Lords Group Trading (LORD) H2 2025 earnings summary

Executive summary

• Achieved record revenue of £472.8 million for FY2025, up 8.3% year-on-year, with positive like-for-like growth despite subdued market conditions.

• Merchanting like-for-like revenue grew 3.1%, and Plumbing & Heating margins improved by 60bps, driven by product mix and margin management.

• Renewables revenue surged 57%, enhancing margin quality.

• Net debt reduced by 59% to £13.4 million, significantly strengthening the balance sheet.

• Strategic acquisitions, new branch openings, and digital expansion accelerated national reach and capability.

Financial highlights

• Revenue increased to £472.8 million (+8.3% year-on-year); gross profit rose 9.2% to £93.0 million, with gross margin stable at 19.7%.

• Adjusted EBITDA was £21.0 million; adjusted operating profit declined 11.5% to £9.2 million due to higher employment costs and branch investment.

• Adjusted EPS fell 38% to 1.14p; dividend per share also down 38% to 0.52p, with £900,000 to be paid.

• Operating cash conversion reached 317%, driven by strong cash flow and sale-and-leaseback transactions.

• Adjusting items before tax of £8 million, mainly non-cash branch impairments.

Outlook and guidance

• Priorities for FY26: drive like-for-like sales in merchanting, enhance P&H margins, scale digital platform, and maintain cost discipline.

• Market conditions remain subdued due to macroeconomic and geopolitical uncertainty, but the group is better positioned for recovery.

• Expect to benefit from increased operating leverage as volumes recover, with incremental revenue driving disproportionate profit growth.