Interim Results
Continued momentum with strategic targets well on track
and growth opportunities strong despite challenging market conditions
Lords (AIM:LORD), a leading distributor of building materials in the UK, today announces its unaudited Interim Results for the six months ended 30 June 2023 (‘H1 2023’ or the ‘Period’).
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H1 2023 Financial Highlights
- Record H1 Group revenues of £222.6 million (H1 2022: £214.2 million), a 3.9% increase overall or decrease of 4.4% on a like-for-like (‘LFL’)1 basis.
- Adjusted EBITDA2 of £15.1 million (H1 2022: £14.2 million restated), a 6.1% increase.
- Adjusted EBITDA margin of 6.8% (H1 2022: 6.6%), on track to reach 7.5% medium term target.
- Operating Profit of £8.1m (H1 2022: £7.3 million restated), a 11.6% increase.
- Interim dividend of 0.67 pence per share (H1 2022: 0.67 pence per share).
- The Board remains confident of delivering our strategic targets of £500 million revenue by 2024 and improving EBITDA margins to 7.5% in the medium term.
Percentages are based on underlying, not rounded, figures.
1 Like-for-like sales is a measure of growth in sales, adjusted for new, divested and acquired locations such that the periods over which the sales are being compared are consistent.
2 Adjusted EBITDA is EBITDA (defined as earnings before interest, tax, depreciation and amortisation and, in accordance with IFRS) but also excluding exceptional items and share-based payments.
Operational Highlights
- Robust Merchanting division performance:
- Record revenues of £109.4 million (H1 2022: £105.9 million), representing growth of 3.3% and decrease of 5.1% on a LFL basis.
- Trading decisions focused on delivering enhanced Adjusted EBITDA margins of 7.7% (H1 2022: 7.3%).
- Plumbing and Heating division (‘P&H’) delivers solid first half despite prevailing trading environment:
- Record revenues of £113.2 million (H1 2022: £108.3 million), representing growth of 4.5% and decrease of 3.8% on a LFL basis.
- Previous industry wide boiler supply issues now resolved, with phasing of Group inventory levels expected to normalise prior to year end.
- Mr Central Heating branch expansion plans continue with the eleventh branch opened in Edinburgh ahead of a planned acceleration of 40 new store openings over the next five years.
- Acquisition pipeline remains active, offering potential for further market share gains, enhanced profitability and further diversified revenue streams:
- Chiltern Timber Supplies Limited was acquired on 3 April 2023 on an initial 3.2x EBITDA multiple, offering the Merchanting division extension of range and geography. The business is performing in line with the Board’s expectations following successful integration.
- Alloway Timber was acquired on 1 September 2023, adding five branches to the Lords Merchanting division in complementary locations in the South East of England. The business was acquired for a total cash outlay of £3.3 million of which £2.6 million was payable upon completion.
- Management remains focused on further opportunities that are complementary to Lords’ strategy of product range and geographic expansion.
Current Trading and Outlook
- The Group has delivered a resilient performance in H1 2023 and the Board believes that the Group is currently outperforming the market3 but is not immune to persistent macro-economic pressures.
- Since our last market update, persistent high levels of inflation, increasing interest rates and weaker consumer confidence have continued to reduce demand in the Group’s key end markets of private repairs, maintenance and improvements (RMI) and new build housing, and consequently demand for the Group’s products.
- Given the continuing challenging backdrop, the Board now anticipates that demand will remain at current levels throughout the remainder of H2 2023. Accordingly, the Board expects the Group to deliver full year revenues of approximately £450 million and Adjusted EBITDA of approximately £27 million.
- The Board remains confident of delivering its strategic targets of £500 million revenue by 2024 and EBITDA margins of 7.5% in the medium term, with the Group’s colleague and customer focused proposition enabling Lords to take market share, as well as being an acquirer of choice in the market.
3The Construction Product Association’s (CPA) January forecasts were for a reduction of 11% and 9% in new build housing and private housing RMI, respectively, in 2023. The CPA’s latest forecasts, published in July, are for a reduction of 19% and 11% in new build housing and private housing RMI, respectively, in 2023.
Commenting on the Interim Results, Shanker Patel, Chief Executive Officer of Lords, commented:
“Lords performed well in the period recording another record half year, despite tougher market conditions. These results are testament to our outstanding colleagues and continued execution of our strategy, which when combined, offer our customers a continually improving proposition.
