Final Results

Growth strategy continuing to progress despite challenging markets
Unchanged dividend reflecting medium term confidence

Lords (AIM:LORD), a leading distributor of building materials in the UK, today announces its annual results for the year ended 31 December 2023 (‘FY23’ or the ‘year’).

 FY23 FY22 (%)
Revenue £462.6m £450.0m +2.8%
Revenue – Merchanting £214.9m £220.8m -2.6%
Revenue – Plumbing & Heating £247.7m £229.3m +8.0%
Adjusted EBITDA(1) £26.8m £30.0m -10.5%
Adjusted EBITDA margin 5.8% 6.7% -0.9%
EBITDA £23.5m £28.6m -18.1%
Profit before tax £3.0m £12.8m -76.8%
Adjusted Profit before tax(2) £10.4m £17.4m -40.7%
Basic earnings per share 0.84p5.68p -85.2%
Adjusted basic earnings per share(3) 4.35p 8.02p -45.8%
Dividend per share 2.0p 2.0p +0.0%
Free cash flow(4) £13.9m £19.1m -27.5%
Cash flow conversion(5) 59.2% 66.9% -7.7%
Net (debt)/cash(6) £(28.5)m £(19.4)m  


* Based on underlying, not rounded, figures.


FY23 Financial Highlights

  • Performance 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
  • Record Group revenue in the year, reaching £462.6 million, up 2.8% on FY22
  • Adjusted EBITDA(1) of £26.8 million (FY22: £30.0 million), down 10.5% and representing a margin of 5.8% (FY22: 6.7%) with a greater proportion of Group revenues generated by the Group’s Plumbing & Heating division (‘P&H’) in FY23
  • Adjusted basic earnings per share(3) down 45.8% to 4.35 pence (FY22: 8.02 pence)
  • Strong cash flow generated of £22.8 million (FY22: £26.8 million), contributing to free cash flow(4) generation of £13.9 million (FY22: £19.1 million)
  • Net debt(6) at 31 December 2023 of £28.5 million (31 December 2022: £19.4 million), with continued focus on providing a robust balance sheet
  • Total dividend for the year of 2.0 pence per share, unchanged from FY22 (FY22: 2.0 pence per share) demonstrating the Board’s confidence in the Group’s ability to deliver long term value for shareholders.

Operational Highlights

  • P&H division revenues increased 8.0% to £247.7 million (FY22: £229.3 million), 3.7% higher on a like-for-like(7) basis (‘LFL’), 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 continue to drive value creation:
    • Brand roll outs 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
    • Product range continuing to expand with new renewables energy range increasing its revenues by 60% in FY23
  • 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
  • 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. Stuart will be joining the Board on 4 June 2024.

Current Trading and Outlook

  • FY24 has begun with wider market conditions remaining uncertain and as such we 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 (‘CHMM’)
  • 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%.


(1)         Adjusted EBITDA is EBITDA (defined as earnings before interest, tax, depreciation, amortisation and impairment charges) but also excluding exceptional items, and share-based payments.

(2)         Adjusted profit before tax is profit before tax before exceptional items, share based payments amortisation of intangible assets and impairment charges.

(3)         Adjusted basic earnings per share is earnings attributable to shareholders of Lords Group Trading plc adjusted for exceptional items, share based payments, amortisation of intangible assets and impairment charges, divided by the weighted average number of shares in issue in the year

(4)         Free cash flow defined as cash generated by operating activities plus exceptional items less capital expenditure, taxation and interest paid

(5)         Free cash flow conversion is free cash flow as a percentage of EBITDA.

(6)         Net debt is defined as gross borrowings less cash and cash equivalents.

(7)         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


Commenting on the results, Shanker Patel, Chief Executive Officer of Lords, commented:

“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.  I would like to thank our colleagues across the UK, who without their fantastic commitment and support for our strategy, these results would not have been achieved.

“Whilst 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.”


Analyst Briefing

There will be an in person meeting for analysts at 09.00hrs today at Buchanan’s offices, which will be hosted by Gary O’Brien (Non-Executive Chairman), Shanker Patel (CEO) and Chris Day (CFO and COO).


