Likewise Group (LSE:LIKE) — 2025 Pre Close update and 2026 Outlook

0:01 Good afternoon, ladies and gentlemen, and welcome to the LIKEWISE GROUP PLC 2025 Pre Close Update and Outlook for 2026 Presentation. Throughout today's recorded meeting, investors will be in listen only mode. Company may not be in a position to answer every question received during today's meeting. The company can review your questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, I would like to submit the following poll, and I'm sure the company would be grateful for your participation. I'd now like to hand over to CEO, Tony Brewer. Tony, good afternoon. Many thanks, Mark, and thanks, everybody, for joining this afternoon. You'll know that we had a pre close statement a couple of weeks ago which confirmed the top line numbers for 2025.

0:49 But I think the key for this afternoon's meeting really is demonstrating, you know, we are building a very good business with strong foundations and an excellent team of people. And across those 12 distribution and logistics centers, we have been putting extra capacity in which I'll go through in the course of the presentation. Fantastic support from our suppliers in those key product areas of carpet, residential vinyl, laminate, luxury vinyl tile, artificial grass, underlayments, flooring accessories, and commercial products. And we've now extended the sales team to total a 102 people who are focused on looking after our customers, putting new point of sale into retail and contractors and generally developing the business.

1:36 And to support that, we've increased the delivery fleet and that will total at least a 160 during the course of 2026. And throughout the businesses, we have excellent staff who understand and have been brought up in the flooring industry, and that's whether that's in our management, our sales teams, our internal sales, warehouse staff and delivery drivers. And we believe there's fantastic opportunity to develop the business further and get more and more point of sale into the market through our 7,000 independent customers, which are flooring retailers and flooring contractors. And whilst we set out a goal in the early days of getting to 200,000,000 sales revenue, we can see opportunities now to take the business some way beyond that number.

2:26 And this just demonstrates the consistency and evolution of the business over a number of years with that seasonality, and you can see that top line growth, 2025, overall up by 8.6%, and likewise, floors actually ahead by 13.3%. We see a very consistent seasonal trend. The spring was very positive for us, probably some challenges, but we still exceeded the previous year during those summer months when it was particularly hot. And that crescendo then towards the end of the year, October, November and December, being the busiest trading periods. And whilst, you know, we're very early into the year, January is a lower trading month, but and that seasonality, but it's fair to say we've made a particularly positive start to this year. And that, I think, gives us confidence for the year as a whole.

3:15 And I mentioned the management team. They've got really got some excellent people there who have learned the business, understand the IT and logistics, the product, have great customer and supplier relationships. And I think what's really further encouraging is that we've got a number of younger people coming into the business that no doubt will be on that page in the not too distant future. And it gives us, again, confidence in the development of the business for the future. And those sales teams across the country in the various locations, as I said, a total of 102, 21 additional in the last year or so. And again, that's further investment and commitment in the business. And in terms of market presence and displays, you see array of products there from the left hand side, luxury vinyl tile from Carndeen, the Cotswold engineered wood collection, the, vitality laminate in the foreground, various derivatives of luxury vinyl tile across the back wall with residential vinyl in the far right hand corner, an array of carpet products, including our premium Louis Abbott product where, again, we've invested in three additional salespeople dedicated to that particular product category.

4:35 And in Valley, again, we've increased their market presence through various types of display stands. The carpet stands in the center, you can see the laminate, which was launched in the back end of twenty four, and we did really well with that product during '25. And the vinyl stands on the left hand side just about to go into the marketplace. And furthermore, with the success of the laminate, we will be launching a luxury vinyl tile into Vale in the spring. And in terms of the infrastructure, you know, the business started when we acquired a business in Sudbury in 2018. We can see thereafter everything on that page as additional 11 sites have all been established, albeit some through acquisition, of course, in Valley, but all been established in the last four years.

