As the Group publishes its unaudited Interim results for the six months ended 30 June 2024, the Board is not expecting any change to trading conditions in the second half of the year.

Lords (AIM:LORD), a leading distributor of building materials in the UK, today announces its unaudited Interim Results for the six months ended 30 June 2024 (‘H1 2024’ or the ‘Period’).

H1 2024 highlights:

  • Group revenue of £214.2 million (H1 2023: £222.6 million)
  • Group like-for-like revenue decreased by 6.1% due to the challenging economic backdrop and previously announced market disruption within Plumbing and Heating relating to the Clean Heat Market Mechanism (‘CHMM’) deferral
  • Gross margin broadly in line with prior period and ahead of FY23 reflecting focus on customer service excellence
  • Decisive management actions taken on overhead costs expected to deliver annualised savings of £2.6 million in FY 2025
  • FY 2023 acquisitions successfully integrated and rebranded
  • Adjusted EBITDA2 16.6% lower at £12.6 million (H1 2023: £15.1 million)        
  • Plumbing and Heating division (‘P&H’) continuing to benefit from the UK’s commitment to sustainable living, with sales of Air Source Heat Pumps up 492%
  • Interim dividend of 0.32 pence per share, scaled in line with earnings per share (H1 2023: 0.67 pence per share)
  • Well positioned to deliver operational gearing from a recovery in the market.

Shanker Patel, Chief Executive Officer, said: “Trading conditions have remained challenging throughout the first half of 2024 with like-for-like (LFL) revenue 6.1% lower. The introduction and subsequent deferral of the Clean Heat Market Mechanism disrupted the Plumbing and Heating market and we experienced a 15% LFL revenue reduction in the first quarter, but a stronger second quarter resulted in a resilient first half with divisional revenue 3.2% down overall.

“In this challenging market, management has remained focused on optimising capital allocation and operating efficiency, with actions taken on costs expected to deliver annualised overhead savings of £2.6 million in FY2025. The Group’s resilience and strategy of maintaining gross margin is testament to our outstanding colleagues and our focus on excellent customer service.

“The Board welcomes the new government’s support for the sector and the recent interest rate reduction which is widely expected to lead to improved conditions for the UK construction market. The Group’s focus on operational efficiency and working capital management will ensure that we are well positioned for any market recovery.

"In the medium term, the Group is well placed in a highly fragmented and essential repair, maintenance and improvement market, to grow the Group’s market share organically and through selective, valued-added acquisitions which will become more attractive as the market returns. We are encouraged by the growth in Renewable product sales and believe this could be an additional near-term growth lever.

“While the outlook for the Construction sector is beginning to improve, the Board is not expecting any change to trading conditions in the second half of 2024 and, recognising the important Autumn season ahead, particularly in Plumbing and Heating, expect that Adjusted EBITDA, will be in line with management expectations.”