TIDMLIKE
RNS Number : 0817O
Likewise Group PLC
29 September 2023
29 September 2023
Likewise Group plc
("Likewise", the "Company" or the "Group")
Interim results for the six months ended 30 June 2023
Further positive sales progress and well on track for 2023 and
beyond
Likewise Group plc (AIM:LIKE), the fast growing UK floor
coverings distributor, is pleased to announce its unaudited interim
results for the six months ended 30 June 2023 (the "Period" or "H1
23") and a continuation of positive sales growth, notwithstanding
market conditions which provide well publicised challenges.
Summary highlights
-- Total sales revenue increased by 17.3% from GBP56.8 million to GBP66.6 million
-- Continued growth in Likewise Branded sales of 23.3%
-- Adjusted EBITDA(1) of GBP3.1 million (H1 2022: GBP3.6 million)
-- Adjusted underlying profit from operations of GBP1.2 million (H1 2022: GBP2.0 million)
-- Adjusted profit before tax(2) of GBP0.7 million, principally
impacted as expected by the accelerated investment in the business
(H1 2022: GBP1.9 million)
-- Positive cash generation from Operating Activities of GBP1.68
million, allowing further investment in property, plant and
equipment
-- Interim dividend of 0.1p per share
-- Increased capacity of distribution network to 15,000,000 cu. ft.
-- Continuing investment in point of sale
-- On target to meet market expectations for FY23
(1) Adjusted EBITDA is defined as profit before finance costs,
tax, depreciation, amortisation, separately disclosed items and
share based payments.
(2) Adjusted profit before tax is defined as profit before
amortisation, separately disclosed items and share based
payments.
H1 23 highlights
Group Revenue in H1 23 increased by 17.3% from GBP56.8 million
to GBP66.6 million. Whilst profitability reduced in the short term
this is principally due to investing in the future growth.
The strong increases in Group Revenue over the past four years
demonstrates an exponential gain in Market Share and the ongoing
enlargement of Logistics and Sales Infrastructure will facilitate
the continuation of Market Share progress.
The Balance Sheet continues to be strong with Net Assets of
GBP38.9 million including four Freehold Properties valued at
GBP22.3 million and net debt of GBP2.1 million.
To demonstrate the progress the Group has made in the last three
years the Board is proposing its maiden Interim Dividend of 0.1
pence per Ordinary Share. The dividend will be paid on 17 November
2023 to shareholders on the register at the close of business on 13
October 2023, the ex-dividend date being 12 October 2023.
Shareholders can also take advantage of the Dividend
Reinvestment Plan ("DRIP") by registering their intentions with the
Company's registrar by 27 October 2023.
Current trading and outlook
With H2 23 starting well the Group is well on target to meet
market expectations for the financial year ending 31 December 2023
("FY23") and more importantly is now ahead of the Group Revenue
milestones to achieve its medium term aspirations.
Further testimony of the Group's progress is that August was a
record month for Sales Revenue which provides confidence entering
the traditionally busy Autumn period.
The Group is beginning to benefit from operational gearing in H2
this year which will contribute towards continued investment in
order to achieve short and medium objectives.
The significant investments made in the last three years will
allow the Group to achieve its short term objectives of Group
Revenue in excess of GBP200 million and with that initial target in
sight the Group can now progress to further objectives in Sales
with the corresponding Return on Sales and Investment.
Operations
In conjunction with Suppliers and Customers, the Group continues
to invest in a significant amount of Point of Sale which is
increasing market presence and expanding sales in all key product
types; Carpet, Residential Vinyl, Laminate, Luxury Vinyl Tile,
Artificial Grass with both Residential and Commercial categories
performing strongly.
Valley Wholesale Carpets Limited ("Valley") continues to be an
important contributor to Profitability and Positive Operational
Cash Flow. Following development in South Wales, Valley is now
poised to expand its operations to the South West of England and
furthermore will extend its product offering into certain Hard
Flooring. The further development of Valley can be achieved through
the infrastructure already established.
Along with normal business development, the Group has
accelerated its logistics capabilities. The New High Bay
Distribution Centre in Glasgow is now operational and the Group is
in the process of significantly increasing the cutting capacity in
Birmingham and Derby, with additional opportunities to now fully
utilise the previously dormant Distribution Centre in Newport.
Likewise has now established a sophisticated Logistics Network
from its Distribution Centres in Glasgow, Newcastle, Leeds,
Manchester, Birmingham, Newbury, Sudbury and London. Valley
distributes significant volume from three Distribution Centres in
Erith London, Derby and Newport. The Group will continue to
increase Market Share and expand its Geographical reach into
2024.
The Group is currently using less than 60% of its total
processing capacity through its established Logistics Operations
and this headroom could be further increased with relatively small
investment and Capital Expenditure.
