Likewise Group (LSE:LIKE) — Final Results for the year ending 31 December 2025

0:00 Good afternoon, and welcome to the LIKEWISE GROUP PLC final results investor presentation. Throughout this recorded meeting, investors will be in listen only mode. Questions can be submitted at any time by the Q and A tab just situated in the right hand corner of your screen. Just simply type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, we can review all questions submitted to stay and publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Tony Brewer, CEO. Good afternoon, sir. Thank you, Paul. Thank you. And welcome, everybody, and thank

0:30 you for joining this presentation this afternoon. So first of all, the picture you can see on the slide is is our leads distribution center, which we moved into in 2021. And really, that was the foundation to accelerate the development of LIKEWISE FLOWS. And you can see the the trucks outside that building, and that transfer trucks literally around The UK, trucks going to to Glasgow, to Newcastle, to Manchester, Birmingham, to Sidcup in London, and to Sudbury. And the development of that business, I say, was really the foundation to progress LIKEWISE FLOWS. So we now have 13 distribution centers around The UK, with the addition of the building we announced last week that we'd acquired a second distribution hub in Leeds.

1:22 We have 87 suppliers across our various product categories, whereby that's carpet, residential vinyl, artificial grass, laminate, luxury vinyl tar, underlayments for residential carpet, adhesive leveling compounds, commercial flooring, and rugs and mats. And those are sold through our hundred and eight management and sales executives across the country, and we are increasing our delivery fleet. And during the course of this year, that will certainly exceed a 160 vehicles. And our 580 staff, a huge proportion of them, have long standing experience in the flooring industry. And we continue, to develop our presence in the marketplace with point of sale and new products, making sure the independent retailer and flooring contractor is at the forefront of all floor covering products, and that's through over 7,000 customers.

2:18 And, you know, we're rapidly approaching that 200,000,000 sales revenue target that we set ourselves. I think now we've got an infrastructure that can take us towards $250,000,000 and beyond. So in terms of the results we've announced this morning, our sales revenue up 9% to 163,000,000, slight improvement in the gross margin of 0.4%, EBITDA increasing from 8,800,000 to 10,400,000, and most importantly, profit before tax up 56% to 3,100,000. On the back of that, we've proposed to increase the final dividend by 10%, which increased the total dividend assembly by 10%.

3:03 And the current trading in January to March, up 15% with April very much maintaining a similar momentum. And the key figure in the balance sheet, is the improving asset base with now property assets of 31,600,000, with just 5,100,000 of fixed borrowing. We've said for a number of years as we've developed this management team, this is the key to how the business is developed and gives us the foundations for growth in the future. We've got really good people, young people coming through the business, learning and understanding all the dynamics of the logistics, the IT, product, having supplier relations, customer relations.

3:48 And what's even more encouraging is we've got many other really good young people who are challenging to be on this page and certainly will be in the future. And that gives very much the future of the business. And as I say, each of those people effectively undertook an apprenticeship in the flooring industry, understanding all aspects of the business and creating excellent teams around The UK. In terms of our supplier base, the largest producer is from Holland, followed by The UK, particularly in the commercial sector, product from Belgium, from Turkey, Germany, and across into the Far East. And you probably appreciate, obviously, with the awful war in Iran currently, is that there is inevitably going to be price increases due to increases in raw materials.

4:40 We're discussing that with our suppliers and are positioning our product to be increased from the May 1. But we're very careful in securing our supply chain through the relationship we have had with suppliers over many years. And our excellent sales teams of 108 people who are positioning those products into our retail and commercial customers on a daily basis, making sure our customers are very much at the forefront of all new flooring products. And this just gives an indication of the different products through LIKEWISE floors, whether that's engineered wood, artificial grass, various types of luxury vinyl tile, laminate products, sheet vinyl, and, of course, carpet being the biggest individual proportion of our business.

5:31 And through Valley Wholesale Carpets, traditionally a carpet business, but now residential vinyl, laminate, and we'll soon be launching luxury vinyl tile into the Valley business. And that gives you the proportion where, as I've said, carpet is the biggest individual part of the business, but across all those flooring sectors of residential vinyl, underlay for residential carpet, laminate, luxury vinyl tile, artificial grass, rugs and mats, and, of course, commercial flooring and adhesives and leveling compounds. Business to business website, which we launched in 2022, is very important to us. That allows our customers, our trade customers with a username and password to access our stock files at any time during the day and place orders. That's a very important service we provide to our customer base.