Chairman’s statement

Lords demonstrated its resilience in FY23 and outperformed the wider sector despite the challenging economic environment.  This outperformance has largely been achieved due to approximately 80% of our revenues coming from the essential areas of the repairs, maintenance and improvement sector where purchases are not discretionary.  This has helped ensure a consistent level of underlying demand in both our core divisions.  We also believe that our superior customer engagement is now helping our brands take market share, using the product preference insights and customer loyalty, through periods of market volatility.

Our performance and growth strategy

Over recent years, the Group’s growth strategy has substantially broadened the business and diversified our revenue streams, and we saw the benefit of this in FY23.  On a like-for-like (LFL) basis, Group revenues held up well and were 1.2% lower than in FY22.  This was the result of 3.7% LFL revenue growth in the Plumbing and Heating (P&H) division offsetting a LFL decrease of 6.3% in the Merchanting division, where some product categories have seen price deflation.  Adjusted EBITDA reduced in the period to £26.8 million (FY22: £30.0 million) reflecting the challenging market conditions in our higher-margin Merchanting division and the impact of loss-making Alloway Timber as anticipated at acquisition.  Adjusted profit before tax of £10.4 million (FY22: £17.4 million) reflected market conditions and interest rate movements.

Mindful of macro conditions, we continue to leverage our differentiated customer first position to swiftly respond to volatile market conditions and ensure we manage the business prudently, focusing on our profitability and cash flows whilst exercising caution about capital allocation where required.

Furthermore, we selectively completed two acquisitions in the year, which were a strong geographical and product extension fit and both are performing in line with our expectations.

Our acquisition strategy is unique among our peers and aims to increase our market share and profitability, while further diversifying our revenue.  This is delivering CAGR beyond our peer group and demonstrating our ability to scale in the sector.  The markets we operate in are highly fragmented, with numerous specialist independent merchants, and we consistently demonstrate that Lords is a great home for these businesses given our customer and colleague-focused culture, making us an acquirer of choice.  Even so, in current economic conditions, maintaining our balance sheet discipline is crucial and we are taking a very considered approach to further acquisitions but remain well positioned as macro conditions improve.


The Board is recommending a final dividend of 1.33 pence per share, to give a total dividend in respect of the year of 2.0 pence per share, unchanged on FY22.

While the Group’s profits were lower in FY23, the total dividend is 2.2 times covered by adjusted earnings per share and the Board concluded it was appropriate to maintain the level of payout.  This reflects our confidence in the future growth of the business, its inherent resilience and commitment to a progressive dividend. Subject to Shareholder approval at the Annual General Meeting ("AGM"), the Final Dividend will be paid on 28 June 2024, with a record date of 24 May 2024 and an ex-dividend date of 23 May 2024.

Our purpose and culture

The Group’s culture is one of its key strengths. It helps us to stand out as an employer and deliver great service for our customers, driving organic growth through increased loyalty and share of wallet expansion.

As we continue to grow, we are focused on maintaining the key parts of our culture, such as the family feel of the business, while ensuring we are flexible enough to seize the opportunities ahead.  We have therefore done a considerable amount of work this year to more formally define our culture and the values that support it, and we are now integrating our refreshed values into the way we recruit and manage our people. This allows wider stakeholders to understand why independent vendors, customers and employees alike are choosing Lords.

As part of this process, we also refined our vision for the Group, which is set out within our annual report.  This encapsulates our fundamental purpose and the factors that make us stand out in our market, and will help to ensure all stakeholders are aligned to deliver Lords’ growth strategy.

Environmental, social and governance (ESG) matters

The Group’s environmental footprint has always been a priority for all of our management teams.  While the Board has ultimate responsibility for this, the actions that determine our performance are taking place across our business. We have therefore looked to increase accountability in the divisions and across local and regional brands, agreeing reduction plans and incentivised targets.  We are in the process of identifying appropriate key performance indicators at divisional and Group level, so we can set targets and incentivise delivery, including for the executive directors.  Since the end of the year, the Board has approved an updated environmental policy which is published on our website.

Our business is built on great customer service and that needs highly engaged and motivated people. Our regular surveys continue to show strong employee engagement, reflecting our people-focused culture and the example set by our CEO, Shanker Patel.

