Floorcoverings distributor Likewise Group (LON: LIKE) continues to gain share in a tough market. First quarter revenues were 19.7% higher as investment in capacity continues to pay off for the number two in the UK flooring distribution market.
Last April’s acquisition Delta Carpets was not included in the comparative period, but it is not a big business. Higher prices helped but there was significant underlying growth.
The estimated 2022 revenues doubled to £124.4m. Zeus forecasts a 10% improvement in 2023 revenues to £136.6m, so this is a good start to the year. There is still uncertainty about consumer spending, though, and the first quarter is a limited guide to the full year.
Flat pre-tax profit of £2.5m is forecast for 2023. However, operational gearing means that if revenues continue to beat expectations the profit figure could be much higher.
AIM-quoted Likewise has an estimated market share of 7%. The current focus is organic growth, although acquisitions are still possible at the right price. There are still deferred payments for past acquisitions, but capital investment will ease from next year. Cash generation will improve, and net debt will be minimal, which means there will be finance available for deals.
The 2022 results will be published on 16 May. At 21p, the shares are trading on 21 times prospective 2023 earnings.