5:24 And that infrastructure, if we take LIKEWISE GROUP, to begin with, the three main hubs in Birmingham, Leeds, and Glasgow, where anything wide width, that's carpet, residential vinyl and artificial grass, is stored, processed, cut and then shipped out to the logistics centres overnight. And each of those lines on that map represent overnight movement of goods from the three hubs to, the logistics centers. And furthermore, with the development in Newport, which is currently under construction, will be completed by the middle of the year, that will create a fourth hub and increase the capacity significantly within LIKEWISE FLORES and Vale. And then the Vale network, which, the main center is in Eyrith in Southeast London.

6:11 We have now, got the cutting table in Derby operational. So that increases Vale's capacity and allows them to develop the business for the future and be there additional sites in Newport and Plymouth. And this just shows the overall infrastructure of the business with comprehensive coverage of The UK. And at some point, and the board is considering various options, we will need to invest further in capacity to push us through well through the 200. I think it's fair to say the infrastructure that we have, particularly with the benefits of Newport, could certainly go well through 200. But if we have aspirations to be at two fifty, 300 and beyond, then we will need to invest in the infrastructure further.

6:58 And this just demonstrates the cutting capacity, where we've invested in additional capacity in Glasgow during the course of last year. We've actually installed, between Christmas and New Year, a new cutting machine into Leeds, which increased our capacity and, reliability there. Everything in Derby I've mentioned where we're now cutting in Derby. And of course, that facility, expanded in Newport, to be operational during the course of the second half of the year. And that just demonstrates really the Newport extension which actually increases our or doubles our capacity that we currently have in Newport. So it's intended to be a fairly brief meeting, just to update you and answer any questions.

7:48 But we've made further significant progress in the last twelve months. We put extra capacity in and have opportunities to further increase that. Newport, it's quite an important step for us to increase that capacity. And those excellent management and sales teams with the support of our suppliers and our customers, you know, there are lots of opportunities in the flooring industry in The UK. And, you we see going through that 200,000,000, and well into $2.50 and beyond. Thank you. That's very kind of you, Tony. Thank you very much indeed. Ladies and gentlemen, please do continue to submit your questions. Tony, thank you very much indeed for the update.

8:39 And I know you've touched on a number of points, but we did receive a number of questions ahead of today's meeting as well as you've received a number throughout. So thank you to everybody for your engagement. First question, and I guess, ties in around M and A. Mark has asked a question last year. You were relatively neutral on possible acquisition activity. What is your view on this? And if I maybe combine that with one of the pre submitted is, you know, what was would the company look at buying a business with a turnover that would propel it forward if it was to surpass its short term target of 200,000,000? So I guess maybe a little bit of color around thoughts around M and A. Sure. Absolutely. I think, obviously, we don't always consider opportunities as they present themselves and they do periodically.

9:27 I think it's fair to say our strategy is not to just buy turnover and pay goodwill just to enlarge the the top line. That's not our strategy, but strategic acquisitions certainly. I guess we're a bit mean when it comes to paying goodwill, so we'll be very cautious with that. But, yeah, we'd consider it, but we equally see lots of opportunities to grow the business organically, and that's where our main focus is and investing in salespeople to help to achieve that. That's great. Thank you. Question here. Please, could you outline what you consider as your competitive advantage in the domestic floor covering market? And maybe some examples of how you're aiming to strengthen these. I think it's it's our people, as I've said at the outset of the presentation.

10:15 It's our speed to market, our decision making. Adrian Laffey, who leads the residential side of the business, that we're constantly looking at product, developing product with our suppliers, making, you know, quick decisions on what we need to do, getting that product into the marketplace, having attractive point of sale, product that's well priced and competitive. I think we are, you know, leading the market in that way. Great. Thank you. Do you consider that the recent price rises may provide some respite for the weaker players that have been losing market share? I think the industry probably needs some price increases. Think, you know, we all know our costs are going up, our people costs are going up, you know, the well publicized NI cost, the business rates going up, our delivery trucks.

