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RNS Number : 5036D Lords Group Trading PLC 10 September 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.
10 September 2024
Lords Group Trading plc
('Lords', the 'Company' or the 'Group')
Interim Results
Lords (AIM:LORD), a leading distributor of building materials in the UK, today
announces its unaudited Interim Results for the six months ended 30 June 2024
('H1 2024' or the 'Period').
H1 2024 Highlights
· Group revenue of £214.2 million (H1 2023: £222.6 million)
· Group like-for-like(1) revenue decreased by 6.1% due to the
challenging economic backdrop and previously announced market disruption
within Plumbing and Heating relating to the Clean Heat Market Mechanism
('CHMM') deferral
· Gross margin broadly in line with prior period and ahead of FY23
reflecting focus on customer service excellence
· Decisive management actions taken on overhead costs expected to
deliver annualised savings of £2.6 million in FY 2025
· FY 2023 acquisitions successfully integrated and rebranded
· Adjusted EBITDA(2) 16.6% lower at £12.6 million (H1 2023: £15.1
million)
· Plumbing and Heating division ('P&H') continuing to benefit
from the UK's commitment to sustainable living, with sales of Air Source Heat
Pumps up 492%
· Interim dividend of 0.32 pence per share, scaled in line with
earnings per share (H1 2023: 0.67 pence per share)
· Well positioned to deliver operational gearing from a recovery in
the market
Note H1 2024 H1 2023 Change
Revenue £214.2m £222.6m (3.8)%
Gross margin 20.2% 20.4% (20) bps
Adjusted EBITDA 17 £12.6m £15.1m (16.6)%
Adjusted EBITDA margin 5.9% 6.8% (90) bps
Adjusted operating profit 17 £7.1m £10.2m (30.7)%
Adjusted diluted earnings per share 10 1.57p 3.30p (52.4)%
Dividend per share 0.32p 0.67p (52.2)%
Operating profit £4.5m £8.1m (44.4)%
Diluted earnings per share 0.39p 2.28p (82.9)%
Shanker Patel, Chief Executive Officer of Lords, commented:
"Trading conditions have remained challenging throughout the first half of
2024 with like-for-like (LFL) revenue 6.1% lower. The introduction and
subsequent deferral of the Clean Heat Market Mechanism (CHMM) disrupted the
Plumbing and Heating market and we experienced a 15% LFL revenue reduction in
the first quarter, but a stronger second quarter resulted in a resilient first
half with divisional revenue 3.2% down overall.
"In this challenging market, management has remained focused on optimising
capital allocation and operating efficiency, with actions taken on costs
expected to deliver annualised overhead savings of £2.6 million in FY2025.
The Group's resilience and strategy of maintaining gross margin is testament
to our outstanding colleagues and our focus on excellent customer service.
"The Board welcomes the new government's support for the sector and the recent
interest rate reduction which is widely expected to lead to improved
conditions for the UK construction market. The Group's focus on operational
efficiency and working capital management will ensure that we are well
positioned for any market recovery. In the medium term, the Group is well
placed in a highly fragmented and essential repair, maintenance and
improvement ('RMI') market, to grow the Group's market share organically and
through selective, valued-added acquisitions which will become more attractive
as the market returns. We are encouraged by the growth in Renewable product
sales and believe this could be an additional near-term growth lever.
"Whilst the outlook for the Construction sector is beginning to improve, the
Board is not expecting any change to trading conditions in the second half of
2024 and, recognising the important Autumn season ahead, particularly in
Plumbing and Heating, expect that Adjusted EBITDA, will be in line with
management expectations."
FOR FURTHER ENQUIRIES:
Lords Group Trading plc Via Burson Buchanan
Shanker Patel, Chief Executive Officer Tel: +44 (0) 20 7466 5000
Stuart Kilpatrick, Chief Financial Officer
Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker) Tel: +44 (0)20 7220 0500
Ben Jeynes / Dan Hodkinson (Corporate Finance)
Julian Morse / Henry Nicol / Charlie Combe (Sales and ECM)
Berenberg (Joint Broker) Tel: +44 (0)20 3207 7800
Matthew Armitt / Richard Bootle / Detlir Elezi
Burson Buchanan Tel: +44 (0) 20 7466 5000
Henry Harrison-Topham / Stephanie Whitmore / Abby Gilchrist LGT@buchanan.uk.com (mailto:LGT@buchanan.uk.com)
Percentages are based on underlying, not rounded, figures.
(1) Like-for-like sales is a measure of growth in sales, adjusted for new,
divested and acquired locations such that the periods over which the sales are
being compared are consistent.
(2) Adjusted EBITDA is EBITDA (defined as earnings before interest, tax,
depreciation, amortisation and impairment charges) but also excluding
exceptional items, and share-based payments.
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.
Chief Executive Officer's Review
On behalf of the Board, I am pleased to report our Interim Results for the six
months ended 30 June 2024.
Overview
Revenue in the first half of 2024 was 3.8% lower at £214.2 million (H1 2023:
£222.6 million). Like-for-like ('LFL') revenue, which adjusts for branches
that were not part of the Group in the whole of the comparator period, was
6.1% lower than the first half of 2023.
Gross margins were in line with the first half of 2023 at 20.2% (H1 2023:
20.4%) but showed an increase on FY 2023 (20.0%) and FY 2022 (19.7%).
Adjusted EBITDA of £12.6 million (H1 2023: £15.1 million) reflected the
reduction in LFL revenue and the impact of the Clean Heat Market Mechanism
('CHMM') on our Plumbing and Heating division, particularly in the first
quarter, traditionally one of its busiest.
Merchanting
Merchanting revenue was 4.4% lower in the H1 2024 at £104.6 million (H1 2023:
£109.4 million). The Group acquired Chiltern Timber and Alloway Timber during
FY 2023 and after adjusting for their contribution, LFL revenue was 9.3%
lower. Whilst our businesses are primarily focused on the more resilient RMI
sector, brands such as AW Lumb, Hevey and MAP have exposure to the new build
sector which has impacted performance in H1 2024.
Our focus on customer service excellence is demonstrated by a small
improvement in gross margin despite the challenging competitive market.
The division renegotiated the terms of its Park Royal branch lease in the
first half of 2024 due to the landlord's intention to redevelop the property
at the expiry of the lease in 2026. In doing so, it exchanged certainty of
vacant possession for improved terms and flexibility. This resulted in a gain
of £1.7 million in the period with nil rental going forward, allowing the
business flexibility to relocate during a three and half year period following
the agreement.