People
Following five successful years implementing the financial
infrastructure, reporting procedures and supporting our successful
listing on AIM, Roy Povey has chosen to step down from his role as
Chief Financial Officer for personal reasons. Roy will continue to
support the business until his proposed exit in Spring 2024. Roy
will be replaced in the immediate term by a combination of internal
promotions for Ben Ashforth to Head of Financial Accounting and
Reporting with Ian Roberts and David Fullard who will be
responsible for the Operational Finance team. The Board wishes Roy
well for his future and thanks him for his significant contribution
to the Group's development.
Undoubtedly the most pleasing aspect is that we have recently
been able to make announcements whereby individuals who are
"learning their trade" have been promoted into senior and middle
management positions across our various activities of Logistics,
IT, Sales and Finance. As the Group continues to expand it allows
hardworking, diligent people the opportunity to fulfil their career
aspirations with Likewise.
It is really encouraging that our management across the country
are developing their skills in all aspects of the business, whilst
in most cases being still relatively young and have many years
ahead of them in their business career. Additionally there are a
number of people who have joined the Group over the last few years
who are already demonstrating skills and commitment with the
likelihood of being management of the future.
The Board would like to thank all Suppliers, Customers,
Management and Employees for their support and contribution to the
ongoing development of Likewise.
The Group has been able to establish a meaningful Flooring
Distribution business in challenging markets which must provide
confidence that the Management Team established along with all
employees can accelerate this growth as the economy and consumer
spending improves.
Tony Brewer, Chief Executive of Likewise Group plc, said:
"The Group continues to make significant progress and it is
brilliant to see our people being given the opportunity to progress
their careers and make an increasingly important contribution to
the Group's future.
"We have so many opportunities before us as we continue to
enlarge the Group's Infrastructure which will create additional
Sales and increased Profitability. With the original Targets before
us, the Group can now focus on creating a much larger Business than
previously anticipated."
For further information, please contact:
Likewise Group plc Tel: 0121 817
Tony Brewer, Chief Executive 2900
Roy Povey, Chief Financial Officer
Zeus (Nominated Adviser & Joint Broker) Tel: 0203 829
Jordan Warburton / David Foreman / James Edis 5000
(Investment Banking)
Dominic King (Corporate Broking)
Ravenscroft Consultancy & Listing Services Limited Tel: 01481
(Joint Broker) 732746
Semelia Hamon (Corporate Finance)
Novella Communications (Financial PR) Tel: 0203 151
Claire de Groot / Tim Robertson 7008
CAUTIONARY STATEMENT
Certain statements included or incorporated by reference within
this announcement may constitute "forward-looking statements" in
respect of the Group's operations, performance, prospects and/or
financial condition. Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or such
words and words of similar meaning as "anticipates", "aims", "due",
"could", "may", "will", "should", "expects", "believes", "intends",
"plans", "potential", "targets", "goal" or "estimates". By their
nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may
differ materially from those expressed or implied by those
statements. Accordingly, no assurance can be given that any
particular expectation will be met and reliance should not be
placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future. No responsibility or
obligation is accepted to update or revise any forward-looking
statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a
profit forecast. This announcement does not constitute or form
part of any offer or invitation to sell, or any solicitation of
any offer to purchase any shares or other securities in the Group,
nor shall it or any part of it or the fact of its distribution form
the basis of, or be relied on in connection with, any contract or
commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other
securities of the Group. Past performance cannot be relied upon as
a guide to future performance and persons needing advice should
consult an independent financial adviser. Statements in this
announcement reflect the knowledge and information available at the
time of its preparation.
CHIEF FINANCIAL OFFICER'S REPORT
2023 2022
Underlying Non-underlying Total Underlying* Non-underlying Total
** **
--------------- --------------- ------------- ---------------
Revenue 66,594,132 - 66,594,132 56,759,588 - 56,759,588
Cost of Sales (46,794,353) - (46,794,353) (39,296,875) - (39,296,875)
Gross Profit 19,799,779 - 19,799,779 17,462,713 - 17,462,713
Other operating
income - - - 782 - 782
Administrative
expenses (9,377,118) (990,064) (10,367,182) (6,981,136) (308,160) (7,289,296)
Distribution costs (9,164,355) (30,537) (9,194,892) (8,470,203) - (8,470,203)
Acquisition costs - - - - (1,293,112) (1,293,112)
Impairment losses
on trade
receivables (73,264) - (73,264) (21,563) - (21,563)
--------------- --------------- -------------- ------------- --------------- ------------
Profit/(loss) from
operations 1,185,042 (1,020,601) 164,441 1,990,593 (1,601,272) 389,321
Finance Income 21,417 - 21,417 161 161
Finance costs (499,520) (176,367) (675,887) (77,631) (225,969) (303,600)
--------------- --------------- -------------- ------------- --------------- ------------
Profit/(loss) before
tax 706,939 (1,196,968) (490,029) 1,913,123 (1,827,241) 85,882
Taxation - - - - - -
--------------- --------------- -------------- ------------- --------------- ------------
Profit/(Loss) for
the period 706,939 (1,196,968) (490,029) 1,913,123 (1,827,241) 85,882
--------------- --------------- -------------- ------------- --------------- ------------
* The figures initially presented in the interim accounts to 30
June 2022 included consolidation of Valley's results for the full 6
month period 1 January to 30 June 2022, and therefore included 13
days of pre-acquisition trade as the entity did not prepare daily
management accounts and therefore the pre-acquisition trade was
therefore not known. It was subsequently agreed with the Group's
auditors to project the pre-acquisition trade based on January's
full month results and to reduce revenue and cost of sales
accordingly. In addition, the H1 2022 revenue figure previously
disclosed also incorrectly included GBP582,192 of inter-group sales
due to an error in a supporting schedule, but was identified and
subsequently corrected in the annual financial statements for the
year ended 31 December 2022. Please see note 19 for more
information on this restatement of comparative information.
