Lords Group Trading plc

('Lords', the 'Company' or the 'Group')

Acquisition of A.W. Lumb for £23.1 million

Extension of Debt Facilities

Extending Lords' geographic reach and product range with Northern local market leader

Lords, a leading distributor of building materials in the UK, is pleased to announce that it is has acquired the business and assets of a leading local independent builders merchant, A.W. Lumb through the acquisition of the entire issued share capital of AWLC Limited ('AWLC') for a total consideration of £23.1 million (the 'Acquisition').  The Acquisition is in line with Lords' stated strategy at the time of IPO in July 2021. The Acquisition is to be immediately earnings accretive.

Total Acquisition consideration of £23.1 million, payable in cash, consists of £19.5 million due on completion and deferred consideration of £3.6 million payable in equal annual instalments over the next five years.  Consideration is to be funded from Lords' existing cash resources and debt facilities.

The Acquisition provides the Group with an extension of its product offering and geographical reach into the North of England. Both key senior management from A.W. Lumb and its 77 employees will be joining the Group, ensuring continuity of local knowledge and customer relationships, as well as continuing the family values core to Lords' success.

Established in 1964 and family owned until a management buyout in 2017, A.W. Lumb is a leading independent builders merchant operating in the North of England from depots in Dewsbury and Tamworth.  A.W. Lumb has a general merchanting service, with offerings in building materials, garden landscaping, timber & joinery and roofing products.  The business also provides a specialist offering in drylining and insulation to housebuilders.  A.W. Lumb's customers include several well-known house builders, civil engineering contractors, local authorities, plasterers and smaller developers.

In the year to 30 June 2021, AWLC generated revenues of £43.3 million, EBITDA of £3.9 million and a profit before tax of £3.8 million.

As at 30 June 2021 AWCL had pro forma net assets of £10.1 million, £1.9 million of pro forma net cash and freehold property with a market value of £4.6 million.

Increase in Group Debt Facilities

Alongside the Acquisition, the Group has agreed with its lender, HSBC, to increase the level of its revolving credit facility from £30.0 million to £50.0 million.  HSBC has also agreed to increase the Group's invoice discounting facility from £10.0 million to £20.0 million.

This increased debt capacity will provide the Group with additional resources with which to continue to take advantage of further accretive acquisition opportunities.

Shanker Patel, Chief Executive Officer of Lords, said: "This acquisition delivers against our strategy of gaining market share through geographic expansion and product range extension.  Specifically, it gives Lords broader reach in the North of the country.  A.W. Lumb is highly regarded in its local markets, respected for its product expertise and superior service levels and we are delighted to welcome their 77 colleagues and senior management to our team, who we believe share the same values as Lords.

"Furthermore, this acquisition is a major milestone in our growth and supports our stated ambition to reach £500 million revenue by 2024."

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.  Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

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Notes to editors:

Lords is a specialist distributor of building, plumbing, heating and DIY goods.  The Group principally sells to local tradesmen, small to medium sized plumbing and heating merchants, construction companies and retails directly to the general public.

The Group operates through the following two divisions:

Lords was established over 35 years ago as a family business with its first retail unit in Gerrards Cross, Buckinghamshire.  Since then, the Group has grown to a business operating from 39 sites.  Lords aims to become a £500 million turnover building materials distributor group by 2024 as it grows its national presence.

Lords was admitted to trading on AIM in July 2021 with the ticker LORD.L.  For additional information please visit www.lordsgrouptradingplc.co.uk.