment incentives linked to changes in ownership of
the Operating group rather than the achievement of individual or Company
specific financial performance targets.
The Directors believe that these items and adjusted measures of performance
should be separately disclosed in order to assist in the understanding of
financial performance achieved by the Operating group and for consistency with
prior years.
Six months to 31 March Six months to 31 March
2023 2022
£m £m
Operating profit 5.5 2.9
Amortisation 1.1 0.9
Depreciation of property, plant and equipment 0.3 0.3
Depreciation of right-of-use assets 0.4 0.5
Exceptional items 0.4 -
Share-based payments (including associated NI) 2.2 2.1
Adjusted EBITDA 9.9 6.7
4. Operating profit
Expenses by nature including exceptional items:
Six months to 31 March Six months to 31 March 2022
2023 £m
£m
Employee costs (excluding share-based payments) 8.7 7.5
Agency and contractor costs 0.7 0.5
Marketing costs 41.7 40.2
Property costs 3.1 2.5
Share-based payments (including associated NI) 2.2 2.1
Depreciation of property, plant and equipment 0.3 0.3
Depreciation of right-of-use assets 0.4 0.5
Amortisation charge 1.1 0.9
Gain on foreign exchange - (0.2)
Other costs 3.1 1.7
Total administrative expenses 61.3 56.0
Share-based payments (2.2) (2.1)
Included within exceptional items (0.4) -
Total administrative expenses before separately disclosed items 58.7 53.9
5. Exceptional items
Six months to 31 March Six months to 31 March
2023 2022
£m £m
Warehouse transformation costs 0.4 -
Warehouse transformation costs relate to legal and other costs associated with
entering into a 20-year lease for a new, 544,000 square foot, purpose-built UK
distribution centre in Lancashire.
6. Taxation
Six months to 31 March Six months to 31 March
2023 2022
£m £m
Corporation tax
Current tax on profits for the period 1.2 0.7
Total current tax 1.2 0.7
Deferred tax
Origination and reversal of timing differences 0.2 -
Total deferred tax 0.2 -
Taxation on profit 1.4 0.7
Factors affecting tax charge for the period
The tax assessed for the period is higher (2022: higher) than the standard
rate of corporation tax in the UK of 22% (2022: 19%). The differences are
explained below:
Six months to 31 March 2023 Six months to 31 March 2022
£m £m
Profit before tax 5.6 2.7
Profit multiplied by the blended standard rate of corporation tax for the full 1.2 0.5
year in the UK of 22% (2022: 19%)
Effects of:
Expenses not deductible for tax purposes 0.1 -
Share options 0.1 0.2
Total tax charge for the period 1.4 0.7
Factors that may affect future tax charges
The rate of corporation tax in the UK throughout the period was 19%. Changes
to the UK corporation tax rates were substantively enacted as part of the
Finance Act 2021 on 24 May 2021. The rate applicable from 1 April 2023 will
increase from 19% to 25%. Deferred taxes at the reporting date have been
measured using these enacted tax rates.
7. Dividends
Six months Six months to 31 March 2022
to 31 March Pence per share
2023
Pence per
share
Final ordinary dividend recognised as distributions in the period 1.10 -
Final special dividend recognised as distributions in the period 1.80 -
Total dividends paid in the period 2.90 -
Interim dividend declared 0.45 -
Six months to 31 March Six months to 31 March 2022
2023 £m
£m
Final ordinary dividend recognised as distributions in the period 3.6 -
Final special dividend recognised as distributions in the period 5.5 -
Total dividends paid in the period 9.1 -
Interim dividend declared 1.5 -
The Board has approved an interim dividend of 0.45 pence per share (H1 2022:
£nil) which is a total cash distribution of £1.5m and will be paid out of
the Company's available distributable reserves on 7 July 2023, to shareholders
on the register of members at 9 June 2023. In accordance with IAS 1, dividends
are recorded only when paid and are shown as a movement in equity rather than
as a charge to the Income Statement.
