Intention to float on AIM

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information in the admission document (the "Admission Document") intended to be published by Lords Group Trading plc (the "Company" or "Lords" and, together with its subsidiary undertakings, the "Group") in due course in connection with the proposed admission of its ordinary shares to trading on the AIM market ("AIM") of the London Stock Exchange plc (the "London Stock Exchange"), ("Admission").  Copies of the Admission Document will, following publication, be available on the Company's website at www.lordsgrouptradingplc.co.uk subject to certain access restrictions.

For immediate release

6 July 2021

Lords Group Trading plc

Announcement of intention to float on AIM

Lords Group Trading plc, a leading distributor of building materials in the UK, is delighted to announce its proposed admission to trading on AIM ("Admission") and proposed placing, conditional on, amongst other things, Admission (the "Placing"), of 54,736,839 new and existing ordinary shares (the "Placing Shares") of 0.5 pence each ("Ordinary Shares"), at a price of 95 pence per share (the "Placing Price").

The Placing was oversubscribed, having received strong support from institutional investors and will raise a total of £52.0 million (before expenses), comprising £30.0 million for the Company and £22.0 million for certain existing shareholders (the "Selling Shareholders").  Cenkos Securities plc ("Cenkos") is acting as Nominated Adviser, sole broker and sole bookrunner to the Company.

The Company is seeking Admission in order to raise new equity to provide flexibility to accelerate its growth organically and through acquisitions, as well as to enable the Selling Shareholders to sell a proportion of their current shareholding.  The Group will seek to continue its growth through a variety of organic and inorganic strategies, including geographic reach, product expansion, the active expansion of e-commerce platforms and the continued investment in its logistical capability.

Admission and commencement of dealings on AIM are expected to take place at 8.00 a.m. on 20 July 2021, under the ticker "LORD".  Based on the Placing Price, the market capitalisation of the Company will be approximately £150 million on Admission.  On Admission, the Company will have 157,503,947 Ordinary Shares in issue and a free float of approximately 34.5 per cent.

OVERVIEW OF LORDS GROUP TRADING

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:

·    Merchanting: supplies building materials and DIY goods through its network of merchant businesses and online platform capabilities.  It operates both in the 'light side' (building materials and timber) and 'heavy side' (civils and landscaping), through 24 locations in the UK.

·   Heating and Plumbing: a specialist distributor in the UK of heating and plumbing products to a UK network of independent merchants, installers and the general public.  The division offers its customers an attractive proposition through a multi-channel offering. The division operates over nine locations enabling nationwide next day delivery service.

Lords was established over 35 years ago as a family business with its first retail unit in Gerrards Cross, Buckinghamshire.  Since then, the Company has grown to a business operating from 33 sites with a combined turnover in excess of £288 million.  The Group aims to become a £500 million turnover building materials distributor group by 2024 as it grows its national presence.

The Group is principally focused on the growing Repairs, Maintenance and Improvement (RMI) market, with approximately 80 per cent. of the Group's demand focused on this segment of the construction market.  The Group's businesses have experienced strong organic growth and remain well placed to take advantage of future favourable conditions in the RMI market.  The Group has also grown via a number of well performing acquisitions. Lords has acquired more than 13 businesses in the last 10 years and it fully understands the issues faced when integrating teams.

The Group's main clients are local tradesmen, hardware stores, plumbing and heating merchants and construction companies, that use Lords' deep product knowledge to source and procure a wide variety of building products.  Customers are offered an excellent buying experience, enabled by the longstanding industry experience held by both the senior management team and employees of Lords, and enhanced through access to a diverse range of suppliers.

KEY STRENGTHS

Strength of customer service offering

·   The Group strives to put the customer at the centre of everything it does at all times.  The Group's business model is focussed on providing customers with the best experience possible and it is for this reason that the Company follows the mantra of "Customer Obsessed, Product Specialists".

