Likewise Group plc

Likewise Group plc share price, company news, analysis and interviews

Likewise Group PLC (LON:LIKE) is a distributor of floorcoverings and matting and has the opportunity to consolidate the domestic and commercial floorcovering markets to become one of the UK’s largest distributors in this sector.

Currently, the UK domestic flooring market is worth C:£2 billion. Although there are a number of larger industry competitors, the market remains fragmented with small local and regional companies accounting for c.50% of the UK market. Likewise PLC believes that, through a number of industry and macro factors, the market will polarise towards larger competitors, and that the Likewise Group can be well positioned to benefit from this trend.

Likewise PLC intends to utilise the expertise and industry knowledge of the Board, Executive Board and Advisors to develop an alternative to larger industry competitors. Management believe this can be achieved through a mixture of organic growth, operational leverage and where appropriate acquisitions.

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Likewise Group plc

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Likewise Group plc

Likewise Group Investment in Logistics Capacity delivers Record Sales

Likewise Group plc (LON:LIKE), the fast growing and progressive Flooring Distributor, has announced that Gross Sales Revenue for the year ended 31 December 2023 increased by 13.6% to £140.2 million. Sales in Likewise Floors increased 29.1% in FY23. These increases are particularly positive given the macro economic headwinds and subsequent challenging market conditions.

The Group’s Sales Revenue for FY23 is ahead of current market expectations and underlying profitability is expected to be in line with market expectations, reflecting the continued investment in the future of the business. The Board is confident of achieving the current market expectations for FY24 as the Group continues to develop its position in the UK Flooring Market. As demonstrated with the maiden Interim Dividend declared in September 2023, the Board is committed to a progressive dividend policy in line with profitability.

Undoubtedly the most encouraging factor during the high sales volume in November and even greater activity in the first two weeks of December, averaging £660,638 per day, was the ability of the Logistics Infrastructure that has been developed over the last three years being able to efficiently process and deliver the additional demand created.

The Group has invested heavily in Point of Sale Displays and Sampling to significantly increase its market presence over the last three years in conjunction with establishing the Logistics Infrastructure. The final quarter of 2023 demonstrated the success of this strategy to date with the ability to generate increasing Sales Revenue whilst providing the Operational expertise to service customers effectively.

This strategy will continue into 2024 as the Group is confident in continuing to gain market share and through operational gearing, improve profitability.

Valley Wholesale Carpets Limited, with its main Distribution Hub in Erith, was able to accommodate the volumes and utilise the additional Cutting Capacity that was established through further investment in the Derby Distribution Centre. This will allow Valley to expand its business with greater Point of Sale and the opportunity to increase its Product range in 2024 to existing customers, in addition to increasing its geographical presence into South West England following the successful development in South Wales. This enlarged sales volume will be absorbed through increased capabilities in both the Derby and Newport Distribution Centres.

The beginning of 2024 will commence with Likewise London increasing its Sales Management and infrastructure with a similar initiative in Likewise South East, allowing both businesses to expand their market presences.

Likewise South is also extending its geographical reach to now develop business with customers in Bristol and the South West of England.

January 2024 sees the launch of Likewise Wales with an experienced Team operating from the Newport Distribution Centre. They are expected to quickly develop a significant presence in both Commercial and Residential markets.

Heads of Terms are agreed for A&A Manchester to relocate to new premises in Spring 2024. A&A will benefit from being part of the Likewise Logistics Network which has now allowed A&A to develop into Commercial Flooring in North West England as well as providing an improved delivery service to its Residential customers in the North of England and Midlands.

Likewise Scotland is now able to really expand its presence through significantly increased capacity in the Glasgow Distribution Centre which can also provide extra capability for both storage and processing into the overall Likewise Logistics Network.

Further investment in the Birmingham Distribution Hub allows this important location to have an increasing influence on the development of Likewise Floors and specifically the capacity to develop the ever expanding Likewise Midlands business.

Additional sales resource in H&V Carpets, Floors by Lewis Abbott and Delta Carpets provides each of these businesses with every opportunity to expand in 2024.

