REG - Lords Group Trading - Acquisition of Chiltern Timber Supplies

Lords TradingAnnouncement

03/04/2023 08:00

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RNS Number : 0460V  Lords Group Trading PLC  03 April 2023

 For immediate release  3 April 2023

 

 

Lords Group Trading plc

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

 

Acquisition of Chiltern Timber Supplies

 

Lords, a leading distributor of building materials in the UK, is pleased to
announce the purchase of Chiltern Timber Supplies Limited ('Chiltern Timber')
for a total consideration of up to £1.65 million on a net cash free / debt
free basis (the 'Acquisition').  The Acquisition is in line with the Group's
stated IPO strategy, due to its complementary geographic position to the
Group's existing Merchanting branches, offering product range extension and is
expected to result in EBITDA margin expansion for Lords.

 

Established in 2013, Chiltern Timber is an independent timber merchant
operating from a modern single site in Hemel Hempstead, Hertfordshire.  The
business specialises in providing hardwoods, special timber sections, timber
landscaping products and veneered sheet material. The business also operates a
modern milling facility, allowing it to offer a differentiated service to that
of its competitors.

 

The Group believes that there is strong growth potential and synergies
achievable from Chiltern Timber operating within the Lords business, given the
ability for it to cross sell into the existing Lords customer base, improving
the existing traditional merchant offering as well as through the provision of
overhead optimisation.  The Acquisition is expected to be earning accretive
from completion and achieve a strong return on capital employed.

 

For year ended 31 December 2022, Chiltern Timber delivered £2.6 million of
revenue and £0.25 million of EBITDA.  The total consideration for Chiltern
Timber is up to £1.65 million in cash on a net cash free / debt free basis,
and is to be funded from the Group's existing facilities. The consideration
payable is £1.175 million on signing and up to a further £0.475 million
deferred equally over 12, 24 and 36 months on a contingent basis subject to
Chiltern Timber delivering certain earnings targets.

 

Shanker Patel, Chief Executive Officer of Lords, said: "We are delighted to
announce the successful acquisition of Chiltern Timber and are also really
excited to welcome their ten colleagues to the Lords Group family. The
acquisition is complementary to our existing Lords Builders Merchants business
and will increase our customer base, broaden our product offering and enhance
our UK geographic coverage."

 

- 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 (Nominated Adviser and Joint Broker)  Tel: +44 (0)20 7397 8900
 Ben Jeynes / Max Gould (Corporate Finance)
 Alex Pollen (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 26 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 16
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 42 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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