Latest Results

H1 2026 Highlights

Financial performance

• Group revenue for the Period remained stable at £232.1 million (H1 2025: £232.1 million), with contributions from new Merchanting branches and CMO offsetting weaker underlying demand in end markets.
• Group like-for-like revenue declined by 6.8%, reflecting continued weakness in construction, RMI and plumbing and heating markets.
• Gross margin increased to 20.2% (H1 2025: 19.3%)
• Adjusted EBITDA¹ before property gains of £8.4 million (H1 2025: £10.4 million), with a margin of 3.6% (H1 2025: 4.5%).
• Net debt³ of £26.5 million at 30 June 2026 (30 June 2025: £20.9 million)

Operational progress

• Merchanting improved sequentially, with the like-for-like decline moderating from 4.9% for H1 2026 to 2.3% in Q2 2026.
• CMO revenue increased by approximately 17.5% and the business delivered positive EBITDA.
• Plumbing & Heating spares revenue increased by approximately 8%.
• Decisive restructuring actions implemented within Plumbing & Heating, including depot rationalisation, reducing operating expenses by £1.5 million annualised.

Priorities and outlook

• Focused improvement plans are in place across every operating business, with emphasis on market-share increase, margin discipline, working capital improvement, carefully controlled capital expenditure and net debt reduction.

H1 2026 Financial Performance

ADJUSTED RESULTS	H1 2026	H1 2025	Change
Revenue	£232.1m	£232.1m	-
Adjusted EBITDA[1] before property gains	£8.4m	£10.4m	(19.2%)
Adjusted EBITDA margin before property gains	3.6%	4.5%	(90 bps)
Adjusted operating profit before property gains[2]	£2.3m	£4.5m	(48.9%)
Adjusted (loss)/profit before tax2	(£1.2m)	£3.1m	n/a
Adjusted diluted (loss)/earnings per share2	(0.70p)	1.35p	n/a
Interim dividend per share	-	0.32p	n/a
STATUTORY RESULTS	H1 2026	H1 2025	Change
Revenue	£232.1m	£232.1m	-
Operating (loss)/profit	(£3.1m)	£3.7m	n/a
(Loss)/profit before tax	(£6.9m)	£0.6m	n/a
Basic (loss)/earnings per share	(3.30p)	0.14p	n/a
Net debt3	£26.5m	£20.9m	26.6%

 

¹ Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation and impairment charges, excluding adjusting items (note 7).
² Adjusted operating profit, adjusted profit before tax and adjusted diluted earnings per share is operating profit, profit before tax and diluted earnings per share excluding adjusting items.
³ Net debt defined as cash less borrowings before lease liabilities.

 

Shanker Patel, Chief Executive Officer of Lords, commented:

“The Group delivered resilient revenue in the first half despite continued weakness across a number of our end markets and a particularly challenging period for Plumbing & Heating. Encouragingly, Merchanting performance improved through the second quarter, CMO delivered positive EBITDA and our Spares business continued to grow.

“We have responded decisively to the slower market recovery. In Plumbing & Heating, we have rationalised the depot network, reducing costs and implementing a focused customer recovery programme aimed at improving service levels, re-engaging inactive accounts and recovering market share. Across the Group, our immediate priorities are improving operational execution, converting profit into cash and reducing leverage.

“Market conditions are challenging and the timing of a market recovery remains uncertain, the actions now underway are intended to strengthen the Group and position Lords to deliver sustainable shareholder value as demand recovers. Whilst full details of the recently announced UK government help to buy home scheme, and its potentially positive impacts on the Group's end markets, remain to be confirmed, the Board continues to expect the Group performance for the full year to be in line with market expectations."

 

 

Chairman's statement

Chief Executive Officer's review

On behalf of the Board, I am pleased to report the Group’s unaudited Interim Results for the six months ended 30 June 2026.

Overview

The first half of 2026 was characterised by continued challenging conditions across a number of the Group’s end markets. Activity in new housing remained subdued and repair, maintenance and improvement (‘RMI’) demand was softer than anticipated, while conditions within the wholesale plumbing market were particularly difficult.

Against this backdrop, Group revenue was £232.1 million, in line with the £232.1 million reported in H1 2025, with contributions from new branches opened since the beginning of 2025 and CMO substantially offsetting weaker underlying demand; Group like-for-like (’LFL’) revenue, adjusted for trading days, declined by 6.8%. Profitability was lower year-on-year due to lower volumes, increasing the importance of cash generation and balance-sheet discipline.

As reported on publication of the Company’s 2025 final results in May, our end markets have remained subdued. Management has therefore increased the pace of operational improvement activity, with a clear focus on sales execution, margin, cost, working capital and capital discipline.

