REG - Likewise Group PLC - Interim results for the six months to 30 June 2024
30/09/2024 07:00
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RNS Number : 1087G Likewise Group PLC 30 September 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR. WITH THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
30 September 2024
Likewise Group plc
("Likewise", the "Company" or the "Group")
Interim results for the six months ended 30 June 2024
Continued growth towards medium term objectives
Likewise Group plc (AIM:LIKE), the fast growing UK floor coverings
distributor, is pleased to announce its unaudited interim results for the six
months ended 30 June 2024 (the "Period" or "H1 2024") and a continued increase
in sales, notwithstanding a prolonged period of challenging market
conditions.
Summary highlights
· Total Sales revenue increased by 6.2% to £70.7m (H1 2023:
£66.6m)
· Continued growth in Likewise Floors sales of 16.8%
· Gross margin increase of 1.1% to 31.1% in H1 2024 (H1 2023:
30.0%)
· Underlying EBITDA(1) of £3.63m (H1 2023: £3.11m)
· Underlying profit from operations of £1.21m (H1 2023: £1.19m)
· Underlying profit before tax(2) of £0.34m (H1 2023: £0.71m)
reflecting the rising cost of interest
· Positive cash generation from Operating Activities of £2.88m (H1
2023: £1.68m)
· Deferred consideration of £4.27m paid in settlement of all
outstanding acquisition obligations
· Interim Dividend of 0.125 pence per share to be paid on 15
November 2024 - a 25% increase on H1 2023 (0.1p per share)
(1) Underlying EBITDA is defined as profit before finance costs, tax,
depreciation, amortisation, separately disclosed items and share based
payments.
(2) Underlying profit before tax is defined as profit before amortisation,
separately disclosed items and share based payments.
H1 2024 highlights
Likewise is pleased to announce further positive progress towards its medium
term objectives during the first six months of 2024.
Despite challenging market conditions and widely publicised unprecedented
events throughout all sectors of the UK flooring industry, Likewise increased
total sales revenue by 6.2% with the organic growth through Likewise Floors
specifically of 16.8% during H1 2024 compared to the corresponding period last
year.
The Group continues to invest in the logistics infrastructure plus extensive
sales and marketing initiatives including the recruitment of 14 additional
Sales Executives in the last twelve months taking the total number to 94.
Notwithstanding the increased investment, particularly in the various Sales
Teams, Underlying Operating Profit of £1.21 million is ahead of the previous
year.
Reflecting the confidence in the future of the Group, the Board proposes to
pay an Interim Dividend of 0.125 pence per Ordinary Share. The interim
dividend will be paid on 15 November 2024
Operations
The Group has developed with support from its key manufacturing partners and
has now further strengthened following additional strategic developments with
other important European manufacturers. The product launches in Q3, and
planned for Q4 2024, are at a significantly higher level than at any time
during our short history and gives us every confidence that we will be able to
continue to grow the business strongly into 2025.
Valley Wholesale Carpets ("Valley") makes an important contribution to Group
profitability and positive Cash Flow. Valley is currently undertaking a number
of initiatives to increase geographical market presence, enlarge product
portfolio into various types of resilient flooring, extensive Point of Sale
& Display Stands and expanding the core Carpet Range. All of which
provides Valley with every opportunity to increase Sales and Profitability
through the excess capacity in the established Logistics Network of Erith,
Derby and Newport.
In Likewise Floors the Glasgow Distribution Hub established in 2023 is now
making a meaningful contribution to the Likewise Logistics Network and
capacity will be increased further in the Spring 2025 to help facilitate the
growth of Likewise Floors in Scotland in addition to England and Wales.
Likewise North and North East are very well established in both Residential
and Commercial Flooring. Their strong relationship with Flooring Retailers and
Contractors provides every opportunity with the extensive product launches
planned throughout the business in Q3 and Q4 2024 and into 2025.
A&A is now operational from its new Logistics Centre in Manchester and
whilst the delay in moving impacted the business in the short term, A&A is
now really well positioned to capitalise on the market opportunities before
them.
Likewise Midlands now has a particularly strong presence in the Central Region
and the Distribution Hub is a key contributor to the Likewise Floors Network.
In Newport South Wales, Likewise Wales formed in January 2024 has now
established itself and will further invest in additional Sales Executives to
expand their presence. The Group is now exploring planning consent to enlarge
the Distribution Centre to become a 4(th) Hub in Likewise Floors in addition
to creating extra capacity for Valley. This will provide the Group with
meaningful additional processing capability from 2026. The project will be
funded through existing facilities and free cash flow.
Floors by Lewis Abbott has just launched its new Collection of Premium Carpet
Products at the recent Harrogate National Flooring Exhibition. Innovative
Displays will be placed into Retailers during Q4 2024, enhancing the business
during this period but more so providing an exciting future into 2025 and
beyond.
Recent management changes at Delta Carpets will allow this semi-national
business to fulfil its potential in Residential Flooring.
The businesses of Likewise South, Likewise London and Likewise South East are
all making good progress in the South of England but still have huge untapped
potential in this very important geographical area.
