Likewise expects half-year sales of £9.5m
Flooring distributor Likewise says it expects half-year sales to be £9.5m and parts of the group are trading ahead of expectations but its matting operation is ‘disappointing.’
It told shareholders that its Heatseam operation is trading in line with expectations and its product range will be expanded in 2020. Its Daventry facility has been upgraded and will become the central hub for the group’s residential offer, particularly in carpets, artificial grass and vinyl. Its Glasgow premises is to be replaced with a larger facility as it looks to grow residential sales and enter the contract market.
Lewis Abbott has delivered ‘a solid performance inside the M25’. It has been enhanced by the introduction of an additional commercial flooring specialist and is now trading ahead of expectations.
‘The original matting businesses of William Armes and Bruce Starke are trading below expectations. As a result it was decided to consolidate them into one business, trading from a single site in Sudbury. Employee consultation is now complete in regard to the restructuring and we are on target to trade solely from Sudbury at the commencement of 2020. Under the management of Anthony Graham, who was appointed to improve the performance, we are confident of a more positive trend as we enter the early part of next year,’ says Tony Brewer, Likewise ceo.
‘Likewise Trading which sources, markets and sells to key national retailers has an order book ahead of expectations for next year and we are developing a number of initiatives to establish a meaningful business in this area of the retail market.
‘In order to enlarge the group’s product range and geographical reach, James Kellett has established other new businesses in addition to Likewise Scotland. Likewise South East operates from the Sudbury freehold facility. Three external senior sales people developing commercial business are now complimented by the addition of two residential sales representatives. This business is performing ahead of expectations and is well positioned for the future. Likewise North has been established from the Dewsbury facility. As with South East there are three senior external sales people providing commercial products to flooring contractors principally in Yorkshire and Humberside.
Likewise North East is also now operating from Dewsbury but will have its own facility in Newcastle by the beginning of 2020 for the one senior commercial manager and two residential sales representatives.
‘With the quality of the sales teams, combined with supplier support and customer relationships we would expect the new businesses in Likewise Scotland, North and North East to replicate the rapid development of Likewise South East. Whilst incurring inevitable start-up cost during 2019, we expect all new start-up businesses to deliver a profit in 2020.
‘As originally planned, the logistics of H&V is being serviced by our UK operations where it is most cost effective, principally from Dewsbury. Tony Judge has taken direct responsibility for this business to accelerate the development of cut length activity alongside the existing full roll business and has implemented initiatives to improve customer service. With more cost-effective logistics and higher margin cut length sales we would expect H&V to make a positive contribution to the group in 2020.’
Judge will also lead the group’s IT and logistics development as it looks to move the businesses on to a single IT platform, with the goal of operating through one common platform in 2020.
Likewise expects revenue for the six months ended 30 June, to be no less than £9.5m, which on a proforma basis, assuming all acquisitions were part of the group for the full period, would have been about £17m.
‘With these various initiatives the group is now becoming a major player in the UK flooring market. Whilst the performance of the matting businesses has been disappointing, actions have been taken and improvements put in place. Importantly Heatseam is in line and the new start-ups are ahead of expectations. As a result, the group continues to trade in line with management’s expectations. Our sales team now totals 56 across the various businesses. With a combination of product knowledge, selling skills and customer relationships we are confident we have a strong collection of individuals to provide the group with a solid foundation for future development,’ says Brewer.