6:27 And also, we've now launched a product information website, given the profile of LIKEWISE with our delivery trucks, the public company, our PR, our social media. This means that consumers can come onto the website, can search products. There's of course no pricing, there's no contact us. It wholly pushes the consumer to the individual retailer that's closest to them, that has the display stand of the particular product that that consumer is looking for. So it just helps provide a channel of business to our retail customer base. You can see from the the sales revenue, as we've said, 9% up last year. You can see the the crimson line for 2025, a strong spring, slightly softer in the summer months, but still year on year increases where we had that particularly hot summer, and that crescendo towards the end of the year, October, November being the busiest trading period. And you'll see from the orange line at the top that the year has started well, as we've said, 15% up in the first four months, so a very strong start. And we're very optimistic, notwithstanding the challenge ahead of us with the worldwide uncertainty, but we believe we are very well placed to navigate those challenging months ahead.

7:50 And then our property, as I mentioned, we acquired an additional site in Leeds, last week, which is principally to hold incoming containers and pallets of luxury vinyl tile and also from the Far East and also laminate from Europe. That helps our supply chain management, very importantly, to funnel those containers and pallets into our network. You can see from the dates demonstrated here that with the exception of the business and building we acquired in 2,018, that that whole infrastructure has been put together since 2021 when we moved into that distribution center in Leeds. And we now have six freehold properties valued at 31,600,000 with just 5,100,000 of fixed debt, which gives us opportunities to extend that that footprint of properties.

8:48 We have an investment potentially in the East Midlands where we've agreed to to acquire a site, and we're just progressing that through the legal channels. But we would again look to own the freehold of that site to give us a strengthening balance sheet and allow us for future investment. And that really demonstrates that network throughout The UK, from those sites with that center in Birmingham. And if we can deflect some of that activity away into the East Midlands, we believe the business can go from the run rate that we currently are towards 200,000,000, towards 250,000,000 sales revenue and further on to 300,000,000.

9:34 And this is the network through Valley Wholesale Carpets with their main distribution hub being in everything Southeast London and then servicing the Midlands and the North through the distribution center in Derby. And that really demonstrates our overall coverage and comprehensive coverage now of The UK market. This slide really is important in terms of showing our cutting capacity. So we launched a second shift into our Glasgow distribution center last year. We invested in a new cutting machine in Leeds, which was installed during the Christmas break and New Year break. We have capacity with the additional cutting table in Derby.

10:20 The Newport extension is very much on schedule to be operational in q three of this year, and as I've mentioned, that new investment in the East Midlands to be operational realistically into q four. And this just demonstrates the Newport extension, which currently is 35,000 square feet extending to 55,000 square feet. So I think the key for us is that we have excellent operational management, sales teams and staff throughout our businesses. We are, as I said, carefully discussing and negotiating with our suppliers what we need to do with prices into the spring, but there will be price increases from the May 1. But we believe, you know, we've got very long standing and strong supplier relationships, and also, very importantly, with our customers as well.

11:15 As I said, the extra capacity that we have in Leeds, Newport and Derby can certainly take us towards 250,000,000 sales revenue, and we're looking at that future investment opportunity as we continue to take market share. And I think we are very much poised to get towards 250,000,000 sales and that operational gearing and subsequent return

11:38 on sales that that will deliver. Many thanks. Fantastic. Thank you very much indeed for the presentation, Tony, of course. Ladies and gentlemen, do please continue to submit your questions just using the Q and A tab situated on the right hand corner of the screen. We just want to take a moment to review those questions we've had in today. Of course, a reminder that recording the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Tony, as you can see, we've had a number of questions throughout today's presentation. Thank you for everyone for submitting those. Perhaps we can start with the the first one. Well, it's probably two actually I can tie together here. Question, Richard, you're saying that there's a a lot going on in your market. How how do you look to take further market share?

12:20 And a question that kind of ties into that from Mark as well. Thank you, Mark. What proportion of the 15% growth in 2026 come from your competitors' divested unprofitable customers? How do you see that impacting profitability?

12:33 Okay. Well, I think the it's the whole spectrum spectrum of how we take market share and how we develop the business. It's, first of all, having that strong relationship with the suppliers. We as a team, Adrian, John and myself particularly, you know, are working with our suppliers within LIKEWISE FLOWS and Simon within the Valley business, working very closely with our suppliers to make sure we're agreeing new products and we're getting those product launched in a timely manner. We have them well merchandised throughout the business. And those sales teams, we're investing now a 108 salespeople, making sure those products are taken to our customers and display stands are installed in, and we have the, you know, correct vehicle to be able to sell to the consumer. It's all of those factors.

13:22 We're not targeting any particular one part of the market. It's, you know, making sure we have bigger and better presence in independent retailers and flooring contractors.

