Likewise doubles sales in first half as strategic acquisitions start to contribute
Despite trading conditions affected by the war in Ukraine and the aftermath of Covid-19, Likewise Group, the fast growing UK floor coverings distributor, has seen sales grow by 108% from £28m to £58.4m in the first half of 2022.
Tony Brewer, chief executive of the Birmingham-headquartered company, said: “Notwithstanding the economic ramifications of the terrible war in Ukraine, Likewise has still made significant progress, which demonstrates the group’s ability to develop the business in challenging markets.
“The positive sales revenue trend has continued through July, August and September which positions the group well for the traditionally busy Autumn trading in the fourth quarter of 2022.”
In the half year to 30 June 2022, Likewise saw organic growth of 27% from £28m to £35.8m and the gross margin improved from 29.4% to 29.9%.
The unaudited interim results show an underlying profit before tax of £1.91m, up from £1.08m, an increase of 77%.
And the group balance sheet also saw significant improvement from £22.4m up to £39.7m.
Product cost pressures resulted in a new trade price list being issued in May 2022. Likewise also continues to experience and manage inflationary costs, particularly fuel and packaging materials.
Tony Brewer said: “With the infrastructure well developed, the group is in a strong position to continue its progress irrespective of market conditions and take further advantage when consumer demand improves.”
Likewise has established an extensive distribution infrastructure from its two national distribution hubs in Leeds and Birmingham, plus distribution centres in Glasgow, Newcastle, Newbury, Sudbury and Peckham. This allows the Likewise trade brand to service customers on a daily basis in most parts of the UK.
Brewer added: “The acquisition of Valley Wholesale Carpets Ltd in January 2022 was an important strategic step for the group.”
Valley currently operates from two distribution hubs in Erith and Derby. The distribution hub in Derby is now being extended to 52,000 sq ft providing increased storage, and a carpet cutting machine has been installed to enlarge the cutting capacity within Valley.
In October, the dormant 35,750 sq ft distribution centre in Newport will startoperations. This will increase both Likewise and Valley’s trading area to include South Wales and South West England.
Delta Carpets was acquired in April 2022 and is now fully operational from the Likewise distribution hub in Leeds. Delta will develop its business utilising the Likewise logistics network.
Construction is nearing completion on the new 42,000 sq ft high bay distribution facility in Glasgow which will be a major increase in capacity for development in Scotland.
Negotiations are at an advanced stage to be able to relocate A&A into a new 46,700 sq ft high bay distribution facility in north west Manchester to be operational from early 2024.
Brewer said: “The logistics capacity of the group has increased from 8 million cubic feet to 15 million cubic feet in the last year and importantly this provides extra capacity to meaningfully increase sales revenue and profitability over the coming years.
“The group also continually develops new products with manufacturing partners and has significantly increased its market presence.
“This has been achieved by a clearly defined strategy of investment in recruiting established sales representatives to create experienced sales teams.”
They are placing new wall stands, lecterns and various other point-of-sale displays into independent retailers.
Brewer added: “The positive relationship with flooring retailers and contractors is vital to the ongoing development of Likewise into a prominent trade brand in the UK flooring industry.
“The board has chosen to accelerate these investments including additional delivery trucks, material handling and cutting equipment, plus increased stock holding, to strength the medium-term opportunities for the group.
“The Business-to-Business website is now fully operational, giving Likewise customers the opportunity to check stock and place orders at any time. The take up on this facility is extremely encouraging and further enhances the customer service proposition.
“Given the performance in the last two years, combined with the infrastructure development and strong management teams, sales representatives and all employees, Likewise Group is confident of continuing to develop towards its medium-term targets.”