Alloway Timber, acquired in September 2023 as a business requiring turnaround,
has now been fully integrated into the Group and rebranded as Lords Builders
Merchants ('LBM'). Four of its five sites in the South-East of England have
been fully refurbished, management has been strengthened and greater emphasis
placed on business development. Although we are confident that the steps we
have taken will result in the business contributing positively to profit in
2025, as previously advised, the business has required more attention than we
anticipated, especially in these difficult trading conditions. Similarly,
Chiltern Timber, which we acquired in April 2023, has also been successfully
integrated into LBM and is trading well in relation to the market with sales
growth of 3.2% in H1 2024.
Costs to serve the business were slightly lower on a LFL basis, as inflation
increases were offset by efficiencies and Adjusted EBITDA was 10.2% lower at
£7.6 million (H1 2023: £8.4 million).
Plumbing and Heating
The introduction of the CHMM resulted in price increases from 1 January 2024,
which were passed onto customers. In advance of this, customers stocked up and
our Plumbing and Heating division experienced increased demand in the final
quarter in 2023. This reversed in the first quarter of 2024 and in
traditionally one of the division's stronger quarters, LFL revenue was down on
prior period comparative by 15.1%.
During March 2024, the government deferred the introduction of the CHMM, and
increased administration time was incurred as the manufacturer's price
increases had to be returned. Having seen the destocking hit sales in the
first quarter, the second quarter resumed to more normal trading resulting in
a first half LFL fall of only 3.2% at £109.6 million (H1 2023: £113.2
million).
Gross margin decreased from 14.5% to 13.2% in the period as the market
disruption and manufacturer promotions impacted the mix of boilers sold and
associated heating products.
Overheads were reduced by £0.3 million compared to the first half of 2023 and
Adjusted EBITDA fell by £1.6 million to £5.0 million (H1 2023: £6.6
million) in the period.
Mr Central Heating, our digitally led P&H trade counter business,
continued to develop recent branch openings in Edinburgh and West Bromwich,
with both expected to contribute in line with normal timeframes in the second
half of 2024. With a strong digital proposition and a broad product range,
further selective branch openings will drive organic growth as the market
improves.
Our P&H range recently broadened after signing an exclusive distribution
agreement, with the World's largest boiler manufacturer, Navien, providing
24-hour availability to over 2,500 independent plumbers merchants. In
addition, we are commencing distribution of the Viessmann Climate Solutions'
portfolio of gas boilers, Heat Pumps and commercial heating solutions. In
continuation of our strategy of product group diversification, P&H are
starting to distribute Termotechnik radiators, who make up approximately 30%
of the UK radiator market.
Renewables
The Group supports the initiatives aimed at the decarbonisation of housing
stock and is well placed to serve this market through its branch network in
both divisions. In H1 2024, air source heat pump (ASHP) revenue increased by
492% and related renewable products, including controls, under floor heating
and air conditioning grew strongly. The Group recently agreed an exclusive
distribution agreement with South Korean manufacturer, Clivet, to distribute
its ASHPs. We continue to look for organic and acquisitive opportunities
within the product category where our product knowledge and related system
design can differentiate.
Operational efficiencies
I am proud of my 900 colleagues, who have strived to maintain our excellence
in customer service throughout this challenging period and worked hard to
delivery operational efficiencies that will optimise our financial performance
once the underlying market conditions improve. Our teams achieved improvements
in working capital whilst maintaining high levels of service and reduced
administration costs by c. 2% on a LFL basis, which will benefit operational
gearing in advance of a market recovery.
Strategic development
In addition to the organic opportunities to develop our existing brands into
new geographies, expand their product range and enhance their digital and
direct routes to market, there is a significant consolidation opportunity to
combine independent merchants and distributors within the fragmented UK
building supplies sector where Lords Group Trading has less than 1% market
share. Our selective approach to acquisitions and focus on delivering value
to shareholders combined with tight control of costs and working capital gives
the Board confidence that the Group will benefit from an improvement in market
conditions.
Environmental, social and governance (ESG)
The Group's environmental footprint continues to be a priority for our
management teams. We have increased accountability in the divisions and across
local and regional brands, agreeing reduction plans and incentivised targets.
Emissions data for 2022 and 2023 has now been collated in line with the Task
Force on Climate-related Financial Disclosures ('TCFD') and progress in 2024
includes solar panel installations, hydrotreated vegetable oil fuel trials and
electric forklifts as replacements are required. Our updated environmental
policy was published on our website early in 2024.
As previously reported, Chris Day stepped down from the Board on 17 May 2024
to take up a new opportunity and we thank him for his service. On 4 June
2024, Stuart Kilpatrick joined the Board as Chief Financial Officer.
Outlook
The Board welcomes the new government's support for the sector and the recent
interest rate reduction which is widely expected to lead to improved
conditions for the UK construction market. The Group's focus on operational
efficiency and working capital management will ensure that we are well
positioned for any market recovery. In the medium term, the Group is well
placed in a highly fragmented and essential repair, maintenance and
improvement ('RMI') market, to grow the Group's market share organically and
through selective, valued-added acquisitions which will become more attractive
as the market returns. We are encouraged by the growth in Renewable product
sales and believe this could be an additional near-term growth lever.
Whilst the outlook for the Construction sector is beginning to improve, the
Board is not expecting any change to trading conditions in the second half of
2024 and, recognising the important Autumn season ahead, particularly in
Plumbing and Heating, expect that Adjusted EBITDA, will be in line with
management expectations.
Shanker Patel
Chief Executive Officer
10 September 2024
Financial Review
Our financial objectives during these challenging market conditions have been
to maintain our focus on customer service, maintain or improve gross margins,
maximise our efficiency in delivering our services and to manage working
capital and cash.
Revenue
H1 2024 revenue was 3.8% lower at £214.2 million (H1 2023: £222.6 million),
as businesses acquired in FY 2023 contributed 2.3% to revenue in H1 2024.
In Plumbing and Heating ('P&H'), H1 2024 revenue was 3.2% lower than H1
2023 due to the impact as described above by the uncertainty surrounding the
CHMM, with a stronger second quarter mitigating performance. Merchanting,
which also had a stronger second quarter, was 4.4% behind H1 2023 but after
adjusting for businesses acquired in FY 2023, LFL revenue was 9.3% lower.
