Interim Results

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-like1 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 EBITDA2 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)

Matthew Armitt / Richard Bootle / Detlir Elezi

 

Tel: +44 (0)20 3207 7800

Burson Buchanan

Tel: +44 (0) 20 7466 5000

Henry Harrison-Topham / Stephanie Whitmore / Abby Gilchrist

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)


£'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 capital

Share

premium

Merger reserve

Share based

payments reserve

Retained earnings

Equity attributable to owners of parent company

Non-

controlling interests

Total

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 capital

Share

premium

Merger reserve

Share-based payments reserve

Retained earnings

Equity attributable to owners of parent company

Non-

controlling interests

Total

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 capital

Share

premium

Merger reserve

Share based

payments reserve

Retained earnings

Equity attributable to owners of parent company

Non-

controlling interests

Total

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

Amortisation of acquired intangibles

 (838)

(2,011)

 (2,849)

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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