Likewise Rugs and Matting continues to develop its business in DIY, Garden
Centres, Hardware Stores and General Independent Retailers.
Throughout the businesses of Valley, A&A, Delta, H&V, Floors by Lewis
Abbott and Likewise Floors, the Group has 94 external Sales Executives
visiting Flooring Retailers and Contractors each day to position new Point of
Sale continually increasing the Group's market presence.
The Group is intending to increase its geographical reach into the South West
of England with an additional Logistics Centre for both the Valley and
Likewise businesses.
The current Logistics Network has capacity to comfortably exceed £200 million
Sales Revenue and with limited investment, particularly in the Newport
Distribution Hub can progress much further in 2026 and 2027.
The Group has banking relationships with NatWest, Barclays and HSBC and is
operating well within the facilities provided. In addition, the Group has
£22.0m of freehold property with very limited fixed debt.
The Board would like to thank all Suppliers, Customers, Management, Staff and
Shareholders for their support and contribution to the ongoing development of
Likewise Group.
Dividend
The Board is pleased to announce a 25% increase in the interim dividend
compared to H1 2023, reflecting its commitment to a progressive dividend
policy, and its confidence in the long-term strategy of the Group.
The interim dividend of 0.125 pence per Ordinary Share will be paid on 15
November 2024 to shareholders on the register at the close of business on 11
October 2024, the ex-dividend date being 10 October 2024.
Shareholders can also take advantage of the Dividend Reinvestment Plan
("DRIP") by registering their intentions with the Company's registrar by 25
October 2024.
Outlook
With extensive Sales and Marketing initiatives throughout its businesses, the
Group looks forward to taking advantage of the traditionally busy Autumn
trading period in Q4.
However, the quantum of the upturn in Q4 remains very difficult to predict
given the unprecedented widespread restructuring in the UK flooring industry.
More importantly the Group is strategically well positioned to maximise the
opportunities presented in the medium term and the Board is particularly
confident in 2025, 2026 and beyond.
Tony Brewer, Chief Executive of Likewise Group plc, said:
"The Group remains committed in its ongoing investment to ultimately maximise
future opportunities, however the immediate return is diluted by difficult
market conditions. Therefore, whilst the short term profit aspirations remain
challenging, the Board is absolutely confident that the foundations are being
prepared for a much larger business to achieve the medium term objectives.
With the longstanding relationship with flooring manufacturers and customers,
combined with the flooring product knowledge of the people throughout our
business and the Logistics Infrastructure established over the last three
years, the Group is in an unrivalled position to take huge advantage of the
opportunities before us. Notwithstanding the further progression as consumer
demand and markets return to more normal levels."
For further information, please contact:
Likewise Group plc Tel: +44 (0) 121 817 2900
Tony Brewer, Chief Executive
Zeus (Nominated Adviser and Joint Broker) Tel: +44 (0) 20 3829 5000
Jordan Warburton / David Foreman / James Edis (Investment Banking)
Dominic King / Fraser Marshall (Corporate Broking)
Ravenscroft (Joint Broker) Tel: +44 (0) 1481 732 746
Semelia Hamon (Corporate Finance)
CAUTIONARY STATEMENT
Certain statements included or incorporated by reference within this
announcement may constitute "forward-looking statements" in respect of the
Group's operations, performance, prospects and/or financial condition.
Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words and words of similar meaning as
"anticipates", "aims", "due", "could", "may", "will", "should", "expects",
"believes", "intends", "plans", "potential", "targets", "goal" or "estimates".
By their nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may differ
materially from those expressed or implied by those statements. Accordingly,
no assurance can be given that any particular expectation will be met and
reliance should not be placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. No responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a profit
forecast. This announcement does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase any shares or
other securities in the Group, nor shall it or any part of it or the fact of
its distribution form the basis of, or be relied on in connection with, any
contract or commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other securities of the
Group. Past performance cannot be relied upon as a guide to future performance
and persons needing advice should consult an independent financial adviser.
Statements in this announcement reflect the knowledge and information
available at the time of its preparation.
FINANCIAL OVERVIEW
Likewise is pleased to report its interim financial results for the Period
ended 30 June 2024. In addition to the Statement of Profit or Loss the below
provides an overview of the Underlying performance of the Group.