As I noted in my report to you last year, Dawn Moore stepped down as a non-executive director at the 2023 AGM, to focus on her executive responsibilities. The Board greatly valued Dawn’s expertise in human resources and we were keen to recruit a new director with a similar skill set.  We were therefore delighted to welcome Sheena Mackay in September 2023. Sheena’s background as a global HR Director in public companies made her the ideal candidate and she has taken over as Chair of the nomination and remuneration committees.  She also has experience as Chair of the ESG committee, helping oversee our efforts to formalise our sustainability commitments.

Since the year end, Chris Day informed the Board that he will be leaving to take up a new opportunity and we thank him for his service.  On 8 May 2024, we were delighted to announce that Stuart Kilpatrick will be joining the Board as our new Chief Financial Officer (CFO) on 4 June 2024.  Stuart is a highly experienced CFO, with a particular track record in M&A delivery, and we believe he will make a significant contribution to our continued success.  Lords is well supported by its strong, well established finance team who will ensure a smooth transition from Chris’s departure to Stuart joining.

Looking forward

In the near term, Lords remains focused on driving organic and margin accretive growth, accessing new markets and customers via new store-roll outs of existing brands, accelerating our digital capabilities and an increasing share of customer wallet through marketing new products.  In addition, the Group’s access to the growing decarbonisation product market is further increasing margin expansion.

Whilst we are seeing wider market conditions remaining uncertain in the near term, and we will continue to manage the business carefully and prudently, we are confident in the medium-term M&A opportunities that exist.  We continue to hold active conversations with a number of independent merchants across the UK.  As the Group monitors its pipeline of opportunities, Lords’ prudence and commitment to protecting its market reputation in the name of long-term success is vital.  We continue to believe in our differentiated proposition and diversified growth strategy and, as we move into the second half of the year, the Board looks to the future with confidence.


Gary O’Brien
Independent Non-Executive Chairman

14 May 2024

Chief Executive Officer’s review

Being a decentralised and flexible business has helped us to navigate difficult conditions in FY23, by allowing our branches to respond to their customers’ needs.  Our relentless focus on customer service continues to bear fruit, as we strive to provide a combined price and service proposition that our larger, less agile competitors cannot match.  This provides us with a strong base of loyal and satisfied customers who value their relationship with us, as reflected in our customer satisfaction scores, our Trusted Partner accreditation on Feefo and the multiple industry awards we received in FY23.  We will continue to take market share as we leverage our best-in-class customer engagement to get closer to customers. In addition, we continue to deploy technology and digitalise our processes to increase efficiency and reduce costs.


Group revenue reached a new high in FY23 of £462.6 million, up 2.8% on the £450.0 million achieved in FY22. As the Chairman has discussed in his statement, like-for-like revenues were resilient overall, with underlying LFL growth in P&H largely offsetting the impact of market conditions on our Merchanting division.  Our digital revenues have started to benefit from the launch in the period of new websites for most of our key brands, improving the customer online experience and customer choice, which is paramount whether in store in an increasing number of quality physical locations or online.

We also continue to see strong growth in newer product lines such as the renewables range in P&H, which has excellent prospects as well as enhanced margins.

Adjusted EBITDA was 10.5% lower at £26.8 million (FY22: £30.0 million), with the adjusted EBITDA margin down 0.9 percentage points to 5.8% (FY22: 6.7%).  This reflects market conditions and the greater proportion of Group revenues generated by P&H in FY23, which has a lower margin than Merchanting.  We remain confident of achieving our medium-term EBITDA margin target of 7.5% and have several levers to do so, including further accretive acquisitions, improving our productivity and efficiency, growing our higher-margin product lines and operational leverage.

Once again our cash flow was strong, with adjusted cash generated by operating activities(8) of £22.5 million (FY22: £24.1 million), while free cash flow was £13.9 million (FY22: £19.1 million).  Free cash flow conversion was 59.2% (FY22: 66.9%), supporting disciplined investment in our 3Ps – people, plant and premises – to deliver further growth.  Our capital expenditure in FY23 was £4.9 million (FY22: £3.5 million), including the initial £2.2 million payment to acquire the George Lines’ Heathrow site.

The Group’s cash flow and our focus on maintaining a robust and prudent balance sheet resulted in a year-end net debt position of £28.5 million (31 December 2022: £19.4 million).