The strategic investments in Derby and Newport plus Glasgow, Manchester and Birmingham in conjunction with the established locations in Erith, Newcastle, Leeds, Newbury, Sidcup and Sudbury, provides the Group with the Logistics Infrastructure to deliver the extensive Sales and Marketing initiatives in progress.

Tony Brewer, Chief Executive of Likewise Group plc, said:

“The Board would like to thank our Management and Sales Team for generating increasing volumes, and particularly our Telesales, Administration, Warehouse, Night Teams and Delivery Drivers for their important contributions.

The ability and commitment of our people combined with the infrastructure coping with ever increasing volumes, demonstrates the ability of the business to surpass its medium term objectives.

The Group has come a long way in the last three years and we look forward to a positive and exciting future as the Group capitalises on the many opportunities for the benefit of all our employees, suppliers, customers and shareholders.”

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Interviews

Likewise Group CEO Investment Paying Off with Continued Sales Growth (VIDEO)

Likewise Group plc (LON:LIKE) CEO Tony Brewer joins DirectorsTalk Interviews to discuss a record performance month with Total Sales Revenue of £14.0 million.

Tony shares his thoughts on the record performance, the factors contributing to the robust sales figures, outlines the company’s investment strategies for 2024, and shares three compelling reasons why investing in Likewise Group’s stock is not just a wise decision, but an exciting opportunity for investors.

https://vimeo.com/894028193

Likewise Group Plc are a Professional Flooring Distribution company formed to bring together some of the most professional businesses and people within the flooring industry.

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Likewise Group Tony Brewer: Capturing beyond 10% of £2 billion flooring market (Video)

Likewise Group plc (LON:LIKE) CEO Tony Brewer presents a summary of the company, its position and outlook.

In this interview with Likewise Group, CEO Tony Brewer provides us with an overview of the company, talks us through the key highlights from its interim results for the six months ended 30 June 2023, shares his thoughts on the outlook for Likewise and lets us know what can investors expect from the company going forward.

https://vimeo.com/882048622

Likewise Group Plc are a Professional Flooring Distribution company formed to bring together some of the most professional businesses and people within the flooring industry.

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Question & Answers

Analyst Notes & Comments

Likewise Group plc

Likewise Group Strong Momentum and Confidence Analyst Andy Hanson Comments

Likewise Group Plc (LON:LIKE) this week provided a trading update in which it stated that that Gross Sales Revenue for the year ended 31 December 2023 increased by 13.6% to £140.2 million.

We caught up with Zeus Capital Analyst Andy Hanson for his view on the news.

Likewise Group plc has announced now published its trading update for FY23. What did you think of the news?

It has traded very strongly across FY 23 taking significant amount of market share.

With the focus on scaling up and growth, do you think it’s starting to pay off?

Yes definitely, lots of confidence in it being able to achieve the medium term £200m of revenue and operating gearing should see earnings grow more quickly than revenue.

How do you see the outlook for the company?

The macro backdrop is still difficult but I see no reason why Likewise can’t continue to take market share.

What newsflow do you hope to see from Likewise over the coming months?

I don’t expect further acquisitions in the short term but for it to now build out on what it has.

Likewise Group PLC (LON:LIKE) is a distributor of floorcoverings and matting and has the opportunity to consolidate the domestic and commercial floorcovering markets to become one of the UK’s largest distributors in this sector.

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Likewise Group plc

Likewise Group trading update means ‘meaningful market share gains’ says WHIreland

Likewise Group plc (LON:LIKE), provided an update for the 11-months to 30 November 2023. It said it remained on track to achieve current market expectations for the financial year ending 31 December 2023. Likewise reported a year-on-year increase in revenue of 13.3%, including a record £14.0m in November. It was notable that this increase was predominantly driven by increased volume rather than price inflation. 

The Group continues to invest in Logistics, Sales Teams and Point of Sale to expand its geographical coverage and presence with existing customers and the Group’s medium term ambition is to exceed £200m annual sales revenue.

WHIreland analyst John Cummins said in his recent note that the update was ‘highly encouraging against what remains a challenging market backdrop’. He added ‘this level of growth undoubtedly represents meaningful market share gains for Likewise – testament to the effective operational and sales platform now in place, as well as excellent relationships with suppliers and independent retailers.’ WHIreland retains its fair value at 30p, providing c.80% upside to levels.

