Lords Group acquires 90% of Ultimate Renewables for £646k, strengthening renewable energy services
Buy low, sell high. It's a simple maxim, but fiendishly difficult to execute as very few people have the stomach to back themselves when there's 'blood on the street'. The trick is finding those situations when the crowd's perception is far too pessimistic.
The good news is this presently appears to be the case for UK building products stocks where there is literally bargains galore for risk-tolerant investors, as evidenced by the amount of corporate buybacks and M&A activity.
One such high-potential opportunity is specialist UK builders merchant and heating/plumbing products distributor () who this morning said that it had purchased 90% of Ultimate Renewables Supplies (UR) for £646k (£196k deferred). Based in Bicester, Oxfordshire, UR provides a full design and commissioning service to installers and independent merchants of heat pumps and renewable energy products. In addition, will pay £256k of UR's existing debt, post completion.
This small bolt-on acquisition will be integrated within the group's Plumbing and Heating division, which has itself recently been awarded exclusivity by Italian heat-pump manufacturer Clivet, in turn bolstering 's expertise in offering energy transition and Clean Heat renewable products.
CEO Shanker Patel commenting: "We are delighted to announce the acquisition of Ultimate Renewables Supplies and are also really excited to welcome their ten colleagues to our Plumbing and Heating division, as well as to the wider Lords family. The acquisition is a key strategic step in our ambition to support the energy transition to cleaner, renewable heating solutions. It is also complementary to our existing Plumbing and Heating division, increases our customer base and broadens our product and service offering."
Lastly, the stock at 37p trades on attractive 'trough' PER multiples of 13.7x and 10.7x respectively for this year and next, compared to rival Travis Perkins on 24x and 14.4x. House broker Cavendish has a 106p/share target price, based on FY24 revenue, adjusted EBITDA and EPS forecasts of £450m, £23.8m and 2.7p respectively, climbing to £465m, £25m and 3.5p in FY25.
Time to be patient.
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