NuGen Properties

Boiler shortage softens builder merchant’s growth

Lords’ team in Watford

In the six months ended 30th June 2022 Lords generated revenue of £214.2m, up 19% on the same period in 2021. Profit before tax was £6.4m (2021 H1: £4.2m).

The merchanting division delivered sales growth of 73.4% (or 14.5% on a like-for-like basis, excluding acquisitions) to £105.9m  but the Plumbing & Heating (P&H) division suffered from the worldwide boiler supply shortage, with like-for-like revenue falling 12.5%.

Lords spent £26.9m on acquisitions during the period, taking over Advance Roofing Supplies, AW Lumb, DH&P Trade Counters and Buildbase Sudbury. Consequently the net cash position of £6.5m at the start of the year had become a net debt position of £21.1m by 30th June.

Lords is a London-based distributor of building, plumbing, heating and DIY goods.  It principally sells to local tradesmen, small to medium sized plumbing and heating merchants, construction companies and retails directly to the general public.

Chief executive Shanker Patel said: “The group’s strategic focus is to invest in organic growth levers that deliver accretive margins alongside a selective and disciplined M&A strategy and in acquiring businesses that produce a high return on investment and offer the group product range and geographic expansion.  Lords remains focused on the repair, maintenance & improvement (RMI) sector which benefits from robust demand (particularly the group’s P&H division which sells ‘essential’ replacement products through heating repairs) and strong fundamentals in the medium to long term.”

He said: “Lords has a strong platform for growth with less than 1% market share and multiple growth levers to pursue. We remain confident of delivering our strategic targets of £500m revenue by 2024 and improving EBITDA margins to 7.5% in the medium term.”

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