“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 value added acquisitions. Our focus on the essential and resilient ‘Repair’ sector of RMI positions us more defensively during periods of volatility.
“The Board is still mindful of accumulating short-term macroeconomic conditions to which the Group is not immune and expects trading conditions to be more challenging in the second half of the year against strong comparators. However, we anticipate Lord’s agility, entrepreneurialism and strong positioning will enable the Group to deliver its strategic target of £500 million revenue by 2024 and EBITDA margins of 7.5% in the medium term.”
Chief Executive Officer's Review
On behalf of the Board, I am pleased to introduce our Interim Results for the six months to 30 June 2023. The Group has performed strongly in the period, delivering enhanced profitability and continued execution of our growth strategy.
H1 2023 Overview
The H1 2023 results demonstrate the success of Lords’ growth strategy which continues to be executed by its divisional teams, resulting in a 6.1% increase in Adjusted EBITDA. These results reflect Lords’ colleague and customer focused proposition which enables continued market share gains.
H1 2023 revenues totalled a record £222.6 million (H1 2022: £214.2 million), a 3.9% increase with both divisions contributing to the revenue growth – P&H 4.5%, Merchanting 3.3%. Revenues on a LFL basis decreased by 4.4% in H1 2023 which we believe continues to outperform the market3.
The Group delivered Adjusted EBITDA of £15.1 million (H1 2022: £14.2 million) with continued margin enhancement as adjusted EBITDA margins increased to 6.8% (H1 2022: 6.6%). Margin accretion continues to be delivered despite overhead inflationary pressures, reflecting disciplined growth investment.
Strategic Initiatives
Lords has made good progress on its strategic initiatives, which are aimed at growing our <1% market share through profitable, margin accretive growth with a revenue target of £500 million in 2024 and 7.5% EBITDA margin in the medium term. Our strategic growth initiatives are:
- New branch openings to expand our geographical presence and access new customers.
- Product range extension to enhance our customer proposition enabling a greater share of customer wallet.
- Digital expansion via our in-house team to generate more customers and an enhanced customer experience.
- Acquisitions on a multiple that are accretive and add geography and product range extension.
These ongoing investments support the execution of our growth strategy, and the organic initiatives (points 1-3) are within our overall capital expenditure guidance. Progress on each of these initiatives is reviewed below:
New branch openings
The Board believes there is opportunity for all of our brands to open new branches as part of our organic growth strategy. Two brands have an exceptional opportunity to open new branches, expanding geographical presence whilst accessing new customers.
Mr Central Heating is our digitally led P&H trade counter business which has the potential to open up to 40 new stores (from 10 to up to 50) over the next five years. The eleventh branch recently opened in Edinburgh and management has identified the additional 39 target markets for future openings. Mr Central Heating is well placed to deliver this branch rollout programme, with access to the wider P&H product range and a mature online proposition. All new Mr Central Heating branches have delivered accretive EBITDA margins at maturity and exceeded internal return hurdles.
George Lines is the second brand identified for organic expansion, being the Group’s specialist civils merchanting business. Currently operating from three locations in the South East of England, management has identified seven further locations for future expansion, which will expand the brand to 10 locations nationwide. The customer proposition is focused on product expertise, service and availability differentiating George Lines from many of its competitors and thus forging strong customer relationships. Management expects the first of the seven new branches to be opened in the next six months.
Product Range Extension
This strategy is designed to leverage our core competencies while tapping into emerging opportunities. By introducing new variations, complementary products, and innovative solutions across product categories, we aim to capture untapped segments and enhance customer loyalty.
Renewables is an example within the innovation category with customer demand for energy efficient technologies gaining continual momentum. Our Group is uniquely placed to serve this market through our distributor, P&H merchant and general builders merchant platforms. In H1 2023, this product category including air source heat pumps, controls, under floor heating and air conditioning delivered 75% revenue growth.
Digital Expansion
We believe our customers benefit from the ability to shift across channels (online / instore) in their purchasing journey with Lords, and our online presence offers a powerful customer attraction and retention tool. Our strategy is to invest in online capability that expands our customer base and builds loyalty through an enhanced purchasing experience.
We have an in-house digital team that delivers our digital roadmap, ensuring there is always a strong connection to the customer requirements. In Q1 2023, the lordsbm.co.uk website was upgraded, resulting in a 5x uplift in conversion rates and with 70% of revenue originating from non-account customers.
