Likewise Group plc (LON:LIKE), the fast growing UK floor coverings distributor, has announced its audited Final Results for the year ended 31 December 2023.
Business on track for £ 200 million in sales achieving first £1 million order intake in a single day
Financial Highlights
· Group Sales increased 12.9% to £139.5 million (FY22: £123.6 million)
· Underlying EBITDA of £7.9 million (FY22: £6.6 million)
· Following further investment in infrastructure, Underlying Profit Before Tax of £2.32 million (FY22: £2.56 million)
· Proposed Final Dividend of 0.25 pence per Ordinary Share, an increase of 25% (FY22: 0.20 pence). (Assuming shareholders approve the total dividend relating to FY23 will be 0.35 pence per Ordinary Share, being an overall increase of 75% compared with FY22*)
· Completion of All Deferred Consideration Payments of £4.3 million post year end
· During April 2024 the Group processed its first £1 million order intake in a single day
· Group Sales to the end of April 2024 increasing by 8.7% and Sales in Likewise Branded businesses increasing by 15.3% compared with the prior year
Operational Highlights as at April 2024
· 11 Distribution and Logistics Centres created with total capacity at c.15 million cubic feet
· 80 Suppliers across key flooring products
· 94 Customer focused Management and Sales Executives
· 139 Delivery trucks providing next day service
· 507 Employees, with a significant majority with long-standing flooring experience
· 100,000’s of point of sale items creating market presence
· Over 5,000 Customers, principally independent flooring retailers and contractors
Chairman and Chief Executive Statement
Likewise is pleased to announce that total Revenue has increased by 12.9% to £139.5 million. The Group has continued to invest during 2023 and also into 2024 to further strengthen the Sales Resource and Logistics Infrastructure. Establishing this overall structure to enable the Group to achieve its medium term objectives inevitably impacts on short term profitability with Underlying Profit Before Tax for FY23 being £2.32 million. Whilst the Group will continue to invest, particularly in Sales Resource, the significant infrastructure costs are largely complete in this phase of our development.
The Group has again made significant progress in 2023, which has continued into the first four months of 2024, with Group Sales to the end of April increasing by 8.7% and Sales in Likewise Branded businesses increasing by 15.3% compared with the prior year. The Group continues to trade in line with current market expectations.
Logistics Network
The Glasgow Distribution Hub, opened in the Spring of 2023, is now making a meaningful contribution with regard to Storage, Picking and Cutting into the Likewise Logistics Network. Furthermore, Likewise Scotland is progressively increasing market share in both Residential and Commercial Flooring.
Likewise North East, which moved into a new Logistics Centre at the beginning of 2022 is now very clearly established across all flooring sectors and is well placed to progress its geographical presence.
Likewise North, based in Leeds, is particularly active throughout the M62 Corridor and with enhanced service to North West England through the new Manchester Logistics Centre. Further investment in sales resource and Point of Sale will continue to increase their market share in Residential and Commercial Flooring.
A&A will move into their new Logistics Centre in June. A&A has made an important contribution to the Group since being acquired in February 2020 and the new facility will allow A&A to make its next progression in both Residential and now Commercial Flooring.
Based in Birmingham, the Likewise Midlands business has made tremendous progress over the last two years and is now very much established as a principal distributor of Residential and Commercial Flooring throughout the Midlands.
Likewise South is progressively taking market share of Residential Flooring in the South of England and will benefit from the expansion of the Floors by Lewis Abbott Premium Branded Carpet.
Likewise London moved into a new Logistics Centre in Sidcup during January 2023 providing a much improved geographical reach and enhanced transportation network. To further develop Likewise London, investment has been made in 2024 to strengthen the Management and Sales Team.
Similarly from its Distribution Centre in Sudbury, Likewise South East invested further in its Management and Sales Team. This allows both businesses to significantly increase their presence in the important London and South East Flooring markets and also particularly benefiting from the Floors by Lewis Abbott product range.
