Alumasc H1 FY26: revenue dip now, stronger H2 set-up with order book momentum
Alumasc’s interim numbers show a tougher first half on revenue and margin, but a clearly improving run-rate into the second half. The order book is growing fast, overseas projects are landing, and management has held the dividend while keeping leverage low.
Two big headwinds framed H1: Building Safety Act-related project delays and affordability pressures in UK construction, plus the absence of last year’s chunky Chek Lap Kok (CLK) airport contribution. Even so, Alumasc exited Q2 with order intake accelerating and expects a materially stronger H2, reaffirming guidance for FY26.
Key H1 FY26 numbers investors should know
| Revenue | £50.4m (H1 FY25: £57.4m) |
| Underlying operating profit | £4.5m; margin 8.9% (H1 FY25: £8.1m; 14.1%) |
| Underlying PBT | £4.0m (H1 FY25: £7.5m) |
| Statutory PBT | £4.0m (H1 FY25: £6.5m) |
| Basic EPS | 8.6p (H1 FY25: 13.6p) |
| Interim dividend | 3.5p (unchanged) |
| Net bank debt | £7.7m; leverage 0.5x |
| Operating cash conversion | 91% (H1 FY25: 127%) |
| Free cash flow | £1.2m |
| IAS 19 pension surplus | £7.1m (Dec 2024: £3.3m) |
“Underlying” strips out non-trading items such as restructuring costs and acquired intangibles amortisation. The leverage ratio is a standard net debt-to-earnings measure – at 0.5x, Alumasc remains conservatively geared.
What dented the first half and why it’s set to ease
Revenue fell 12% to £50.4m, mainly because H1 FY25 included £5.5m from the CLK airport project in Hong Kong, versus just £0.1m this time. Shipments to CLK temporarily paused in H1 but are resuming, with around £2m expected in H2.
In the UK, Building Safety Act implementation continues to delay approvals, particularly on mid- to high-rise projects, and affordability weighed on activity. Management also cites the delayed Autumn 2025 Budget as a confidence drag in Q2. The RNS points to some early signs of improvement, with interest rates easing and policy reforms (Building Safety Regulator and NPPF) expected to help unlock demand through 2026.
Divisional performance: Timloc shines, Water Management set to rebound
Water Management: project timing hurts H1, H2 comeback in sight
- Revenue £22.7m (H1 FY25: £29.6m); underlying operating profit £1.5m (H1 FY25: £4.7m); margin 6.4%.
- CLK accounted for most of the year-on-year revenue decline (£5.5m in H1 FY25). Remaining c.£2m of CLK shipments expected in H2.
- Ex-CLK, revenue down 6% amid UK market softness and Building Safety Act delays.
- Cost actions delivered £1.1m of annualised savings; £0.2m restructuring cost booked as non-underlying.
- Order book £7.6m at December 2025, up 3% year-on-year; ex-CLK up 53% vs December 2024 and 66% vs December 2023.
My take: margins were hit by lower volumes and operational gearing in H1, but cost savings plus a bigger order book should lift H2 profitability. The international pipeline is broadening beyond Asia/Middle East, which is encouraging.
Building Envelope: steady demand, pipeline and orders building
- Revenue £19.0m (H1 FY25: £20.2m); underlying operating profit £1.9m (H1 FY25: £2.5m); margin 10.0%.
- Project delays tied to the Building Safety Act plus Autumn Budget uncertainty slowed sales realisation.
- Order book £6.9m, up 11% vs December 2024 and 38% vs December 2023; strong pipeline with blue-chip landlords and public sector work.
- New single-ply roofing product, Aluply, launched in November 2025 and gaining traction.
My take: the mix and momentum exiting Q2 look better than the headline H1 suggests. Specifications are a competitive edge here.
Housebuilding Products (Timloc): outperformance in a weak market
- Revenue £8.7m (H1 FY25: £7.5m), up 15%; operating profit £2.2m (H1 FY25: £1.9m); margin 25.4%.
- Benefited from competitors’ supply issues and Timloc’s next-day delivery and low carriage-paid thresholds.
- New national merchant and specialist plastics agreements; investment in a new 1,000 tonne injection moulding machine commissioned January 2026.
- Loftite loft door launched, exceeding Building Regulations Part L airtightness and aimed at Future Homes Standard specifications.
My take: Timloc is executing superbly, taking share while the market is down. That sets up nicely for operating leverage as volumes recover.
Cash, dividend and balance sheet: conservative and shareholder-friendly
Operating cash conversion was a solid 91% despite a deliberate working capital build to support the growing H2 order book. Free cash flow stood at £1.2m after £1.2m capex, £0.5m interest and £0.5m tax.
Net bank debt rose to £7.7m, mainly due to the inventory build and dividends. Even so, leverage is a comfortable 0.5x, well inside covenants. The interim dividend is held at 3.5p, signalling confidence.
The defined benefit pension showed a £7.1m IAS 19 surplus at December 2025, up from £3.3m a year ago, helped by asset returns. Annual contributions reduced from £1.2m to £0.7m from September 2025, with a low-dependency target by 2030. There was also a £0.5m non-underlying cash receipt from the sale of a Dover property.
Order book, pipeline and outlook: Changi win and broader catalysts
Excluding CLK, the Group order book at December 2025 was 27% higher year-on-year and 50% above December 2023. That includes a £2m initial order for Changi Airport in Singapore, with substantial potential for further phases of £10m-£15m (not yet tendered).
The wider pipeline spans defence, schools rebuilding, new hospitals, prison estate expansion, and upgrades to transport and energy networks. Interest rate reductions and reforms to the Building Safety Regulator/NPPF are expected to release pent-up demand over 2026. The Board remains confident in delivering FY26 in line with expectations.
Leadership and organisation: CEO transition and strengthened Water Management team
Pamela Bingham joins as CEO Designate on 2 March 2026, taking over from long-serving Chief Executive Paul Hooper on 31 March 2026. Alumasc also strengthened its Water Management leadership, appointing Steve Dann as Managing Director of Rainwater Products and Peter Blanchard as Managing Director of Covers & Drainage (Gatic/Wade).
My take: the handover looks orderly, with a clear strategy focused on sustainable products, margin improvement and overseas growth intact.
What it means for investors: my view
Positives
- Order book acceleration ex-CLK (+27% year-on-year) and growing overseas specifications.
- Changi Airport award provides proof of traction outside traditional geographies, with potential further phases.
- Cost savings (£1.1m annualised) to support margin recovery in H2 alongside volume pick-up.
- Conservative balance sheet (0.5x leverage) and maintained dividend.
- Pension in surplus with lower cash contributions, boosting future free cash flow resilience.
Watch-outs
- Timing risk on Building Safety Act approvals and UK project starts.
- Weather and broader macro could still disrupt construction activity in H2.
- Overseas project phasing (including CLK) remains a swing factor for quarterly revenue and margins.
Key things to watch in H2 FY26
- Conversion of the larger order book into revenue and margin recovery, especially in Water Management and Building Envelope.
- Further orders at Changi and progress on new overseas territories beyond Asia and the Middle East.
- UK policy execution on the Building Safety Regulator and NPPF reforms, and continued easing in interest rates.
- Cash unwinding of the working capital build and trajectory of free cash flow.
Bottom line: the H1 dip was largely about project timing and sector-wide delays, but Alumasc’s order book and pipeline suggest a stronger H2. With disciplined costs, a supportive balance sheet and growing overseas wins, the company looks set to deliver the year as guided and is well placed for medium-term recovery in sustainable construction demand.