The movement is explained by the combination of 2023 acquisitions, freehold purchase and deferred consideration relating to prior year acquisitions.  Combined, these total £13.0 million.  At 31 December 2023 we had £46.7 million of headroom in our bank facilities and £19.0 million of accessible cash, giving us a robust liquidity position.  Our balance sheet is also backed by our freehold property portfolio, which has a book value of at least £13.0 million.

(8) Adjusted cash generated from operating activities is defined as net cash generated by operating activities plus exceptional items.



We made good progress with our growth strategy, which aims to deliver margin-accretive growth by opening new branches, margin-accretive acquisitions, extending our product range and expanding our digital revenues, through carefully targeted capital expenditure.  Whilst the majority of this progress in FY23 was driven by organic growth, we also acquired two businesses that add to our geographical presence and product range.

New branch openings

All our brands have the strong localised reputation which allows us to open new branches and access new customers, with regional brand power offering faster market penetration.  In particular, we see excellent prospects for Mr Central Heating and George Lines.  We opened Mr Central Heating’s eleventh branch, in Edinburgh, and have identified further sites to expand the brand to up to 50 branches over the medium term.

George Lines, our civils and landscaping merchant, currently has three branches in the South East of England and our plans will see it grow to ten branches nationwide.  This will give us national coverage, with each branch having a delivery radius of 30 to 50 miles.

Product range extension

We are continually introducing complementary or innovative products, so we can capture untapped demand and further enhance our customer loyalty.  Our renewables range is a prime example of an innovative category, as customers increasingly demand energy-efficient technologies.  This range, which includes air source heat pumps, controls, under-floor heating and air conditioning, delivered a 60% revenue increase in FY23.

In Q1 2024, the Government’s position was that the Clean Heat Market Mechanism (CHMM) would come into effect in Q2 2024.  The CHMM incentivises boiler manufacturers and homeowners to accelerate the transition towards renewable energy sources in UK homes, increasing demand for renewable products including air source heat pumps. Some manufacturers have claimed that the initiatives applied to promote air source heat pump sales will also force an increase in the unit price of gas boilers, which will be passed through to consumers.

In March 2024, the Government confirmed its commitment to the CHMM but announced a twelve-month adjustment to its introduction, to April 2025.  Lords remains well placed to benefit from the shift in demand towards air source heat pumps when it comes into force.

An example of the team putting data and customer insights into practice to broaden product range, demonstrating our agility, is following the success of the Advance Roofing implant into our Beaconsfield branch where we are targeting further growth in roofing supplies. Electrical supplies are also a natural complement to our existing product range in Merchanting, and we are starting to offer them in selected branches.

Digital expansion

Our online presence is an important tool for attracting and retaining customers, allowing them to shift between online and in-store as they prefer, improving their buying experience and helping us to reach new customers.  This year, our in-house digital team has launched upgraded websites for our Lords, Condell and George Lines brands, increasing their functionality and conversion rates. We continue to see online platforms as a growing part of the customers’ purchasing journey as they move across channels in their decision process.


As the Chairman has outlined, there is a substantial consolidation opportunity in our sector of independent local merchants, and potential vendors see us as an attractive buyer given our proven track record, integrating 15 acquisitions over the past seven years.  In FY23 we acquired Chiltern Timber Supplies and Alloway Timber in the Merchanting division, adding six branches to our network and increasing our product range through Chiltern’s specialist timber offering. We were delighted to welcome 93 new colleagues to the Group with these businesses.  Both acquisitions are performing in line with market expectations and are helping to drive EBITDA margin expansion.

Our approach to M&A remains disciplined given the wider volatility and value fluctuations.  For example, we withdrew from two other transactions due to the more challenging market conditions, remaining disciplined about securing acquisitions on our stated target range of 4 to 6x EBITDA basis. This discipline is a key driver of our 25%+ return on investment enjoyed across 13 transactions between 2016 and 2022.

Our 3Ps – people, plant and premises

We continuously invest in our people through promotions, training and recruitment. The Workvivo platform we introduced in FY23 has been brilliant for colleague communication and engagement, and we held our first colleague conference in March 2024, bringing together 100 colleagues to discuss our strategy, growth ambitions and ESG initiatives.  Our strong engagement scores continue and we have maintained our average length of service, which is six years.

