Likewise Group Plc (LON:LIKE), a leading UK distributor of residential and commercial floor coverings, has released its full-year results for 2023, demonstrating robust growth and a promising outlook for 2024 and beyond. The company, listed on the FTSE AIM, reported a 12.9% year-on-year increase in revenue to £139.5 million, underscoring its successful market share gains despite challenging industry conditions.
Financial Performance
Likewise Group’s revenue growth reflects the company’s strategic investments in expanding its market presence and sales force, which now comprises 94 staff members. This increase in sales capability has bolstered the group’s ability to capture a larger share of the market. The company’s underlying EBITDA, on an IFRS 16 basis, rose to £7.9 million from £6.6 million in 2022. Despite a slight decline in pre-tax profit (PBT) to £2.3 million, down from £2.6 million the previous year, the results met WH Ireland’s expectations and highlighted the impact of increased spending on growth initiatives.
Investments and Future Growth
Analysts John Cummins and Charlie Cullen emphasise significant investments in Likewise’s infrastructure, which are set to drive future growth. The opening of new distribution hubs in Glasgow and new premises in London and Wales are pivotal in enhancing the company’s logistics network. These developments are expected to support the company’s ambitious target of achieving over £200 million in annual sales, leveraging operational efficiencies and market expansion.
Market Outlook
The year-to-date performance has been encouraging, with revenue up by 8.7% by April and a notable 15.3% increase in sales of Likewise-branded products. This strong start aligns with WH Ireland’s forecast of 7.5% revenue growth for the full year. Additionally, the group achieved a significant milestone with its first £1 million order intake in a single day, reflecting robust market demand and effective execution of its growth strategy.
Valuation and Recommendations
WH Ireland maintains its fair value estimate for Likewise at 30p per share, citing the company’s continued growth trajectory and potential for further margin expansion. The current valuation multiples are deemed unjustified, given the current growth rates and future prospects. The analysts view the company’s model as highly competitive, benefiting from operational gearing as revenue growth continues.
Strategic Vision
Likewise’s strategy focuses on expanding its distribution capabilities and increasing market penetration through strategic investments in infrastructure and sales headcount. The management’s effective execution of this strategy has been key to navigating the challenging market environment for domestic flooring and achieving consistent growth.
Conclusion
Likewise Group Plc has demonstrated strong performance in 2023, setting a solid foundation for future growth. The company’s strategic investments and market expansion efforts are expected to yield significant benefits in the coming years, making it a compelling proposition for investors looking for long-term value in the consumer products sector.
Investors are advised to monitor Likewise’s ongoing developments closely, as the company continues to enhance its market position and drive towards its ambitious revenue targets.
About Likewise Group Plc
Likewise Group Plc is a leading distributor of residential and commercial floor coverings in the UK, offering a comprehensive range of products to meet diverse customer needs. The company is committed to providing high-quality products and exceptional service, supported by strategic investments in its distribution network and sales capabilities.
Disclaimer: This article based on a report by WH Ireland is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence before making any investment decisions.
