Trading Update

RNS Number : 4315E

Likewise Group PLC

28 October 2022

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

28 October 2022

Likewise Group plc

("Likewise", the "Company" or the "Group")

Trading Update

Likewise Group plc (AIM:LIKE), the fast growing UK floor coverings distributor, provides a trading update for the current financial year ending 31 December 2022 ("FY22").

The Group is pleased that its ongoing investment in Sales Representatives, Point of Sale and Logistics infrastructure, has resulted in Sales Revenue continuing to progressively increase month on month. Revenue growth in Q3 of 23% organic and 96% total growth exceeded the performance achieved in Q2, with full year revenues expected to slightly exceed current market expectations.

Investment in all aspects of the business has been undertaken over the recent years to create a Nationwide Platform with a current logistics capacity of 15m³. This provides the opportunity to grow revenues and profitability to achieve the long term aspirations of the Group.

Notwithstanding the increase in revenues, it is expected that the Group's profitability will be lower than originally anticipated due to unfavourable market conditions caused by the terrible war in Ukraine, political instability in the UK and a particularly hot summer. The pace of investments and inflationary cost pressures have continued into the Group's key trading period and as a result Q4 profitability is expected to be lower than previously anticipated.

Subsequently the Board is now expecting profit before tax margins to be below current expectations at c.2%. Consumer spending is likely to remain volatile and inflationary cost pressures to continue into 2023, and therefore the Board expects adjusted profit before tax for the year ending 31 December 2023 to remain broadly in line with FY22.

The Board is committed to its key objectives and will continue to invest in the logistics infrastructure with the new High Bay Distribution Centre in Glasgow scheduled to be operational in Q1 2023. Productivity continues to increase in the new Birmingham Distribution Hub.

We are pleased with the performance of Valley Wholesale Carpets Limited ("Valley") acquired in January 2022. The extension to the Derby Distribution Centre will be completed in November and the Cutting Table is commissioned to increase the cutting capacity in the Valley logistics infrastructure. This will also allow the previously dormant Distribution Centre in Newport to commence operations to expand Valley's market presence to South Wales and South West England.

Whilst continuing to invest, the Group is also very mindful of increasing profitability, but it does not believe it to be in the best interest of stakeholders to solely maximise short term profitability which would compromise the clearly stated medium to long term objectives.

Profits are expected to increase on the previous year and the Board is confident in achieving its longer term aspirations. With the benefit of a strong Balance Sheet, having in excess of £40 million of Net Asset Value, the Board intends to announce a maintained dividend in line with that paid in July 2022 when the final results for FY22 are announced next year.

The Board would like to thank all management, staff, suppliers, customers and shareholders for their support and contribution over the formative years of the Group's development and look forward to a prosperous future.

For further information, please contact:  

Likewise Group plc Tony Brewer, Chief Executive Roy Povey, Chief Financial Officer	Tel: [phone]
Zeus   (Nominated Adviser & Joint Broker) Jordan Warburton / David Foreman / James Edis (Investment Banking) Dominic King (Corporate Broking)	Tel: [phone]
Ravenscroft Consultancy & Listing Services Limited  (Joint Broker) Semelia Hamon (Corporate Finance)	Tel: [phone]
Novella Communications  (Financial PR) Claire de Groot / Tim Robertson	Tel: [phone]

 

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