Acquisitions
There is a substantial consolidation opportunity within the UK building supplies sector to combine independent merchants and distributors. Lords targets transactions that deliver on our strategy of geographic and range expansion.
Due to our colleague and customer focused culture, Lords is seen as an attractive buyer with a proven track record of successful integrations. Since 2016, the Group has completed 14 acquisitions, of which five have occurred in the last two years at a blended 4.8x maintainable EBITDA.
Lords has a strong platform for future growth, with less than 1% market share and multiple growth levers to pursue. We remain confident of delivering our strategic targets of £500 million revenue by 2024 and improving EBITDA margins to 7.5% in the medium term.
Shanker Patel
Chief Executive Officer
7 September 2023
Financial Review
Revenue
The Group delivered revenue of £222.6 million in H1 2023 (H1 2022: £214.2 million), representing a total increase of 3.9% or £8.4 million and decline of 4.4% on a LFL basis. The LFL revenue performance is reflective of deflation in several core product categories alongside more selective customer profitability decisions supporting continued margin enhancements. Trading towards the end of Q2 2023 was more challenging, reflective of the impact of macroeconomic factors such as persistent, higher inflation and accelerating interest rates, impacting market conditions.
The Merchanting division contributed revenue of £109.4 million (H1 2022: £105.9 million) with growth of 3.3% and a decline of 5.1% on a LFL basis. The P&H division delivered total revenue of £113.2 million (H1 2022: £108.3 million) with growth of 4.5% and a decline of 3.8% on a LFL basis.
Revenue by division:
| H1 2023 | H1 2022 | % | % LFL | ||||
| £’m | £’m | growth | growth | ||||
| Merchanting | 109.4 | 105.9 | 3.3% | (5.1%) | |||
| Plumbing and Heating | 113.2 | 108.3 | 4.5% | (3.8%) | |||
| 222.6 | 214.2 | 3.9% | (4.4%) | ||||
Adjusted EBITDA
The Group’s Adjusted EBITDA increased by 6.1% to £15.1 million in H1 2023, compared to £14.2 million in H1 2022. Adjusted EBITDA margin improved to 6.8% (H1 2022: 6.6% restated) which is progressing well against our 7.5% medium term target.
Merchanting division EBITDA in H1 2023 increased to £8.5 million (H1 2022: £7.7 million) supported by revenue growth of 3.3%. The Adjusted EBITDA margin of 7.7% (H1 2022: 7.3%) reflects continued trading decisions around customer profitability designed to balance product price deflation and overhead inflation.
The P&H division achieved Adjusted EBITDA of £6.6 million (H1 2022: £6.5 million), with Adjusted EBITDA margin reducing to 5.8% (H1 2022: 6.0%). In a more challenging market year on year, the division is largely holding onto margin gains delivered over the last 24 months via a growing mix of higher margin product ranges.
Adjusted EBITDA by division:
| H1 2023 | H1 2023 | H1 2022 | H1 2022 | |
| £’m | margin | £’m | margin | |
| Merchanting | 8.5 | 7.7% | 7.7 | 7.3% |
| Plumbing and Heating | 6.6 | 5.8% | 6.5 | 6.0% |
| Total Group | 15.1 | 6.8% | 14.2 | 6.6% |
Depreciation and amortisation
Depreciation and amortisation increased to £6.6 million (H1 2022: £ 5.8 million restated) in line with acquisitions made in the last twelve months and in addition to continued capital expenditure investment in the Group’s three P’s (People, Plant, Premises) strategy.
Profit before tax
The Group generated Adjusted Profit before tax5 for the period of £7.7 million, compared to £8.4 million (restated) in the prior period.
The Group generated a profit before tax for the period of £5.6 million, compared to £5.8 million (restated) in the prior period. Interest on bank loans and overdrafts increased to £1.4 million (H1 2022: £0.3 million), linked to increased net debt and base rates.
5 Adjusted profit before tax is profit before tax before exceptional items, share based payments and amortisation of intangible assets.
Earnings per share
The Group reported a statutory profit after tax of £3.9 million (H1 2022: £4.2 million) (restated) resulting in a basic earnings per share of 2.35 pence compared to 2.53 pence (restated) in H1 2022.
Adjusted basic earnings per share (defined in note 10) decreased to 3.39 pence in H1 2023 compared to 3.87 pence (restated) in H1 2022.