H1 2024
Underlying Non-Underlying Reported
Revenue 70,745,379 - 70,745,379
Cost of Sales (48,771,849) - (48,771,849)
Gross Profit 21,973,530 - 21,973,530
Other operating income - - -
Administrative expenses (11,381,028) (587,190) (11,968,218)
Distribution costs (9,306,676) (46,248) (9,352,924)
Impairment losses on trade receivables (77,164) - (77,164)
Profit/(loss) from operations 1,208,662 (633,438) 575,224
Finance Income 31,651 - 31,651
Finance costs (905,256) - (905,256)
Loss on revaluation of consideration on acquisition - (18,985) (18,985)
Profit / (loss) before tax 335,057 (652,423) (317,366)
H1 2023
Underlying Non-Underlying Reported
Revenue 66,563,280 - 66,563,280
Cost of Sales (46,619,938) - (46,619,938)
Gross Profit 19,943,342 - 19,943,342
Other operating income - - -
Administrative expenses (10,029,710) (990,064) (11,019,774)
Distribution costs (8,655,326) (30,537) (8,685,863)
Impairment losses on trade receivables (73,264) - (73,264)
Profit/(loss) from operations 1,185,042 (1,020,601) 164,441
Finance Income 21,417 - 21,417
Finance costs (499,520) (176,367) (675,887)
Loss on revaluation of consideration on acquisition - - -
Profit / (loss) before tax 706,939 (1,196,968) (490,029)
Non-underlying items represent exceptional items, which include share based
payment transactions, acquisition costs, amortisation of acquisition
intangibles and strategic project costs. These represent non-GAAP metrics used
by management to appraise the underlying performance of the business.
Revenue & Margin
Notwithstanding the challenges faced by the sector in 2024, Likewise has
continued to benefit from its underlying business growth. Group revenues rose
by 6.2% in the six months leading up to 30 June 2024, reaching £70.7 million
(H1 2023: £66.6 million).
While the more mature businesses within the Group are naturally more sensitive
to broader macroeconomic conditions, the Board is particularly pleased with
the progress of Likewise Floors. The business achieved a 16.8% increase in
sales compared to the same period in 2023, showcasing the strength of its
established trade brand.
In response to current market challenges, the management team has developed a
range of new sales and product initiatives aimed at positioning the Group for
growth as consumer demand improves in the latter half of 2024, and more
importantly, as they look ahead to 2025.
Gross margin improved by 1.1% compared to the previous period, driven
primarily by a favourable mix of sales and stock purchases. Likewise Wales,
launched in January 2024, is performing ahead of expectations and continues to
build on its strong foundation. Similarly, A&A Carpets' relocation to a
new distribution centre in Manchester has enhanced materials handling
capabilities, integration within the broader Likewise network, and provided an
improved working environment for employees, all of which present significant
growth opportunities in the northwest.
The increase in overhead costs reflects the continued investment in the
business and its growth. However, the Board acknowledges that as the
significant investment requirement reduces over time, incremental margin
generation will lead to increasing return on sales.
Underlying profit before tax has decreased compared to the same period last
year due to higher interest costs on the Group's variable-rate financing
facilities. With cash generation expected to increase, the Group continues to
carefully monitor its capital allocation.
Balance Sheet and Cash Flow
The Group maintains a robust balance sheet, supported by £22.0 million in
largely unencumbered freehold property assets.
Net working capital utilisation increased by £0.5 million, primarily driven
by the increase in trade receivables during the period. Inventory growth was
significantly higher in the same period in 2023 due to investments in initial
stock builds for new facilities. Whilst the Group continues to invest in
logistics infrastructure to support its medium-term ambitions, there were no
major capital projects undertaken in H1 2024, leading to reduced cash outflows
for property, plant and equipment investments.
The overall decrease in cash and cash equivalents is largely due to the
Group's £4.3 million settlement of contingent consideration related to the
acquisitions of Valley and Delta in 2022. While the cash settlement occurred
in 2024, the liability had been recognised in the previous year's financial
statements. This payment marks the important milestone of successfully meeting
the Group's final major obligation, aside from its day-to-day commitments.
The Group continues to utilise invoice financing facilities as its primary
source of finance, benefitting from flexibility and relatively low-interest
costs. In addition, the Group holds a modest fixed-term bank loan secured
against one of its properties. The Group also has access to a £1.75 million
Trade Loan Facility in Valley, providing further flexible financing if needed.
As of the reporting date, the Trade Loan Facility was unutilised with further
headroom available on the invoice finance facility. The Group continues to
appraise its financing arrangements but acknowledge the current arrangements
provide suitable funding and flexibility to the Group to allow it to realise
its growth ambitions.
