Chris Day (CFO) and Shanker Patel (CEO)
The Group has continued to accelerate the delivery of its strategic plan, reflected in its financial performance in the half year.
Trading continues in line with market expectations for FY22, being revenue of £435.0 million, adjusted EBITDA of £26.0 million and adjusted profit before tax of £16.0 million.
The Merchanting division has continued to perform strongly, with record revenues of £105.9 million (H1 2021: £61.1 million), representing growth of 73.4% and 14.5% on a like-for-like basis
The Plumbing and Heating division has demonstrated resilient performance with increased profitability and margin, and customer demand remaining strong during the period, delivering Adjusted EBITDA increase of 10.6% in H1 2022 to £6.5 million (H1 2021: £5.9 million).
Boiler component shortages resulted in like-for-like revenue of (12.5%) and (8.2%) including the H1 2022 acquisition of DH&P Plumbing and Heating.
Management actions, including shifting sales mix towards higher margin energy efficiency product ranges, has mitigated the impact of shortages, although management expects the boiler component shortage to ease during H2 2022.
Group digital revenues grew by 4.8% on a like-for-like basis with customers benefiting from the ability to shift across channels (online/instore) in their purchasing journey with Lords.
Merchanting digital revenues growing by 133.1% on a like-for-like basis, equivalent to 3.4% of divisional revenue (H1 2021: 2.2%).
Four completed acquisitions in the period all continue to perform in line with the Board’s expectations following successful integration.
The company's product range extension is continuing to expand customer base and share of existing customer wallet, with new ranges introduced to support the decarbonisation of the UK housing stock and energy price impact, including heating controls, air source heat pumps and underfloor heating within the P&H division.
Lords continues to see positive customer demand across the Group’s product offering and the Board considers that the Group’s organic growth strategy of product range extension and new locations will continue to secure new customers alongside a greater share of existing customer wallet.
The Board remains vigilant of the potential for broader macro-economic volatility, however is confident that the Group’s business plan, adaptability and high levels of customer service leave the Group well positioned for continued outperformance.
Shanker Patel, Chief Executive Officer of Lords, said: “We can only deliver these results due to our colleagues’ outstanding dedication and commitment to our customers, their superior product knowledge and focus on exceptional service, all of which are visible throughout our H1 2022 results which have delivered record H1 revenue
“The Group has continued to accelerate the delivery of its strategic plan, reflected in our financial performance in the half year which reaffirm delivery of our strategic targets of £500m revenue by 2024 and 7.5% EBITDA margin in the medium term.
"We have a substantial opportunity to grow the Group’s current < 1% market share through attracting new customers, a greater share of existing customer wallet, product range extension, new geographies, digital capability and valued added acquisitions."
Patel continued: "In the Group’s 12 months as a listed company, we have delivered all our IPO commitments and believe our strategy will continue to deliver outperformance. The strength of these results and confidence in the outlook supports our declaration of an interim dividend to shareholders of 0.67 pence per share. Our agility and entrepreneurialism allow the Group to manage challenges and seize opportunities and our H1 2022 results are testament to this mentality.”