Prior year adjustment
The December 2022 annual financial statements included a prior year adjustment to reflect the omission of accounting for put and call options over share holdings of non-controlling interests. As these adjustments impacted the prior period to 30 June 2023 comparatives these have been restated. For further information see note 4.3.
Dividend
The Board is pleased to announce an interim dividend for the period of 0.67 pence per ordinary share. This is in line with market expectations at the time of the Group’s IPO and is in line with the Board’s intention of a progressive dividend policy.
The interim dividend will be paid on 6 October 2023 to shareholders on the register at the close of business on 15 September 2023. The Company’s ordinary shares will therefore be marked ex-dividend on 14 September 2023.
Net Cash / Debt
The Group’s net debt (defined as borrowings less cash and cash equivalents) position, moved from a net debt position of £19.4 million at 31 December 2022 to a net debt position of £38.0 million at 30 June 2023.
The net cash / debt movement during the period is linked to three factors totalling £23.5 million:
- Deferred consideration payments totalling £4.6 million.
- Acquisition of Chiltern Timber Supplies Limited £0.7 million (net of cash acquired) and George Lines freehold £2.2 million initial outlay.
- P&H division working capital profile as at June 2023 being reflective of response to historical industry wide boiler supply issues. With industry wide boiler supply issues now resolved, the P&H division working capital profile is now expected to normalise back to cash through H2 2023 and in due course.
Cashflow
The Group generated operating cash flow before movements in working capital of £14.8 million in H1 2023 compared to £13.3 million (restated) in H1 2022. Cash consumed by operations was £1.3 million (H1 2022 cash generated: £12.8 million) with the P&H stock phasing driving the year on year movement.
Free cashflow (defined as cash generated by operating activities less capital expenditure, exceptional items, share based payments and interest paid) is the Group’s primary cashflow metric with £8.2 million consumed in H1 2023 verses £9.0 million (restated) generated in H1 2022.
£0.7 million was used for business acquisitions in H1 2023, relating to the acquisition of Chiltern Timber Supplies Limited.
Liquidity
At 30 June 2023, the Group had balance sheet liquidity of £57.0 million (30 June 2022 £48.9 million) of which £7.4 million (30 June 2022: £11.6 million) was held in accessible cash and £49.6 million (30 June 2022: £37.3 million) in undrawn but available bank facilities.
These resources together with strong cash flow from operations provide good liquidity and the capacity to fund investment in working capital, routine capital expenditure and growth activity including acquisitions.
Capital Expenditure and Investment in Intangible Assets
The Group maintained disciplined control over the allocation of capital, and capital expenditure for the period was £4.3 million (H1 2022: £1.9 million).
The most notable investment in the half year being the freehold purchase of George Lines’ Heathrow site for £6.3 million, with £2.2 million paid on signing and the remainder due to be paid by 5 July 2024. The Group will continue to lease the site until completion, which is the date on which the remaining consideration is paid, and with any rental payments before that date being deducted from the final consideration.
Excluding the freehold purchase, the underlying capital expenditure totalled £2.1 million (H1 2023: £1.9 million) as the Group continues to focus on the execution of its strategic initiatives to support growth.
Intangible assets rose to £44.6 million (30 June 2022: 43.6 million) as a result of the Chiltern Timber Supplies Limited acquisition.
Exercised options
On 11 May 2023, 3,021,478 new Ordinary Shares were admitted to trading on AIM as a result of the exercise of options by Lords colleagues under the Group's existing Company Share Option Plan. Following admission of the new Ordinary Shares, the Company's issued Ordinary Share capital comprise 165,532,849 Ordinary Shares.
Post balance sheet events
Acquisition of Alloway Holdings Limited
On 1 September 2023, the Group announced the acquisition of Alloway Holdings Limited (‘Alloway Timber’), an independent family-run merchant operating from five sites located in the South East of England at Mitcham, Cheam, Byfleet, Kingston and Putney.
For the year ended 31 December 2022, Alloway Timber delivered £15.9 million of revenue and c.£(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 £2.25 million in cash, of which £1.53 million is payable immediately and £0.72 million deferred 12 months from entry into the sale and purchase agreement, with £0.25 million payable to the vendor and £0.47 million to HMRC for corporation tax liabilities in Alloway Timber triggered by the transaction. In addition, the Company will pay down £1.05 million of Alloway Timber’s existing debt, immediately post completion of the Acquisition. The Acquisition consideration is net of freehold property disposal of £3.6 million which occurred concurrently with the Acquisition purchase.