Interim Consolidated Statement of Profit or Loss and Other Comprehensive 6 month period ended 6 month period ended
income (Unaudited) for the period
30 June 30 June
2024 2023
As restated
Notes £ £
Revenue 3 70,745,379 66,563,280
Cost of sales (48,771,849) (46,619,938)
───────────── ─────────────
Gross profit 21,973,530 19,943,342
Administrative expenses (11,968,218) (11,019,774)
Distribution costs (9,352,924) (8,685,863)
Impairment losses on trade receivables (77,164) (73,264)
───────────── ─────────────
Profit from operations 4 575,224 164,441
Finance income 31,651 21,417
Finance costs (905,256) (675,887)
Loss on revaluation of consideration on acquisition (18,985) -
───────────── ─────────────
Loss before tax (317,366) (490,029)
Taxation 5 (11,749) -
───────────── ─────────────
Loss for the financial period (329,115) (490,029)
═════════════ ═════════════
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Revaluation of land and buildings 154,870 154,724
Items that will or may be reclassified to profit or loss:
Exchange losses arising on translation of foreign operations (5,488) (10,147)
───────────── ─────────────
Total comprehensive loss for the financial period (179,733) (345,452)
═════════════ ═════════════
Earnings per share Pence per share Pence per share
Basic loss per share (0.13) (0.20)
6
═════════════ ═════════════
Diluted loss per share 6 (0.13) (0.19)
═════════════ ═════════════
Interim Consolidated Statement of Financial Position (Unaudited) 30 June 31 December
2024 2023
Notes £ £
Assets
Non-current assets
Goodwill 8 5,624,284 5,624,284
Other intangible assets 9 3,811,980 3,938,497
Property, plant and equipment 10 29,229,808 29,442,007
Right-of-use assets 10 17,692,465 18,943,682
────────────── ──────────────
56,358,537 57,948,470
Current assets
Inventories 20,973,125 20,253,799
Trade and other receivables 20,127,286 17,679,986
Cash and cash equivalents 3,232,600 5,709,229
────────────── ──────────────
44,333,011 43,643,014
────────────── ──────────────
Total assets 100,691,548 101,591,484
────────────── ──────────────
Liabilities
Non-current liabilities
Loans and borrowings 11 (2,289,402) (2,342,222)
Lease liabilities 11 (17,002,877) (18,401,597)
Deferred tax liability (1,866,950) (1,866,950)
────────────── ──────────────
(21,159,229) (22,610,769)
────────────── ──────────────
Current liabilities
Trade and other liabilities (28,390,134) (29,765,971)
Loans and borrowings 11 (7,561,724) (5,273,300)
Lease liabilities 11 (4,312,596) (4,373,760)
Provisions 13 (45,103) (45,103)
────────────── ──────────────
(40,309,557) (39,458,134)
────────────── ──────────────
Total liabilities (61,468,786) (62,068,903)
────────────── ──────────────
Net assets 39,222,762 39,522,581
══════════════ ══════════════
Equity
Share capital 14 2,452,835 2,439,645
Share premium 14 17,514,900 17,396,190
Employee Benefit Trust shares 14 (223,636) -
Warrant reserve 128,170 128,170
Share option reserve 15 874,945 903,295
Revaluation reserve 2,756,826 2,626,976
Foreign exchange reserve (52,990) (47,502)
Retained earnings 15,771,712 16,075,807
────────────── ──────────────
Total equity 39,222,762 39,522,581
══════════════ ══════════════
Interim Consolidated Statement of Changes in Equity (Unaudited)
Share Capital £ Share Premium Account £ EBT shares £ Revaluation reserve £ Retained earnings £
Balance at 1 January 2024 2,439,645 17,396,190 - 2,626,976 16,075,807
Loss for the period - (329,115)
- -
-
Other comprehensive income - -
- -
154,870
Share options exercised 13,190 118,710 - - -
Transfer between reserves - (25,020) 25,020
- -
Share option valuation - - -
- -
Purchase of own shares into EBT - - - -
(223,636)
Dividends - - -
- -
Balance at 30 June 2024 2,452,835 17,514,900 (223,636) 2,756,826 15,771,712
Share option reserve £ Warrant reserve £ Foreign exchange reserve £ Total £
Balance at 1 January 2024 903,295 128,170 (47,502) 39,522,581
Loss for the period - - - (329,115)
Other comprehensive income - - (5,488) 149,382
Share options exercised - - - 131,900
Transfer between reserves - - - -
Share option valuation (28,350) - - (28,350)
Purchase of own shares into EBT - - - (223,636)
Dividends - - - -
Balance at 30 June 2024 874,945 128,170 (52,990) 39,222,762
Share Capital £ Share Premium Account £ Revaluation reserve £ Retained earnings £
Balance at 1 January 2023 2,438,360 17,384,625 2,662,384 15,909,763
Loss for the period (490,029)
-
- -
Other comprehensive income - - -
154,724
Share options exercised 225 2,025 - -
Share option valuation - - - -
Dividends - - - -
Balance at 30 June 2023 2,438,585 17,386,650 2,817,108 15,419,734
Share option reserve £ Warrant reserve £ Foreign exchange reserve £ Total £
Balance at 1 January 2023 628,454 128,170 (40,487) 39,111,269
Loss for the period - - - (490,029)
Other comprehensive income - - (10,147) 144,577
Share options exercised - - - 2,250
Share option valuation 114,955 - - 114,955
Dividends - - - -
Balance at 30 June 2023 743,409 128,170 (50,634) 38,883,022
Interim Consolidated Statement of Cash Flows (Unaudited) for the period 6 month period ended 6 month period ended
30 June 30 June
2024 2023
£ £
Cash flows from operating activities
Loss for the period (329,115) (490,029)
Adjustments for:
Depreciation and amortisation 2,651,539 2,255,228
Revaluation of consideration 18,985
Profit on disposal of tangible fixed assets (8,750) (74,021)
Finance income (31,651) (21,417)
Finance costs 905,256 675,887
Taxation 11,749 -
Decrease in provisions - (4,972)
Revaluation of share options (28,350) 114,955
Net foreign exchange loss (5,488) (9,880)
───────────── ─────────────
3,184,175 2,445,751
Movements in working capital:
Increase in inventories (719,326) (2,201,266)
Increase in trade and other receivables (2,696,419) (2,539,302)
Increase in trade and other payables 2,870,239 3,972,387
───────────── ─────────────
Cash flows from operations 2,638,669 1,677,570