** Non -- underlying values are exceptional items, which include
share based payment transactions, acquisition costs, amortisation
of acquisition intangibles and strategic project costs. Adjusted
results are non -- GAAP metrics used by management and are not an
IFRS disclosure. Details of these charges can be seen in note 5 in
the accounts below.
Revenue and Margin
In the six months to June 2023, Group revenue was GBP66.6
million, (H1- 2022: GBP56.6 million).
This represents a year on year increase of 17.3%.
Reflecting the continued investment in the group and the
Likewise brand, the organic growth in the six months to June 2023
is 22.3%.
Gross profit for the period increased by 13% from GBP17.5
million to GBP19.8 million.
With the opening of the new facility in Glasgow and the
distribution capacity now established at 15 million cubic feet, the
group has started to see improvements in its operational
gearing.
In the six months to June 2023, distribution costs as a
percentage of sales were 13.8%, an improvement of more than one
percentage point over the 14.9% in the corresponding period in
2022.
Underlying profit before tax in the period to June 2023 was
GBP0.7 million compared to GBP1.91 million for the same period in
2022.
Financial position
Net assets at 30 June 2023 were GBP38.9 million compared to
GBP39.1 million, as presented in the full year financial statements
to 31 December 2022.
The group balance sheet remains strong and with debt levels
relatively low is well placed to support the business through the
next phase of its development.
The closing cash position of GBP4.5 million was a reduction of
-GBP1.4 million from the closing balance of GBP5.9 million as at 31
December 2022.
The positive operating cash generation in the period allowed the
group to continue with investment in property, plant and equipment
of GBP2.9 million and support the increased levels of working
capital required, GBP0.8 million.
There was a small receipt of asset funding in the six months to
June 2023, GBP0.3 million and the group will continue to consider
appropriate forms of funding to support future growth.
Consolidated statement of profit or loss and other comprehensive
income for the six months ended 30 June
6 month period 6 month period
ended ended
30 June 30 June
2023 2022
Note GBP GBP
Revenue 3 66,594,132 56,759,588
Cost of sales (46,794,353) (39,296,875)
-------------- --------------
Gross profit 19,799,779 17,462,713
Other operating income 4 - 782
Administrative expenses (10,367,182) (8,582,408)
Distribution costs (9,194,892) (8,470,203)
Impairment losses on trade receivables (73,264) (21,563)
-------------- --------------
Profit/(loss) from operations 5 164,441 389,321
Finance income 21,417 161
Finance costs (675,887) (303,600)
Profit/(loss) before tax (490,029) 85,882
Taxation 6 - -
-------------- --------------
Profit for the period (490,029) 85,882
-------------- --------------
Other comprehensive income:
Items that will not be reclassified
to profit or loss:
Revaluation of land and buildings 154,724 161,850
Items that will or may be reclassified
to profit or loss:
Exchange losses arising in relation
to translation of foreign operations (10,147) (15,406)
-------------- --------------
Total comprehensive income (345,452) 232,326
-------------- --------------
Pence per Pence per
Earnings per share share share
Basic profit per share 7 (0.20) 0.04
============== ==============
Diluted profit per share 7 (0.18) 0.03
============== ==============
Consolidated statement of financial position as at 30 June
30 June 31 December
2023 2022
Note GBP GBP
Assets
Non--current assets
Goodwill 9 5,624,284 5,624,284
Other intangible assets 10 4,012,450 4,208,884
Property, plant and equipment 11 29,594,420 28,003,809
Right-of-use assets 11 18,652,438 19,296,412
Trade and other receivables - -
57,883,592 57,133,389
Current assets
Inventories 20,589,793 18,388,527
Trade and other receivables 18,112,605 15,573,303
Cash and cash equivalents 4,523,957 5,913,155
43,226,355 39,874,985
Total assets 101,109,947 97,008,374
------------ ------------
Liabilities
Non--current liabilities
Trade and other liabilities 13 - (4,380,365)
Loans and borrowings 12 (1,409,061) (1,456,025)
Lease liabilities 12 (17,392,572) (18,766,025)
Deferred tax liability (2,496,677) (2,496,677)
(21,298,310) (27,099,092)
------------ ------------
Current liabilities
Trade and other liabilities 13 (31,323,178) (22,970,426)
Loans and borrowings 12 (5,232,509) (4,595,139)
Lease liabilities 12 (4,327,825) (3,182,373)
Provisions 14 (45,103) (50,075)
(40,928,615) (30,798,013)
------------ ------------
Total liabilities (62,226,925) (57,897,105)
------------ ------------
Net assets 38,883,022 39,111,269
============ ============
Share capital 15 2,438,585 2,438,360
Share premium 15 17,386,650 17,384,625
Warrant reserve 128,170 128,170
Share option reserve 16 743,409 628,454
Revaluation reserve 2,817,108 2,662,384
Foreign exchange reserve (50,634) (40,487)
Retained earnings 15,419,734 15,909,763
------------ ------------
Total equity 38,883,022 39,111,269
============ ============
Consolidated statement of changes in equity for the period ended
30 June
Revaluation Retained
Share capital Share premium reserve earnings
GBP GBP GBP GBP
Balance at 1 January
2023 2,438,360 17,384,625 2,662,384 15,909,763
Profit for the period - - - (490,029)
Other comprehensive income - - 154,724 -
Issue of share capital 225 2,025 - -
Share options exercised - - - -
Share issue costs - - - -
Reduction of share premium - - - -
Share options valuation - - - -
Dividends - - - -
------------- ------------- ----------- ----------
Balance at 30 June 2023 2,438,585 17,386,650 2,817,108 15,419,734
============= ============= =========== ==========
Share option Foreign exchange
reserve Warrant reserve reserve Total
GBP GBP GBP GBP
Balance at 1 January
2023 628,454 128,170 (40,487) 39,111,269
Profit for the period - - - (490,029)
Other comprehensive income - - (10,147) 144,577
Issue of share capital - - - 2,250
Share options exercised - - - -
Share issue costs - - - -
Reduction of share premium - - - -
Share options valuation 114,955 - - 114,955
Dividends - - - -
------------ --------------- ---------------- ----------
Balance at 30 June 2023 743,409 128,170 (50,634) 38,883,022
============ =============== ================ ==========
Revaluation Retained
Share capital Share premium reserve earnings
GBP GBP GBP GBP
Balance at 1 January
2022 1,923,742 22,458,816 2,406,127 (4,815,043)
Profit for the period - - - 85,882
Other comprehensive income - - 161,850 -
Issue of share capital 512,143 17,425,357 - -
Share options exercised 2,065 18,860 - -
Share issue costs - (522,098) - -
Reduction of share premium - (22,000,000) - 22,000,000
Share options valuation - - - -
Dividends - - - (487,590)
------------- ------------- ----------- -----------
Balance at 30 June 2022 2,437,950 17,380,935 2,567,977 16,783,249
============= ============= =========== ===========
Share option Foreign exchange
reserve Warrant reserve reserve Total
GBP GBP GBP GBP
Balance at 1 January
2022 308,776 128,170 (56,625) 22,353,963
Profit for the period - - - 85,882
Other comprehensive income - - (15,406) 146,444
Issue of share capital - - - 17,937,500
Share options exercised - - - 20,925
Share issue costs - - - (522,098)
Reduction of share premium - - - -
Share options valuation 150,547 - - 150,547
Dividends - - - (487,590)
------------ --------------- ---------------- ----------
Balance at 30 June 2022 459,323 128,170 (72,031) 39,685,573
============ =============== ================ ==========
Consolidated statement of cash flows for the period ended 30
June
6 month 6 month
period ended period ended
30 June 30 June
2023 2022
GBP GBP
Cash flows from operating activities
Profit for the period (490,029) 85,882
Adjustments for
Depreciation and amortisation 2,255,228 1,668,586
(Profit) / Loss on disposal of tangible
fixed assets (74,021) (34,411)
Finance income (21,417) (161)
Finance costs 675,887 303,600
Decrease in provisions (4,972) (338,852)
Share options issued 114,955 150,547
Net foreign exchange gain (9,880) (15,775)
---------------------- -------------------
2,445,751 1,819,416
Movements in working capital:
Increase in trade and other receivables (2,201,266) (3,960,608)
(Increase)/decrease in inventories (2,539,302) (4,546,649)
Increase in trade and other payables 3,972,387 6,631,758
---------------------- -------------------
Cash (used in)/generated from operations 1,677,570 (56,083)
Income taxes paid - (500,000)
---------------------- -------------------
Net cash (used in)/from operating
activities 1,677,570 (556,083)
---------------------- -------------------
Cash flows from investing activities
Purchases of property, plant and
equipment (2,865,150) (689,732)
Proceeds from disposal of property,
plant and equipment 88,197 20,926
Acquisition of subsidiaries, net
of cash acquired - (15,477,415)
Interest received 21,417 161
---------------------- -------------------
Net cash used in investing activities (2,755,536) (16,146,060)
---------------------- -------------------
Cash flows from financing activities
Interest paid (675,887) (303,600)
Consideration for new shares 2,250 15,498,827
Increase in invoice discounting 637,435 1,885,299
Repayment of lease liabilities (533,601) (854,666)
Cash received on leased assets 305,600
Repayment of loans (47,029) (62,493)
---------------------- -------------------
Net cash from/(used in) financing
activities (311,232) 16,163,367
---------------------- -------------------
Net increase/(decrease) in cash
and cash equivalents (1,389,198) (538,776)
Cash and cash equivalents at the
beginning of year 5,913,155 8,447,550
---------------------- -------------------
