Lords Group Trading Plc · LSE:LORD
Lords Group Trading — H1 2023 Earnings Presentation
22 slides from Lords Group Trading's earnings presentation, Sep 7, 2023
Slide 1: H1 23 Results
H1 23 Results 7 September 2023
Slide 2: Agenda
Agenda Overview Shanker Patel, CEO Financial review Chris Day, CFO & COO Strategy update Shanker Patel / Chris Day Outlook Shanker Patel Q&A Lords Group Trading PLC 2
Slide 3: Overview
Overview Dave, Yard Foreman, Scott, AW Lumb, Tamworth
Slide 4: H1 23 Highlights
H1 23 Highlights Continued momentum with strategic targets well on track and growth opportunities strong despite challenging market conditions • Customer focused proposition enables market outperformance, tremendous credit goes to our 895 colleagues • Record performance with half year results inline
Slide 5: The Lords Investment Case
The Lords Investment Case A leading, high growth distributor of building materials in the UK Unique Customer First Proposition Successful Value-Creative M&A History • Customer service excellence is the central pillar of our strategy • Independent merchants (£2-£100m turnover) hold 40% of market and
Slide 6: Financial Review
Financial Review Adam, Internal Sales Assistant, Hevey Terry, Mr CentralSupplies, Building Heating,Kettering Croydon
Slide 7: H1 23 Financial Highlights
H1 23 Financial Highlights H1 23 H1 22 Change • Resilient first half performance (Restated)1 in line with our expectations Revenue £222.6m £214.2m +£8.4m / +3.9% Adjusted EBITDA £15.1m £14.2m +£0.9m / +6.1% • Strong Adjusted EBITDA result despite macro environment Adjusted EBITDA Margin 6.8% 6.6% +0
Slide 8: H1 23 Financial Highlights - Merchanting
H1 23 Financial Highlights - Merchanting A record half year with continued momentum in Adjusted EBITDA margin. 6 months ended 30 June (£m) H1 23 H1 22 Change Total revenue £109.4m £105.9m +£3.5m / +3.3% LFL Growth vs HY22 -5.1% Adjusted EBITDA £8.5m £7.7m +£0.8m / +10.4% Margin 7.7% 7.3% +0.4% • Mer
Slide 9: H1 23 Financial Highlights – P&H
H1 23 Financial Highlights – P&H Plumbing & Heating division delivers solid first half despite prevailing trading environment. 6 months ended 30 June (£m) H1 23 H1 22 Change Total revenue £113.2m £108.3m +£4.9m / +4.5% LFL Growth vs HY22 -3.8% Adjusted EBITDA £6.6m £6.5.m +£0.1m / +1.9% Margin 5.8%
Slide 10: H1 23 Financial highlights – Working Capital
H1 23 Financial highlights – Working Capital £m H1 21 H1 22 H1 23 Decrease / (Increase) in inventories 2.4 (0.3) (1.6) Decrease / (Increase) in trade and other receivables 3.2 0.4 2.1 (Decrease) / Increase in trade and other payables (6.4) (0.7) (16.6) Total working capital movement (0.8) (0.5) (16.
Slide 11: H1 23 Financial highlights – Free cash flow
H1 23 Financial highlights – Free cash flow £m H1 23 H1 22 Free cash flow presentation distorted by (Restated) phasing of stock purchases and normal EBITDA (IFRS) 14.7 13.1 seasonal fluctuations in working capital Exceptional Items and share based payments 0.4 1.1 Free cash flow (from IFRS EBITDA) o
Slide 12: Strategic Update
Strategic Update Dean, Lords Builders Merchants, Sutton
Slide 13: Renewables range
Renewables range • Sales momentum continues with positive customer response to extended product range – revenue growth of 75% in H1 23 in the renewables category1 • Demand for energy efficient technology being driven by energy prices and government 'green initiatives’ • Lords is uniquely positioned
Slide 14: Acquisition – Chiltern Timber
Acquisition – Chiltern Timber • Single site specialist timber merchant delivering £2.6 million revenue and £0.25 million EBITDA prior to acquisition in April 2023 • Fully integrated into Lords merchanting network enabling product range extension to wider customer base • Chilterns specialist ranges a
Slide 15: Delivering Growth – Beaconsfield
Delivering Growth – Beaconsfield • 4 acre site within a substantial market catchment. Acquired in 2017, the business was delivering revenue of £2.5m and represented a significant turnaround project • Lords have transformed via 3 P’s investment across People, Plant and Premises. Significant product r
Slide 16: Delivering Growth – Ladbroke Grove
Delivering Growth – Ladbroke Grove • Single site general merchant located in West London, acquired in August 2021 for £0.6 million consideration – a turnaround acquisition • Highly empowered management team have grown revenue by 70% and adjusted EBITDA by 400% (for the H1 23 period) • Site has benef
Slide 17: Acquisition – Alloway Timber
Acquisition – Alloway Timber • Five site general merchant delivering £15.9 million revenue and £(1.0) million EBITDA prior to acquisition in September 2023 • Transaction is in the Lords ‘sweet spot’ of turnaround transactions, expected to be earnings accretive from 2024 financial year with significa
Slide 18: Medium Term Targets
Medium Term Targets Revenue growth target: £500m by 2024 Medium term EBITDA margin of 7.5% £500m £450m £363m £288m Operational leverage 2020 2021 2022 2024 Illustrative and not to scale Revenue growth driven by: Our targets: • Organic – product range extension, new geographies 1. Grow revenues to £5
Slide 19: Outlook
Outlook Chris, Stephen, Tony, Aimee, Jack, Claude, Reece, and Dean, Lords Builders Merchants, Sutton
Slide 20: Outlook
Outlook • The Group has delivered a resilient performance in H1 23 and the Board believes that the Group is currently outperforming the market1 but is not immune to persistent macro-economic pressures • The persistent high levels of inflation, increasing interest rates and weaker consumer confidence
Slide 21: Outlook
Outlook The fundamentals of the Lords investment proposition remain: • Experienced management team and agile divisional structure allows Lords to seize opportunities in more challenging markets • Significant organic growth levers – including new sites and extended product range • Lords holds <1% of
Slide 22: Disclaimer
Disclaimer This presentation may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of Lords Group Trading plc (the “Company”). Such statements and forecasts involve risk and uncertainty because they ar