Income tax received 241,809 -
───────────── ─────────────
Net cash from operating activities 2,880,478 1,677,570
Cash flow from investing activities
Purchase of property, plant and equipment (477,779) (2,865,150)
Purchase of intangibles (99,830) -
Proceeds from disposal of property, plant and equipment 12,623 88,197
Deferred consideration paid (4,269,500) -
Interest received 31,651 21,417
───────────── ─────────────
Net cash used in investing activities (4,802,835) (2,755,536)
Cash flows from financing activities
Interest paid (310,432) (675,887)
Consideration for new shares 131,900 2,250
Purchase of own shares (223,636) -
Increase in invoice discounting 2,281,995 637,435
Repayment of lease liabilities (2,387,708) (533,601)
Cash received on leased assets - 305,600
Repayment of loans (46,391) (47,029)
───────────── ─────────────
Net cash used in financing activities (554,272) (311,232)
Net decrease in cash and cash equivalents (2,476,629) (1,389,198)
Cash and cash equivalents at the beginning of financial period 5,709,229 5,913,155
───────────── ─────────────
Cash and cash equivalents at end of financial period 3,232,600 4,523,957
Comprising
Cash at bank 3,232,600 4,523,957
───────────── ─────────────
3,232,600 4,523,957
═════════════ ═════════════
Notes to the consolidated (unaudited) financial statements for the period
ended 30 June 2024
1. General information
The Company is a public company limited by shares, registered in England and
Wales and listed on the Alternative Investment Market (AIM). The registered
company number is 08010067 and the address of the registered office is Unit 4
Radial Park, Radial Way, Birmingham Business Park, Solihull, England, B37 7WN.
The principal activity of the Group is the wholesale distribution of
floorcoverings and associated products.
2. Accounting policies
Basis of preparation
The condensed and consolidated interim financial statements for the period
from 1 January 2024 to 30 June 2024 have been prepared in accordance with
International Accounting Standards ('IAS') 34 Interim Financial Reporting as
adopted by the UK and on the going concern basis. They are in accordance with
the accounting policies set out in the statutory accounts for the year ended
31 December 2023 and those expected to be applied for the year ended 31
December 2024 unless otherwise stated below.
Employee Benefit Trusts ("EBTs") are consolidated on the basis that the Group
has control, thus the assets and liabilities of the EBT are included in the
consolidated statement of financial position and shares held by the EBT in the
Company are presented as a deduction from equity.
These interim financial statements do not include all of the information
required in annual financial statements in accordance with UK adopted
International Accounting Standards and should be read in conjunction with the
consolidated financial statements for the year ended 31 December 2023.
The comparatives shown are for the period 1 January 2023 to 30 June 2023, and
at 31 December 2023 and do not constitute statutory accounts, as defined in
section 435 of the Companies Act 2006, but are based on the statutory
financial statements for the year ended 31 December 2023.
A copy of the Group's statutory accounts for the year ended 31 December 2023
has been delivered to the Registrar of Companies and the accounts are
available to download from the Company website at www.likewiseplc.com.
(http://www.likewiseplc.com/)
The financial information is presented in pounds sterling, which is the
functional currency of the Group and rounded to the nearest £. The financial
statements are prepared on the historical cost basis unless otherwise
specified within these accounting policies.
Going concern
The Group continues to utilise invoice financing arrangements in some
subsidiaries and has the option to draw on additional authorised facilities to
support working capital requirements. The Group has operated within these
facilities throughout the period and continues to do so. The directors are
confident that the Group will be able to operate within the finance facilities
available to us.
The Group also has a trade loan facility, providing the Group with flexible
short-term working capital to support its trading activities, of up to
£1.75m. As at the period end, there were no amounts drawn down from the
facility.
The Board have also undertaken assessments of going concern by building a cash
flow model through to December 2025, based on 2023 actuals, 2024 budget and
forecast performance for 2025. These cashflows indicate that the business has
adequate resources to continue to operate for the foreseeable future and
within the current financing arrangements in place.
Overall, given the strength of the Group's balance sheet, cash reserves on
hand, availability of financing arrangements and the strong forecast
performance of the Group, this provides the directors with sufficient
assurance on the Group's ability to continue as a going concern, and therefore
adopt the going concern basis of accounting in preparing the interim financial
statements.
Impact of new international reporting standards
There are no accounting pronouncements which have become effective from 1
January 2024 that have a significant impact on the Group's interim condensed
consolidated financial statements.
Judgements and key sources of estimated uncertainty
The preparation of the interim financial information requires management to
make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing this condensed interim financial information, 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 applied to
consolidated financial statements for the year ended 31 December 2023.
3. Segmental reporting
For the purposes of segmental reporting, the company's Chief Operating
Decision Maker (CODM) is considered to be the Executive Board of Directors.