Operating performance
Gross margins overall held up well at 20.2% (H1 2023: 20.4%) with improvement
in Merchanting offset by a reduction in P&H as the CHMM led to changes in
product mix within boilers and in ancillary products.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA)
was 16.6% lower at £12.6 million (H1 2023: £15.1 million) due to the effect
of high levels of operational gearing within the business. Costs to serve the
business continue to be tightly managed and after excluding the impact of
businesses acquired during 2023, administrative expenses on a LFL basis were
c. 2% lower. Full time equivalent employees totalled 890 at 30 June 2024, 7%
lower than at 30 September 2023.
Merchanting Plumbing and Heating Group
H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 H1 2023
Revenue (£m) 104.6 109.4 109.6 113.2 214.2 222.6
Adjusted EBITDA (£m) 7.6 8.4 5.0 6.6 12.6 15.1
Adjusted EBITDA margin (%) 7.3% 7.7% 4.5% 5.8% 5.9% 6.8%
Whilst revenue in P&H was resilient, the market disruption referred to
above, impacted gross margin and although overheads were tightly managed,
Adjusted EBITDA margin declined from 5.8% to 4.5% in the period. During
2024, following the redesignation of the local area by the local authorities,
an agreement was negotiated with the landlord at the Park Royal branch in the
Merchanting division, to remove future uncertainty of tenure at that site.
The negotiation resulted in a lease surrender premium of £1.7 million
included within other income in the period, which arises from a commercial
negotiation to balance the benefit of securing the site in the short term
whilst compensating for anticipated disruption and potential loss of trade as
the business looks for a potential alternative location in the next three and
a half years.
Amortisation increased by 15.6% to £6.1 million (H1 2023: £5.3 million) due
to the five sites acquired with Alloway Timber adding to amortisation on right
of use assets. Depreciation was similar to the prior period at £1.2 million
(H1 2023: £1.3 million). Adjusted operating profit was £7.1 million (H1
2023: £10.2 million) and statutory operating profit was £4.5 million (H1
2023: £8.1 million).
Exceptional costs in the period were £0.5 million (H1 2023: £0.2 million)
comprising £0.3 million of redundancy, system and wider integration costs of
businesses previously acquired and £0.2 million relating to deferred
consideration. In the first half of 2023, exceptional items of £0.2 million
related to the cost of business combinations (£0.3 million), partly offset by
a profit on disposal of business of £0.1 million.
Net finance costs
Net finance costs were £3.4 million (H1 2023: £2.5 million), with £0.3
million of the increase due to the higher interest rates in 2024, which were
on average 100bps higher than in 2023. Additionally, the average level of
borrowings was higher in the first half of 2024. The interest expense
associated with the Group's leases was also £0.2 million higher at £1.3
million (H1 2023: £1.1 million) due to the additional Alloway Timber
branches.
Profit before tax and earnings per share
Adjusted profit before tax, which excludes exceptional items, share-based
payments, acquisition related charges, including amortisation of intangible
assets and impairment, was £3.7 million (H1 2023: £7.7 million). Statutory
profit before tax for the period was £1.1 million (H1 2023: £5.6 million).
Adjusted diluted earnings per share was 1.57 pence (H1 2023: 3.30 pence).
Basic diluted earnings per share was 0.39 pence (H1 2023: 2.28 pence).
Dividend
The Board has carefully considered the interests of all of its stakeholders
and based on first half financial performance, has scaled the interim dividend
in line with the change in adjusted earnings per share. Whilst the Board
considers this a prudent approach, its dividend policy through the cycle will
continue to be progressive as the market recovers. The interim dividend of
0.32 pence per ordinary share (H1 2023: 0.67p) will be paid on 11 October 2024
to shareholders on the register at the close of business on 20 September 2024.
The Company's ordinary shares will therefore be marked ex-dividend on 19
September 2024.
Cash flow
The Group typically experiences a seasonal outflow in working capital in the
first half of the year which reverses in the second half. Whilst the Group
made good progress in reducing stock and debtor days, in the first half of
2024, a drop in payables, which were higher in December 2023 due to the market
reaction to the CHMM in Plumbing and Heating, resulted in a net outflow of
£6.7 million (H1 2023: outflow of £16.2 million). Boiler supply issues in
the first half of 2023 exacerbated the seasonal outflow in the first half of
2023. Cash generated by operations was £5.4 million (H1 2023: outflow of
£1.4 million). Investing activities included deferred consideration of £0.5
million (H1 2023: £3.5 million) related to two acquisitions and financing
activities included £1.1 million (H1 2023: £1.1 million) to buy out
non-controlling interests.
Capital expenditure of £2.6 million (H1 2023: £4.4 million) in the period
included £0.9 million (H1 2023: £2.2 million) in scheduled payments for the
George Lines branch near Heathrow. Other significant capex included £0.5
million to refurbish the Alloway branches acquired in 2023, and the rollout of
a new ERP system within the Plumbing and Heating division.
After financing and investing activities, net debt (defined as borrowings less
cash and cash equivalents, and before recognising lease liabilities) increased
by £7.8 million (H1 2023; £18.6 million) since the end of the year to £36.3
million (H1 2023: £38.0 million).
Debt financing and liquidity
The Group has banking facilities with a syndicate of HSBC, NatWest and BNP
Paribas. The facilities comprise a £70.0 million revolving credit facility
('RCF') and a £25.0 million receivables financing facility. Entered into in
April 2023, the RCF includes a £20.0 million accordion option and both
facilities run for an initial three years, with two one-year extension
options. The accordion and extension options are subject to lender approval.
In May 2024, the Group exercised its extension option under the banking
facilities agreement such that the RCF has now been extended from its initial
three-year term by 12 months to expire on 5 April 2027.
The Group had substantial headroom of £47.5 million (H1 2023: £49.6 million)
within its debt facilities at the period end, and a further £11.9 million of
accessible cash (H1 2023: £7.4 million).
Working capital
Inventories decreased by £7.9 million compared to 30 June 2023 and by £2.0
million since year end. The reduction reflects the continued focus on
inventory optimisation, but also industry wide boiler supply issues described
earlier at 30 June 2023. The 30 June 2024 balance equated to 46 days of stock
(30 June 2023: 53 days).
