Fast-growing flooring distributor Likewise (LON:LIKE) rolled out another positive trading update confirming ongoing revenue growth and market share gains.
The small cap also stressed that by the end of FY26, it will have capacity to ‘materially exceed’ its £250 million annual sales target. The upbeat news sent shares in Tony Brewer-led Likewise up in early dealings.
On a roll
Year-to-date to 31 May, Likewise’s like-for-like revenue is up 16.5%. Furthermore, like-for-likes were up 19.1% in the month of May. ‘Order intake continues to be positive as the group takes exponential gains in market share’, insisted the company.
Likewise faces a headwind from ongoing macroeconomic uncertainty and weak UK consumer confidence.
Nevertheless, the board remains confident of achieving joint broker Zeus’ FY26 estimates. These point to growth in sales from £163.1 million to £174.1 million and an adjusted pre-tax profits jump from £3.1 million to £4 million.
Investing for growth
Likewise’s new Leeds distribution hub is now live and an extension of the Newport facility will be operational in July. In addition, legal due diligence is underway on a new 60,000 square foot hub in the East Midlands.
In combination, these investments underpin capacity in excess of Likewise’s £250 million revenue target. They also demonstrate Brewer’s confidence that there is market share still to be captured.
Why Brewer is bullish
Brewer, the former boss of Likewise’s struggling rival Headlam (LON:HEAD), said: ‘We are very proud of the excellent management and teams of people we have around the UK, who with the support of our suppliers and customers are building a really strong business.
‘We have a clear focus and strategy on what to achieve over the next five years and beyond. We very much appreciate the commitment and support of all stakeholders.’
Likewise faces uncertainty around consumer confidence and the impact of rising fuel and input costs. However, management has pedigree in passing through price increases, which should protect margins.
We think the firm has a clear opportunity to capture a larger share of the fragmented flooring distribution market.
As Zeus argues: ‘With peers continuing to report weak demand, Likewise’s ability to sustain its growth trajectory through this period of disruption cements its position, in our view, as the flooring sector’s emerging winner.’
Disclaimer: The author James Crux has a personal interest in Likewise.
Read the press release here: https://www.likewiseplc.com/investor-relations