Chris Day
Chief Financial Officer and Chief Operating Officer
7 September 2023
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2023
| 30 June | 30 June | 31 December | ||||
| 2023 | 2022 | 2022 | ||||
| Restated* | ||||||
| (unaudited) | (unaudited) | (audited) | ||||
| Note | £'000 | £'000 | £'000 | |||
| Revenue | 222,552 | 214,189 | 450,020 | |||
| Cost of sales | (177,153) | (172,827) | (361,237) | |||
| Gross profit | 45,399 | 41,362 | 88,783 | |||
| Other operating income | 349 | 658 | 681 | |||
| Distribution expenses | (2,174) | (2,274) | (4,632) | |||
| Administrative expenses | (28,517) | (25,561) | (54,866) | |||
| Adjusted EBITDA ** | 15,057 | 14,185 | 29,966 | |||
| Share based payments | (211) | (190) | (400) | |||
| Exceptional expenses | 7 | (165) | (879) | (929) | ||
| EBITDA * | 14,681 | 13,116 | 28,637 | |||
| Depreciation | (1,294) | (940) | (2,069) | |||
| Amortisation | (5,274) | (4,906) | (10,240) | |||
| Operating profit | 8,113 | 7,270 | 16,328 | |||
| Finance income | 99 | 8 | 42 | |||
| Finance expense | 8 | (2,623) | (1,502) | (3,572) | ||
| Profit before taxation | 5,589 | 5,776 | 12,798 | |||
| Taxation | 9 | (1,699) | (1,545) | (3,257) | ||
| Profit for the year | 3,890 | 4,231 | 9,541 | |||
| Other comprehensive income | - | - | - | |||
| Total comprehensive income | 3,890 | 4,231 | 9,541 | |||
| Total comprehensive income for the year attributable to: | ||||||
| Owners of the parent company | 3,839 | 4,010 | 9,117 | |||
| Non-controlling interests | 51 | 221 | 424 | |||
| 3,890 | 4,231 | 9,541 | ||||
| Earnings per share | ||||||
| Basic earnings per share (pence) | 10 | 2.35 | 2.53 | 5.68 | ||
| Diluted earnings per share (pence) | 10 | 2.28 | 2.32 | 5.36 |
1 EBITDA is defined as earnings before interest, tax, depreciation, and amortisation and, in accordance with IFRS.
2 Adjusted EBITDA is EBITDA but also excluding exceptional items and share-based payments.
See note 4.3 for details regarding the restatement.
The above condensed consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
As at 30 June 2023
| 30 June | 30 June | 31 December | ||||
| 2023 | 2022 | 2022 | ||||
| Restated* | ||||||
| (unaudited) | (unaudited) | (audited) | ||||
| £'000 | £'000 | £'000 | ||||
| Note | ||||||
| Non - Current assets | ||||||
| Intangible assets | 11 | 44,600 | 43,599 | 45,331 | ||
| Property, plant and equipment | 12 | 20,707 | 14,583 | 13,647 | ||
| Right-of-use assets | 13 | 42,301 | 34,867 | 38,968 | ||
| Other receivables | 14 | 337 | 309 | 279 | ||
| Investments | 30 | 85 | 85 | |||
| 107,975 | 93,443 | 98,310 | ||||
| Current assets | ||||||
| Inventories | 55,184 | 45,551 | 53,177 | |||
| Trade and other receivables | 14 | 69,029 | 70,205 | 71,023 | ||
| Assets classified as held for sale | - | - | 1,333 | |||
| Cash and cash equivalents | 7,409 | 11,581 | 16,038 | |||
| 131,622 | 127,337 | 141,571 | ||||
| Total assets | 239,597 | 220,780 | 239,881 | |||
| Current liabilities | ||||||
| Trade and other payables | 15 | (76,205) | (86,960) | (94,343) | ||
| Borrowings | 16 | (6,334) | (9,857) | (10,348) | ||
| Lease liabilities | 17 | (9,289) | (5,466) | (5,496) | ||
| Liabilities classified as held for sale | - | - | (675) | |||
| Current tax liabilities | (2,032) | (1,434) | (1,700) | |||
| Total current liabilities | (93,860) | (103,717) | (112,562) | |||
| Non-current liabilities | ||||||
| Trade and other payables | 15 | (6,847) | (5,675) | (4,716) | ||
| Borrowings | 16 | (39,080) | (22,816) | (25,086) | ||
| Lease liabilities | 17 | (37,273) | (33,144) | (37,024) | ||
| Other provisions | (1,353) | (1,220) | (1,283) | |||
| Deferred tax | (7,085) | (7,752) | (7,022) | |||
| Total non-current liabilities | (91,638) | (70,607) | (75,131) | |||
| Total liabilities | (185,498) | (174,324) | (187,693) | |||
| Net assets | 54,099 | 46,456 | 52,188 | |||
| Equity | ||||||
| Share capital | 828 | 788 | 813 | |||
| Share premium | 28,293 | 28,293 | 28,293 | |||
| Merger reserve | (9,980) | (9,980) | (9,980) | |||
| Share based payment reserve | 707 | 286 | 497 | |||
| Retained earnings | 32,889 | 22,521 | 31,237 | |||
| Equity attributable to owners of the parent company | 52,737 | 41,908 | 50,860 | |||
| Non-controlling interests | 1,362 | 4,548 | 1,328 | |||
| Total equity | 54,099 | 46,456 | 52,188 | |||
See note 4.3 for details regarding the restatement.