Current trade and other payables at £79.6 million were £3.4 million higher
than 30 June 2023 (£76.2 million), representing trade creditor days of 49 (30
June 2023: 45 days). Current trade and other receivables of £69.2 million
remained broadly in line with the prior year balance of £69.0 million,
resulting in trade debtor days of 38 relative to 37 at 30 June 2023.
Non-current assets
Intangible assets of £44.8 million were £1.4 million lower than at 31
December 2023 (£46.2 million). Software additions of £0.5 million in
relation to an ERP upgrade in the Plumbing and Heating division, were offset
by the amortisation charge of £1.8 million (H1 2023: £1.7 million).
Leases that are recorded on the balance sheet as right of use assets, with a
corresponding lease liability, relate to properties, cars and distribution
vehicles. The right-of-use asset in the balance sheet at 30 June 2024 was
£42.5 million (31 December 2023: £47.4 million). The reduction comprises
amortisation for the period of £4.3 million, and a £2.2 million reduction as
a result of the lease surrender agreement at the Park Royal site within the
Merchanting division.
Non-current liabilities
Trade and other payables relate to deferred consideration liabilities. The
liability has reduced since the year end by £1.7 million reflecting the
scheduled payments on the acquisition of the non-controlling interest of Hevey
Building Supplies and in relation to the acquisition of AW Lumb (£0.5
million).
Stuart Kilpatrick
Chief Financial Officer
10 September 2024
Consolidated statement of comprehensive income
For the six months ended 30 June 2024
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Revenue 214,150 222,552 462,601
Cost of sales (170,929) (177,153) (370,238)
Gross profit 43,221 45,399 92,363
Other operating income 2,069 349 766
Distribution expenses (2,231) (2,174) (5,057)
Administrative expenses (30,494) (28,517) (61,252)
Adjusted EBITDA 17 12,565 15,057 26,820
Depreciation (1,195) (1,294) (2,610)
Amortisation of right-of-use-assets (4,283) (3,538) (7,699)
Adjusted Operating Profit 17 7,087 10,225 16,511
Share based payments (301) (211) (513)
Exceptional items 7 (484) (165) (2,849)
Amortisation of acquired intangibles (1,814) (1,736) (3,515)
Impairment charge - - (501)
Operating profit 4,488 8,113 9,133
Finance income 142 99 196
Finance expense 8 (3,523) (2,623) (6,356)
Profit before taxation 1,107 5,589 2,973
Taxation 9 (355) (1,699) (1,273)
Profit for the period 752 3,890 1,700
Other comprehensive income - - --
Total comprehensive income 752 3,890 1,700
Total comprehensive income for the period attributable to:
Owners of the parent company 651 3,839 1,382
Non-controlling interests 101 51 318
752 3,890 1,700
Earnings per share
Basic earnings per share (pence) 10 0.39 2.35 0.84
Diluted earnings per share (pence) 10 0.39 2.28 0.82
The results for the period arise solely from continuing activities.
The condensed financial statements should be read in conjunction with the
accompanying notes.
Consolidated statement of financial position
As at 30 June 2024
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
Note £'000 £'000 £'000
Non-current assets
Intangible assets 11 44,845 44,600 46,205
Property, plant and equipment 12 20,479 20,707 20,233
Right-of-use assets 13 42,510 42,301 47,364
Other receivables 192 337 200
Investments 180 30 180
108,206 107,975 114,182
Current assets
Inventories 47,323 55,184 49,292
Trade and other receivables 69,195 69,029 81,171
Cash and cash equivalents 11,881 7,409 19,811
128,399 131,622 150,274
Total assets 236,605 239,597 264,456
Current liabilities
Trade and other payables (79,649) (76,205) (98,915)
Borrowings 14 (9,851) (6,334) (9,507)
Lease liabilities 15 (7,663) (9,289) (7,815)
Current tax liabilities (568) (2,032) (7)
Total current liabilities (97,731) (93,860) (116,244)
Non-current liabilities
Trade and other payables (2,638) (6,847) (5,917)
Borrowings 14 (37,686) (39,080) (38,239)
Lease liabilities 15 (40,010) (37,273) (43,953)
Other provisions (1,427) (1,353) (1,565)
Deferred tax (7,019) (7,085) (7,373)
Total non-current liabilities (88,780) (91,638) (97,047)
Total liabilities (186,511) (185,498) (213,291)
Net assets 50,094 54,099 51,165
Equity
Share capital 829 828 828
Share premium 28,412 28,293 28,293
Merger reserve (9,980) (9,980) (9,980)
Share-based payment reserve 1,127 707 1,009
Retained earnings 27,976 32,889 29,386
Equity attributable to owners of the parent company 48,364 52,737 49,536
Non-controlling interests 1,730 1,362 1,629
Total equity 50,094 54,099 51,165
Consolidated statement of changes in equity
For the six months ended 30 June 2024
Called up Share Merger reserve Share‑ based Retained earnings Equity attributable to owners of parent company Non- Total
share capital premium payments reserve controlling interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 January 2024 828 28,293 (9,980) 1,009 29,386 49,536 1,629 51,165
Profit for the financial period and total comprehensive income - - - - 651 651 101 752
Share-based payments - - - 303 - 303 - 303
Exercise of share-based-payments - - - (185) 185 - - -
Share capital issued 1 119 - - - 120 - 120
Put and call options over non-controlling interests - - - - (44) (44) - (44)
Dividends paid - - - - (2,202) (2,202) - (2,202)
As at 30 June 2024 (unaudited) 829 28,412 (9,980) 1,127 27,976 48,364 1,730 50,094
Called up Share Merger reserve Share-based payments reserve Retained earnings Equity attributable to owners of parent company Non- Total
share capital premium controlling interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 January 2023 813 28,293 (9,980) 497 31,237 50,860 1,328 52,188
Profit for the financial period and total comprehensive income - - - - 3,839 3,839 51 3,890
Share-based payments - - - 212 - 212 - 212
Share capital issued 15 - - - - 15 - 15
Put and call options over non-controlling interests - - - - 15 15 - 15
Deferred tax on options (2) - (2) - (2)
Capital reorganisation - - - - - - (17) (17)
Dividends paid - - - - (2,202) (2,202) - (2,202)
As at 30 June 2023 (unaudited) 828 28,293 (9,980) 707 32,889 52,737 1,362 54,099
Called up Share Merger reserve Share‑ based Retained earnings Equity attributable to owners of parent company Non- Total
share capital premium payments reserve controlling interests equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 January 2023 813 28,293 (9,980) 497 31,237 50,860 1,328 52,188
Profit for the financial period and total comprehensive income - - - - 1,382 1,382 318 1,700
Share-based payments - - - 512 - 512 - 512
Share capital issued 15 - - - - 15 - 15
Put and call options over non-controlling interests - - - - 78 78 - 78
Corporation tax on options - - - - 515 515 - 515