·    The employees are engaged and each division has specific training to make sure customer service is of the highest calibre.  It is for these reasons that Lords has been recognised within the industry for its customer service with the Platinum FEEFO service award (2021) and Plumbase Supplier of the Year (2017).

Specialist product knowledge and investment in ecommerce and technology

·    The Group aims to have significant product range and expertise and is focused on a technology driven strategy to enhance levels of efficiency, and in doing so the customer experience.  The Group prides itself on being extremely flexible and customer centric, with the aim of satisfying the customers' desire for getting the product they are after, when they want it and how they want it.

Acquisition track record and future platform for growth

·    The Group has a strong track record of acquisitions, with the six acquisitions completed between 2016 and 2020 having been fully integrated and performing at a return-on-investment rate of greater than 20 per cent.

·    The directors of the Company (the "Directors") believe that Lords is a highly attractive 'next custodian' for many vendors.  This is the reason why the majority of the Group's acquisition opportunities since 2016 come from vendors approaching the Group, and thus are presented with a large number of motivated vendors that view Lords as the mechanism through which they can elevate their businesses to the next level.  Post Admission, the Group will have a strong balance sheet to fund future acquisitions.

Group culture and employee engagement

·    The Group has focused on establishing a strong company culture, which in turn has led to high levels of employee engagement, which the Directors believe contributes towards the impressive levels of customer satisfaction.

·    The Company's strong culture and engagement is demonstrated by high employee retention levels, the average employee length of service and by all five divisional managing directors having been promoted from within the business, including two of which who commenced their employment with the Company working on the shop floor.

·   The Group aims to further increase employee engagement by refreshing and enhancing, on and after Admission, the employee share schemes that were implemented prior to Admission.  The Directors believe in democratised ownership of the business which is intended to remove business dependence on existing management and to focus on the next generation of management leading the Group.

Long-term relationships with UK suppliers

·   The Company regards its relationship with its suppliers as critical to its business model and, as such, considers it key to maintain an open and collaborative approach with suppliers.  The Group considers itself to have excellent relationships with its suppliers which is demonstrated by the average tenure with suppliers being much longer than the average builders merchant.

·    For example, a number of the Group's timber suppliers have been supplying the Group for more than 20 years.  Its excellent working relationships gives the Group good surety of supply, with the Group not experiencing any major supply issues during recent surges in demand for homebuilding equipment.

Intention to pay progressive dividend

·   The Directors recognise the strong cash profile of the Company following Admission and believe that Lords will be well placed to pay a regular dividend to shareholders.  At the same time, the Directors believe that there is significant opportunity to grow the business and win market share; establishing Lords as a market leader in the UK.

Shanker Patel, Chief Executive Officer of Lords Group Trading plc, commented:

"We are delighted to announce our plans to join the AIM market.  The entire team has worked hard to establish Lords' position as a leading distributor in the UK building materials market, and it is this ability and ambition that will allow us to capitalise on the significant opportunities ahead.

"The RMI market in particular has huge potential and is supported by a number of short, medium and longer term growth drivers.  We look forward to continuing to grow our business as a publicly quoted company."

FOR FURTHER ENQUIRIES:

The ISIN of the Ordinary Shares is GB00BM9CLS53, the SEDOL of the Ordinary Shares is BM9CLS5 and the Company's LEI number is 9845009A4D87F1CE5145.

To find out more, please visit: www.lordsgrouptradingplc.co.uk

BOARD OF DIRECTORS

Shanker Patel, Chief Executive Officer

Shanker has a BSc from London school of Economics alongside a Law degree and an Exec Ed from Harvard Business School.  He has been active within the business since 1993 and has held the Chief Executive Officer role for over 10 years.  Shanker has and continues to set the strategic direction of the Group and guided the business through transitioning from an owner managed structure to a business that incorporates an independent professional management team.  Shanker is also a designated member of the H&B buying group that represents Lords, as well as a board member of the Builders Merchants Federation, which is the only trade body representing merchants.