The above condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2023
Called up share capital | Share premium | Merger reserve | Share based payments reserve | Retained earnings | Equity attributable to owner of parent company | Non-controlling Interests | Total equity | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2023 | 813 | 28,293 | (9,980) | 497 | 31,237 | 50,860 | 1,328 | 52,188 |
| Profit for the financial period and total comprehensive income | - | - | - | - | 3,839 | 3,839 | 51 | 3,890 |
| Share based payments | - | - | - | 212 | - | 212 | - | 212 |
| Share capital issued | 15 | - | - | - | - | 15 | - | 15 |
| Put and call options over non-controlling interests | - | - | - | - | 15 | 15 | - | 15 |
| Deferred tax on options | - | - | - | (2) | - | (2) | - | (2) |
| Capital repayment | - | - | - | - | - | - | (17) | (17) |
| Dividends paid | - | - | - | - | (2,202) | (2,202) | - | (2,202) |
| As at 30 June 2023 | 828 | 28,293 | (9,980) | 707 | 32,889 | 52,737 | 1,362 | 54,099 |
| Called up share capital | Share premium | Merger reserve | Share based payments reserve | Retained earnings | Equity attributable to owner of parent company | Non controlling Interests | Total equity | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2022 as originally presented | 788 | 28,293 | (9,980) | 96 | 27,214 | 46,411 | 4,337 | 50,748 |
| Correction of error (net of tax) | - | - | - | - | (6,214) | (6,214) | - | (6,214) |
| Restated total equity at the beginning of the financial year | 788 | 28,293 | (9,980) | 96 | 21,000 | 40,197 | 4,337 | 44,534 |
| Profit for the financial period and total comprehensive income | - | - | - | - | 4,010 | 4,010 | 221 | 4,231 |
| Share based payments | - | - | - | 190 | - | 190 | - | 190 |
| Put and call options over non-controlling interests | - | - | - | - | (492) | (492) | - | (492) |
| Capital reorganisation | - | - | - | - | (10) | (10) | ||
| Dividends paid | - | - | - | - | (1,997) | (1,997) | - | (1,997) |
| As at 30 June 2022 (restated) | 788 | 28,293 | (9,980) | 286 | 22,521 | 41,908 | 4,548 | 46,456 |
| Called up share capital | Share premium | Merger reserve | Share based payments reserve | Retained earnings | Equity attributable to owner of parent company | Non-controlling Interests | Total equity | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| As at 1 January 2022 as originally presented | 788 | 28,293 | (9,980) | 96 | 27,214 | 46,411 | 4,337 | 50,748 |
| Correction of error (net of tax) | - | - | - | - | (6,687) | (6,687) | - | (6,687) |
| Restated total equity at the beginning of the financial year | 788 | 28,293 | (9,980) | 96 | 20,527 | 39,724 | 4,337 | 44,061 |
| Profit for the financial period and total comprehensive income | - | - | - | - | 9,117 | 9,117 | 424 | 9,541 |
| Share based payments | - | - | - | 400 | - | 400 | - | 400 |
| Share capital issued | 25 | - | - | - | - | 25 | - | 25 |
| Put and call options over non-controlling interests | - | - | - | - | (609) | (609) | - | (609) |
| Corporation tax options | - | - | - | - | 606 | 606 | 606 | |
| Deferred tax on options | - | - | - | 1 | 515 | 516 | 516 | |
| NCI share of acquisitions | - | - | - | - | - | - | 745 | 745 |
| Acquisition of non-controlling interest | - | - | - | - | 4,168 | 4,168 | (4,168) | - |
| Capital repayment | - | - | - | - | - | - | (10) | (10) |
| Dividends paid | - | - | - | - | (3,087) | (3,087) | - | (3,087) |
| As at 31 December 2022 | 813 | 28,293 | (9,980) | 497 | 31,237 | 50,860 | 1,328 | 52,188 |
See note 4.3 for details regarding the restatement.