As volumes recover, we expect to benefit from significantly increased operating leverage as a result of the strategic progress made.  With much of our cost base now established, incremental future revenue increases should translate into a disproportionate increase in profitability.

Merchanting

Merchanting experienced a challenging start to the year, reflecting poor weather conditions and the continued weakness in construction activity, particularly in markets with greater exposure to new-build housing.

Revenue for the division was £112.3 million compared with £117.7 million in H1 2025. LFL revenue improved progressively after February 2026, and the rate of decline moderated to 2.3% in the second quarter, compared to a reduction of 4.9% for H1 2026, as a whole.

This improving trajectory reflects a gradual stabilisation in customer activity alongside the benefits of commercial and operational initiatives implemented across the division.

Performance varied across the portfolio. Lords Builders Merchants and George Lines both delivered positive LFL growth during the period, supported by their customer propositions and local market positions, while businesses with greater exposure to new-build housing remained more challenging.

The division is focused on increasing sales intensity, improving gross margin discipline, tightly controlling operating costs and ensuring that each branch delivers an appropriate return on capital employed.

Plumbing and Heating

The Plumbing & Heating division had a challenging first half. Revenue reduced to £96.4 million from £112.2 million in the comparable period, representing a LFL decline of 13.3%. As previously highlighted, the division did not benefit from the exceptional boiler market volumes experienced in March 2025, while the wider UK boiler market is estimated to have contracted by approximately 3% to 4%.

Within APP, performance was impacted by lower market share as we targeted value over volume. We have responded with a depot rationalisation, which reduces operating expenses by £1.5 million annualised, and strengthened the commercial team. A focused customer recovery programme is being implemented to improve service levels, re-engage inactive accounts and recover market share.

Importantly, the Plumbing & Heating division operates more broadly than just in traditional boiler activities. Spares revenue increased by approximately 8% during the period, benefitting from the resilient nature of repair and maintenance demand. Renewables also continued to progress, reflecting increasing customer adoption of low-carbon heating technologies.

These specialist categories remain strategically important and increase the division’s exposure to markets with stronger structural characteristics.

Digital

CMO has made significant progress since its acquisition in June 2025. Revenue increased by approximately 17.5% compared to H1 2026 and the business delivered positive EBITDA. The initial integration programme focused on restoring volumes, simplifying the operating model and reducing the cost base. Management is now focused on sustainable revenue growth, further margin improvement and increased operational efficiency.

The return to positive EBITDA is an important milestone and reflects a more efficient cost base, greater operational discipline and the actions taken to restore the business following acquisition.

Further opportunity remains to improve profitability, develop the product proposition and increase operational efficiency as the business moves into the next phase of its development.

Cash generation and operational improvement

Given the slower-than-anticipated market recovery, we have increased the pace and intensity of the Group’s operational improvement programme.

Each operating business has developed a focused improvement plan covering sales growth, gross margin, cost reduction, working capital and organisational effectiveness, with clearer ownership and regular Executive team review of delivery.

Capital allocation is also being tightly managed. Near-term priorities are to improve operational execution, convert profit into cash and reduce leverage through working capital discipline, restricted capital expenditure and delivery of the business improvement plans.

These actions are intended to strengthen returns and balance sheet resilience while preserving the Group’s ability to benefit from improving market conditions.

Our people

Periods of difficult trading place additional demands on our colleagues, and I would like to thank everyone across Lords for their continued commitment and hard work.

Our decentralised operating model remains an important strength. Our businesses succeed through the relationships our colleagues build with customers and suppliers with nimble decision making based on deep knowledge of the markets we serve.

At the same time, we are strengthening accountability across the Group, with clearer ownership of performance improvement initiatives and more frequent measurement of delivery.

Outlook

Trading in Merchanting improved during Q2 2026, but activity across our markets remains below the levels we had anticipated at the beginning of the year. We expect the recovery across our end markets to be more gradual than previously assumed. Our priorities for the remainder of the year are to increase market share within Plumbing & Heating, build on the improving momentum within Merchanting, deliver further benefits from CMO, grow our specialist businesses and convert profit into cash.

The Group retains established positions in fragmented markets. The operational improvements now underway, together with exposure to the long-term drivers of housing repair and maintenance, infrastructure and lower-carbon heating, are intended to position Lords for sustainable value creation as demand recovers.

Shanker Patel
Chief Executive Officer
30 September 2026

 

Financial review

Group revenue for the six months ended 30 June 2026 was flat at £232.1 million (H1 2025: £232.1 million), with contributions from four new branches opened since the beginning of 2025 and CMO, acquired in June 2025, substantially offsetting weaker underlying trading. Group LFL revenue, adjusted for trading days, declined by 6.8%. Lower volumes were only partly offset by price and mix, resulting in lower profitability compared with both the prior year and our expectations entering 2026.