8. Earnings per share
Basic and diluted earnings per share
Basic earnings per share ('EPS') is calculated by dividing the profit for the
period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the period.
Diluted EPS is calculated by dividing the profit attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of ordinary
shares that would be issued on conversion of all the dilutive potential
ordinary shares into ordinary shares.
The following table reflects the income and share data used in the EPS
calculations:
Weighted average number of ordinary shares Total earnings Pence per share
£m
Half year ended 31 March 2023
Basic EPS 282,060,246 4.2 1.5
Diluted EPS 322,972,802 4.2 1.3
Half year ended 31 March 2022
Basic EPS 273,509,210 2.0 0.7
Diluted EPS 321,186,798 2.0 0.6
Year ended 30 September 2022
Basic EPS 275,832,944 9.2 3.3
Diluted EPS 315,898,691 9.2 2.9
Weighted average number of shares
Weighted average number of shares for basic EPS 282,060,246
Dilutive impact of unvested shares in relation to restricted share awards 40,912,556
Weighted average number of shares for diluted EPS 322,972,802
The average market value of the Group's shares for the purposes of calculating
the dilutive effect of share-based incentives was based on quoted market
prices for the period during which the share-based incentives were
outstanding.
Adjusted earnings per share ('Adjusted EPS')
Adjusted basic and diluted earnings per share figures are calculated by
dividing adjusted profit after tax for the period by the weighted average
number of shares in issue (as set out above).
Six months to 31 March 2023 Six months to 31 March 2022
£m £m
Profit for the period 4.2 2.0
Exceptional items 0.4 -
Share-based payments 2.2 2.1
Tax effect (0.5) (0.4)
Total adjusted profit for the period 6.3 3.7
Adjusted basic earnings per share (pence) 2.2 1.4
Adjusted diluted earnings per share (pence) 1.9 1.2
9. Intangible assets
Computer software
£m
Cost
At 30 September 2021 7.5
Additions 1.3
At 31 March 2022 8.8
Additions 1.3
At 30 September 2022 10.1
Additions 1.3
At 31 March 2023 11.4
Accumulated amortisation
At 30 September 2021 4.8
Charge for the period 0.9
At 31 March 2022 5.7
Charge for the period 1.1
At 30 September 2022 6.8
Charge for the period 1.1
At 31 March 2023 7.9
Net book value
At 30 September 2021 2.7
At 31 March 2022 3.1
At 31 March 2023 3.5
Computer software comprises both internal salaries and external development
capitalised in relation to the Group's bespoke operational software. The Group
capitalised internal salaries of £1.2m in the six months ended 31 March 2023
(H1 2022: £1.1m) for development of computer software.
For the six-month period to 31 March 2023, the amortisation charge of £1.1m
(H1 2022: £0.9m) has been charged to administrative expenses in the income
statement.