The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the six month ended 30 June 2023
| 30 June | 30 June | 31 December | |||
| 2023 | 2022 | 2022 | |||
| Restated* | |||||
| £'000 | £'000 | £'000 | |||
| Cash flows from operating activities | |||||
| Profit before taxation | 5,589 | 5,776 | 12,798 | ||
| Adjusted for: | |||||
| Depreciation of property, plant and equipment | 1,294 | 940 | 2,069 | ||
| Amortisation of intangibles | 1,736 | 1,564 | 3,317 | ||
| Amortisation of right-of-use assets | 3,538 | 3,342 | 6,923 | ||
| Profit on disposal of property, plant and equipment | (27) | - | (151) | ||
| Profit on sale of business | (103) | - | - | ||
| Write off of investment | 55 | - | - | ||
| Share based payment expense | 211 | 190 | 400 | ||
| Finance income | (99) | (8) | (42) | ||
| Finance expense | 2,623 | 1,502 | 3,572 | ||
| Operating cash flows before movements in working capital | 14,817 | 13,306 | 28,886 | ||
| (Increase) in inventories | (1,601) | (279) | (8,438) | ||
| Decrease / (Increase) in trade and other receivables | 2,108 | 420 | (526) | ||
| (Decrease) / Increase in trade and other payables | (16,592) | (684) | 6,918 | ||
| Cash generated/(consumed) by operations | (1,268) | 12,763 | 26,840 | ||
| Corporation tax paid | (1,435) | (2,251) | (3,679) | ||
| Net cash (consumed) / generated by operating activities | (2,703) | 10,512 | 23,161 | ||
| Cash flows from investing activities | |||||
| Purchase of intangible assets | (128) | (119) | (236) | ||
| Business acquisitions (net of cash acquired) | (696) | (26,854) | (26,854) | ||
| A.W. Lumb resale creditor paid (see note 19) | - | (2,707) | - | ||
| Deferred consideration paid | (3,467) | (583) | (2,683) | ||
| Purchase of property, plant and equipment | (4,301) | (1,924) | (3,516) | ||
| Proceeds on disposal of property, plant and equipment | 264 | 57 | 195 | ||
| Purchase of non-controlling interest of Hevey | (1,063) | - | (2,480) | ||
| Cash received on sale of business | 805 | - | - | ||
| Interest received | 99 | 8 | 42 | ||
| Net cash used in investing activities | (8,487) | (32,122) | (35,532) | ||
| Cash flows from financing activities | |||||
| Principal paid on lease liabilities | (3,775) | (3,482) | (8,395) | ||
| Issue of share capital | 15 | - | 25 | ||
| Dividends | (2,202) | (1,997) | (3,087) | ||
| Non-controlling interests cash contribution | (17) | (10) | (10) | ||
| Proceeds from borrowings | - | 57,074 | 110,976 | ||
| Repayment of borrowings | 9,980 | (29,309) | (80,450) | ||
| Bank interest paid | (1,395) | (325) | (1,306) | ||
| Interest on financial liabilities | (45) | (162) | (124) | ||
| Net cash inflow / (outflow) from financing activities | 2,561 | 21,789 | 17,629 | ||
| Net increase / (decrease) in cash and cash equivalents | (8,629) | 179 | 5,258 | ||
| Cash and cash equivalents at the beginning of the year | 16,038 | 11,402 | 11,402 | ||
| Cash and cash equivalents at the end of the year | 7,409 | 11,581 | 16,660 | ||
| Cash and cash equivalents | 7,409 | 11,581 | 16,038 | ||
| Cash and cash equivalents included in assets held for resale | - | - | 622 | ||
| Cash and cash equivalents at the end of the year | 7,409 | 11,581 | 16,660 |
See note 4.3 for details regarding the restatement.
The above condensed consolidated statement of changes of cash flows should be read in conjunction with the accompanying notes.