11:09 So, you know, we we've got to be able to cover those costs and importantly, the business needs to make an improved return, to be able to further invest, and then give increased and improved service to our customers. Where that helps weaker competitors, I'm not so sure. But it's, you know, it's important that we we have, I think, some a little bit of price inflation while still keeping the floor covering affordable for the consumer. Thank you, Tony. A couple of questions around, I guess, the momentum that you guys are seeing in the you know, operationally. What do you see as the main constraints on investing in further growth? Is it purely financing or are there perhaps other operational considerations?

11:56 I think the we have great support from our principal banks, and we've obviously talked to them about what we need to do for the future. And, you know, we could be making some fairly significant investments at the right time, and the board is considering the options on what we should do there. We realized we need to, you know, put some further capacity into the business over the next one or two years, to take advantage of market opportunities. So I don't think there's particularly a constraint on that. And it's fair to say our shareholders have been very supportive, and I think we'll continue to do so, if we have, you know, the right investment opportunities. Yeah. Thank you, Tony. Question from Mark. Mark, thank you very much indeed for your question. Can you say more on this statement?

12:43 The board is now considering various investment options to materially exceed that figure. Is there any color or clarity you can give on that for Mark? I I think that's covered by the the last answer, really. Perfect. Lovely. We we do need to put you know, we put a lot into the sites we've developed over the last four years, from 2021 when we had a sea change when we moved into the leads distribution center from what we previously had and then built those other centers around that across the country. You know, we we will be prepared to make further steps in investment to give us more capacity at the appropriate time. Just turning back to to one of the previous, questions around price increases, that you maybe suggest are coming in q one. What what's the general customer reaction been to this? That's from Mark. Thank you, Mark.

13:34 I think it's it's understanding. It comes back to we're all experiencing higher operating costs, whether that be manufacturers, whether it be distribution or or retailers. I think there's been a clear understanding that it's that some price increases are necessary. Thank you. I guess a question here around some diversification. Do you have any dependencies on particular any one particular supplier or customer? No. Certainly not. Our customer base is very widespread. The suppliers, think it's fair to say, and the people in the flooring industry know that the the manufacturing in Western Europe, particularly in carpet, has reduced over the last ten, fifteen years. We do also buy carpet from from Turkey and have good partners there. We have a very strong relationship with our largest suppliers, so we're very comfortable with with our position there.

14:31 Thank you. Question from Donald. Donald, thank you, very much indeed. What's your aspiration for the commercial floor coverings, go go forward as you barely mentioned this segment? Well, it represents pretty much a third of LIKEWISE FLOOR's business, so we are very active in commercial. I think it's fair to say that the dynamic is very different in commercial because, you know, the leading players are getting their products specified typically or creating demand for their products and we're supplying that demand. Whereas in residential, we're probably more so creating the demand. But we are also developing particularly in carpet and carpet tiles, our own, range of products under the Guardian label.

15:16 So we'll be further developing that over the course of this year. Lovely. And I think this is the last question unless any more more come in. So please do submit them if you would be so kind. It comes from Keith as well, Tony. It says, Tony, what keeps you going? You obviously don't need to be doing this but appear to want to be doing it. I think we've we've as I said at the outset, we've we've got a great team of people. We're building a very good business, and I think we've got a really exciting future. Well, look, that's that's great. As I say, that was the the last question that we had. Tony, I'm surely gonna redirect everybody on the call to perhaps give you their thoughts, their expectations, and so on. But before doing so, I just wondered if you just wanted to have a couple of closing comments, then I'll send investors to give you their feedback. Sure. Thank you, Mark. Well, as I said, I think, you know, we've developed the business over the last few years.

16:06 We've got very strong foundations with the strength of the balance sheet that we've developed. We've invested, hopefully, very wisely in the business, and I think we've got a really good future. And there are so many opportunities in the floor covering market for us to continue to take share. That's great. Tony, thank you once again for your time this afternoon. If I could please ask investors not to close this session as we now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. It does only take a couple of moments to complete, but it's incredibly useful for the company. On behalf of the management team of LIKEWISE GROUP PLC, we'd like to thank you for attending today's presentation. I wish you all a good