13:35 Fantastic. Thank you. Question here as well. Obviously, you've talked about 200,250,000,000 for that revenue target. Now in the current environment, what what gives you that real confidence in achieving that and exceeding it? I think there's obviously some uncertainties in in the market as we speak and in the bigger worldwide issues, of course, and what effect that has on consumer confidence and consumer spending is is difficult to predict in the short term. What we're wholly confident in is we're putting you know, we have the right people, we have the infrastructure, we have the right suppliers and customers to be able to continue to develop our business. So there may be some short term hurdles to overcome, but we're in a good position to be able to do that. And for the medium to long term, we will be a continually increasing player in The UK flooring market.

14:28 That's great. Thanks, Tony. Question around the property here. With a large property base, how do you look to release value from that? I guess it's really just looking, you know, the balance between fixed assets and and operating. I think with with the cost of leasehold property, we would much prefer to own our properties. It's far more cost effective, we believe, and it's about putting capacity in for the future developments for the business. So I think, you know, where we bought the property recently, we've agreed to buy a further property, as I said, in the East Midlands, and we're considering other investments. But, you know, we have the support of our principal bankers to be able to do that, and we believe it strengthens our balance sheet rather than have the operating leases, which are extremely expensive.

15:19 Fantastic. Thank you. Question around AI. Are you using that in the business? How are looking at utilizing that and and making things, I guess, more efficient? Good question. Yes. We've had a number of meetings with our IT providers. We are, at the moment, having some in various enhancement enhancements to our operating systems, but AI is certainly on the list in terms of improving our supply chain management and also the efficiency wherever we can of our salespeople.

15:49 That's great. Thank you. Question here from James. Thanks for the update. We've seen a steep rise in fuel prices recently. How exposed is the business to this? For sure. It there is an on cost with running a 160 vehicles, particularly in diesel. There's a small on cost with the the cost of the the cars, but the the bigger cost is with the diesel. We're managing that, and, you know, we've acknowledged there needs to be price increases, and that's both the input cost of of raw materials and subsequent finished product, but also, to be fair, to cover our increased cost of operating. Super. And one here, which I guess looks at really the the key operational leverage.

16:40 Now what factors can you see really driving that moving forward? Obviously, you've seen that come through. Is everything gonna continue going, do you expect, or a bit of headwind in there as well? Well, we've we've set out to get a return on sales of 5%. We're not there currently and a little away from there, but we have equally been investing heavily in the infrastructure, the property, all the things that go with that, the racking, the cutting tables, the the delivery vehicles, and also, obviously, our salespeople and staff throughout the business. But we we believe, you know, as the business continues to scale up, that we will see the operational gearing, as we've mentioned, and then we'll get an improved return on sales. And that's important because that then allows us to invest further in the business to the benefit of all our stakeholders, whether that be, you know, customers, and the business as a whole.

17:38 Fantastic. Nigel, thank you as well for for your next question. Have you considered moving to international presence and operations or further m and a? No. Our our focus is very much The UK. We we don't have any plans to move outside The UK. We see ourselves continuing to make take market share. We had a goal originally of 10% market share. I think we're we're probably there and probably exceeding that now. We don't want to dilute that by spreading overseas, so that's that's not on our agenda. In terms of m and a, I'd I'd say never say never, but we're not particularly active. Active. I think we want to grow the business organically. We had the various acquisitions, principally the original acquisition, of course, of the matting business, followed by HeatSeam factory flooring, ANA in Delta, then very importantly, the acquisition of Valley Wholesale Carpets.

18:32 That's giving us a really good foundation, to now expand our business organically. If the right acquisition presented itself, of course, we would consider it, but it's not a key focus for us. That's fantastic, Tony. I think you've covered off all those questions you can, and and thank you to all the investors for submitting those today. And just a reminder that company be able to review questions submitted and we'll publish those responses back on the platform. Tony, just before redirecting investors back to give you some feedback, wonder if you could just give us a few closing comments, please. Thank you. Well, I think we've demonstrated we set about a number of years ago with a target to get up to 200,000,000 and beyond. We're achieving that and pretty much there.

19:19 We've got foundations to be, you know, a much bigger business, explained that we can certainly go to 250,000,000 with the infrastructure we now have, particularly with Leeds, Newport and Derby, operational, and it's what other opportunities present themselves and how much market share we can take. But I'd like to thank you all for listening to the the presentation. I'm sure there's a number of investors and suppliers and perhaps customers, hopefully. So thanks for all your support. Fantastic, Tony. Thanks indeed for updating investors today. Can I please ask investors not to close this section as you'll be automatically redirected to provide your feedback in order the team can better understand your views and expectation? This only take a few moments to complete, and it's greatly valued by the company.

20:04 On behalf of Tony and the LIKEWISE GROUP PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon.