Intrinsic Value Likewise Group plc (LIKE.L)

• Previous Close: £25.00
• Intrinsic Value: £10.48
• Upside potential: -58%

Stock Valuation Context

Business Model And Market Position

Likewise Group plc operates in the furnishings, fixtures, and appliances sector, specializing in the distribution and manufacturing of floorcoverings and matting products for both domestic and commercial markets. The company serves the UK and international markets with a diversified portfolio that includes carpets, vinyl, laminate, luxury vinyl tile (LVT), artificial grass, underlays, and accessories, alongside doormats and rugs. Its revenue model is driven by wholesale distribution and direct sales under well-established brands such as Dandy, BRUKE STRAKE, Marquee Floors, and Likewise, among others. The company has carved a niche in the competitive flooring industry by offering a broad product range that caters to varied customer needs, from residential to commercial applications. Likewise Group’s market position is reinforced by its vertically integrated operations, combining distribution with in-house manufacturing capabilities, which allows for cost efficiencies and quality control. The company’s focus on sustainability and innovation in flooring solutions further strengthens its competitive edge in a sector increasingly influenced by environmental considerations.

Revenue Profitability And Efficiency

For FY 2023, Likewise Group reported revenue of £139.5 million (GBp 13,953.8 million), reflecting its established presence in the flooring distribution market. Net income stood at £844,025 (GBp 84,402.5), with diluted earnings per share (EPS) of 0.0034 GBp, indicating modest profitability. Operating cash flow was £5.8 million (GBp 578,984.8), demonstrating the company’s ability to generate cash from core operations, while capital expenditures of £2.0 million (GBp 2,029,306) suggest ongoing investments in business infrastructure.

Earnings Power And Capital Efficiency

The company’s diluted EPS of 0.0034 GBp highlights its earnings power in a competitive market. Operating cash flow of £5.8 million (GBp 578,984.8) underscores efficient cash generation relative to its revenue base. The modest net income margin suggests room for operational improvements, though the company’s ability to sustain positive cash flow indicates resilience in its business model.

Balance Sheet And Financial Health

Likewise Group’s balance sheet shows £5.7 million (GBp 5,709,229) in cash and equivalents, providing liquidity for short-term obligations. Total debt stood at £30.4 million (GBp 30,390,879), indicating a leveraged position. The company’s financial health appears stable, supported by positive operating cash flow, though the debt level warrants monitoring for long-term sustainability.

Growth Trends And Dividend Policy

The company did not declare dividends for FY 2023, reflecting a reinvestment strategy aimed at growth. Revenue growth trends will depend on market demand for flooring products and the company’s ability to expand its distribution network. The absence of a dividend policy suggests a focus on capital retention for operational and strategic initiatives.

Valuation And Market Expectations

With a market capitalization of approximately £52.9 million (GBp 5,294,8191), Likewise Group trades at a valuation reflective of its niche market position and modest profitability. The beta of 0.821 suggests lower volatility compared to the broader market, aligning with its stable but cyclical industry exposure. Investor expectations likely hinge on the company’s ability to improve margins and expand its market share.

Strategic Advantages And Outlook

Likewise Group benefits from a diversified product portfolio and strong brand recognition in the UK flooring market. Its vertically integrated operations provide cost advantages, while its focus on sustainability aligns with evolving consumer preferences. The outlook remains cautiously optimistic, contingent on macroeconomic conditions affecting the housing and commercial construction sectors, which drive demand for flooring products.

Sources

Company filings, London Stock Exchange data