10. Property, plant and equipment
Leasehold improvements Plant and machinery Fixtures Office Total
£m £m and fittings equipment £m
£m £m
Cost
At 30 September 2021 0.1 1.4 1.2 1.4 4.1
Additions - 0.1 - 0.1 0.2
At 31 March 2022 0.1 1.5 1.2 1.5 4.3
Additions - - - 0.1 0.1
Disposals - (0.1) (0.4) (0.1) (0.6)
At 30 September 2022 0.1 1.4 0.8 1.5 3.8
Additions - 0.1 - 0.1 0.2
At 31 March 2023 0.1 1.5 0.8 1.6 4.0
Accumulated depreciation
At 30 September 2021 - 0.7 1.0 0.7 2.4
Charge for the period - 0.1 0.1 0.1 0.3
At 31 March 2022 - 0.8 1.1 0.8 2.7
Charge for the period - 0.1 - 0.2 0.3
Disposals - (0.1) (0.4) (0.1) (0.6)
At 30 September 2022 - 0.8 0.7 0.9 2.4
Charge for the period - 0.1 0.1 0.1 0.3
At 31 March 2023 - 0.9 0.8 1.0 2.7
Net book value
At 30 September 2021 0.1 0.7 0.2 0.7 1.7
At 31 March 2022 0.1 0.7 0.1 0.7 1.6
At 31 March 2023 0.1 0.6 - 0.6 1.3
11. Right-of-use assets
Right-of-use assets
£m
Cost
At 30 September 2021 8.2
Modifications 0.1
At 31 March 2022 and 30 September 2022 8.3
At 31 March 2023 8.3
Accumulated depreciation
At 30 September 2021 2.9
Charge for the period 0.5
At 31 March 2022 3.4
Charge for the period 0.4
At 30 September 2022 3.8
Charge for the period 0.4
At 31 March 2023 4.2
Net book value
At 30 September 2021 5.3
At 31 March 2022 4.9
At 31 March 2023 4.1
The right of use asset and lease for the new 544,000 sq. ft UK distribution
centre in Lancashire will be recognised on the date of Practical Completion.
12. Trade and other receivables
Six months ended 31 March 2023 Six months ended 31 March 2022
£m £m
Trade receivables 2.0 2.2
Right-of-return asset 0.4 0.3
Accrued income 0.9 0.8
Prepayments 1.9 1.1
5.2 4.4
The Group provides against trade receivables using the forward-looking
expected credit loss model under IFRS 9. An impairment analysis is performed
at each reporting date. Trade receivables, accrued income and other
receivables expected credit losses have been reviewed by management and have
been determined to have an immaterial impact on these balances.
13. Trade and other payables
Six months ended 31 March 2023 Six months ended 31 March 2022
£m £m
Trade payables 25.2 25.2
Other taxation and social security 8.3 7.0
Refund liability 1.1 0.8
Other payables 1.3 1.1
Accruals 3.3 2.6
39.2 36.7
14. Lease liabilities
Lease liability
£m
At 30 September 2021 5.8
Modifications 0.1
Interest expense 0.1
Lease payment (0.6)
At 31 March 2022 5.4
Interest expense 0.1
Lease payment (0.5)
At 30 September 2022 5.0
Interest expense 0.1
Lease payment (0.6)
At 31 March 2023 4.5
The Group had total cash outflows for leases of £0.6m (H1 2022: £0.6m).
Lease liabilities as at 31 March were classified as follows:
Six months ended 31 March 2023 Six months ended 31 March 2022
£m £m
Current 0.7 0.9
Non-current 3.8 4.5
Total 4.5 5.4
The right of use asset and lease for the new 544,000 sq. ft UK distribution
centre in Lancashire will be recognised on the date of Practical Completion.
15. Borrowings
Six months ended 31 March 2023 Six months ended 31 March 2022
£m £m
Amounts drawn under revolving credit facility - -
Unamortised debt issue costs (0.1) (0.1)
(0.1) (0.1)
On 7 June 2021, the Group signed into a new Revolving Credit Facility (the
'RCF'). The RCF has total commitments of £10m and a termination date of June
2024. The facility is secured by a debenture dated 7 June 2021. Interest on
the RCF is charged at SONIA plus a margin of between 2.3% and 2.8% depending
on the consolidated leverage of the Group. A commitment fee of 40% of the
margin applicable to the RCF is payable quarterly in arrears on unutilised
amounts of the RCF. There is no requirement to settle all, or part, of the
debt earlier than the termination date. At 31 March 2023 the Group had not
utilised the RCF.
Unamortised debt issue costs of £0.1m (H1 2022: £0.1m) are included in
prepayments.