Likewise Wales became operational in January 2024 from the Newport Distribution Centre and with the support of the Likewise Network has every opportunity to build a meaningful business in both Residential and Commercial Flooring.
Valley Wholesale Carpets (“Valley”) is a very important part of the Group. The profitability and positive cash flow of Valley has been particularly strong in the last two years. Valley has extended its geographical reach over the last year and there are further opportunities to expand from its key Distribution Centres in Erith, Derby and Newport. Furthermore, Valley will increase its product portfolio and develop additional point of sale displays to provide an enlarged offering to their customers, enabling Valley to have an exciting future whilst remaining autonomous in the Group structure.
The H&V Carpets, Delta Carpets, Likewise Rugs and Matting and Floors by Lewis Abbott Premium Brand have every opportunity to further establish themselves in their respective products segments to be an increasing part of the Group’s activities.
Dividend
Whilst the Group will continue to invest, the significant initial phase is now largely complete and therefore the Board is confident in expanding on the progressive policy previously announced by proposing a Final Dividend payment of 0.25 pence per ordinary share (FY22: 0.20 pence per ordinary share).
This makes the total dividend paid in the year of 0.35 pence per ordinary share (2022: 0.20* pence per ordinary share). This is a 75% increase on the FY22 Total Dividend, an encouraging reflection of the financial performance in 2023. The final dividend, if approved by shareholders at the AGM, will be paid on 5 July 2024 to shareholders on the register at the close of business on 31 May 2024, the ex-dividend date being 30 May 2024.
Shareholders can also take advantage of the Dividend Reinvestment Plan (“DRIP”) by registering their intentions with the Company’s registrar by 14 June 2024.
Outlook
Developing the Group’s market presence is fundamental to achieving its aspirations with the 94 Sales Management and Sales Executives absolutely focused on their daily visits to independent flooring retailers and contractors to maximise the various Brands and in store displays.
To support these numerous sales initiatives, the Logistics Network is now very well established in both the Likewise Floors and Valley Operations with capacity created to extend the Group through its medium term objectives.
The quality of the infrastructure developed over the last three years was clearly demonstrated in early April when the Group was able to process a record order intake of over £1 million of Sales in a single day.
With a continued focus on investment in Sales Resource and Point of Sale combined with the additional capacity in the Logistics Infrastructure, the Board is confident of achieving its ambitions in the coming years. Notwithstanding some cost inflation, Sales progression in the near future will be delivered at a lower than historic percentage cost resulting in Operational Gearing and the Return on Sales meeting the aspirations of the Group.
The quality of the Management and Sales Teams created by the Group over the last three years is particularly impressive and in our opinion, the strongest in the UK Flooring Industry, providing the foundations for the Likewise Group to reach and then surpass its medium term intentions.
Tony Brewer, Chief Executive of Likewise Group plc, said:
“The Group has made significant progress in the last three years. The Board thanks the Management, Sales Teams and all Staff for their tremendous contribution to developing the Group and what has been achieved in such a short time.
Despite challenging market conditions, 2024 has started positively and we have every confidence of a successful year and most importantly another major step towards our medium term objectives.
The Group would also like to thank all our Suppliers, Customers and Shareholders for their support over the last few years and look forward to further strengthen those relationships to our mutual benefit.”
*The 2022 interim dividend of 0.20 pence per ordinary share was the maiden dividend paid by the Group on 8 July 2022. Whilst this was paid as an interim dividend in 2022, it was in reflection of the Group’s performance in the year ending 31 December 2021 for which no final dividend was declared. The Capital Reduction at the beginning of 2022 enabled a payment of a maiden dividend in respect of the Group’s performance in 2021. Therefore, the total dividend for 2023 of 0.35 pence per ordinary share represents a 75% increase on the total dividend paid in respect of the performance of the Group in FY22 of 0.20 pence per ordinary share.
