REG - Lords Group Trading - Acquisition of A.W. Lumb for £23.1 million

Lords TradingAnnouncement

01/03/2022 07:00

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RNS Number : 1130D  Lords Group Trading PLC  01 March 2022

 For immediate release  1 March 2022

 

 

Lords Group Trading plc

('Lords', the 'Company' or the 'Group')

 

Acquisition of A.W. Lumb for £23.1 million

Extension of Debt Facilities

 

Extending Lords' geographic reach and product range with Northern local market
leader

 

Lords, a leading distributor of building materials in the UK, is pleased to
announce that it is has acquired the business and assets of a leading local
independent builders merchant, A.W. Lumb through the acquisition of the entire
issued share capital of AWLC Limited ('AWLC') for a total consideration of
£23.1 million (the 'Acquisition').  The Acquisition is in line with Lords'
stated strategy at the time of IPO in July 2021. The Acquisition is to be
immediately earnings accretive.

 

Total Acquisition consideration of £23.1 million, payable in cash, consists
of £19.5 million due on completion and deferred consideration of £3.6
million payable in equal annual instalments over the next five years.
Consideration is to be funded from Lords' existing cash resources and debt
facilities.

 

The Acquisition provides the Group with an extension of its product offering
and geographical reach into the North of England. Both key senior management
from A.W. Lumb and its 77 employees will be joining the Group, ensuring
continuity of local knowledge and customer relationships, as well as
continuing the family values core to Lords' success.

 

Established in 1964 and family owned until a management buyout in 2017, A.W.
Lumb is a leading independent builders merchant operating in the North of
England from depots in Dewsbury and Tamworth.  A.W. Lumb has a general
merchanting service, with offerings in building materials, garden landscaping,
timber & joinery and roofing products.  The business also provides a
specialist offering in drylining and insulation to housebuilders.  A.W.
Lumb's customers include several well-known house builders, civil engineering
contractors, local authorities, plasterers and smaller developers.

 

In the year to 30 June 2021, AWLC generated revenues of £43.3 million, EBITDA
of £3.9 million and a profit before tax of £3.8 million.

 

As at 30 June 2021 AWCL had pro forma net assets of £10.1 million, £1.9
million of pro forma net cash and freehold property with a market value of
£4.6 million.

 

Increase in Group Debt Facilities

Alongside the Acquisition, the Group has agreed with its lender, HSBC, to
increase the level of its revolving credit facility from £30.0 million to
£50.0 million.  HSBC has also agreed to increase the Group's invoice
discounting facility from £10.0 million to £20.0 million.

 

This increased debt capacity will provide the Group with additional resources
with which to continue to take advantage of further accretive acquisition
opportunities.

 

Shanker Patel, Chief Executive Officer of Lords, said: "This acquisition
delivers against our strategy of gaining market share through geographic
expansion and product range extension.  Specifically, it gives Lords broader
reach in the North of the country.  A.W. Lumb is highly regarded in its local
markets, respected for its product expertise and superior service levels and
we are delighted to welcome their 77 colleagues and senior management to our
team, who we believe share the same values as Lords.

 

"Furthermore, this acquisition is a major milestone in our growth and supports
our stated ambition to reach £500 million revenue by 2024."

 

The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.  Upon the publication of this announcement
via a Regulatory Information Service, this inside information is now
considered to be in the public domain.

 

- Ends -

 

FOR FURTHER ENQUIRIES:

 

 Lords Group Trading plc                                                     Via Buchanan
 Shanker Patel, Chief Executive Officer                                      Tel: +44 (0) 20 7466 5000
 Chris Day, Chief Financial Officer

 Cenkos Securities plc                                                       Tel: +44 (0)20 7397 8900
 Ben Jeynes / Max Gould / Dan Hodkinson (Corporate Finance)
 Alex Pollen (Sales)

 Buchanan Communications                                                     Tel: +44 (0) 20 7466 5000
 Henry Harrison-Topham / Stephanie Whitmore / Kim Looringh-van Beeck / Kiki  LGT@buchanan.uk.com (mailto:LGT@buchanan.uk.com)
 Norman

 

Notes to editors:

Lords is a specialist distributor of building, plumbing, heating and DIY
goods.  The Group principally sells to local tradesmen, small to medium sized
plumbing and heating merchants, construction companies and retails directly to
the general public.

 

The Group operates through the following two divisions:

 

·       Merchanting: supplies building materials and DIY goods through
its network of merchant businesses and online platform capabilities.  It
operates both in the 'light side' (building materials and timber) and 'heavy
side' (civils and landscaping), through thirty locations in the UK.

 

·       Heating and Plumbing: a specialist distributor in the UK of
heating and plumbing products to a UK network of independent merchants,
installers and the general public.  The division offers its customers an
attractive proposition through a multi-channel offering.  The division
operates over nine locations enabling nationwide next day delivery service.

 

Lords was established over 35 years ago as a family business with its first
retail unit in Gerrards Cross, Buckinghamshire.  Since then, the Group has
grown to a business operating from 39 sites.  Lords aims to become a £500
million turnover building materials distributor group by 2024 as it grows its
national presence.

 

Lords was admitted to trading on AIM in July 2021 with the ticker LORD.L.
For additional information please visit www.lordsgrouptradingplc.co.uk
(http://www.lordsgrouptradingplc.co.uk) .

 

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