Likewise Group PLC on Friday warned that annual profit will be held back by a high level of investment, as well as poor market conditions that are driving up inflationary pressures.

The Solihull, England-based floor coverings distributor said adjusted profit before tax in 2022 is likely to remain ‘broadly in line’ with that of 2021.

In 2021, Likewise posted an adjusted pretax profit of £1.6 million.

Its shares fell 16% to 15.23 pence in London on Friday morning.

This is ‘due to unfavourable market conditions caused by the terrible war in Ukraine, political instability in the UK and a particularly hot summer’, Likewise said.

Inflationary cost pressures and investments have continued into its ‘key trading period’, which is likely to result in lower fourth-quarter profit than expected.

Likewise said it expects consumer spending to remain volatile and for inflationary cost pressures to continue into 2023.

More positively, it noted sales revenue has continued to increase month-on-month, and it expects annual revenue to slightly exceed market expectations.

In the third quarter, revenue grew 23% organically and 96% in total compared to the second quarter.

‘Investment in all aspects of the business has been undertaken over the recent years to create a nationwide platform with a current logistics capacity of 15 cubic metres. This provides the opportunity to grow revenues and profitability to achieve the long-term aspirations of the group,’ it said.

Likewise expects to maintain the annual dividend of 0.2 pence paid back in July, thanks to a ‘strong’ balance sheet, and net asset value in excess of £40 million.

‘Whilst continuing to invest, the group is also very mindful of increasing profitability, but it does not believe it to be in the best interest of stakeholders to solely maximise short-term profitability which would compromise the clearly stated medium to long-term objectives,’ the firm added.

Copyright 2022 Alliance News Limited. All Rights Reserved.