REG - Lords Group Trading - Trading Update and Notice of Interim Results

Lords TradingAnnouncement

26/07/2022 07:00

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RNS Number : 6852T  Lords Group Trading PLC  26 July 2022

 For immediate release  26 July 2022

 

Lords Group Trading plc

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

 

Trading Update and Notice of Interim Results

 

Lords, a leading distributor of building materials in the UK, is pleased to
provide the following trading update for the six-month period ended 30 June
2022 (the 'period' or 'H1 2022') ahead of the publication of its interim
results on 6 September 2022.

 

Highlights

 

·    Trading in line with market expectations for FY22, being revenue of
£435.0 million (FY21: £363.3 million), adjusted EBITDA of £26.0 million
(FY21: £22.3 million) and adjusted profit before tax(1) of £16.0 million
(FY21: £10.2 million), with positive H1 2022 momentum carried into the
beginning of the second half

 

·    Group revenue for the period increased 19.9% to £214.7 million (H1
FY21: £179.0 million) with the divisional and like for like ('LFL')(2)
breakdown as follows:

 Revenue by division:    H1 2022  H1 2021  % Growth  % LFL Growth

                         £m       £m

 Merchanting             105.9    61.1     73.2%     14.5%
 Plumbing & Heating      108.7    117.9    (7.8)%    (12.5)%
 Total Group             214.7    179.0    19.9%     (3.3)%

 

·    Adjusted EBITDA(3) for the period is expected to be up approximately
33% to c.£14.0m (H1 2021 reported: £10.5 million(4)). Management actions
taken in H1 2022 continue to ensure profitability is upheld in Plumbing &
Heating

 

·    Integration of all five acquisitions since IPO in July 2021 are now
complete and all performing in line with management expectations

 

·    Group remains on track to deliver strategic targets of £500.0
million revenue in 2024 and 7.5% EBITDA margin in the medium term

 

Trading performance and strategic progress

 

Overall Group trading was strong in the first half of the year with total
revenue growth of 19.9%.  This positive momentum has continued in to H2 2022
as the Group continues to execute its strategy, through organic levers
including product range extension, new site openings, and digital and
operational leverage and in executing value added acquisitions.

 

Demand for the Group's Merchanting division has continued to be strong, as
Lords continues to take advantage of its brand's successful positioning as the
local market leaders in premises across the UK.  The strength of the Group's
brand and local market presence has positioned the Group well.

 

Performance in Lords' Plumbing and Heating division ('P&H') has proven
resilient and customer demand remains strong.  Management actions taken in H1
2022 continue to ensure profitability is upheld despite the industry wide
boiler component shortage which management expects to ease during H2 2022.

 

Product range extension allows the Group's brands to secure a greater share of
their customers wallet, whilst also attracting new customers.  During the
first half the Group has added ranges to support the decarbonisation of the UK
housing stock, including heating controls, air source heat pumps and
underfloor heating within its P&H division.

 

The Group is also pursuing new locations for its brands that offer EBITDA
margin accretion and 20%+ return on investment.  During H1 2022 the Group has
delivered the following locations:

 

·    Advance Roofing Supplies, an acquisition completed in Q1 2022, has
now been implanted into Lords Builders Merchants Beaconsfield site, offering
customers a logical product range extension and increasing the returns on that
site

·    George Lines, the Group's specialist civils merchant brand, has
expanded by opening a third location in Horsham

·    Mr Central Heating, our leading multi-channel Plumbing & Heating
brand supplying the installer and end user customer segments, is due to open
its tenth branch in West Bromwich in Q3 2022.

 

Notice of Interim Results

 

There will be a conference call for analysts at 09.00hrs on the day of the
interim results on 6 September 2022, which will be hosted by Shanker Patel
(CEO) and Chris Day (CFO).  Please contact Buchanan at LGT@buchanan.uk.com if
you would like to receive details.

 

For retail investors, the Group will also be presenting its H1 2022 results
via the Investor Meet Company platform and a further announcement detailing
the specific timing for this will be issued in due course.

 

Shanker Patel, Chief Executive Officer of Lords Group Trading plc, said: "As
we complete our first twelve months trading on AIM, it is fantastic to reflect
on the financial and operational progress that Lords has achieved and, on
behalf of the Board, I would like to thank all our colleagues across the UK
for their continued hard work and commitment.  I am also delighted with our
strategic progress in the first half of 2022 and we have a substantial
opportunity to grow the Group's current < 1% market share through bringing
in new customers, a greater share of customer wallet, product range extension,
new geographies, digital capability and valued added acquisitions.

 

"We have demonstrated that we are able to consistently grow our Group revenues
and profitability as we deliver both our organic and inorganic growth
strategies.  Our size, reach and product range are ensuring the strength of
our proposition continues to stand out in our markets despite ongoing
macro-economic uncertainties."

 

Notes:

 

(1) Adjusted PBT (basic) is defined as profits before tax before amortisation
of goodwill.

(2) Like-for-like is defined as revenue growth for the period excluding the
impact of acquisitions and new branch openings

(3) Adjusted EBITDA is defined as earnings before interest, tax, depreciation
and amortisation, share option expense, acquisition costs and exceptional
items, and is stated on an IFRS basis.

4 Adjusted EBITDA for the 6 months ended 30 June 2021 currently expected to be
restated as £11.0 million in the Company's interim results to be published on
6 September 2022.

 

- 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 / Dan Hodkinson (Corporate Finance)
 Alex Pollen (Sales)

 

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

 Matthew Armitt / Richard Bootle / Ciaran Walsh

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

 

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 30 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 15
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 45 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/) .

 

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.

 

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