We have an ongoing programme of modernising our plant with new trucks and forklifts, and we continue to invest in our systems to support productivity and customer service.  Our investment in premises in FY23 included relocating our Glasgow branch and refurbishments of other selected locations.  In FY24, we are planning refits at five branches, including four of the recently acquired Alloway Timber locations.


In line with the wider market, trading in FY24 has begun with market conditions remaining uncertain and Q1 FY24 was impacted by a combination of macro conditions and wet weather. During Q1 FY24, demand in the Group’s P&H division was volatile following the postponement of the Government’s CHMM but LFL revenue performance has improved across both divisions during April 2024.

Looking ahead, and whilst there remain risks associated with macroeconomic shocks that could potentially affect our supply chains, I am confident that Lords is in a very strong position with less than 1% of the UK building materials market and a proven, differentiated growth strategy.  Furthermore, we remain well placed to capture the UK’s transition to renewable energy sources in homes and the Board continues to be cautiously optimistic as to the Group’s ability to gain market share via organic growth levers and value-added acquisition opportunities.

We will continue to manage the business prudently, particularly when looking at M&A opportunities and in relation to our supply chain, where we continue to invest in our supplier relationships and to ensure that we hold sufficient inventory to meet customer needs, while ensuring we carefully manage our working capital levels.


Shanker Patel
Chief Executive Officer

14 May 2024

Financial review

The Group demonstrated its resilience during FY23 and our focus on controlling our cost base and carefully managing our financial resources leaves us well placed for further growth, as market conditions turn more positive.


Group revenue was £462.6 million (FY22: £450.0 million), up 2.8%.  Excluding acquisitions and new locations, LFL revenue was down 1.2%.  Acquisitions made in the year contributed revenue of £5.4 million in FY23.

In the year, P&H performed well, with LFL revenue growth of 3.7%, benefiting from extended product ranges, and contributing to total revenue growth of 8.0% as a result of the full year effect of the Direct Heating and HRP Trade businesses acquired in 2022.  Market conditions for Merchanting presented a difficult trading environment in 2023, with LFL revenues declining by 6.3%, albeit generally outperforming the wider sector.  Overall sales were down 2.6% on FY22, offset by the positive impacts from the contributions of the 2023 acquisitions of Chiltern Timber Supplies and Alloway Timber.

Administrative expenses

Administrative expenses (excluding depreciation, amortisation, impairment, exceptional items and share-based payments) totalled £61.3 million (FY22: £54.9 million), an increase of 11.6%.  This partly resulted from the additional overheads in the businesses we acquired in the year with overhead synergies delivered in Q4 2023 of £0.5 million.

On a like-for-like basis, administrative expenses were £1.5 million higher in FY23, reflecting the impact of inflation and our continued investment to support the Group’s growth, including appointing a Group Human Resources Director in February 2023 and strengthening our finance teams.

Depreciation, amortisation and impairment

Depreciation and amortisation rose by 12.3% to £13.8 million (FY22: £12.3 million).  Of this, £7.7 million relates to right-of-use assets (FY22: £6.9 million), with the increase resulting from leases in the acquired businesses.  A further £3.5 million related to intangible assets (FY22: £3.3 million) and £2.6 million to property, plant and equipment (‘PPE’) (FY22: £2.1 million).  Additionally, in 2023 a £0.5 million impairment charge was taken in the year relating to two loss-making sites within the Group, having assessed the recoverable value of the right‑of‑use assets and PPE at these sites.

Exceptional items

The Group incurred exceptional costs of £2.8 million in FY23.  The most significant items related to: £0.9 million of costs associated with business combinations completed in the year and for potential acquisitions which will not occur or did not occur by the end of 2023; £1.4 million in relation to the impact of the Group reassessing its estimation basis for stock provisioning within the Merchanting division as well as an isolated stock theft at one site; and £0.6 million for Group simplification activities as a result of Group reorganisation in the year to streamline management structures and generate operational efficiency.

Exceptional items in FY22 totalled a net cost of £0.9 million, with the largest component being diligence costs associated with acquisitions.