Deferred tax on options - - - - (515) (515) - (515)
Capital repayment - - - - - - (17) (17)
Dividends paid - - - - (3,311) (3,311) - (3,311)
As at 31 December 2023 (audited) 828 28,293 (9,980) 1,009 29,386 49,536 1,629 51,165
Consolidated statement of cash flows
For the six months ended 30 June 2024
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash flows from operating activities
Profit before taxation 1,107 5,589 2,973
Adjusted for:
Depreciation of property, plant and equipment 1,195 1,294 2,610
Amortisation of intangibles 1,814 1,736 3,515
Amortisation of right-of-use assets 4,283 3,538 7,699
Impairments of property plant and equipment - - 77
Impairments of right-of-use assets - - 424
Profit on disposal of property, plant and equipment - (27) (368)
Profit on sale of business - (103) (119)
Write off of investment - 55 56
Share-based payment expense 301 211 513
Finance income (142) (99) (196)
Finance expense 3,523 2,623 6,356
Operating cash flows before movements in working capital 12,081 14,817 23,540
Decrease / (increase) in inventories 1,969 (1,601) 5,199
Decrease / (increase) in trade and other receivables 11,984 2,108 (8,067)
(Decrease) / increase in trade and other payables (20,611) (16,749) 2,112
Cash generated by operations 5,423 (1,425) 22,784
Corporation tax received / (paid) 127 (1,435) (3,124)
Net cash inflow/ (outflow) from operating activities 5,550 (2,860) 19,660
Cash flows from investing activities
Purchase of intangible assets (454) (128) (734)
Business acquisitions (net of cash acquired) - (696) (5,150)
Deferred consideration paid (550) (3,467) (3,116)
Purchase of property, plant and equipment (2,184) (4,301) (4,905)
Purchase of investments - - (150)
Proceeds on disposal of property, plant and equipment 58 264 4,160
Cash received on sale of business - 340 340
Interest received 142 99 196
Net cash outflow from investing activities (2,988) (7,889) (9,359)
Cash flows from financing activities
Principal paid on lease liabilities (3,753) (2,702) (6,912)
Interest paid on lease liabilities (1,325) (1,073) (2,340)
Issue of share capital - 15 15
Dividends (2,202) (2,202) (3,311)
Purchase of non-controlling interest of Hevey (1,063) (1,063) (2,126)
Capital repayment to non-controlling interests - (17) (17)
Proceeds from borrowings 20,891 9,980 109,116
Repayment of borrowings (21,100) - (97,853)
Bank interest paid (1,548) (1,395) (2,917)
Interest paid on invoice discounting facilities (392) (45) (805)
Net cash (outflow) / inflow from financing activities (10,492) 1,498 (7,150)
Net (decrease) / increase in cash and cash equivalents (7,930) (9,251) 3,151
Cash and cash equivalents at the beginning of the period 19,811 16,660 16,660
Cash and cash equivalents at the end of the period 11,881 7,409 19,811
( )
Notes to the financial statements
For the six months ended 30 June 2024
1. General information
Lords Group Trading PLC is a public limited company incorporated in England
and Wales. The registered office is 2nd Floor 12-15 Hanger Green, London W5
3EL. 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.
2 Basis of preparation
These interim financial statements have been prepared in accordance with IAS
34 "Interim Financial Reporting" as contained in UK-adopted International
Accounting Standards. These interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Accordingly, this report should be read in conjunction with the annual
report for the year ended 31 December 2023 (the "Annual Financial Statements")
which was prepared in accordance with UK-adopted International Accounting
Standards.
The Annual Financial Statements constitute statutory accounts as defined in
section 434 of the Companies Act 2006 and a copy of these statutory accounts
has been delivered to the Registrar of Companies. The auditor's report on the
Annual Financial Statements was not qualified, did not include a reference to
any matters to which the auditors drew attention by way of emphasis without
qualifying the report and did not contain statements under section 498(2) or
(3) of the Companies Act 2006. The accounting policies adopted in the
preparation of the interim financial statements are consistent with those used
to prepare the Group's consolidated financial statements for the year ended 31
December 2023 and the corresponding interim reporting period.
These interim financial statements have been prepared on a going concern
basis, under the historical cost convention.
These interim financial statements are presented in Pound sterling (£), which
is also the functional currency of the Company. These interim financial
statements have been approved by the Board of Directors.
3.Accounting policies
Going concern
The Group is well funded with strong support from stakeholders. The Group
operates strong cash flow management and forecasting enabling cash receipts
and payments to be balanced in accordance with trading levels. The Board of
Directors has completed a rigorous review of the Group's going concern
assessment and its cash flow liquidity which included:
· The Group's cash flow forecasts and revenue projections for all
subsidiaries;
· Reasonably possible changes in trading performance, including a
number of downside scenarios;
· Reviewing the committed facilities available to the Group and the
covenants thereon; and,
· Reviewing the Group's policy towards liquidity and cash flow
management.
The Group has banking facilities of £95.0 million available to it until 5
April 2027 and on 30 June 2024 had headroom against the facilities of £47.5
million and cash of £11.9 million.
After reviewing the Group's forecasts and risk assessments and making other
enquiries, the Board has formed the judgement at the time of approving the
interim financial statements that there is a reasonable expectation that the
Group and subsidiaries have adequate resources to continue in operational
existence until at least 5 April 2027.
Taxation
Taxes on income in the interim periods are accrued using the tax rate that
would be applicable to expected total annual profit or loss.
4. Critical accounting judgements and estimates
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The preparation of financial information in compliance with UK-adopted
International Accounting Standards requires the use of certain critical
accounting estimates. It also requires Group management to exercise judgement
and use assumptions in applying the Group's accounting policies. The resulting
accounting estimates calculated using these judgements and assumptions will,
by definition, seldom equal the related actual results but are based on
historical experience and expectations of future events. Management believe
that the estimates utilised in preparing the financial information are
reasonable.