Cash and cash equivalents at the
end of the year 4,523,957 7,908,774
====================== ===================
Comprising
Cash at bank 4,523,957 7,908,774
Bank overdrafts - -
---------------------- -------------------
4,523,957 7,908,774
====================== ===================
Notes to the consolidated financial statements for the period
ended 30 June 2023
1. General information
The Company is a public company limited by shares, registered in
England and Wales and listed for trading on the Alternative
Investment Market operated by the London Stock Exchange Plc (AIM).
The registered company number is 08010067 and the address of the
registered office is Unit 4 Radial Park, Radial Way, Birmingham
Business Park, Solihull, Birmingham, United Kingdom, B37 7WN.
The principal activity of the Group is the wholesale
distribution of floorcoverings and associated products.
2. Accounting policies
Basis of preparation
The condensed and consolidated interim financial statements for
the period from 1 January 2023 to 30 June 2023 have been prepared
in accordance with International Accounting Standards ("IAS") 34
Interim Financial Reporting as adopted by the UK and on the going
concern basis. They are in accordance with the accounting policies
set out in the statutory accounts for the year ended 31 December
2022 and those expected to be applied for the year ended 31
December 2023 unless otherwise stated below.
These interim financial statements do not include all of the
information required in annual financial statements in accordance
with UK adopted International Accounting Standards and should be
read in conjunction with the consolidated financial statements for
the year ended 31 December 2022.
The comparatives shown are for the period 1 January 2022 to 30
June 2022, and 31 December 2022 and do not constitute statutory
accounts, as defined in section 435 of the Companies Act 2006, but
are based on the statutory financial statements for the year ended
31 December 2022.
A copy of the Group's statutory accounts for the year ended 31
December 2022 has been delivered to the Registrar of Companies and
the accounts are available to download from the Company website at
www.likewiseplc.com.
The financial information is presented in pounds sterling, which
is the functional currency of the entity and rounded to the nearest
GBP. The financial statements are prepared on the historical cost
basis unless otherwise specified within these accounting
policies.
Going concern
Given the uncertainty in the wider economic climate and the
subsequent impact this has on discretionary household spend, the
Group continue to monitor the impact of the high inflationary
environment. Whilst the Group has naturally faced increased costs,
we have continued to work with our suppliers and ensured where
possible we protect our customers from widespread price
increases.
As noted in the Chief Executive's statement, the trading
performance of the business remains positive and as such from
review of the Group's projections, the Board have reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and thus continue
to adopt the going concern basis in preparing these interim
financial statements.
These projections include the cash outflow required to fulfil
the contingent acquisition consideration linked to the acquisitions
of Valley Wholesale Carpets and Delta Carpets in the prior year.
Whilst not expected, the Board also consider that should there be
any deviation from these projections there are various mitigating
factors that could be taken in order to provide the cash required
to fulfil these obligations as they fall due. These include, but
are not limited to increasing the Group's invoice financing
facilities or other borrowing arrangements, reduction in capital
expenditure or the disposal of freehold property.
Impact of new international reporting standards
There are no accounting pronouncements which have become
effective from 1 January 2023 that have a significant impact on the
Group's interim condensed consolidated financial statements.
Estimates
The preparation of the interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this condensed interim financial information, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those applied to consolidated financial statements
for the year ended 31 December 2022. These are impairment of trade
receivables, accounting for defined benefit pension scheme,
inventory valuation and valuation of land and buildings.
3. Segmental reporting
For the purposes of segmental reporting, the Group's Chief
Operating Decision Maker (CODM) is considered to be the Executive
Board of Directors. The Board has not identified any separate
operating segments within the business. The Board reviews revenue
and expenses for the business as a whole and makes decisions about
resources and assesses performance based on this information.