EBITDA for FY23 was £23.5 million (FY22: £28.6 million). Adjusted EBITDA, which excludes the exceptional items set out above as well as share-based payments, was £26.8 million, down 10.5% from £30.0 million in FY22.  The decline in Adjusted EBITDA reflects challenging market conditions in the higher margin Merchanting division and anticipated impact of the loss making Alloway Timber at acquisition.  The Adjusted EBITDA margin was 5.8% (FY22: 6.7%).

The table below shows Adjusted EBITDA by division:


 FY23 FY23 FY22 FY22
 £m margin £m margin
Plumbing and Heating 12.9 5.2% 13.8 6.0%
Merchanting and other services 14.0 6.5% 16.1 7.3%
Total Group 26.8 5.8% 30.0 6.7%


Presented numbers are based on underlying, not rounded, figures

Net finance costs

Net finance costs were £6.2 million (FY22: £3.5 million), with the increase mainly due to rising interest rates during the year and higher levels of borrowings as a result of acquisitions made across 2022 and 2023.  The interest expense associated with the Group’s leases was £2.3 million (FY22: £1.9 million).

Profit before tax and adjusted profit before tax

Adjusted profit before tax, which excludes exceptional items, share-based payments, amortisation of intangible assets and impairment, was £10.4 million (FY22: £17.4 million).  The Group generated profit before tax for the year of £3.0 million (FY22: £12.8 million).

Earnings per share and adjusted earnings per share

Adjusted earnings per share(3) was 4.35 pence (FY22: 8.02 pence). Basic earnings per share was 0.84 pence (FY22: 5.68 pence).  


The Board has recommended a final dividend of 1.33 pence per share.  Combined with the interim dividend of 0.67 pence per share, this gives a total dividend for the year of 2.0 pence per share, unchanged on FY22.  The final dividend will be paid on 28 June 2024 to shareholders on the register at the close of business on 24 May 2024.  The cash cost of the total dividend for the year will be £3.3 million (FY22: £3.3 million). At the year end, the Company had distributable reserves of £15.8 million (31 December 2022: £19.5 million).

Cash flow

Adjusted cash generated by operating activities was £22.5 million (FY22: £24.1 million) while free cash flow was £13.9 million (FY22: £19.1 million).  Free cash flow conversion, which is free cash flow as a percentage of EBITDA, was 59.2% (FY22: 66.9%).  In FY23, the Group used £5.1 million to acquire Chiltern Timber Supplies and Alloway Timber.  The Group paid deferred consideration of £3.1 million related to six prior acquisitions (FY22: £2.7 million) and £2.1 million to buy out non-controlling interests (FY22: £2.5 million).

Deferred consideration was higher than typical due to the number of transactions Lords completed in the aftermath of the Covid pandemic, and will return to a lower level in FY24 and beyond.  The Group maintained its capital discipline during the year, with capital expenditure of £4.9 million (FY22: £3.5 million).  This included the initial £2.2 million payment to acquire the George Lines site near Heathrow. Underlying capital expenditure was therefore £2.7 million, as we invested to deliver our strategic growth initiatives.

Debt financing and liquidity

In April 2023, we refinanced the Group’s £70.0 million facilities with HSBC and agreed new facilities totalling £95.0 million with HSBC, NatWest and BNP Paribas.  The facilities comprise a £70.0 million revolving credit facility (RCF) and a £25.0 million receivables financing facility.  The RCF includes a £20.0 million accordion option and both facilities run for an initial three years, with two one-year extension options.  The accordion and extension options are subject to lender approval.

At 31 December 2023, the Group had net debt (defined as borrowings less cash and cash equivalents, and before recognising lease liabilities) of £28.5 million (31 December 2022: £19.4 million).  The Group had substantial headroom of £46.7 million (31 December 2022: £34.6 million) within its debt facilities at the year end, and a further £19.8 million of accessible cash (31 December 2022: £16.0 million).

Working capital

Inventory decreased by £3.9 million, from £53.2 million at 31 December 2022, to £49.3 million at the year end.  This included inventories acquired from acquisitions of £1.3 million, and an underlying reduction in inventories of £5.2 million, as seen in the cash flow, as a result of management focus on inventory optimisation at its sites.  The year-end balance equated to 48 days of stock (31 December 2022: 50 days).

Current trade and other payables were £4.6 million higher at £98.9 million (31 December 2022: £94.3 million), equating to trade creditor days of 61 (31 December 2022: 56 days).  Current trade and other receivables rose by £10.2 million to £81.2 million (31 December 2022: £71.0 million), resulting in trade debtor days of 45 at the year end (31 December 2022: 40 days).  The movement in trade debtor days is the result of a surge in demand in December 2023 from B2B customers in our P&H segment ahead of the now postponed Clean Heat Market Mechanism levy implementation.

Intangible assets

Intangible assets rose to £46.2 million (31 December 2022: £45.3 million), mainly as a result of the acquisitions during the year, which resulted in the recognition of customer relationships of £1.2 million, trade names of £0.4 million and goodwill of £2.1 million, partially offset by the amortisation charge of £3.5 million.

Non-current liabilities

Trade and other payables relate to deferred consideration liabilities.  The liability has increased by £1.2 million to £5.9 million as at 31 December 2023 (31 December 2022: £4.7 million), primarily as a result of the additional consideration payable from 2025 in relation to businesses acquired in the year.

Right-of-use assets

Leases that are recorded on the balance sheet principally relate to properties, cars and distribution vehicles.  The right-of-use asset in the balance sheet at 31 December 2023 was £47.4 million (31 December 2022: £39.0 million).  The movement is reflective of additional lease commitments relating to the six sites acquired in the Chiltern Timber Supplies and Alloway Timber transactions in FY23.

Post balance sheet events

Since the end of FY23:

  • The Group has exercised its extension option under the banking facilities agreement in relation to the Group’s existing £95 million lending facilities. The terms of the facilities, which consist of a £70 million revolving credit facility (the ‘RCF’) and a £25 million receivables financing facility, were announced by the Company on 6 April 2023 and, pursuant to the extension now entered, the RCF has now been extended from its initial three year term by 12 months such that the RCF will now expire on 5 April 2027.
  • Chris Day, Chief Financial Officer and Chief Operating Officer, informed the Board of his decision to leave the Company to take up another professional opportunity on 9 January 2024.  On 8 May 2024, it was announced that Stuart Kilpatrick will be joining the Board as the new Chief Financial Officer on 4 June 2024.


Chris Day
Chief Financial Officer and Chief Operating Officer

14 May 2024


Consolidated statement of comprehensive income
For the year ended 31 December 2023

  2023 2022
 Note £'000 £'000
Revenue 4 462,601 450,020
Cost of sales  (370,238) (361,237)
Gross profit  92,363 88,783
Other operating income  766 681
Distribution expenses  (5,057) (4,632)
Administrative expenses  (61,252) (54,866)
Adjusted EBITDA 1  26,820 29,966
Share based payments  (513) (400)
Exceptional items 5 (2,849) (929)
EBITDA 2  23,458 28,637
Depreciation  (2,610) (2,069)
Amortisation  (11,214) (10,240)
Impairment charge  (501)
Operating profit 7 9,133 16,328
Finance income 8 196 42
Finance expense 9 (6,356) (3,572)
Profit before taxation  2,973 12,798
Taxation 10 (1,273) (3,257)
Profit for the year  1,700 9,541
Other comprehensive income  
Total comprehensive income  1,700 9,541
Total comprehensive income for the year attributable to:    
Owners of the parent company  1,382 9,117
Non-controlling interests  318 424
  1,700 9,541
Earnings per share    
Basic earnings per share (pence) 11 0.84 5.68
Diluted earnings per share (pence) 11 0.82 5.36


1 Adjusted EBITDA is EBITDA but also excluding exceptional items and share-based payments.

2 EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment charge.


The results for the year arise solely from continuing activities.