The Board has not identified any separate operating segments within the
business. The Board reviews revenue and expenses for the business as a whole
and makes decisions about resources and assesses performance based on this
information.
Revenue is derived from continuing operations and arises entirely through the
wholesale of goods. Segmental analysis is therefore not presented.
The Group is not reliant on any one customer and no customer exceeds 10% of
total annual turnover.
The Group generates revenue from both the UK and overseas as detailed below:
6 month 6 month
period ended period ended
30 June 30 June
2024 2023
As restated
£ £
UK 70,602,934 66,381,007
Other EU 142,445 167,623
Rest of the World - 14,650
────────────── ──────────────
70,745,379 66,563,280
══════════════ ══════════════
Seasonal fluctuations
The overall demand for the wholesale of floorcoverings has previously been
higher in the third and fourth quarters of the year. In the previous six month
period to 30 June 2023, revenue equated to 47.7% of the annual revenue
generated.
4. Operating profit
Operating profit is stated after charging: 6 month 6 month
period ended period
ended
30 June 30 June
2024 2023
£ £
Depreciation of property, plant and equipment including right-of-use assets 2,425,192 2,058,794
Amortisation of intangible assets 226,347 196,434
Share based payments (28,350) 114,955
Impairment of inventories 442,574 274,075
Short term lease expense 247,292 196,610
Strategic restructuring and relocation costs 376,165 693,033
Loss from new operations 89,289 -
Muelebeke restructuring cost - 47,122
Exceptional investment in point of sale - 145,424
═══════════ ═══════════
5. Taxation on ordinary activities
Tax is calculated at 25% for the six months ended 30 June 2024 representing
the average annual effective tax rate expected to apply for the full year. No
income tax is expected in the period given the losses previously incurred by
the Group. The tax charge of £11,749 for the period relates to amendments to
prior period charges.
The Group has tax losses available to be carried forward. Due to uncertainty
around timing of the Group's projects, management have not considered it
appropriate to recognise all losses as an asset in the financial statements.
Tax losses of £13,955,031 were available for offset against future taxable
profits at 31 December 2023. A deferred tax asset of £1,318,295 was not
recognised at 31 December 2023 in relation to these losses. In addition, a
deferred tax asset of £162,970 was not recognised in relation to the future
tax benefit on the future exercise of employee share options.
6. Earnings per share
Basic loss per share is based on the loss after tax for the period and the
weighted average number of shares in issue during each period.
6 month 6 month
period ended period ended
30 June 30 June
2024 2023
£ £
Loss attributable to equity holders of the company (329,115) (490,029)
════════════ ══════════
No. No.
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
244,638,112 243,843,314
Adjustments for calculation of diluted earnings per share:
Shares held by EBT (995,408) -
Options 2,497,509 5,268,969
Warrants 2,900,000 2,800,000
Weighted average number of shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share
249,040,213 251,912,283
════════════ ══════════
Pence per share Pence per share
Basic loss per share (pence) (0.13) (0.20)
════════════ ══════════
Diluted loss per share (pence) (0.13) (0.19)
════════════ ══════════
7. Dividends
Dividends were declared for the period to 30th June 2024 totalling £Nil (2023
- £Nil).
8. Goodwill
Goodwill
£
Cost and net book value
At 31 December
2023
5,624,284
────────
At 30 June
2024
5,624,284
════════
The Group tests goodwill annually for impairment, or more frequently if there
are indications that goodwill might be impaired.
The Directors have considered the impact of the current economic uncertainty
on the value of the goodwill but did not deem there to be any impairment
required as at 30 June 2024 (31 December 2023 - £Nil).
9. Other intangible assets
Net book value Delta Carpets Customer Base £ Likewise Floors Customer Base £ Delta Carpets Brand Name £ Likewise Floors Brand Name £ Software Modifi- cations £ Total £
At 31 December 2023 423,790 1,450,272 446,086 1,495,869 122,480 3,938,497
Additions - - - - 99,830 99,830
Amortisation (25,683) (70,745) (27,036) (72,971) (29,912) (226,347)
───────── ─────── ─────── ────── ────── ───────
At 30 June 2024 398,107 1,379,527 419,050 1,422,898 192,398 3,811,980
═════════ ═══════ ═══════ ══════ ══════ ═══════
The Directors have considered the impact of the current economic uncertainty
on the value of other intangibles but did not deem there to be any impairment
required as at 30 June 2024 (31 December 2023 - £Nil).
10. Property, plant and equipment
Land and buildings Other owned assets Right-of-use assets Total
£ £ £ £
Net book value
At 31 December 2023 22,022,872 7,419,135 18,943,682 48,385,689
Additions 25,845 451,934 344,064 821,843
Disposals - (3,873) (11,064) (14,937)
Depreciation (154,870) (686,105) (1,584,217) (2,425,192)
Revaluation 154,870 - - 154,870
───────────── ───────────── ───────────── ─────────────
At 30 June 2024 22,048,717 7,181,091 17,692,465 46,922,273
═════════════ ═════════════ ═════════════ ═════════════
11. Loans and borrowings
Consolidated
30 June 31 December
2024 2023
£ £
Current borrowings - Secured
Bank loans and invoice discounting facility 7,561,724 5,273,300
Lease liabilities 4,312,596 4,373,760
───────────── ─────────────
11,874,320 9,647,060
═════════════ ═════════════
Non-current borrowings - Secured
Bank loans 2,289,402 2,342,222
Lease liabilities 17,002,877 18,401,597
───────────── ─────────────
19,292,279 20,743,819
═════════════ ═════════════
The directors consider that the carrying amount of the invoice discounting
facility and bank loan approximates their fair value.
