Flooring distributor Likewise Group (AIM:LIKE) has announced that positive sales growth seen in the late Summer and early Autumn has continued, with group revenue in October increasing by 36.7%, taking the year to date growth to 22.8% against the same period last year. All of the company’s businesses are said to have contributed to the positive trend.
Combined with operational gearing and subsequent improved profitability, Likewise is confident that it will be materially ahead of current market expectations for FY2026, with pre-tax profit expected to be a minimum of £6 million.
The business
Likewise Group was formed in 2018 with the intention of obtaining a meaningful share of the UK flooring distribution market. As of today, the firm is a leading wholesale distributor of floor coverings, rugs and matting products, serving customers throughout the UK via a number of regionally branded businesses. Growth over the years has been driven by a number of accretive acquisitions of regional wholesale distribution businesses as well as the establishment of new distribution centres and hubs throughout the country. The firm’s main customers are independent flooring retailers and contractors. Its current goal is to upscale capacity so it can reach annual sales of £300 million; the previous £200 million target looks set to be achieved this financial year.
In October, the firm announced the acquisition of a number of assets from rival Headlam (in administration) for total consideration of £14.9 million (plus VAT) in cash. Following Headlam's administration and this acquisition, Likewise believes it is the largest floor coverings distributor in the UK, with an enlarged brand portfolio, additional freehold distribution capacity and a broader customer base. It will further support the goal of achieving £300 million of revenue in the medium term.
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Operational progress
Likewise added that it is currently progressing with the acquisition and integration of the Headlam assets. Following the acquisition of the freehold of the 90,000 square foot High Bay Distribution Hub in Thatcham, Likewise now owns the freehold of 8 properties valued at £56 million, with just £11 million of fixed debt.
Incoming deliveries to Thatcham commenced on 22nd October to establish stock levels and during November the facility is expected to become an important part of the Likewise Floors Logistics Network, particularly across the South of England and enhancing service levels in Newport, Birmingham, Sudbury, Plymouth and Sidcup.
Acquired business Concept Flooring Supplies in West Bromwich and Stoke-on-Trent has replenished stock levels and is almost back to resuming “service as normal” on behalf of its supplier and customer base. Meanwhile, premium carpet brand, Crucial Trading, has placed stock orders with key suppliers to supplement existing stock, and the bespoke rug manufacturing operation in Kidderminster is immediately processing incoming orders.
Likewise expects that both Concept Flooring Supplies and Crucial Trading will be earnings enhancing in FY2027, reinforcing the firm’s position as the leading UK flooring distributor and supporting further growth in market share and profitability.
At the time of the acquisition Likewise said that it will help the Joint Administrators sell Headlam’s current inventory over a nine month period through its sales and distribution network. The agreement is said to be being managed particularly carefully to sell through the administration stock and avoid any disruption to the UK flooring industry.
Numerous exclusive products from the various purchased brands are currently being restocked in both Likewise Floors and Valley Wholesale Carpets to enable continuity across the residential and commercial customer base.
To facilitate the transport and logistics requirements, Likewise will increase the number of delivery trucks by 16 to 192 this year, with further increases expected in Q1 and Q2 2027.
Comment
Shares in Likewise have hit 46.25p on the back of this update, a level not seen since January 2022, capitalising the company at £168.9 million. The £6 million pre-tax profits expected for the full year are up from £3.1 million in FY2025 (underlying pre-tax profits) and £1.32 million at the halfway stage in June. If last year’s financial calendar is repeated then investors should expect a year-end trading update in January, when they will see if the very strong momentum seen this year has continued.
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Disclosures
Likewise is not a corporate client of Optimo Research Ltd.
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