Consolidated statement of financial position
As at 31 December 2023

  2023 2022
 Note £'000 £'000
Non-current assets    
Intangible assets 12 46,205 45,331
Property, plant and equipment  20,233 13,647
Right-of-use assets 13 47,364 38,968
Other receivables  200 279
Investments  180 85
  114,182 98,310
Current assets    
Inventories  49,292 53,177
Trade and other receivables  81,171 71,023
Assets classified as held for sale   1,333
Cash and cash equivalents  19,811 16,038
  150,274 141,571
Total assets  264,456 239,881
Current liabilities    
Trade and other payables  (98,915) (94,343)
Borrowings  (9,507) (10,348)
Lease liabilities 13 (7,815) (5,496)
Liabilities classified as held for sale   (675)
Current tax liabilities  (7) (1,700)
Total current liabilities  (116,244) (112,562)
Non-current liabilities    
Trade and other payables  (5,917) (4,716)
Borrowings  (38,239) (25,086)
Lease liabilities 13 (43,953) (37,024)
Other provisions  (1,565) (1,283)
Deferred tax  (7,373) (7,022)
Total non-current liabilities  (97,047) (75,131)
Total liabilities  (213,291) (187,693)
Net assets  51,165 52,188
Share capital  828 813
Share premium  28,293 28,293
Merger reserve  (9,980) (9,980)
Share-based payment reserve  1,009 497
Retained earnings  29,386 31,237
Equity attributable to owners of the parent company  49,536 50,860
Non-controlling interests  1,629 1,328
Total equity  51,165 52,188


Consolidated statement of changes in equity
For the year ended 31 December 2023

Called up




Equity attributable
to owners of parent

£'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 1,382 1,382 318 1,700
Share-based payments 512 512 512
Share capital issued 15 15 15
Put and call options over non-controlling interests 78 78 78
Corporation tax on options 515 515 515
Deferred tax on options (515) (515) (515)
Capital repayment (17) (17)
Dividends paid (3,311) (3,311) (3,311)
As at 31 December 2023 828 28,293 (9,980) 1,009 29,386 49,536 1,629 51,165




Called up




Equity attributable
to owners of parent

£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 January 2022 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 on options 606 606 606
Deferred tax on options 1 515 516 516
Non-controlling interests 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


Consolidated statement of cash flows
For the year ended 31 December 2023

 2023 (restated1)
 £'000 £'000
Cash flows from operating activities  
Profit before taxation 2,973 12,798
Adjusted for:  
  Depreciation of property, plant and equipment 2,610 2,069
  Amortisation of intangibles 3,515 3,317
  Amortisation of right-of-use assets 7,699 6,923
  Impairments of property plant and equipment 77
  Impairments of right-of-use assets 424
  Profit on disposal of property, plant and equipment (368) (151)
  Profit on sale of business (119)
  Write off of investment 56
  Share-based payment expense 513 400
  Finance income (196) (42)
  Finance expense 6,356 3,572
Operating cash flows before movements in working capital 23,540 28,886
Decrease / (increase) in inventories 5,199 (8,438)
Increase in trade and other receivables (8,067) (526)
Increase in trade and other payables 2,112 6,918
Cash generated by operations 22,784 26,840
Corporation tax paid (3,124) (3,679)
Net cash generated by operating activities 19,660 23,161
Cash flows from investing activities  
Purchase of intangible assets (734) (236)
Business acquisitions (net of cash acquired) (5,150) (26,854)
Deferred consideration paid (3,116) (2,683)
Purchase of property, plant and equipment (4,905) (3,516)
Purchase of investments (150)
Proceeds on disposal of property, plant and equipment 4,160 195
Cash received on sale of business 340
Interest received 196 42
Net cash used in investing activities (9,359) (33,052)
Cash flows from financing activities  
Principal paid on lease liabilities (6,912) (6,482)
Interest paid on lease liabilities (2,340) (1,913)
Issue of share capital 15 25
Dividends (3,311) (3,087)
Purchase of non-controlling interest of Hevey (2,126) (2,480)
Capital repayment to non-controlling interests (17) (10)
Proceeds from borrowings 109,116 110,976
Repayment of borrowings (97,853) (80,450)
Bank interest paid (2,917) (1,306)
Interest paid on invoice discounting facilities (805) (124)
Net cash (outflow) / inflow from financing activities (7,150) 15,149
Net increase in cash and cash equivalents 3,151 5,258
Cash and cash equivalents at the beginning of the year 16,660 11,402
Cash and cash equivalents at the end of the year 19,811 16,660
Cash and cash equivalents 19,811 16,038
Cash and cash equivalents included in assets held for sale 622
Cash and cash equivalents at the end of the year 19,811 16,660


1 See note 3.3 for details regarding the restatement.