16. Ordinary share capital
Six months ended 31 March 2023 Six months ended 31 March 2022
£ £
Allotted, called up and fully paid
325,227,984 ordinary shares of 0.1p 325,228 325,063
325,228 325,063
The share capital of the Group is represented by the share capital of the
parent company, Victorian Plumbing Group plc. The Company was incorporated on
6 May 2021 to act as the holding company of the Group. Prior to this the share
capital of the Group was represented by the share capital of the previous
parent, VIPSO Limited.
17. Own shares held
The Employee Share Option Trust purchases shares to fund the Share Incentive
Plan. At 31 March 2023, the trust held 635,504 (H1 2022: 635,504) ordinary
shares with a book value of £636 (H1 2022: £636). The market value of these
shares as at 31 March 2023 was £0.5m (H1 2022: £0.3m).
Number of shares £
ESOT shares reserve
Own shares held at 30 September 2022 and 31 March 2023 635,504 636
18. Share-based payments
The Group operates four share plans being the Share Incentive Plan ('SIP'), a
Sharesave scheme ('SAYE'), a Deferred Bonus Plan ('DBP') and a Long-Term
Incentive Plan ('LTIP'). In addition, both prior to and following Admission to
AIM in June 2021, the Group awarded shares to the Chairman and certain members
of Key Management which had restrictions placed against them that bring the
awards into the scope of IFRS 2.
All share-based incentives carry a service condition. Such conditions are not
taken into account in the fair value of the service received. The fair value
of services received in return for share-based incentives is measured by
reference to the fair value of share-based incentives granted. The estimate of
the fair value of the share-based incentives is measured using the
Black-Scholes pricing model or Monte Carlo simulation, as appropriate for each
scheme.
Sensitivity analysis has been performed in assessing the fair value of the
share-based incentives. There are no changes to key assumptions that are
considered by the Directors to be reasonably possible, which give rise to a
material difference in the fair value of the share-based incentives.
The total charge in the period was £2.2m (H1 2022: £2.1m). This included
associated national insurance ('NI') at 13.8% (H1 2022: 15.1%), which
management expects to be the prevailing rate when the awards are exercised,
and apprenticeship levy at 0.5%, based on the share price at the reporting
date.
Six months ended 31 March 2023 Six months ended 31 March 2022
£m £m
Share Incentive Plan ('SIP') 0.1 0.2
Sharesave schemes - -
Deferred bonus plans 0.5 0.1
Long term incentive plans 0.1 -
IPO restricted share awards 1.2 1.9
Total IFRS 2 charge 1.9 2.2
National insurance and apprenticeship levy on applicable schemes 0.3 (0.1)
Total charge 2.2 2.1
19. Cash generated from operating activities
Six months ended 31 March 2023 Six months ended 31 March 2022
Cash flows from operating activities £m £m
Profit before taxation for the financial period 5.6 2.7
Adjustments for:
Amortisation of intangible assets 1.1 0.9
Depreciation of property, plant and equipment 0.3 0.3
Depreciation of right-of-use assets 0.4 0.5
Exceptional costs 0.4 -
Share-based payments (including NI) 2.2 2.1
Net finance expense (0.1) 0.2
Adjusted EBITDA 9.9 6.7
Fair value profit on financial derivatives 0.8 (0.1)
Increase in inventories (2.1) (2.9)
(Increase)/decrease in receivables (0.1) 0.6
Decrease in payables 0.1 (0.9)
Increase in provisions - 0.1
Cash generated from operating activities before exceptional operating items 8.6 3.5
Free cash flows Six months ended 31 March 2023 Six months ended 31 March 2022
£m £m
Cash generated from operating activities before exceptional operating items 8.6 3.5
Repayment of lease liabilities (0.6) (0.6)
Purchase of intangible assets (1.3) (1.3)
Purchase of property, plant and equipment (0.2) (0.2)
Free cash flows 6.5 1.4
Cash conversion 66% 21%
20. Post balance sheet events
There have been no events between the half year-end date and the date of this
report which represent a reportable event after the reporting period under IAS
10.
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