Lords Group Trading PLC Acquisition of Alloway Timber (1090L)

TIDMLORD

RNS Number : 1090L

Lords Group Trading PLC

01 September 2023

 
 For immediate release   1 September 2023

Lords Group Trading plc

('Lords', the 'Group' or the 'Company')

Acquisition of Alloway Timber

Lords, a leading distributor of building materials in the UK, is pleased to announce the purchase of Alloway Holdings Limited ('Alloway Timber') for a total net consideration of GBP2.25 million (the 'Acquisition'). The Acquisition is in line with the Group's stated IPO strategy, due to its complementary geographic position to the Group's growing Merchanting branch portfolio.

Established in 1971, Alloway Timber is an independent family-run merchant operating from five sites located in the South East of England at Mitcham, Cheam, Byfleet, Kingston and Putney. The business specialises in providing timber and general building supplies and will join the Group's Lords Builders Merchant network, taking the brand to 17 locations in the South East of England. The Acquisition is expected to be earnings accretive from 2024 financial year, and will achieve a strong return on capital employed as synergies are realised and the business financially and operationally matures in-line with a typical Lords Builders Merchant profile.

For year ended 31 December 2022, Alloway Timber delivered GBP15.9 million of revenue and c.GBP(1.0) million of EBITDA. In the medium term, Lords expect the Alloway Timber branches to reach the margins achieved by the wider Merchanting division.

The total net vendor consideration is GBP2.25 million in cash, of which GBP1.53 million is payable immediately and GBP0.72 million deferred 12 months from entry into the sale and purchase agreement, with GBP0.25 million payable to the vendor and GBP0.47 million to HMRC for corporation tax liabilities in Alloway Timber triggered by the transaction. In addition, the Company will pay down GBP1.05 million of Alloway Timber's existing debt, immediately post completion of the Acquisition. The Acquisition consideration is net of freehold property disposal of GBP3.6 million which occurred concurrently with the Acquisition.

Shanker Patel, Chief Executive Officer of Lords, said:

"We are delighted to announce the successful acquisition of Alloway Timber and to welcome their 83 colleagues to the Lords Group family. The acquisition is complementary to our existing Lords Builders Merchants business with strong synergies, continued strategic investment in our 3Ps and will increase our customer base -along with further increasing our geographic presence in the South East."

- Ends -

FOR FURTHER ENQUIRIES:

 
 Lords Group Trading plc                                     Via Buchanan 
 Shanker Patel, Chief Executive Officer              Tel: +44 (0) 20 7466 
                                                                     5000 
 Chris Day, Chief Financial Officer and Chief 
  Operating Officer 
 
 Cenkos Securities plc (Nominated Adviser             Tel: +44 (0)20 7397 
  and Joint Broker)                                                  8900 
 Ben Jeynes / Max Gould / Dan Hodkinson (Corporate 
  Finance) 
 Julian Morse / Henry Nicol (Sales) 
 
 
 Berenberg (Joint Broker)                       Tel: +44 (0)20 3207 
  Matthew Armitt / Richard Bootle / Detlir                     7800 
  Elezi 
 Buchanan Communications                       Tel: +44 (0) 20 7466 
                                                               5000 
 Henry Harrison-Topham / Jamie Hooper / Abby    LGT@buchanan.uk.com 
  Gilchrist

Notes to editors:

Lords is a specialist distributor of building, plumbing, heating and DIY goods. The Group principally sells to local tradesmen, small to medium sized plumbing and heating merchants, construction companies and retails directly to the general public.

The Group operates through the following two divisions:

-- Merchanting: supplies building materials and DIY goods through its network of merchant businesses and online platform capabilities. It operates both in the 'light side' (building materials and timber) and 'heavy side' (civils and landscaping), through 31 locations in the UK.

-- Plumbing and Heating: a specialist distributor in the UK of plumbing and heating products to a UK network of independent merchants, installers and the general public. The division offers its customers an attractive proposition through a multi-channel offering. The division operates over 17 locations enabling nationwide next day delivery service.

Lords was established over 35 years ago as a family business with its first retail unit in Gerrards Cross, Buckinghamshire. Since then, the Group has grown to a business operating from 48 sites. Lords aims to become a GBP500 million turnover building materials distributor group by 2024 as it grows its national presence.

Lords was admitted to trading on AIM in July 2021 with the ticker LORD.L. For additional information please visit www.lordsgrouptradingplc.co.uk .

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September 01, 2023 03:34 ET (07:34 GMT)

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