Chris Day, Chief Financial Officer

Chris joined Lords in March 2017 as Group Finance Director.  Chris began his career as a Management Accountant at Clipper Logistics and during the two years he was with the business it grew from £86 million turnover to £153 million, largely through new customer acquisitions with Chris leading the finance integration part.  In 2008 he moved to Monsoon Accessorize Ltd, the clothing retailer, and held both Supply Chain Financial Controller as well as Head of Supply Chain Finance during his five years with the business.  Chris joined Travis Perkins in 2013 and in early 2015 was promoted from his role as Head of Finance - Supply Chain & IT to become the Finance Director of Tile Giant.  Chris is CGMA qualified in addition to holding a BA (hons) degree from Cardiff and an MSc in Supply Chain management from Cranfield.  During his time at Lords, Chris has overseen the growth of the Group through seven acquisitions, an enlarged finance team and helped to structure many parts of the business in readiness for the growth.

Gary O'Brien, Independent Non-Executive Chairman

Gary is one of the retail sectors most seasoned leaders, progressing through such companies such as Allied Lyons, Granada Group and Black & Decker to join Max Factor in 1982 as Deputy Managing Director and Finance Director. Already experienced in business transformations, Gary built Max Factor, a loss maker, into one of the most profitable divisions in the worldwide operation at the time.

He moved on to join the board of the Burton Group in 1986, again instituting significant changes which saw the group increase earnings per share through a recession of the 1980s/ early 1990s. Gary was then introduced to the Ratners Group (now Signet) where he arranged two re-financings for the group involving 32 banks, eventually seeing it return to profit.  Gary's career has since turned to private companies and subsequently, he has been involved in a management and advisor capacity within corporate finance, telecommunication, IT and financial services marketing businesses, alongside his ex-Chairmanship of John Lewis of Hungerford, his advisory roles' at Lords and Bailey Montagu, Gary is also currently involved in both the Internet Retailing and Property arenas. Gary has worked with the Group since 2014 adding strong financial acumen and strategic guidance.

Dawn Moore, Independent Non-Executive

Dawn has an extensive record of proven success in executive level human resources (HR) and people strategy, across a range of large organisations and sectors.  Dawn's current role is Group People Director at Murphy Group having previously held the position of Director in human resources for Morgan Sindell, Tarmac and Keepmoat.  During Dawn's executive HR tenure with Tarmac, she led the development of a HR strategy aligned to public company separation and plan for growth and sale.  Dawn has significant, relevant up-to-date knowledge across manufacturing, construction, and infrastructure sectors. Dawn was named one of the most influential eight women in construction in 2018 and has received multiple national awards for work on diversity and inclusion, culture change, recognition, and HR strategy over the last few years.  Dawn is regularly asked to speak at national events and contribute to published articles on HR work. Dawn has worked with the Group since 2020 offering her wealth of experience across people, strategic and governance.

Andrew Harrison, Independent Non-Executive

Andrew was formerly Chief Executive Officer of the Plumbing and Heating division of Travis Perkins plc and prior to that role held many senior positions within the Travis Perkins Group including the roles of Chief Operating Officer of Travis Perkins as well as Managing Director of Keyline, Benchmarx and CCF.  Andrews executive career spans forty-one years within the merchant industry with 21 years at Travis Perkins plc (1999-2020) and 20 years between Graham-Reeves (1980-1989) and Sharpe & Fisher (1989 to 1999) which grew from four to 38 branches over 10 years before being acquired by Travis Perkins.  Andrew has deep experience and knowledge of business transformation programs, governance, and customer relationship strategy across the home improvement, timber and builders merchant sector.

Important Notices

This announcement is a financial promotion and is not intended to constitute investment advice.  The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by Cenkos Securities plc ("Cenkos") solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

Neither this announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, in, into or from the United States of America (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or the "US")), Australia, Canada, Japan or the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each a "Restricted Jurisdiction").  Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities laws.

