Operating Site Property Leases
11 August 2021
Lords (AIM:LORD), a leading distributor of building materials in the UK, announces the extension or amendment of existing property leases covering five of the Group’s 33 sites (the ‘Lease Updates’). The Lease Updates will provide the
Group with desirable continuity of tenure at three existing sites and will also see material capital contributions from the property owner to site improvements at two of the sites.
Under the Lease Updates, a total of six existing property leases (the ‘Leases’) between the Group, as lessee, and Gempoint 2000 Limited (‘Gempoint’), as lessor, will be extended in term only (the ‘Extended Leases’).
In addition, to reflect Gempoint’s agreement to making capital contributions, at the Group’s request, of an aggregate of £1.26 million to site improvements at the Group’s Beaconsfield and Huntingdon sites (the ‘Site Improvements’),
the Group has agreed to an increase in rents at these two locations such that aggregate annual payments across the two Leases will increase from £306,600 to £411,600 with effect from completion of the Site Improvements. The Site Improvements
are expected to be completed by no later than June 2022.
The rents under the Leases have been arrived at on an arm’s length basis having been subject to independent valuations.
The Extended Leases, which cover three of the Group’s operating sites, will be extended as to their term until 17 August 2026 (four Leases), 24 March 2031 (one Lease) and 31 December 2031 (one Lease) with no increase in aggregate annual rental payments
of £575,900 prior to rent reviews for these properties at the original dates of expiry of the Leases between 31 December 2022 and 17 August 2024.
The Leases covering the Group’s Beaconsfield and Huntingdon sites, which are to benefit from the Site Improvements, will see no extension in term and will continue to expire on 31 December 2036 and 31 December 2039 respectively.
Related Party Transaction
Shanker Patel, the Company’s Chief Executive Officer, is a director of Gempoint and as a result Gempoint is deemed a related party of the Group pursuant to the AIM Rules for Companies (the ‘AIM Rules’). Whilst the Group’s existing
property leasing relationships with Gempoint are disclosed in the Company’s recent AIM Admission Document, the Lease Updates therefore constitute a related party transaction pursuant to AIM Rule 13.
The independent Directors of the Company, being Gary O’Brien, Andrew Harrison, Dawn Moore and Chris Day consider, having consulted with the Company's nominated adviser, that the terms of the Lease Updates are fair and reasonable insofar as the Company's shareholders are concerned.
For further enquiries:
|Lords Group Trading plc||Via Buchanan|
|Shanker Patel, Chief Executive Officer||Tel: +44 (0) 20 7466 5000|
|Chris Day, Chief Financial Officer||www.lordsgrouptradingplc.co.uk|
|Cenkos Securities plc||Tel: +44 (0)20 7397 8900|
|Ben Jeynes / Max Gould / Dan Hodkinson (Corporate Finance)|
|Alex Pollen (Sales)|
|Buchanan Communications||Tel: +44 (0) 20 7466 5000|
|Henry Harrison-Topham / Stephanie Whitmore|
Kim Looringh-van Beeck / Kiki Norman
Notes to Editors
Lords is a specialist distributor of building, plumbing, heating and DIY goods. The Group principally sells to local tradesmen, small to medium sized plumbing and heating merchants, construction companies and retails directly to the general public.
The Group operates through the following two divisions:
- Merchanting: supplies building materials and DIY goods through its network of merchant businesses and online platform capabilities. It operates both in the 'light side' (building materials and timber) and 'heavy side' (civils and landscaping), through 24 locations in the UK.
- Heating and Plumbing: a specialist distributor in the UK of heating and plumbing products to a UK network of independent merchants, installers and the general public. The division offers its customers an attractive proposition through a multi-channel offering. The division operates over nine locations enabling nationwide next day delivery service.
Lords was established over 35 years ago as a family business with its first retail unit in Gerrards Cross, Buckinghamshire. Since then, the Group has grown to a business operating from 33 sites with a combined turnover in excess of £288
million. The Group aims to become a £500 million turnover building materials distributor group by 2024 as it grows its national presence.