Lords Group Trading Plc · LSE:LORD
Lords Group Trading — H1 2024 Earnings Presentation
24 slides from Lords Group Trading's earnings presentation, Sep 10, 2024
Slide 1: Interim Results 2024
Interim Results 2024 10 September 2024
Slide 2: Agenda
Agenda Highlights Shanker Patel, CEO Financial review Stuart Kilpatrick, CFO Strategic update & Outlook Shanker Patel, CEO Q&A Lords Group Trading PLC
Slide 3: H1 FY24 Highlights
Mitcham, Lords Builders Merchants H1 FY24 Highlights Resilient performance in challenging market conditions • Group revenue £214.2m (H1 2023: £222.6m); LFL revenues decreased by 6.1% • Plumbing & Heating division recovery Q2 after CHMM disruption in Q1 • Gross margins maintained reflecting focus on
Slide 4: The Lords Investment Case
The Lords Investment Case A leading, high-growth distributor of building materials in the UK Unique Consistently high Top 10 UK customer Management Feefo scores merchant first track record proposition Organic, Strong ASHP’s margin Free cash flow financial 59% in FY ‘23 +492% accretive profile growth
Slide 5: Financial Review
Financial Review
Slide 6: H1 Financial Summary
H1 Financial Summary H1 2024 H1 2023 Change • Gross margins maintained and improving trend (FY’23: 20.0%; FY’22: 19.7%) Revenue £214.2m £222.6m (3.8)% Gross margin 20.2% 20.4% (20) bps • EBITDA margin impacted by market conditions and operational Adjusted EBITDA £12.6m £15.1m (16.6)% leverage. Mediu
Slide 7: H1 - Merchanting
H1 - Merchanting H1 2024 H1 2023 Change • LFL revenue Q1 (10.3)%; Q2 (8.5)%; H1 (9.3)% Revenue £104.6m £109.4m (4.4)% Gross profit £28.7m £29.0m (1.0)% • Gross margin increased by 100bps in a challenging market reflecting focus on Gross margin 27.5% 26.5% +100 bps customer service excellence Overhea
Slide 8: H1 – Plumbing & Heating
H1 – Plumbing & Heating H1 2024 H1 2023 Change • LFL revenue Revenue £109.6m £113.2m (3.2)% Q1 (15.1)%; Q2 +16.7%; H1 (3.2)% Gross profit £14.5m £16.4m (11.5)% • Market disruption from CHMM impacted volumes and gross margin Gross margin 13.2% 14.5% (130) bps • Manufacturer promotions resulted in mor
Slide 9: H1 – Group Results
H1 – Group Results £m H1 2024 H1 2023 Adjusted EBITDA 12.6 15.1 Depreciation & amortisation (5.5) (4.9) Increased ROU amortisation from FY ‘23 acquisitions Adjusted operating profit 7.1 10.2 Finance costs (3.4) (2.5) Average rate 100 bps higher - £0.4m, Average debt - £0.3m, ROU - £0.2m Adjusted pro
Slide 10: H1 – 2024 Cash Flow
H1 – 2024 Cash Flow £m H1 2024 H1 2023 • H1 seasonal working capital outflow £8.9m lower than Adjusted EBITDA 12.6 15.1 2023 where boiler supply issues increased inventory Working capital (6.7) (15.6) Tax and interest paid (1.7) (2.8) Capex (2.6) (4.3) Lease rentals (5.1) (3.8) Acquisition related (
Slide 11: Balance Sheet
Balance Sheet £m 30 June 30 June • Continued focus on working capital 2024 2023 management whilst maintaining high level of service Tangible assets 20.5 20.7 • Operating capital employed reduced by Stock 47.3 55.2 £10.6m Trade and other receivables 69.4 69.4 • Inventory days 7 lower than prior year
Slide 12: Committed Bank Facilities
Committed Bank Facilities £m 30 June 31 December 30 June 2023 2023 2024 Net Debt pre IFRS 16 38.0 28.5 36.3 Total debt facilities 95.0 95.0 95.0 Total undrawn headroom 49.6 46.7 46.8 Debt facility maturity date April 2026 April 2026 April 2027 • £95m (£70m RCF, £25m IF) syndicated facilities with HS
Slide 13: Strategic Update
Strategic Update
Slide 14: Strategic Update
Croydon, Mr Central Heating Strategic Update • Track record of organic and acquisitive growth • Revenue & EBITDA ten-year CAGR of 35+% • Organic opportunities: • Expand geographic footprint • MRCH branch opened in Edinburgh; George Lines potential site identified • Decarbonisation of housing stock •
Slide 15: Update on 2023 Acquisitions
Kingston, Lords Builders Merchants Update on 2023 Acquisitions Alloway Timber • Highly strategic geographic expansion, growing Lords presence in the South East – Mitcham, Byfleet, Putney, Cheam, Kingston • Pre-acquisition loss making of c. £1m • Since acquisition, invested in the 3 ‘P’s: People, pro
Slide 16: Driving Profitable Growth
Driving Profitable Growth Boilers • Exclusive UK distributorship with Navien to provide 24-hour availability to over 2,500 independent merchants • World’s largest boiler manufacturer • High efficiency heating solutions which are competitively priced • Opportunity to support on spares distribution an
Slide 17: Supporting the Energy Transition
Supporting the Energy Transition Air Source Heat Pumps (ASHP) • Exclusive distribution agreement with Italian manufacturer, Clivet, to distribute ASHPs • Global market leader, manufacturing for European branded heat pumps • Relationship with Viessmann may lead to another strong brand • Transition to
Slide 18: Growth
Scott, Horsham, George Lines Growth • Renewables • ASHP sales growth of 492% in H1 • Existing channels to customer can be leveraged with no further investment • Accredited installation to assist driving towards government targets • Market leading brands and customer service excellence • Win market s
Slide 19: Environmental, Social and Governance
Sutton, Lords Builders Merchants Environmental, Social and Governance • Strategy and framework in place • Implemented new environmental policy outlining ambition to reduce Scope 1 & 2 emissions by 90% by 2035 and reduce Scope 3 emissions by 90% by 2050. • Environmental progress in H1 2024 • Forklift
Slide 20: Outlook
Outlook
Slide 21: Outlook
Beaconsfield, Lords Builders Merchants Outlook • Well positioned in highly fragmented and essential RMI sector to grow market share organically and through selective, accretive acquisitions • H2 trading conditions not expected to change • Medium-term outlook is positive supported by industry data an
Slide 22: Questions
Questions
Slide 23: Appendix – Alternative Performance Measures
Appendix 1 – Alternative Performance Measures £m H1 2024 H1 2023 £m H1 2024 H1 2023 Operating Profit 4.5 8.1 Profit before taxation 1.1 5.6 Amortisation of Exceptional items 0.5 0.2 1.8 1.7 acquired intangibles Share based Exceptional items 0.5 0.2 0.3 0.2 payments Share based Amortisation of 0.3 0.
Slide 24: Cautionary Statement
Cautionary Statement This presentation may contain forward-looking statements. Such statements are based on current expectations and assumptions and are subject to a number of risks and uncertainties that could cause actual results or developments to differ materially from those expressed or implied