Regulatory News

Lords Group Trading (AIM:LORD), a leading distributor of building materials in the UK, today announces its unaudited Interim Results for the six months ended 30 June 2021 (“H1 2021” or the “Period”).

Financial Highlights

• Group revenues of £179.0 million (H1 2020: £124.0 million)
• Group like-for-like revenue growth of 36.9% and 20.2% on a two year like-for-like basis** versus H1 2019
• Gross profit increased by 40% to £29.3 million (H1 2020: £20.9 million)
• Gross profit margin reduced slightly to 16.4% (H1 2020: 16.8%), due to divisional sales mix disruption as a result of Covid-19
• Adjusted EBITDA* increased by 62% to £10.5 million (H1 2020: £6.5 million)
• Profit before tax of £4.5 million (H1 2020: £0.3 million loss before tax)
• 0.63 pence per share proposed interim dividend, in line with progressive dividend policy outlined at IPO
• Performance in line with market expectations for the full year

*Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation, exceptional and acquisition costs on an IFRS basis and therefore prior to lease liability payments during the period in accordance with IFRS 16.

** like-for-like sales is a measure of growth in sales, adjusted for new, divested and acquired locations.

Operational Highlights

• Successful admission to AIM on 20 July 2021, raising gross proceeds of £52.0 million in an oversubscribed Placing (£30.0 million for the Group, £22.0 million for existing shareholders)
• Strong performance across the Group and a notable record contribution from Lords Builders Merchants
• Continued increase in the Group’s Online Instore strategy with Y-on-Y digital sales growth in H1 2021 of 41.9%
• Integration of MAP Building & Engineering Supplies Ltd and Condell Limited are well advanced following the acquisition in March 2021 and April 2021 respectively
• Pipeline of potential acquisition opportunities remains robust and a number of conversations provide interesting inorganic growth potential for the Group
• The Plumbing and Heating division relocated its Croydon and Bristol facilities to provide capacity for future growth
• Customer satisfaction remains robustly strong in H1 2021 with a satisfaction score of 4.7 out of 5.0 (H1 2020: 4.7 out of 5), a fantastic testament to the customer-led ethos of the Group’s employees
• Colleague engagement remains exceptionally high with the Group’s Q2 2021 survey delivering a score of 4.7 out of 5.0 (No comparative available)
• Continued progress across the Group’s sustainability programme

Current Trading and Outlook

Lords is strategically focused on the Repair, Maintenance, and Improvement (“RMI”) market which represents 80% of Group revenue.  The long-term fundamentals of the RMI market are supported by pent up demand due to historic under investment in the UK housing stock and enhanced consumer savings triggered by the Covid-19 pandemic.

The Board is very encouraged by the strong first half performance across the Group and, while there remain product availability issues for a variety of reasons, it is confident in the full year outlook for Lords against a backdrop of positive macro trends.

Commenting on the Interim Results, Gary O’Brien, Chairman of Lords, commented:

“Market conditions remained favourable in our core markets throughout the period and I am delighted to report on a very strong first half, which was subsequently followed by our successful AIM IPO in July.

“We have continued to focus on our stated strategy of bolt-on acquisitions and organic growth, with H1 2021 reflecting significant milestones in both channels.  I am also pleased to report that the acquisition pipeline remains strong and we are in discussions with a number of potential businesses that would enhance the Group’s proposition.

“The strength of these results supports our first interim dividend payment to shareholders of 0.63 pence per share.

“This period has been hugely successful for the Group, underpinned by the significant milestone of a public listing.  I am extremely grateful to every colleague in the Group for their continued dedication and customer first ethos.”

Shanker Patel, Chief Executive, added:

“I want to thank all of our exceptional colleagues for their superb contribution and customer focus in delivering an excellent set of maiden interim results.  During this period Lords has delivered record operating profits and margins, and continues to deliver strong cash generation.

“2021 represents another key year in our strategic development and I’m delighted with the progress delivered in the half year with the acquisitions of MAP Building & Engineering Supplies Ltd and Condell Limited.  Most importantly, the continued high engagement from our colleagues and customers is nothing short of exceptional and uniquely positions Lords in our market.

“The overall outlook for Lords remains positive given the strength of our diversified portfolio model, macro trends, investment pipeline and strong balance sheet.”

This announcement contains inside information.

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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 25 locations in the UK.
• Heating and Plumbing: 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 nine 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 34 sites.  Lords aims to become a £500 million turnover building materials distributor group by 2024 as it grows its national presence.

Lords was admitted to trading on AIM in July 2021 with the ticker LORD.L.  For additional information please visit www.lordsgrouptradingplc.co.uk.