Victorian Plumbing makes a splash on AIM

Victorian Plumbing makes a splash on AIM

Victorian Plumbing plc, an online-only retailer of bathroom products and accessories, was admitted to AIM on 22 June 2021. The offer price of £2.62 per ordinary share valued the company at £850m on admission, making it the largest initial public offering (IPO) by market capitalisation to date on London’s junior market. The transaction garnered investor interest from JPMorgan and US investment manager Kayne Anderson Rudnick, and has been particularly lucrative for founder and CEO Mark Radcliffe and his family, who raised a combined total of £285.9m by selling their shares, and will retain 58% of the company’s voting rights post admission.

In its admission document, the company illustrated the growing market share of online bathroom specialists, which increased from 16% in 2015 to 29% in 2020. Like many other businesses, Victorian Plumbing has capitalised on a well-developed e-commerce platform and warehouse management system. As a one-stop shop solution for both residential and trade customers, it combines an effective online-only business model with a product offering considered to be the largest in the market, which has placed the company in an excellent position to capitalise on the heightened interest in home improvement fuelled by the pandemic related lockdowns. The company reported in its admission document:

‘During the second half of the year ended 30 September 2020 and for the six months ended 31 March 2021, the Group experienced increased levels of active customers and an increase in average order value, due in part to an acceleration in customer behaviour online as a result of the impact of Covid-19 and related lockdowns.’

Victorian Plumbing’s IPO highlights the flourishing home improvements sector. Homeware and furniture retailer Made.com’s admission to trading on 21 June 2021 further illustrates the trend, also attributing its success to its online presence. Much like Victorian Plumbing, Made.com reported revenues increased by 16.8% to £247.3m in 2020. The link between increased online traffic and the lockdown was also met with a shift in demand to a variety of furniture and homeware purchases, with homes predicted to be a ‘nexus of multiple activities’ following the permanent work from home set up. The pandemic-related lockdowns and regulations have certainly sparked a shift in attitudes towards improving or updating living conditions, a trend which can also be seen in light of the increase in home purchases, which The UK Residential REIT plc plans to take advantage of, after announcing its intention to float on the Main Market at the start of this month. For more information, see: UK Residential REIT looks to make the Main Market its home.

The initial market reaction to Victorian Plumbing’s IPO has been encouraging, with the company’s share price increasing by a fifth on its market debut, closing at a price of £3.30 per share. The transaction marks a comeback for the AIM market following a period of depressed activity in 2019, which Market Tracker reported on in the Market Tracker Trend Report: Trends in UK Equity Capital Markets 2020/21. Since 2020, the junior market has picked up pace, with a significant increase in smaller companies joining AIM. However, aggregate gross proceeds raised decreased by 33% to £278m in 2020, with no companies raising in excess of £50m, rendering Victorian Plumbing a milestone for the market.

These trends will be further explored in our upcoming H1 Equity Capital Markets trend report, which reviews activity and emerging trends in the first half of the year. 

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