Adjusted EBITDA before property gains for the period was £8.4 million compared with £10.4 million in H1 2025, with adjusted EBITDA margin reducing to 3.6% from 4.5%. Adjusted operating profit was £2.3 million and adjusted loss before tax was £1.2 million.

Reported operating loss was £3.1 million after charging adjusting items of approximately £5.7 million, principally relating to restructuring activities, depot consolidation in P&H, redundancy costs and acquisition-related non-cash amortisation.

Gross margin and operating expenses

Group gross margin was 20.2% compared to 19.3% in the prior period reflecting pricing discipline and improved gross margin in Plumbing & Heating. Management continued to focus on improving procurement, product mix and branch-level gross margin management as part of the business improvement plans.

Cost control remained a significant focus. On an underlying basis, excluding the impact of new branches and CMO, the Group’s operating cost base reduced year-on-year by 1.9%.

Adjusting items

Adjusting items during the period are set out below:

	H1 2026	H1 2025
	£m	£m
Business combination charges and amortisation of acquired intangibles	2.0	2.1
Depot rationalisation in P&H	2.1	-
Restructuring and redundancy	1.3	-
Share-based payments	-	0.4
Arrangement fees following refinancing	0.3	-
	5.7	2.5

Business combination charges and amortisation of acquired intangibles were similar to prior period at £2.0 million. In H1 2026, the Group incurred costs associated with the depot rationalisation at P&H of £2.1 million and restructuring, redundancy costs as Condell was rationalised, and further costs initiatives implemented across all divisions.

The Board continues to assess adjusting items carefully to ensure that the presentation of adjusted results provides shareholders with a clear understanding of underlying trading performance.

Cash flow, working capital and capital expenditure

Cash management remains a significant priority. Net debt increased as the December 2025 position unwound and as a result of the typical first half seasonal investment in working capital. A proportion of the first half working capital investment is expected to unwind during the second half.

June 2026 delivered a strong working capital inflow, and further initiatives are underway across the Group to optimise inventory, enhance receivables collection and improve supplier terms.

Capital expenditure is being tightly controlled, and, for the remainder of 2026, expenditure will be prioritised towards essential maintenance and projects offering clear financial returns.

Net debt and liquidity

Net debt at 30 June 2026 was £26.5 million, compared with £20.9 million on 30 June 2025. On 2 April 2026, the Group refinanced its banking facilities, which are committed until 1 April 2029, with extension options. The facilities comprise a £20.0 million committed revolving credit facility (‘RCF’) and a £45.0 million receivables financing facility. At the period end, the Group had £32.4 million of available liquidity headroom.

Current leverage is above the Board’s medium-term target and reducing net debt is a key priority. This is being supported by inventory optimisation, enhanced receivables collection, supplier-term initiatives, restricted capital expenditure, delivery of operating improvement plans and the Group’s expected second-half seasonal cash profile. The Group continues to receive the support of its lending banks and other key stakeholders.

Taxation and earnings per share

The tax credit for the period was £1.4 million, representing an effective tax rate of 20.9%. Adjusted basic loss per share was 0.70 pence compared with 1.35 pence in H1 2025. Reported basic loss per share was 3.30 pence.

Capital allocation and dividend

Given the current trading environment and the Board’s priority on strengthening the balance sheet and reducing leverage, capital allocation is disciplined. Immediate priorities are to support the operating requirements of the Group, invest selectively where returns are compelling and reduce net debt.

No interim dividend will be declared for H1 2026 (H1 2025: 0.32p). The Board recognises the importance of dividends to shareholders and intends to review distributions in light of trading performance, cash generation and progress in reducing net debt.

Summary Balance Sheet	H1 2026	H1 2025
	£m	£m
Tangible assets	10.6	9.0
Working capital	33.0	40.1
Operating capital employed	43.6	49.1
Deferred consideration	(1.7)	(2.9)
Other net assets	92.5	90.7
Leases	(71.4)	(67.2)
Net debt	(26.5)	(20.9)
Net assets	36.5	48.8

Working capital at 30 June 2026 was £33.0 million (30 June 2025: £40.1 million) and represented 7.0% of sales (30 June 2025: 8.7%). The movement reflects the Group’s continued focus on inventory optimisation and receivables collection together with the normal seasonal working capital profile.

Lease liabilities in respect of right-of-use assets were £71.4 million (30 June 2025: £67.2 million). Deferred consideration of £1.7 million at the period end (30 June 2025: £2.9 million).

Stuart Kilpatrick
Chief Financial Officer
30 September 2026

 

Consolidated statement of comprehensive income
For the six months ended 30 June 2026

Consolidated statement of financial position
As at 30 June 2026

 

Consolidated statement of changes in equity
For the six months ended 30 June 2026

 

 

Consolidated statement of cash flows
For the six months ended 30 June 2026