• Mark Watson-Mitchell

Likewise Group – impressive and significant progress in the first half-year

The interim results from this UK floor coverings distributor for the six months to the end of June showed sales up an impressive 108% to £58.4m (£28.0m) and a 77% increase in underlying pre-tax profits at £1.91m (£1.08m).


The figures from the Solihull-based Likewise Group (LON:LIKE) also showed 77% improvement in its net assets from £22.4m to £39.7m.


Coping with the pressures


The very acquisitive group has really been spreading its coverage in the last couple of years, at the same time its organic business has grown.


That is impressive against the backdrops of Covid-19, inflationary costs, stock supply and staffing hassles.


The fast-growing £52m capitalised group countered such pressures by increasing its selling prices in early May.


There has been a continuation of positive sales in the last three months, as it leads into the busier final quarter of the year.


CEO Tony Brewer stated that:


“Likewise has made considerable progress in the last two years. The acquisition of Valley was a particularly important step. The increase in Net Assets and subsequently solid Balance Sheet provides the Group with strong foundations for the future.


With the extensive logistics, sales and marketing investment we are confident in progressively building a substantial and profitable floor covering distribution business."


Analyst’s opinion


Brokers analyst Andy Hanson, at Zeus Capital, rates the group’s shares as a Buy.


He is looking for benefits to come from new product launches in the second half of the current year, together with the almost doubling of the group’s logistics capacity to 15m cubic feet, helping to expand its geographic coverage.


His estimates for the year to end December are for sales of some £114.9m, providing more than doubled profits of £3.7m, generating 1.3p of earnings per share, together with a 0.3p dividend.


The 2023 trading year sees Hanson estimating £136.6m in sales, £5.9m in profits, with earnings of 1.9p and a 0.5p per share dividend.


The recent acquisitions, logistics increase and rising coverage across the country should be able to help push the Likewise Group 2024 revenues up to £160.8m, its profits up to £8.8m, and earnings of 2.7p amply covering a 0.7p per share dividend.


Good equity involvement


The group’s management has a good 21% of its equity, while it is also being backed by a good number of institutional investors, like Octopus, CRUX, AXA, and Allianz Global.


I now see the group looking to make its recent acquisitions, and its operations generally, perform to management expectations.


The company has a strong balance sheet, with gross cash of £7.9m and net cash of £1.9m, backed up by over £20m of properties.


Floated at 25p a share in August last year, they were up to 52.5p by last December, since when the shares have gradually drifted back to the current 21.5p.


At that level they could well offer investors the potential for a 50% appreciation within a year or so.

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