Lords has entered into an agreement with Gempoint 2000 Limited for the sale and leaseback of four of its properties for £13.1 million.
The sites, all within the Merchanting division, are located in Tamworth, Dewsbury, Luton and Ilkeston, and will be leased back to the Group on fifteen-year leases.
The net proceeds from the Sale will be applied towards reducing Group borrowings, and in doing so will provide additional liquidity headroom capable of supporting the Group’s organic growth strategy, as well as selective acquisitive growth opportunities in the future.
The initial rent for all four properties will be £917,082 per annum, while the rent on each will be subject to five yearly upward-only rent review at the higher of RPI.
Lords expect the impact of the transaction to be broadly neutral as the additional rent payable will be offset by reduced interest payments. The balance sheet will be impacted in the current year by a right of use asset of approximately £4.4 million and an IFRS 16 lease liability of £9.0 million. At 31 December 2024, the properties had an unaudited aggregate book value of £6.5 million and a property gain of approximately £2.0 million is expected to result from the Transaction.
Shanker Patel, CEO of Lords, is majority owner and a Director of Gempoint 2000.
Commenting on the transaction, Stuart Kilpatrick, Chief Financial Officer of Lords, said: "We are pleased to announce this transaction which will not only significantly enhance the Group’s balance sheet but also support our strategy of scaling the business through organic growth, as evidenced by the recent branch openings in Maidstone, Mansfield and Bicester, as well as through selective acquisition opportunities that exist in the fragmented markets in which we operate.”
