Lords Group Reports Strong H1 2025 Growth with 8.4% Revenue Increase and Strategic Acquisitions

Lords Group Trading H1 2025 results: revenue up 8.4% and market share gains

Lords Group Trading delivered solid top-line progress in a tough market. Group revenue rose 8.4% to £232.1m with like-for-like sales up 7.0%, showing the existing estate did the heavy lifting without relying on acquisitions. Profitability was resilient but under pressure from mix and inflation, with Group Adjusted EBITDA down 3.9% to £12.1m and the Adjusted EBITDA margin 70 bps lower at 5.2%.

Management kept the interim dividend flat at 0.32 pence per share and nudged the balance sheet in the right direction. Net debt (excluding leases) fell to £20.9m, a £15.4m reduction since June 2024, helped by a £13.1m sale and leaseback in April.

Quick-scan of the key numbers

Metric	H1 2025	H1 2024	Change
Revenue	£232.1m	£214.2m	+8.4%
Like-for-like revenue	+7.0%	–	–
Adjusted EBITDA	£12.1m	£12.6m	(3.9)%
Adjusted EBITDA margin	5.2%	5.9%	(70) bps
Adjusted operating profit	£6.2m	£7.1m	(12.7)%
Adjusted diluted EPS	1.35p	1.57p	(14.0)%
Statutory diluted EPS	0.14p	0.39p	(64.1)%
Net debt (ex-leases)	£20.9m	£36.3m	£15.4m better
Interim dividend	0.32p	0.32p	Maintained

Definitions in brief: like-for-like strips out new, disposed or acquired sites to compare apples with apples. Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, including property gains and losses but excluding exceptional items and share-based payments.

Merchanting division: strong double-digit growth

Merchanting is the standout. Revenue rose 12.6% to £117.7m with like-for-like up 11.5%. Brands exposed to new build, such as Civils and Dry Lining, led the charge and three new branches added £2.4m of revenue.

Adjusted EBITDA in Merchanting increased 8.6% to £8.2m, though margin eased to 7.0% due to the lower-margin mix. Management investment is notable here: the division now benefits from a dedicated COO, and the branch rollout continues, which should support further market share gains when RMI demand improves.

Plumbing & Heating: steady sales, margin squeeze

Plumbing and Heating revenue edged up 2.4% to £112.2m, with like-for-like up 2.8%. APP wholesale volumes rose 6.8% and market share was maintained at around 11%, but merchanting was softer and Mr Central Heating had a challenging half with revenue 13% lower.

Adjusted EBITDA fell to £3.9m versus £5.0m. Importantly, H1 2024 benefited by roughly £0.8m from the Clean Heat Market Mechanism, which later reversed. Excluding that H1 2024 tailwind, the year-on-year gap narrows to £0.3m. Leadership changes – a new COO for P&H and a shift of the previous head into Group business development – aim to sharpen execution in H2.

Digital strategy: CMO acquisition broadens the channel

Lords bought the trade, assets and IP of Construction Materials Online for £1.8m on 6 June 2025 (including a property valued at £1.2m). CMO is the largest online-only retailer of construction products and brings nine specialist websites plus know-how in supplier-direct fulfilment.

Pre-acquisition, CMO’s leverage and credit insurance issues had created fulfilment challenges and refunds. In its first three weeks inside Lords, the business made a small loss, as flagged, but is expected to contribute positively in H2 as supply stabilises, product ranges are broadened through Lords procurement, and costs are reset. Strategically, this gives Lords a bigger digital footprint to complement its 48-site physical network.

Cash flow, debt and the sale-and-leaseback call

Cash generation improved. Cash generated from operations rose to £9.7m from £5.4m, helped by tight working capital – the usual seasonal outflow was just £0.2m versus £6.7m last year. Over the 12 months to 30 June 2025, operating cash conversion was 97%.

The April sale and leaseback of four sites delivered £13.1m of gross proceeds, part of roughly £17m realised in the last 12 months. That strengthened liquidity and allowed net debt to fall to £20.9m. The trade-off is higher lease liabilities – now £67.2m – and incremental lease interest, which you can see in finance costs.

Facilities look comfortable. Lords runs a £50.0m revolving credit facility to April 2027 and a £25.0m receivables facility. Headroom at period end was £37.3m with accessible cash of £16.6m. The RCF was trimmed from £75.0m to £50.0m due to strong headroom – a tidy signal of prudence.

Margins and earnings: why they dipped despite growth

Gross margin was 19.3%, down 90 bps, reflecting mix shift toward lower-margin categories and the competitive RMI backdrop. Operating expenses were well controlled on a like-for-like basis, but new branches and acquisitions added cost. Adjusted operating profit fell to £6.2m and statutory diluted EPS was 0.14p, with adjusted diluted EPS at 1.35p.

Adjusting items of £2.5m were broadly similar to last year and mainly comprised £1.7m of amortisation of acquired intangibles and £0.4m of acquisition-related costs.

Outlook and guidance: holding the line in a choppy RMI market

Management says trading so far in H2 has not shown a sustained RMI recovery, and the important seasonal period lies ahead. Even so, performance remains in line with market expectations for full year Group Adjusted EBITDA, where company-compiled consensus sits at an average £24.8m (range £24.7m to £25.1m).

The strategic direction is clear: keep taking share, open branches where returns stack up, embed CMO and maintain discipline on working capital. If consumer confidence lifts alongside interest rate reductions, Lords is well placed to benefit.

My take for investors: what’s good, what to watch

Positives

• Top-line resilience – like-for-like growth of 7.0% in a difficult market shows continued share gains.
• Merchanting momentum – double-digit growth with new branches opening in Maidstone, Bicester and Mansfield.
• Balance sheet progress – net debt down to £20.9m and strong facility headroom of £37.3m.
• Digital optionality – CMO adds scale and know-how online at a modest £1.8m price tag.
• Cash discipline – improved working capital and 97% operating cash conversion over 12 months.

Watch items

• Margin pressure – gross margin down 90 bps and Group Adjusted EBITDA margin down 70 bps due to product mix and competition.
• P&H profitability – Adjusted EBITDA at £3.9m with pockets of weakness at Mr Central Heating that need fixing.
• Lease drag – sale and leasebacks boost liquidity but raise lease interest and obligations.

Bottom line

This is a sensible, execution-focused half from Lords. Revenue growth, lower net debt and a maintained dividend provide steady reassurance, even as margins feel the pinch. If CMO stabilises and the new P&H leadership lands improvements, there is scope for earnings to rebuild when RMI demand normalises.

For now, the message is disciplined growth and preparation for recovery, with full year Adjusted EBITDA tracking in line with expectations. Not a fireworks display – but a well-placed platform for the next leg up.