Likewise Group PLC (LON:LIKE) is a distributor of floorcoverings and matting and has the opportunity to consolidate the domestic and commercial floorcovering markets to become one of the UK’s largest distributors in this sector.

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profit growth

Likewise “2021 was a transformational year as it gained scale” says Zeus

2021 was a transformational year for Likewise Group plc (LON:LIKE) as it gained scale and became the clear number two player in the floor covering distribution market. Revenue increased 28% to £60.5m (FY20: £47.3m) and, since it listed on AIM in August 2021, Likewise has successfully completed two acquisitions adding c. £40.0m of annualised revenue. Zeus forecasts assume a CAGR in revenue of 38% over the next three years, taking revenue to over £160.0m. Profit before tax of £1.6m is in line with forecasts and had been communicated to the market in December. The improvement in profitability has been driven by scale but also a 390bp in gross margin due to improved product and customer mix. A maiden dividend will be paid in FY22 and the Company, subject to gaining permission and the AGM, could undertake a buyback should accretive acquisitions not present themselves. Trading in the current year remains solid and is on track to meet FY expectations, Zeus estimates are unchanged.

Despite economic headwinds the business has structural growth

¨ Maiden year of profitability: Likewise has announced £1.6m of adj. Profit Before Tax (FY20: Loss Before Tax £1.5m) a maiden year of profitability since the business was created by Tony Brewer (CEO) and his team in 2018. A maiden dividend will be paid in FY22, fulfilling its commitment to instigate a progressive pay out policy.

¨ Growth in FY21 has created a business of scale: Revenue increased 28% to £60.5m (FY20: £47.3m) and over 100% on the £30.0m generated in FY19. The growth has been both organic and through acquisition. Businesses acquired have added scale, product, customers but also capacity and footprint, meaning the business has the infrastructure to support materially higher volumes. This is reflected in Zeus’ revenue estimate in FY23 being 125% up on FY21A. Already the clear number two player in the distribution market, Likewise remains materially behind the market leader Headlam in terms of market share.

¨ Acquisitions post period end underpin FY22 expectations: Zeus Revenue estimate for FY22 is £114.9m. a c.90% uplift on today’s reported FY21A. The acquisitions of Valley Wholesale Carpets (VWC) (Jan 2022) and Delta Carpets (Apr 2022) will add an annualised c.£40.0m of revenue. Organic growth will be double digit as site utilisation increases on the back of market share win. Cost inflation remains an issue, but price increases will be used to offset these, the most recent being introduced on May 1st.

¨ Valuation: Likewise offers best in class growth in a fragmented market with a single dominant player and a management team that has done it before. The current year earnings multiple of 25x falls to sub 12x in FY24. On an EV/EBITDA basis, including leases, the reduction in the rating is 11.1x to 5.5x over the same period.

Summary financials

Price 31.5p
Market Cap £76.8m
Shares in issue 243.8m
12m Trading Range 29.3p– 49.7p
Free float 71.60%
Next Event Interims September

Financial forecasts

Yr end Dec (£’m) 2020A 2021E 2022E 2023E
Revenue 60.5 114.9 136.6 160.8
yoy growth (%) 27.8 90 18.9 17.7
EBITDA 3.8 8.7 14.2 17.7
EBIT 1.7 4.7 6.9 9.9
Adj. PBT 1.6 4.2 6.2 9.1
Adj. PAT 1.7 3.4 4.9 7.3
EPS (p) basic adj. 0.9 1.4 2 3
EPS (p) ful dil. Adj. 0.8 1.3 1.8 2.7
DPS (p) 0.3 0.5 0.7
Net cash/(debt)^ 4.3 -2.9 5.4 5.4
P/E 39.7 24.9 17.1 11.6
EV/EBITDA 22.1 11.1 6.6 5.5
Div yield (%) 1.1 1.6 2.4

^Net cash/(dent) excludes leases

Source: Audited Accounts and Zeus estimates

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Latest Likewise Group plc News

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Likewise Group plc share price

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