The invoice discounting facility is secured against the related trade debtor
balances and by a floating charge over the assets of the Group. The invoice
discounting facility is denominated in Sterling. The invoice discounting
facility is held for Likewise Floors Limited and has a fixed service charge of
£18,000 per annum.
Lease liabilities are secured against the assets to which they relate.
Carrying Amount
30 June 31 December
2024 2023
£ £
Amounts repayable under bank loans
Within one year 124,597 118,168
In the second to fifth year inclusive 485,852 462,401
Beyond five years 1,803,550 1,879,821
───────────── ─────────────
2,413,999 2,460,390
═════════════ ═════════════
During 2023 the Company restructured their bank loans resulting in a principal
loan value of £2,495,000 drawn down in July 2023. Repayments commenced in
September 2023 and will continue until July 2038. The loan is secured by a
fixed and floating charge over the Group's assets. The loan carries interest
on a floating rate basis with interest at Bank of England rate plus a margin
of 2.35%.
The loan is at a floating interest rate and exposes the Group to fair value
interest rate risk.
During 2024 the subsidiary company, Valley Wholesale Carpets Limited, extended
the trade loan facility agreement with Barclays Bank Plc. This agreement
provides the company with the facility to drawdown up to a maximum limit of
£1,750,000 available at their request. No funds were drawn down at 30 June
2024.
12. Financial Instruments
The fair value hierarchy groups financial assets and liabilities into three
levels based on the significance of inputs used in measuring the fair value of
the financial assets and liabilities.
The fair value hierarchy has the following levels:
- Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities;
- Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
- Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The only financial instruments the Group holds which are measured at fair
value through the Income Statement (as level 2 above) are forward currency
contracts and, in the prior period, deferred consideration. All other
financial assets and liabilities are held at amortised cost.
The tables below set out the Group's accounting classification of each class
of its financial assets and liabilities.
30 June 31 December
2024 2023
£ £
Financial assets at amortised cost
Trade receivables 14,534,259 12,432,679
Other receivables 2,728,885 2,938,182
Cash and cash equivalents 3,232,600 5,709,229
───────────── ─────────────
20,495,744 21,080,090
═════════════ ═════════════
All of the above financial assets' carrying values are approximate to their
fair values, as at each reporting date disclosed.
30 June 31 December
2024 2023
£ £
Non-current financial liabilities at amortised cost
Bank loans 2,289,402 2,342,222
Lease liabilities 17,002,877 18,401,597
───────────── ─────────────
19,292,279 20,743,819
═════════════ ═════════════
30 June 31 December
2024 2023
£ £
Current financial liabilities at amortised cost
Trade payables 24,574,841 21,638,744
Other payables 515,461 533,997
Accruals 1,460,636 1,462,027
Invoice discounting facility 7,437,127 5,155,132
Bank loans 124,597 118,168
Lease liabilities 4,312,596 4,373,760
Deferred consideration - held at fair value - 4,250,515
───────────── ─────────────
38,425,258 37,532,343
═════════════ ═════════════
All of the above financial liabilities' carrying values are considered by
management to be approximate to their fair values, as at each reporting date
disclosed.
At 30 June 2024, subsidiary companies held time option and forward Euro
contracts totalling €932,624 and time option and forward USD contracts
totalling $4,215,256. These contracts had a fair value of £(35,225) at period
end and crystallise between 1 July 2024 and 31 December 2024.
13. Provisions
Provisions primarily relate to future dilapidation charges expected to be
incurred in respect of the Group's leasehold property portfolio.
14. Share capital
Consolidated and Company 30 June 31 December
Issued and fully paid 2024 2023
No. No.
Ordinary shares of £0.01 each (2023: Ordinary shares of £0.01 each) 245,283,480 243,964,480
═══════════════ ═══════════════
The Company has one class of ordinary share which carry no right to fixed
income.
On 18 March 2024, the Company allotted 1,044,000 new £0.01 shares for
consideration of £0.10 per share, totalling £104,400. These shares were
issued under the Company's SAYE scheme.
On 10 May 2024, the Company allotted 275,000 new £0.01 shares for
consideration of £0.10 per share, totalling £27,500. These shares were
issued under the Company's SAYE scheme.
