New investment in Likewise Group plc

Kelso bets big on Likewise as it consolidates UK floorcoverings after Headlam's collapse.

What the company is saying

Kelso Group Holdings plc has acquired 5,000,000 shares in Likewise Group plc at an average price of 30p, now valued at approximately £2m and representing nearly 10% of Kelso’s gross investments. The announcement frames Likewise as the new UK market leader, highlighting its rapid revenue growth from zero in 2018 to £163m in 2025, with expectations to exceed £200m this year. Kelso emphasises the strategic opportunity created by Headlam’s administration, positioning Likewise as the natural beneficiary and underlining the experience of its management team, many of whom previously built Headlam. The company stresses operational gearing, recent asset acquisitions—including the £14.9m purchase of Headlam assets and a £9.6m Corby hub—and strong sales momentum, with recent growth rates of 8.9%, 15.4%, 29.1%, and 20.7% for various periods. Kelso’s messaging is confident and forward-looking, asserting that the market underestimates Likewise’s earnings potential as it targets £300m revenue. The board’s alignment with shareholders is highlighted by a 16.2% ownership stake and over 150 years of combined experience, with Sir Nigel Knowles and John Goold named as Chairman and CEO respectively.

What the data suggests

Kelso’s investment in Likewise is underpinned by hard numbers: 5,000,000 shares purchased at 30p, now worth £2m, or nearly 10% of Kelso’s portfolio. Likewise’s revenue grew 8.9% to £163m in 2025, then 15.4% to £90m in the first half of 2026, with sales up 29.1% between July and late September and 20.7% year to date, indicating accelerating growth. The £14.9m acquisition of Headlam assets adds a 90,000 sq. ft. distribution centre, two brands, and 110 staff, with Likewise also handling Headlam’s remaining inventory for a £2.3m payment. The Corby distribution hub, purchased for £9.6m and due to open January 2027, expands capacity further. All acquisitions were funded from cash, with no new debt or equity. Despite these moves, Likewise expects no material profit from the Headlam assets in 2026, only a positive contribution in 2027. The UK floorcoverings market is £2.5bn, leaving significant headroom, but profit conversion remains unproven. Kelso’s board owns 16.2% of the company, and its concentrated portfolio includes seven other UK small and mid-caps.

Analysis

The announcement is upbeat, highlighting Kelso's investment in Likewise and Likewise's rapid revenue growth, recent acquisitions, and expansion plans. However, while revenue and sales growth figures are specific and realised, there is a notable absence of any profitability metrics (net income, EBITDA, operating profit, or cash flow), which prevents a strong_positive signal under the Disclosure Completeness Rule. Several key claims are forward-looking, including expectations for revenue to exceed £200m this year, the opening of the Corby hub in January 2027, and anticipated profit contributions from the Headlam assets only in 2027. The acquisition of Headlam assets (£14.9m) and the Corby hub (£9.6m) represent significant capital outlays, but the benefits are not immediate—Likewise explicitly expects no material profit contribution in 2026. The tone is promotional, with phrases about 'unique opportunity' and 'significant headroom,' but these are not substantiated with concrete, near-term financial impact. The gap between narrative and evidence is moderate: operational expansion is real, but profitability and return timelines are long-term and uncertain.

Risk flags

• ●Profitability risk is high: Likewise expects no material profit from the Headlam assets in 2026, so the return on the £14.9m acquisition is delayed and unproven. If integration or market share gains stall, the investment case weakens.
• ●Execution risk is material: The rapid expansion—acquiring assets, onboarding 110 staff, and opening a new 60,000 sq. ft. hub—requires flawless operational execution. Any misstep could disrupt service or erode margins.
• ●Market risk persists: The UK floorcoverings market is £2.5bn, but Headlam’s collapse shows the sector is vulnerable to strategic errors and debt. Likewise’s growth may not be immune to broader market pressures or competitive response.
• ●Disclosure risk: The announcement provides detailed revenue and growth numbers but omits profit, EBITDA, or cash flow figures for Likewise, making it difficult to assess underlying financial health and margin sustainability.
• ●Concentration risk: Kelso’s holding in Likewise is nearly 10% of its gross investments, increasing exposure if the integration or sector thesis fails.

Bottom line

Kelso’s £2m investment in Likewise is a high-conviction bet on the company’s ability to capture market share following Headlam’s collapse, supported by accelerating revenue and sales growth and significant recent capital deployment. The operational expansion is real—Likewise now controls major distribution assets and is targeting £300m in revenue—but the lack of disclosed profit metrics and the explicit statement that no material profit is expected from new assets until 2027 means the investment thesis is not yet validated by earnings. Execution and integration risks are significant, and the concentrated position amplifies downside if the growth story falters. Investors should focus on evidence of margin improvement and profit delivery from the acquired assets in 2027. The most important takeaway: this is a scale-up story with strong top-line momentum but unproven bottom-line delivery.

Announcement summary

(LSE:KLSO) Kelso Group Holdings plc announced a new investment in Likewise Group plc, following the purchase of 5,000,000 shares at an average price of 30p. The rise in Likewise's share price to approximately 40p has resulted in a market capitalisation of about £144m for Likewise, with Kelso's holding now valued at approximately £2m, representing nearly 10% of Kelso's gross investments. Likewise, founded in 2018 by Tony Brewer, Adrian Laffey, and Andrew Simpson, has grown revenue from zero to £163m in 2025 and expects to exceed £200m in the current year. On 8 September 2026, Headlam, which reported revenue of £499m in 2025, entered administration. On 7 October 2026, Likewise acquired selected Headlam assets from the administrators for £14.9m in cash, including the 90,000 sq. ft. freehold Thatcham distribution centre, Crucial Trading and Concept Flooring businesses, Headlam's principal intellectual property, and with around 110 employees expected to transfer. Likewise will also sell Headlam's remaining inventory on behalf of the administrators over nine months from Headlam's Coleshill site, with a £2.3m payment on account. The acquisition was funded from existing cash with no new debt or equity. Likewise expects no material profit contribution in 2026 and a positive contribution in 2027 from the acquired assets. Likewise’s revenue increased 8.9% to £163m in 2025 and 15.4% to £90m in the six months to 30 June 2026. Sales rose 29.1% between 1 July and 25 September 2026 and are up 20.7% year to date. In August 2026, Likewise raised over £30m in an oversubscribed fundraise and completed the £9.6m freehold purchase of a 60,000 sq. ft. distribution hub in Corby, due to open in January 2027. The company employs over 500 people and operates 13 distribution centres. The UK floorcoverings market is estimated at £2.5bn a year at manufacturer prices. Kelso's Board owns approximately 16.2% of Kelso and consists of about 80 investors and a small number of institutions, with more than 150 years of combined experience. Kelso's principal holdings include Saga plc, CVS Group plc, The Works.co.uk plc, NCC Group plc, Likewise Group plc, Angling Direct plc, Selkirk Group plc, and THG plc. Kelso has raised equity at 2p, 2.5p, 3p, and most recently at 3.3p. John Goold is Kelso's Chief Executive Officer, and Sir Nigel Knowles is Chairman.

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