Unchanged dividend reflecting medium term confidence.
Lords, a leading distributor of building materials in the UK, has today (Wednesday 15 May) announced its annual results for the year ended 31 December 2023.
Performance was in line with market expectations for FY23 and FY24. Non-discretionary nature of a significant proportion of Lords’ product range, alongside the Group’s differentiated growth strategy, delivered this performance despite material market headwinds across the sector
Lords showed a record Group revenue in the year, reaching £462.6 million, up 2.8% on FY22.
P&H division revenues increased 8.0% to £247.7 million (FY22: £229.3 million), 3.7% higher on a like-for-like basis, benefitting from extended product ranges at higher margins such as renewables.
Merchanting division revenues decreased 2.6% to £214.9 million (FY22: £220.8 million), with LFL decrease of 6.3% reflecting price deflation in some product categories.
Lords’ customer first proposition continuing to benefit the Group, giving superior customer insight and agility in specific product and brand sales strategies.
Organic growth levers continued to drive value creation.
Brand roll outs saw Lords accessing new markets and customers - Mr Central Heating opened a new site in Edinburgh and will seek to establish a 50 branch network in the medium term.
The product range is continuing to expand with new renewables energy range increasing its revenues by 60% in FY23.
There was also a successful completion of two acquisitions in the Merchanting division – Chiltern Timber Supplies and Alloway Timber – adding six branches to the Group’s network and 93 new colleagues.
And ESG momentum continues, including the launch of a new environmental policy alongside setting scope 1,2,3 emission reduction targets.
Post year-end announced the appointment of Stuart Kilpatrick as CFO, a highly experienced finance executive with a track record in public company M&A, who will be joining the Board on 4 June 2024.
As far as current trading and outlook, FY24 has begun with wider market conditions remaining uncertain and Lords will continue to manage the business carefully and prudently, particularly when looking at M&A opportunities
In line with the wider market, trading in Q1 FY24 was impacted by a combination of macro conditions and wet weather. Furthermore, demand in the P&H division was turbulent following the timing adjustment to the Government’s Clean Heat Market Mechanism
Despite the uncertain market conditions, Lords is trading in line with market expectations and the Board remains confident in achieving the Group’s medium-term EBTIDA margin target of 7.5%.
Shanker Patel, Chief Executive Officer of Lords, said: “FY23 has demonstrated that we have successfully built a sustainable growth business. Despite the challenging macroeconomic backdrop, the Group has once again grown its top line and gained market share, while continuing to invest to deliver future growth.
“While short term trading pressures may exist, I remain confident in our strategy and its ability to deliver sustained growth over the medium term. Our market remains substantial, highly fragmented and we have a track record of consolidation and organic growth which combined deliver excellent returns for all of our stakeholders.”