Key accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
In preparing the condensed interim financial statements, the Board considers
both quantitative and qualitative factors in forming its judgements, and
related disclosures, and are mindful of the need to best serve the interests
of its stakeholders and to avoid unnecessary clutter borne of the disclosure
of immaterial items. In making this assessment the Board considers the nature
of each item, as well as its size, in assessing whether any disclosure
omissions or misstatements could influence the decisions of users of the
condensed interim financial statements.
4.1 Key accounting judgements
Recognition of legal and regulatory provisions
A key area of judgement applied in the preparation of these financial
statements is determining whether a present obligation exists and where one
does, in estimating the probability, timing and amount of any outflows. In
determining whether a provision needs to be made and whether it can be
reliably estimated, the Group consults relevant professional experts and
reassess the Group's judgements on an ongoing basis as facts change. In the
early stages of legal and regulatory matters, it is often not possible to
reliably estimate the outcome and in these cases the Group does not provide
for their outcome but instead include further disclosures outlining the
matters within its contingent liabilities note. See note 18 for contingent
liabilities.
Assessment of who has the risk and reward of ownership of non-controlling
interests with put and call options
A key area of judgement applied in the preparation of these financial
statements is determining whether the risk and rewards of ownership reside
with the non-controlling interests or the Group when an acquisition has put
and call options.
Where the pricing is at a variable price, the Group assesses the risks and
rewards reside with the non-controlling interests. This is because the
exposure to any increase or decrease in the value of the business resides with
the non-controlling interest, as they will either retain the investment
indefinitely (if neither party exercises) or they can recover the fair value
of the business through the exercise price.
Where the exercise price is a fixed amount (or an amount that varies only for
the passage of time), then the risks and rewards reside with the Group. This
is because once the put and call become exercisable, one party will be
incentivised to exit because they benefit from doing so.
4.2 Key accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are addressed below.
Useful economic lives of intangible and tangible assets
Annual amortisation and depreciation charge for intangible and tangible assets
is sensitive to changes in the estimated useful economic lives and residual
values of the assets. The useful economic lives and residual values are
re-assessed annually. They are amended when necessary to reflect current
estimates, based on cash generating unit performance, technological advances,
future investments, economic utilisation and the physical condition of the
assets.
Fair value of goodwill and intangible assets
The fair value of customer relationship assets and trade names separately
acquired through business combinations involved the use of valuation
techniques and the estimation of future cash flows to be generated over
several years. The estimation of the future cash flows requires a combination
of assumptions including assumptions for customer attrition rate, sales
growth, EBIT and discount rates. The relief from royalty rate is the value
that would be obtained by licencing trade names out to a third party, as a
percentage of sales.
Inventories
The Group carries significant levels of inventory and key judgments are made
by management in estimating the level of provisioning required for slow moving
inventory. Provision estimates are forward looking and are formed using a
combination of factors including historical experience, management's knowledge
of the industry, group discounting and sales pricing. Management use a number
of internally generated reports to monitor and continually re-assess the
adequacy and accuracy of the inventory provision.
5. Segmental analysis
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 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
fifteen locations enabling nationwide next day delivery service.
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Maker (CODM). The CODM, who
is responsible for allocating resources and assessing performance of the
Operating segments, has been identified as the Board of directors of the
Group. The Group will provide information to the CODM on the basis of products
and services; being the sale and distribution of plumbing and heating goods,
and the sale and distribution of all other merchanting services.
All of the Group's revenue was generated from the sale of goods in the UK for
both periods. No one customer makes up 10% or more of revenue in any period.
Plumbing and
Heating Merchanting Total
Six months to 30 June 2024 £'000 £'000 £'000
Revenue 109,596 104,554 214,150
Gross profit 14,492 28,729 43,221
Adjusted EBITDA 4,981 7,584 12,565
Depreciation (272) (923) (1,195)
Amortisation of right-of-use-assets (1,328) (2,955) (4,283)
Adjusted Operating Profit 3,381 3,706 7,087
Share-based payments (110) (191) (301)
Exceptional items (64) (420) (484)
Amortisation of acquired intangibles (634) (1,180) (1,814)
Operating profit 2,573 1,915 4,488
Finance income 142
Finance costs (3,523)
Profit before taxation 1,107
Taxation (355)
Profit for the period 752
Additions to non-current assets 1,452 2,102 3,554
Plumbing and
Heating Merchanting Total
Six months to June 2023 £'000 £'000 £'000
Revenue 113,167 109,385 222,552
Gross profit 16,367 29,032 45,399
Adjusted EBITDA 6,609 8,448 15,057
Depreciation (216) (1,078) (1,294)
Amortisation of right-of-use-assets (1,324) (2,214) (3,538)
Adjusted Operating Profit 5,069 5,156 10,225
Share based payments (73) (138) (211)
Exceptional items (89) (76) (165)
Amortisation of acquired intangibles (589) (1,147) (1,736)
Operating profit 4,318 3,795 8,113
Finance income 99
Finance costs (2,623)
Profit before taxation 5,589
Taxation (1,699)
Profit for the period 3,890
Additions to non-current assets 3,462 12,126 15,588
Plumbing and
Heating Merchanting Total
Year to 31 December 2023 £'000 £'000 £'000
Revenue 247,667 214,934 462,601
Gross profit 33,234 59,129 92,363
Adjusted EBITDA 12,860 13,960 26,820
Depreciation (485) (2,125) (2,610)
Amortisation of right-of-use-assets (2,632) (5,067) (7,699)
Adjusted Operating Profit 9,743 6,768 16,511
Share based payments (156) (357) (513)
Exceptional items (838) (2,011) (2,849)
Amortisation of acquired intangibles
Exceptional items (1,183) (2,332) (3,515)
Impairment charge - (501) (501)
Operating profit 7,566 1,567 9,133
Finance income 196
Finance costs (6,356)
Profit before taxation 2,973
Taxation (1,273)
Profit for the period 1,700
Additions to non-current assets 5,281 28,670 33,951
6. Share based payments
Share based payments relate to the fair value, at the date of the grant, of
share-based payments to the directors and employees which are expensed in the
profit and loss on a straight-line basis over the vesting period, with the
corresponding credit going to the share-based payment reserve.