Revenue is derived from continuing operations and arises
entirely through the wholesale of goods. Segmental analysis is
therefore not presented.
The Group is not reliant on any one customer and no customer
exceeds 10% of total annual turnover.
The Group generates revenue from both the UK and overseas as
detailed below:
6 month
6 month period period ended
ended 30 June 30 June
2023 2022
GBP GBP
United Kingdom 66,411,859 56,627,013
Rest of Europe 167,623 118,164
Rest of the world 14,650 14,411
-------------- -------------
66,594,132 56,759,588
============== =============
Seasonal fluctuations
The overall demand for the wholesale of goods has previously
been higher in the third and fourth quarters of the year. In the
previous six month period to 30 June 2022 revenue equated to 45.9%
of the annual revenue generated.
4. Other operating income
6 month
6 month period period ended
ended 30 June 30 June
2023 2022
GBP GBP
Sundry income - 782
5. Operating profit
Operating profit is stated after charging:
6 month
6 month period period ended
ended 30 June 30 June
2023 2022
GBP GBP
Underlying expenses
Depreciation of property, plant and equipment
including right-of-use assets 2,058,794 1,524,872
Amortisation of intangible assets 196,434 143,714
Share based payments 114,955 150,547
Impairment of inventories 274,075 24,969
Short term lease expense 196,610 137,589
Establishment costs of new sites 693,033 -
Muelebeke restructuring cost 47,122 -
Exceptional investment in point of sale 145,424 -
Acquisition costs - 1,293,112
6. Taxation on ordinary activities
Tax is calculated at 23.5% for the six months ended 30 June 2023
representing the best estimate of the average annual effective tax
rate expected to apply for the full year. No income tax is expected
in the period given the losses previously incurred by the
Group.
The Group has tax losses available to be carried forward. Due to
uncertainty around timing of the Group's projects, management have
not considered it appropriate to recognise all losses as an asset
in the financial statements. Tax losses of GBP11,539,175 were
available for offset against future taxable profits at 31 December
2022. A deferred tax asset of GBP1,577,985 was not recognised at 31
December 2022 in relation to these losses.
7. Earnings per share
Basic profit per share is based on the profit after tax for the
period and the weighted average number of shares in issue during
each period.
6 month
6 month period period ended
ended 30 June 30 June
2023 2022
GBP GBP
Profit attributable to equity holders of the
company (490,029) 85,882
============== =============
Number Number
Weighted average number of ordinary shares
used as the denominator in calculating basic
earnings per share 243,843,439 239,821,834
Adjustments for calculation of diluted earnings
per share:
Options 23,254,963 23,865,832
Warrants 2,800,000 2,800,000
----------- -----------
Weighted average number of ordinary shares
and potential ordinary shares used as the
denominator in calculating diluted earnings
per share 269,898,402 266,487,666
----------- -----------
pence per pence per
share share
Basic profit per share (pence) (0.20) 0.04
=========== ===========
Diluted profit per share (pence) (0.18) 0.03
=========== ===========
8. Dividends
Dividends were declared for the period to 30th June 2023
totalling GBPNil (2022 - GBP487,590).
9. Intangible assets
Goodwill
GBP
Cost and net book value
at 31 December 2022 5,624,284
Goodwill on acquisition -
(see note 16)
Impairment -
Amortisation -
---------
At 30 June 2023 5,624,284
=========
The Group tests goodwill annually for impairment, or more
frequently if there are any indications that goodwill might be
impaired.
The Directors have considered the impact of the current economic
uncertainty on the value of the goodwill but do not consider any
impairment required as at 30 June 2023 (31 December 2022 -
GBPNil).
10. Other intangible assets
Likewise
Delta Carpets Floors Likewise
Customer Customer Delta Carpets Floors
base base Brand name Brand name Total
GBP GBP GBP GBP GBP
Net book value
at 31 December
2022 475,158 1,591,762 500,157 1,641,807 4,208,884
Impairment - - - - -
Amortisation (25,684) (70,745) (27,036) (72,969) (196,434)
--------------- ----------- ------------- ----------- ----------
At 30 June 2023 449,474 1,521,017 473,121 1,568,838 4,012,450
=========== ============= =========== ==========
11. Property, plant and equipment
Land and Other owned Right of
buildings assets use assets Total
GBP GBP GBP GBP
Net book value at 31 December
2022 22,269,664 5,734,145 19,296,412 47,300,221
Additions 31,338 2,122,354 711,458 2,865,150
Disposals - (473) (13,703) (14,176)
Depreciation (154,724) (562,341) (1,341,729) (2,058,794)
Foreign exchange movements - (267) - (267)
Revaluation 154,724 - - 154,724
---------- ----------- ------------ -----------
At 30 June 2023 22,301,002 7,293,418 18,652,438 48,246,858
========== =========== ============ ===========
12. Loans and borrowings
Consolidated
30 June 31 December
2023 2022
GBP GBP
Current borrowings - secured
Bank loans and invoice discounting facility 5,232,509 4,595,139
Lease liabilities 4,327,825 3,182,373
---------- -----------
9,560,334 7,777,512
---------- -----------
Non-current borrowings - secured
Bank loans 1,409,061 1,456,025
Lease liabilities 17,392,572 18,766,025
---------- -----------
Total loans and borrowings 18,801,633 20,222,050
========== ===========
The directors consider that the carrying amount of the invoice
discounting facility and bank loan approximates their fair
value.