This announcement does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or other securities in any Restricted Jurisdiction.  The Placing and the distribution of this announcement and other information in connection with the Placing and Admission in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein comes should inform themselves about and observe any such restrictions.  Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.  Neither this announcement nor any part of it nor the fact of its distribution shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

This announcement is directed only at persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments and are: (i) if in a member state of the European Economic Area ("EEA"), Qualified Investors as defined in article 2(e) of Regulation (EU) 2017/1129 (the "EU Prospectus Regulation"); (ii) if in the United Kingdom, are Qualified Investors as defined in article 2(e) of the EU Prospectus Regulation as it forms part of domestic law pursuant to the European Union (Withdrawal) Act 2018 and (a) fall within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (b) are persons who fall within article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Order or (c) are persons to whom it may otherwise be lawfully distributed (all such persons together being referred to as "Relevant Persons").

This announcement must not be acted on or relied on by persons who are not Relevant Persons.  Persons distributing this announcement must satisfy themselves that it is lawful to do so.  Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.  This announcement does not itself constitute an offer for sale or subscription of any securities in Lords Group Trading plc.

The Ordinary Shares referred to in this Announcement have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.  The Ordinary Shares have not been and will not be approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement.  Any representation to the contrary is a criminal offence in the United States.

Any subscription for or purchase of Ordinary Shares in the proposed Placing should be made solely on the basis of the information contained in the final Admission Document to be published by the Company in connection with the Placing and Admission.  The information in this announcement is for background purposes only and does not purport to be full or complete.  No reliance may or should be placed for any purposes whatsoever on the information contained in this announcement or its accuracy, completeness or fairness.  The information in this announcement is subject to change.  However, the Company does not undertake to provide the recipient of this announcement with any additional information, or to update this announcement or to correct any inaccuracies, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of the Company to proceed with the Placing or any transaction or arrangement referred to in this announcement.  This announcement has not been approved by any competent regulatory authority.

In connection with the Placing, Cenkos and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase Ordinary Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Ordinary Shares and other securities of the Company or related investments in connection with the Placing or otherwise.  Accordingly, references in the Admission Document, once published, to the Ordinary Shares being offered, subscribed, acquired, placed or otherwise dealt in should be read as including any offer to, or subscription, acquisition, placing or dealing by Cenkos and any of its affiliates acting as investors for their own accounts.  In addition, Cenkos or its affiliates may enter into financing arrangements and swaps in connection with which it or its affiliates may from time to time acquire, hold or dispose of Ordinary Shares.  Cenkos has no intention to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Cenkos which is authorised and regulated by the Financial Conduct Authority in the United Kingdom is acting exclusively for the Company and no one else in connection with the Placing and Admission, and Cenkos will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this announcement.

Neither Cenkos, nor any of its subsidiary undertakings, affiliates or any of its directors, officers, employees, advisers, agents or any other person accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions contained in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith and any liability therefore is expressly disclaimed.

The anticipated timetable for Admission, including the publication of the Admission Document and/or the date of Admission, may be influenced by a range of circumstances, including market conditions.  There is no guarantee that the Admission Document will be published or that Admission will occur and investors should not base their financial decisions on the Company's intentions in relation to the Placing and Admission at this stage.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements".  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology.  These forward-looking statements include matters that are not historical facts.  They appear in a number of places throughout this announcement and include statements regarding the directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets.  By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances.  Actual results and developments could differ materially from those expressed or implied by the forward-looking statements.  Forward-looking statements may and often do differ materially from actual results.  Any forward-looking statements in this announcement are based on certain factors and assumptions, including the directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity.  Whilst the directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect.  Save as required by applicable law or regulation, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the directors' expectations or to reflect events or circumstances after the date of this announcement.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

Certain figures contained in this announcement, including financial, operational and statistical information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

UK product governance

Solely for the purposes of the product governance requirements contained within of Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the Placing Shares may decline and investors could lose all or part of their investment; (b) the Placing Shares offer no guaranteed income and no capital protection; and (c) an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.  The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.  Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cenkos will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.