7. Exceptional items
Exceptional items are presented separately as one-off costs that are unlikely
to reoccur or costs outside normal business trading.
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Group simplification and restructuring costs 305 - 594
Stock provisioning/ theft - - 1,382
Profit on disposal of Lords at Home Ltd - (103) (119)
Costs of business combinations 27 179 936
Retention employment costs on acquisitions 152 89 219
National insurance recovery - - (13)
Reduction in contingent consideration - - (150)
484 165 2,849
The Group continued its reorganisation activities following the hive up of its
subsidiaries in 2023. These activities include redundancy and other costs of
integrating the businesses. The activities in 2024 included the hive up of AW
Lumb Northern and AW Lumb Midlands into parent entity AW Lumb & Co. The
cost of such exercises amounted to £305,000.
The costs associated with the business combinations including costs associated
with other potential acquisitions which will not occur or had not occurred
before the balance sheet date amount to £27,000. Where the Group includes
retention payments on its acquisitions for key staff, the cost of these
retentions is expensed over the period that it relates to. The costs in the
period were £152,000.
8. Finance expense
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Bank loans and overdrafts 1,719 1,395 2,917
Invoice discounting facilities 392 45 805
Unwinding of deferred consideration and call and put options 54 84 236
Interest on dilapidation provision 33 26 58
Lease liabilities 1,325 1,073 2,340
3,523 2,623 6,356
9. Taxation
Tax expense is recognised based on management's estimate of the weighted
average effective annual income tax rate expected for the full financial year.
The estimated average annual rate for the year ended 31 December 2024 is 32.0%
(2023: 30.4%).
10. Earnings per share
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
Basic earnings per share
Earnings from continuing activities (pence) 0.39 2.35 0.84
Diluted earnings per share
Earnings from continuing activities (pence) 0.39 2.28 0.82
Weighted average shares for basic earnings per share 165,641,697 163,446,193 164,340,814
Number of dilutive share options 472,046 4,636,633 3,750,887
Weighted average number of shares for diluted earnings per share 166,113,742 168,082,826 168,091,701
Earnings attributable to the equity holders of the parent (£'000) 651 3,839 1,382
The Group has also presented adjusted earnings per share. Adjusted earnings
per share have been calculated using earnings attributable to shareholders of
the parent company, Lords Group Trading PLC, adjusted for the after-tax effect
of exceptional items (see note 7), share based payments, amortisation of
intangible assets and impairments as the numerator.
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Earnings attributable to the equity holders of the parent 651 3,839 1,382
Add back / (deduct):
Exceptional items 484 165 2,849
Share-based payments 301 211 513
Amortisation of intangible assets 1,814 1,736 3,515
Impairments - - 501
Less tax impact of adjustments (650) (402) (1,617)
Adjusted earnings 2,600 5,549 7,143
Adjusted basic earnings per share
Earnings from continuing activities (pence) 1.57 3.39 4.35
Adjusted diluted earnings per share
Earnings from continuing activities (pence) 1.57 3.30 4.25
11. Intangible assets
Software Customer relationships Trade names Goodwill Total
£'000 £'000 £'000 £'000 £'000
Six months ended 30 June 2024 (unaudited)
Opening net book value 1,604 23,550 2,617 18,434 46,205
Additions 454 - - - 454
Amortisation charge (160) (1,481) (173) - (1,814)
Closing net book value 1,898 22,069 2,444 18,434 44,845
At 30 June 2024
Cost 2,897 34,722 3,741 18,434 59,794
Accumulated amortisation and impairment (999) (12,653) (1,297) - (14,949)
Net book value 1,898 22,069 2,444 18,434 44,845
Six months ended 30 June 2023 (unaudited)
Opening net book value 1,112 25,316 2,607 16,296 45,331
Additions 128 - - - 128
Acquired through business combinations - - 350 527 877
Amortisation charge (102) (1,466) (168) - (1,736)
Closing net book value 1,138 23,850 2,789 16,823 44,600
At 30 June 2023
Cost 1,837 33,555 3,741 16,823 55,956
Accumulated amortisation and impairment (699) (9,705) (952) - (11,356)
Net book value 1,138 23,850 2,789 16,823 44,600
Year ended 31 December 2023 (audited)
Opening net book value 1,112 25,316 2,607 16,296 45,331
Additions 734 - - - 734
Acquired through business combinations - 1,167 350 2,138 3,655
Amortisation charge (242) (2,933) (340) - (3,515)
Closing net book value 1,604 23,550 2,617 18,434 46,205
At 31 December 2023
Cost 2,443 34,722 3,741 18,434 59,340
Accumulated amortisation and impairment (839) (11,172) (1,124) - (13,135)
Net book value 1,604 23,550 2,617 18,434 46,205
12. Property, plant and equipment
Land and buildings Land and building leasehold improvements Plant and Machinery Motor vehicles Fixtures, fittings and equipment Office equipment Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Six months ended 30 June 2024 (unaudited)
Opening net book value 12,975 3,064 1,212 646 1,583 753 20,233
Additions - 724 515 45 173 42 1,499
Disposals - - - (55) - (3) (58)
Depreciation charge (125) (421) (207) (38) (245) (159) (1,195)
Closing net book value 12,850 3,367 1,520 598 1,511 633 20,479
At 30 June 2024
Cost 13,539 8,195 3,476 904 4,510 1,742 32,366
Accumulated depreciation and impairment (689) (4,828) (1,956) (306) (2,999) (1,109) (11,887)
Net book value 12,850 3,367 1,520 598 1,511 633 20,479
Six months ended 30 June 2023 (unaudited)
Opening net book value 6,962 2,542 1,451 832 1,275 585 13,647
Additions 6,280 657 484 244 383 313 8,361
Disposals (229) - - (8) - - (237)
Acquired through business combinations 153 - 38 39 - - 230
Depreciation charge (145) (305) (302) (160) (223) (159) (1,294)
Closing net book value 13,021 2,894 1,671 947 1,435 739 20,707
At 30 June 2023
Cost 13,487 6,909 3,095 1,472 3,845 1,571 30,379
Accumulated depreciation and impairment (466) (4,015) (1,424) (525) (2,410) (832) (9,672)