The invoice discounting facility is secured against the related
trade debtor balances and by a floating charge over the assets of
the Group. The invoice discounting facility is denominated in
Sterling.
Carrying amount
30 June 31 December
2023 2022
GBP GBP
Amounts repayable under bank loans
Within one year 206,058 206,123
In the second to fifth year inclusive 706,626 706,822
Beyond five years 702,435 749,203
--------- -----------
1,615,119 1,662,148
--------- -----------
The invoice discounting facility is held for Likewise Floors
Limited and has a fixed service charge of GBP18,000 per annum.
During 2018 the Parent Company obtained a bank loan of
GBP2,280,000. Repayments commenced on 5th August 2018 and were due
to continue until 5th January 2033. The loan is secured by a fixed
and floating charge over the Group's assets. The loan carries
interest on a floating rate basis with interest at Bank of England
rate plus a margin of 2.95%. A twelve month capital repayment
holiday was granted effective April 2020, with interest payments
made throughout the period to April 2021 when capital repayments
recommenced.
The loan was refinanced after the period end. Further details
are provided in note 20.
The loan is at a floating interest rate and exposes the Group to
fair value interest rate risk.
13. Financial instruments
The fair value hierarchy groups financial assets and liabilities
into three levels based on the significance of inputs used in
measuring the fair value of the financial assets and
liabilities.
The fair value hierarchy has the following levels:
- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
- Level 2: inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly
- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
The only financial instruments the Group holds which are
measured at fair value through the Income Statement (as level 2
above) are forward currency contracts. All other financial assets
and liabilities are held at amortised cost.
The tables below set out the Group's accounting classification
of each class of its financial assets and liabilities.
30 June 31 December
2023 2022
GBP GBP
Financial assets at amortised cost
Trade receivables 13,198,764 11,704,781
Other receivables 4,913,841 2,282,032
Cash and cash equivalents 4,523,957 5,913,155
---------- -----------
22,636,562 19,899,968
---------- -----------
All of the above financial assets' carrying values are
approximate to their fair values, as at each reporting date
disclosed.
30 June 31 December
2023 2022
GBP GBP
Non-current financial liabilities at amortised
cost
Deferred consideration - held at fair value - 4,380,365
Bank loans 1,409,061 1,456,025
Lease liabilities 17,392,572 18,766,025
18,801,633 24,602,415
---------- -----------
30 June 31 December
2023 2022
GBP GBP
Current financial liabilities at amortised
cost
Trade payables 22,387,476 18,106,217
Other payables 628,589 429,321
Accruals 2,049,711 1,727,216
Invoice discounting facility 5,026,451 4,389,016
Bank loans 206,058 206,123
Lease liabilities 4,327,825 3,182,373
Deferred consideration - held at fair value 4,380,365 -
---------- -----------
39,006,475 29,040,266
---------- -----------
All of the above financial liabilities' carrying values are
considered by management to approximate to their fair values, as at
each reporting date disclosed.
14. Provisions
Dilapidation
provision Total
GBP GBP
At 31 December 2022 50,075 50,075
Charged to profit or loss - -
Utilised during the period (4,972) (4,972)
At 30 June 2023 45,103 45,103
============== =======
All provisions are considered to be due within one year.
15. Share Capital
Consolidated and Company
30 June 31 December
Issued and fully paid 2023 2022
Number Number
Ordinary shares of GBP0.01 each 243,858,480 243,835,980
----------- -----------
The Company has one class of ordinary share which carry no right
to fixed income.
On 2 May 2023, the Company allotted 22,500 new GBP0.01 shares
for consideration of GBP0.10 per share, totalling GBP2,250. These
shares were issued under the Company's SAYE scheme.
16. Share-based payments
Equity settled share option plan
The Group has a number of share options plans including a
Savings-Related Share Option Plan ("SAYE") for all employees of the
Group. In accordance with the terms of the plan, as approved by
shareholders, employees of the Group may be granted options to
purchase ordinary shares. There are no performance criteria for the
SAYE and options are issued to participants in accordance with HMRC
rules. Vesting is conditional on continuity of service.