At the Annual General Meeting of the Company held on 20 June 2024, special
resolutions were passed by members of the Company to authorise the
disapplication of pre-emption rights in respect of shares allotted by the
authority of the Directors of up to 10% of the issued share capital of the
Company. In addition, a special resolution was passed to authorise the
Directors of the Company to purchase own shares up to an aggregate 10% of the
Company's issued share capital, where the Directors believe that it is in the
interests of the Company to do so. The authority granted under each resolution
expires at the earlier of, the end of the next AGM of the Company or 15 months
from the date of the AGM in which the authority was granted. More information
can be found in the Company's AGM notice on 23 May 2024. This can be found on
the company website www.likewiseplc.com/documents-reports-and-presentations.
(http://www.likewiseplc.com/documents-reports-and-presentations.)
At 30 June 2024, the Company held in Trust 995,408 of its own shares with a
nominal value of £9,954 which were purchased for consideration of £223,636.
The shares were purchased at the market value at the date of each transaction.
The Employee Benefit Trust has waived any entitlement to the receipt of
dividends in respect of its holding of the Company's ordinary shares. The
market value of these shares at 30 June 2024 was £141,846. In the current
period 945,408 shares were repurchased and transferred into the Trust.
15. Share-based payments
The Group has a number of share options plans including a Savings-Related
Share Option Plan ("SAYE") for all employees of the Group. In accordance with
the terms of the plan, as approved by shareholders, employees of the Group may
be granted options to purchase ordinary shares. There are no performance
criteria for the SAYE and options are issued to participants in accordance
with HMRC rules. Vesting is conditional on continuity of service.
As at 31 December 2023, 9,584,334 share options remained active. During the
current period no new options were issued and 4,457,790 options lapsed on
employees leaving the Group. During the current period, 1,319,000 options were
exercised as detailed in note 14. The average remaining contractual life of
the remaining 3,807,544 options is approximately 1.5 years.
In addition, as at 31 December 2023, 10,800,000 share options remained active
which were issued under Enterprise Management Incentives (EMIs). There were no
options granted, lapsed or exercised in the period leaving 10,800,000 options
active as at 30 June 2024. The remaining contractual life of these options is
approximately 0.5 years.
In addition, as at 31 December 2023, 4,900,000 share options remained active
which were issued under a Company Share Option Plan ("CSOP"). There were no
options granted, lapsed or exercised in the period leaving 4,900,000 options
active at 30 June 2024. The remaining contractual life of these options is
approximately 2.5 years.
Share options are valued using the Black-Scholes model. The inputs to the
model are the option price and share price at date of grant, expected
volatility (20%), expected dividend rate (0%) and risk free rate of return
(4%). The model has been adjusted for expected behavioural considerations.
The cost of options is amortised to the Statement of Comprehensive Income over
the service life of the option resulting in a credit of £28,350 for the
period (2023 - charge of £114,955). A deferred tax asset has not been
recognised in relation to the charge for share based payments.
16. Retirement benefit plans
Likewise Floors Limited, a subsidiary of the Group, operates a pension scheme
providing benefits based on final pensionable pay. The Scheme is closed to new
members and is closed to future accrual. For pensions earned after 5 April
1997 and for Guaranteed Minimum Pensions earned between 6 April 1988 and 5
April 1997, increases in payment will be in line with CPI rather than RPI.
Revaluations of pensions in deferment are linked to RPI.
The assets of the Scheme are held separately from those of the Group in
trustee-administered funds. The level of contributions is determined by a
qualified actuary on the basis of triennial valuations. The liabilities have
been rolled forward based on data at 31 December 2020.
The latest set of workings and assumptions can be found in the full Likewise
Group Plc financial statements to 31 December 2023. At 31 December 2023, there
was no recognition on the statement of financial position as the pension
scheme assets were in excess of the defined benefit obligation. An updated
valuation could not be obtained at 30 June 2024 and so no further disclosure
has been made in this set of interim financial statements.
17. Restatement of comparatives
Management have restated the prior period comparatives within the subsidiary
companies Valley Wholesale Carpets Limited and Likewise Floors Limited to
ensure that classification of cost of sales, distribution expenses and
administrative expenses are in line with the classifications of Likewise Group
Plc.
The impact of this has been to:
- Decrease revenue by £30,852 from £66,594,132 to £66,563,280
- Decrease cost of sales by £174,415 from £46,794,353 to £46,619,938
- Increase administrative expenses by £652,592 from £10,367,182 to
£11,019,774
- Decrease distribution costs by £509,029 from £9,194,892 to £8,685,863
There have been no amendments to the prior period Statement of Financial
Position or overall loss for the financial period as a result of these
reclassifications.
18. Post balance sheet events
On 5 July 2024, the Company made a dividend payment of £613,209.
On 8 July 2024, the Company allotted 300,000 new £0.01 Ordinary Shares for
consideration of £0.10 per share, totalling £30,000. These shares were
issued under the Company's SAYE scheme.
On 30 August 2024, 100,000 Ordinary Shares of £0.01 each were allotted to W H
Ireland Limited to satisfy the exercise of warrants granted on 24 October
2023. The warrants have been exercised at a price of £0.05 per Ordinary
Share, for an aggregate value of £5,000.
On 6 September 2024, the Company allotted 900,000 new £0.01 Ordinary Shares
for consideration of £0.10 per share, totalling £90,000. These shares were
issued under the Company's EMI scheme.
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