Net book value 13,021 2,894 1,671 947 1,435 739 20,707
Year ended 31 December 2023 (audited)
Opening net book value 6,962 2,542 1,451 832 1,275 585 13,647
Additions 6,494 1,077 211 85 735 373 8,975
Disposals (3,838) - (12) (34) - - (3,884)
Acquired through business combinations 3,600 142 190 38 140 72 4,182
Impairment - (7) (14) - (43) (13) (77)
Depreciation charge (243) (690) (614) (275) (524) (264) (2,610)
Closing net book value 12,975 3,064 1,212 646 1,583 753 20,233
At 31 December 2023
Cost 13,539 7,471 2,962 1,286 4,337 1,703 31,298
Accumulated depreciation and impairment (564) (4,407) (1,750) (640) (2,754) (950) (11,065)
Net book value 12,975 3,064 1,212 646 1,583 753 20,233
13. Right-of-use-assets
Leasehold Plant and Motor
property equipment vehicles Total
£'000 £'000 £'000 £'000
Six months ended 30 June 2024 (unaudited)
Opening net book value 39,252 1,743 6,369 47,364
Additions 360 - 1,241 1,601
Lease modifications (2,172) - - (2,172)
Amortisation charge (2,405) (396) (1,482) (4,283)
Closing net book value 35,035 1,347 6,128 42,510
At 30 June 2024
Cost 53,575 3,930 10,715 68,220
Accumulated amortisation and impairment (18,540) (2,583) (4,587) (25,710)
Net book value 35,035 1,347 6,128 42,510
Six months ended 30 June 2023 (unaudited)
Opening net book value 34,015 2,381 2,572 38,968
Additions 1,630 156 3,466 5,252
Acquired through business combinations 970 - - 970
Lease modifications 1,307 - - 1,307
Disposals (653) - (5) (658)
Amortisation charge (2,311) (363) (864) (3,538)
Closing net book value 34,958 2,174 5,169 42,301
At 30 June 2024
Cost 52,215 6,151 12,365 70,731
Accumulated amortisation and impairment (17,257) (3,977) (7,196) (28,430)
Net book value 34,958 2,174 5,169 42,301
Year ended 31 December 2023 (audited)
Opening net book value 34,015 2,381 2,572 38,968
Additions 5,044 330 5,031 10,405
Acquired through business combinations 5,519 113 378 6,010
Lease modifications 818 (262) 372 928
Disposals (819) - (5) (824)
Impairment (424) - - (424)
Amortisation charge (4,901) (819) (1,979) (7,699)
Closing net book value 39,252 1,743 6,369 47,364
At 31 December 2023
Cost 57,726 4,881 9,861 72,468
Accumulated amortisation and impairment (18,474) (3,138) (3,492) (25,104)
Net book value 39,252 1,743 6,369 47,364
14. Borrowings
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Current
Other loans 9,851 6,334 9,507
Total current borrowings 9,851 6,334 9,507
Non-current
Bank loans 37,686 39,080 38,239
Total non-current borrowings 37,686 39,080 38,239
Total borrowings 47,537 45,414 47,746
Loans under invoice financing are included within other loans.
The Group has available banking facilities totalling £95 million, consisting
of:
· An invoice financing facility of £25 million attracting an
interest rate of UK base rate + 1.4%.
· A revolving credit facility of £70 million attracting an interest
rate of SONIA + margin with fixed tiers between 2.00% and 2.80% based on
leverage.
In May 2024 the Group exercised its extension option under the banking
facilities agreement. The facilities were extended from the initial three year
term by twelve months such that the revolving credit facility will now expire
on 5 April 2027.
15. Lease liabilities
Leasehold Plant and Motor
property equipment vehicles Total
£'000 £'000 £'000 £'000
At 1 January 2024 44,166 1,544 6,058 51,768
Additions 360 - 1,329 1,689
Lease modifications (2,031) - - (2,031)
Interest expenses 1,084 35 206 1,325
Lease payments (including interest) (3,238) (434) (1,406) (5,078)
At 30 June 2024 (unaudited) 40,341 1,145 6,187 47,673
At 1 January 2023 37,699 1,945 2,876 42,520
Additions 1,562 156 3,466 5,184
Acquired through business combinations 970 - - 970
Disposals (736) - (5) (741)
Lease modifications 1,331 - - 1,331
Interest expenses 891 44 138 1,073
Lease payments (including interest) (2,604) (426) (745) (3,775)
At 30 June 2023 (unaudited) 39,113 1,719 5,730 46,562
At 1 January 2023 37,699 1,945 2,876 42,520
Additions 4,894 329 5,029 10,252
Acquired through business combinations 5,402 113 378 5,893
Disposals (901) - (5) (906)
Lease modifications 838 45 38 921
Interest expenses 1,933 90 317 2,340
Lease payments (including interest) (5,699) (978) (2,575) (9,252)
At 31 December 2023 (audited) 44,166 1,544 6,058 51,768
Reconciliation of current and non-current lease liabilities
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Current 7,663 9,289 7,815
Non-current 40,010 37,273 43,953
Total 47,673 46,562 51,768
16. Dividends
A final dividend for the year ended 31 December 2023 of £2,202,485 was paid
to shareholders on 28 June 2024. An interim dividend for 2024 of 0.32 pence
per share will be paid on 11 October 2024 to shareholders on the register at
the close of business on 20 September 2024.
17. Alternative Performance Measures
Income Statement
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Operating Profit 4,488 8,113 9,133
Depreciation 1,195 1,294 2,610
Amortisation 6,097 5,274 11,214
Impairment charge - - 501
EBITDA 11,780 14,681 23,458
Exceptional items 484 165 2,849
Share- based payments 301 211 513
Adjusted EBITDA 12,565 15,057 26,820
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Operating Profit 4,488 8,113 9,133
Amortisation of intangible assets 1,814 1,736 3,515
Impairment charge - - 501
Exceptional items 484 165 2,849
Share- based payments 301 211 513
Adjusted operating profit 7,087 10,225 16,511
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Profit before tax 1,107 5,589 2,973
Exceptional items 484 165 2,849
Share- based payments 301 211 513
Impairment charge - - 501
Amortisation of intangible assets 1,814 1,736 3,515
Adjusted profit before tax 3,706 7,701 10,351
Balance Sheet
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Short-term borrowings (9,851) (6,334) (9,507)
Long- term borrowings (37,686) (39,080) (38,239)
Cash and cash equivalents 11,881 7,409 19,811
Less capitalised debt costs (664) - (580)
Net debt (36,320) (38,005) (28,515)
- ENDS -
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