REG - Lords Group Trading - Acquisition of Alloway Timber

Lords TradingAnnouncement

01/09/2023 08:45

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RNS Number : 1090L  Lords Group Trading PLC  01 September 2023

 For immediate release  1 September 2023

 

 

Lords Group Trading plc

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

 

Acquisition of Alloway Timber

 

Lords, a leading distributor of building materials in the UK, is pleased to
announce the purchase of Alloway Holdings Limited ('Alloway Timber') for a
total net consideration of £2.25 million (the 'Acquisition').  The
Acquisition is in line with the Group's stated IPO strategy, due to its
complementary geographic position to the Group's growing Merchanting branch
portfolio.

 

Established in 1971, Alloway Timber is an independent family-run merchant
operating from five sites located in the South East of England at Mitcham,
Cheam, Byfleet, Kingston and Putney.  The business specialises in providing
timber and general building supplies and will join the Group's Lords Builders
Merchant network, taking the brand to 17 locations in the South East of
England. The Acquisition is expected to be earnings accretive from 2024
financial year, and will achieve a strong return on capital employed as
synergies are realised and the business financially and operationally matures
in-line with a typical Lords Builders Merchant profile.

 

For year ended 31 December 2022, Alloway Timber delivered £15.9 million of
revenue and c.£(1.0) million of EBITDA.  In the medium term, Lords expect
the Alloway Timber branches to reach the margins achieved by the wider
Merchanting division.

 

The total net vendor consideration is £2.25 million in cash, of which £1.53
million is payable immediately and £0.72 million deferred 12 months from
entry into the sale and purchase agreement, with £0.25 million payable to the
vendor and £0.47 million to HMRC for corporation tax liabilities in Alloway
Timber triggered by the transaction. In addition, the Company will pay down
£1.05 million of Alloway Timber's existing debt, immediately post completion
of the Acquisition. The Acquisition consideration is net of freehold property
disposal of £3.6 million which occurred concurrently with the Acquisition.

 

Shanker Patel, Chief Executive Officer of Lords, said:

 

"We are delighted to announce the successful acquisition of Alloway Timber and
to welcome their 83 colleagues to the Lords Group family.  The acquisition is
complementary to our existing Lords Builders Merchants business with strong
synergies, continued strategic investment in our 3Ps and will increase our
customer base -along with further increasing our geographic presence in the
South East."

 

- 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 and Chief Operating Officer

 Cenkos Securities plc (Nominated Adviser and Joint Broker)      Tel: +44 (0)20 7397 8900
 Ben Jeynes / Max Gould / Dan Hodkinson (Corporate Finance)
 Julian Morse / Henry Nicol (Sales)

 

 Berenberg (Joint Broker)                               Tel: +44 (0)20 3207 7800

 Matthew Armitt / Richard Bootle / Detlir Elezi

 Buchanan Communications                                Tel: +44 (0) 20 7466 5000
 Henry Harrison-Topham / Jamie Hooper / Abby Gilchrist  LGT@buchanan.uk.com (mailto:LGT@buchanan.uk.com)

 

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 31 locations in the UK.

 

·    Plumbing and Heating: a specialist distributor in the UK of plumbing
and heating 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 17
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 48 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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