Lords Group Trading plc has provided its trading update for the six-month period ended 30 June 2022 ahead of the publication of its interim results on 6 September.
Trading was reported to be in line with market expectations for the 2022 Full Year, being revenue of £435.0 million (FY21: £363.3million), adjusted EBITDA of £26.0 million (FY21: £22.3 million) and adjusted profit before tax of £16.0 million (FY21: £10.2 million), with positive H1 2022 momentum carried into the beginning of the second half. Group revenue for the period increased 19.9% to £214.7 million (H1 FY21: £179.0 million) with the divisional and like for like (‘LFL’) breakdown as follows:
| Revenue by division: | H1 2022 £m | H1 2021 £m | % Growth | % LFL Growth |
| Merchanting | 105.9 | 61.1 | 73.2% | 14.5% |
| Plumbing & Heating | 108.7 | 117.9 | (7.8)% | (12.5)% |
| Total Group | 214.7 | 179.0 | 19.9% | (3.3)% |
The update noted that “management actions taken in H1 2022 continue to ensure profitability is upheld in Plumbing & Heating” whilst the “integration of all five acquisitions since IPO in July 2021 are now complete and all performing in line with management expectations”. The Group states it “remains on track” to deliver its strategic targets of £500.0 million revenue in 2024 and 7.5% EBITDA margin in the medium term.
Trading performance and strategic progress
Overall Group trading was reported to be strong in the first half of the year, with total revenue growth of 19.9%. The update steated that “this positive momentum has continued in to H2 2022 as the Group continues to execute its strategy, through organic levers including product range extension, new site openings, and digital and operational leverage and in executing value added acquisitions.
“Demand for the Group’s Merchanting division has continued to be strong, as Lords continues to take advantage of its brand’s successful positioning as the local market leaders in premises across the UK. The strength of the Group’s brand and local market presence has positioned the Group well.”
Performance in Lords’ Plumbing and Heating division (‘P&H’) is said to have proven resilient with customer demand remaining strong. Management actions taken in H1 2022 “continue to ensure profitability is upheld despite the industry wide boiler component shortage which management expects to ease during H2 2022”.
Product range extension “allows the Group’s brands to secure a greater share of their customers wallet”, whilst also attracting new customers. During the first half the Group has “added ranges to support the decarbonisation of the UK housing stock, including heating controls, air source heat pumps and underfloor heating within its P&H division”.
The Group is also pursuing new locations for its brands that “offer EBITDA margin accretion and 20%+ return on investment”. During H1 2022, it has delivered the following locations:
Advance Roofing Supplies, an acquisition completed in Q1 2022, has now been implanted into the Lords Builders Merchants Beaconsfield site, offering customers a logical product range extension and increasing the returns on that site.
George Lines, the Group’s specialist civils merchant brand, has expanded by opening a third location in Horsham.
Mr Central Heating, the Grroup’s “leading multi-channel Plumbing & Heating brand supplying the installer and end user customer segments”, is due to open its tenth branch in West Bromwich in Q3 2022.
Shanker Patel, Chief Executive Officer of Lords Group Trading plc, said: “As we complete our first twelve months trading on AIM, it is fantastic to reflect on the financial and operational progress that Lords has achieved and, on behalf of the Board, I would like to thank all our colleagues across the UK for their continued hard work and commitment. I am also delighted with our strategic progress in the first half of 2022 and we have a substantial opportunity to grow the Group’s current < 1% market share through bringing in new customers, a greater share of customer wallet, product range extension, new geographies, digital capability and valued added acquisitions.
“We have demonstrated that we are able to consistently grow our Group revenues and profitability as we deliver both our organic and inorganic growth strategies. Our size, reach and product range are ensuring the strength of our proposition continues to stand out in our markets despite ongoing macroeconomic uncertainties.”