As at 31 December 2022, 8,140,830 share options remained active.
During the current period 4,462,181 new options were issued at a
weighted average option price of GBP0.17 per share and 1,873,707
options lapsed on employees leaving the Group. During the current
period, 22,500 options were exercised as detailed in note 15. The
average remaining contractual life of the remaining 10,706,804
options is approximately 2.5 years.
In addition, as at 31 December 2022, 11,350,000 share options
remained active which were issued under Enterprise Management
Incentives (EMIs). During the current period 150,000 options lapsed
on employees leaving the Group. The remaining contractual life of
these options is approximately 1.5 years.
In addition, as at 31 December 2022, 4,150,000 share options
remained active which were issued under a Company Share Option Plan
("CSOP"). During the current period 200,000 options lapsed on
employees leaving the Group. The remaining contractual life of
these options is approximately 3 years.
Share options are valued using the Black-Scholes model. The
inputs to the model are the option price and share price at date of
grant, expected volatility (20%), expected dividend rate (0%) and
risk free rate of return (4% - 5.25%). The model has been adjusted
for expected behavioural considerations.
The cost of options is amortised to the Statement of
Comprehensive Income over the service life of the option resulting
in a charge of GBP114,955 for the period.
A deferred tax asset has not been recognised in relation to the
charge for share based payments.
17. Retirement benefit plans
Defined benefit scheme
William Armes Limited, a subsidiary of the Group since 9 January
2018, operated a pension scheme providing benefits based on final
pensionable pay. The Scheme is closed to new members and is closed
to future accrual. For pensions earned after 5 April 1997 and for
Guaranteed Minimum Pensions earned between 6 April 1998 and 5 April
1997, increases in payment will be in line with CPI rather than
RPI. Revaluations of pensions in deferment are linked to RPI. The
scheme has been transferred to Likewise Floors Limited as part of
the transfer of trade and assets in December 2021.
The assets of the Scheme are held separately from those of the
Group in trustee-administered funds. The level of contributions is
determined by a qualified actuary on the basis of triennial
valuations. The latest full valuation was completed by an
independent actuary on 28 March 2022.
The latest set of workings and assumptions can be found in the
full Likewise Group Plc financial statements to 31 December 2022.
At 31 December 2022, there was no recognition on the statement of
financial position as the pension scheme assets equalled the
defined benefit obligation. An updated valuation could not be
obtained at 30 June 2023 and so no further disclosure has been made
in this set of interim financial statements.
18. Related party transactions
Key management personnel remuneration is disclosed as
follows:
6 month
6 month period period ended
ended 30 June 30 June
2023 2022
GBP GBP
Remuneration of key management
Remuneration 474,046 1,135,850
Social security costs 60,478 153,777
Company pension contribution to defined contribution
schemes 30,675 30,675
Share based payments - -
-------------- -------------
565,199 1,320,302
============== =============
Included in the figures disclosed for the period ended 30 June
2022 is the bonus paid in respect of the successful acquisition of
Valley Wholesale Carpets (2004) Limited, as set out in the
acquisition document.
19. Restatement of comparative
The Group acquired Valley Wholesale Carpets Limited as a
subsidiary entity on 14 January 2022. The figures initially
presented in the interim accounts to 30 June 2022 included
consolidation of Valley's results for the full 6 month period 1
January to 30 June 2022, and therefore included 13 days' of
pre-acquisition trade, as the entity did not prepare daily
management accounts and the pre-acquisition trade was therefore not
known. It was later agreed with the Group's auditors to project the
pre-acquisition trade based on January's full month results, and to
reduce income and cost of sales accordingly. The adjustment of
GBP1,013,349 was made in the financial statements for the year
ended 31 December 2022, and has therefore also been made to the
comparatives in these interim financial statements to reflect
this.
In addition, the H1 2022 revenue and cost of sales figures
previously disclosed incorrectly included GBP582,192 of inter-group
sales/purchases due to a formula error in a supporting schedule.
The was not identified prior to issuance of the 2022 interim
results but was identified and corrected in the annual financial
statements for the year ended 31 December 2022, and as such these
were not misstated as a result of this error. Revenue and cost of
sales have been reduced by this amount to correct the results for
the comparative period.
20. Post balance sheet events
On 31 July 2023, the Group obtained a bank loan of GBP2,495,000
to refinance its existing borrowing. On 2 August 2023, the existing
bank loan, and all outstanding interest accrued to this date, was
repaid in full. Repayments of the new loan commenced on 31 August
2023 and will continue until 30 June 2038. This loan is secured by
a fixed and floating charge over the Group's assets. The loan
carries interest on a floating rate basis with interest at Bank of
England base rate plus a margin of 2.35%.
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END
IR SELESAEDSESU
(END) Dow Jones Newswires
September 29, 2023 02:00 ET (06:00 GMT)
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