Lords Group Trading flags weak markets but CMO turnaround offers encouragement

What has Lords Group Trading announced?

Lords Group Trading PLC has reported broadly stable headline revenue for the six months ended 30 June 2026, despite difficult conditions across construction, new housing and wholesale plumbing.

Group revenue was £232.0 million, compared with £232.8 million in the first half of 2025. That looks resilient on the surface, but the underlying picture was weaker. On a like-for-like basis and adjusted for trading days, revenue declined by 7.1%.

New Merchanting branches and the acquisition of digital retailer CMO helped offset softer demand elsewhere. Encouragingly, CMO moved from an initial loss-making position following its June 2025 acquisition to positive earnings before interest, tax, depreciation and amortisation, or EBITDA, during the period.

However, management does not expect a significant market recovery in the second half of 2026. The Board now expects full-year revenue of £475 million to £495 million and adjusted EBITDA of £17 million to £18 million.

Investors can read the original company announcement for the full regulatory update.

Lords Group Trading's key H1 2026 figures

Metric	H1 2026	H1 2025	Change or comment
Group revenue	£232.0 million	£232.8 million	Broadly stable on a reported basis
Like-for-like group revenue	Not disclosed	Not disclosed	Down 7.1%, adjusted for trading days
Merchanting revenue	£112.3 million	£117.7 million	Like-for-like decline of 4.9%
Merchanting Q2 like-for-like revenue	Not disclosed	Not disclosed	Down 2.3% year on year
Plumbing & Heating revenue	£96.3 million	£112.9 million	Like-for-like decline of 13.9%
Plumbing & Heating spares revenue	Not disclosed	Not disclosed	Up 8%
Digital revenue	Not disclosed	Not disclosed	Up 17.5%
Period-end net debt	£29 million	Not disclosed	Includes normal seasonal working-capital investment
Available liquidity	Approximately £30 million	Not disclosed	At 30 June 2026
FY26 revenue guidance	£475 million to £495 million	Not applicable	Current Board expectation
FY26 adjusted EBITDA guidance	£17 million to £18 million	Not applicable	Current Board expectation

Reported stability masks weaker underlying trading

The £0.8 million reduction in group revenue is modest, particularly given the difficult markets described by management. However, investors should not overlook the 7.1% like-for-like decline.

Like-for-like figures strip out factors such as newly opened branches and acquisitions, providing a clearer view of how the existing operations performed. In this case, the difference shows that expansion and CMO's contribution were important in supporting the headline result.

This is not necessarily negative. Opening branches and acquiring businesses are legitimate routes to growth. Still, shareholders will want the established estate to stabilise because acquisition-led or branch-led growth cannot permanently compensate for weaker underlying demand.

The comparison also benefited from exceptional Plumbing & Heating market volumes in March 2025, making the prior-year period more demanding.

For context, Lords had previously reported FY25 revenue growth and a substantial reduction in net debt, covered in this earlier Lords Group Trading results analysis.

Merchanting shows signs of sequential improvement

Merchanting revenue fell from £117.7 million to £112.3 million, with like-for-like revenue down 4.9% for the half year.

The more encouraging detail is that trading improved after February. The like-for-like decline narrowed to 2.3% in the second quarter, compared with the same quarter of 2025.

This does not amount to a recovery, as revenue was still lower year on year. It does suggest that the rate of decline eased as the period progressed. Management pointed to improving customer activity and actions intended to strengthen commercial performance.

Lords is also reviewing branch costs, staffing and overheads to align the division with current activity. Cost discipline should protect profitability while demand remains subdued, although excessive reductions could leave the business less able to respond when markets recover. Management says it intends to retain that capacity.

Plumbing & Heating remains the main pressure point

The Plumbing & Heating division had a more difficult half. Revenue declined from £112.9 million to £96.3 million, representing a 13.9% like-for-like fall.

Part of this reflects the absence of the exceptional March 2025 volumes. There is also a broader challenge: Lords identified a structural decline in the UK boiler market over recent years.

Management has responded by reducing the wholesale distribution network from seven centres to four. The rationalisation is expected to generate annualised cost savings of approximately £1.4 million while preserving customer service levels.

That saving is useful, but restructuring alone cannot resolve weak demand. The division will still need to rebuild market share and demonstrate that the smaller network can operate efficiently without damaging service.

Spares provided a brighter spot, with revenue increasing by 8%. This category could help diversify the division away from its more pressured activities, although its absolute revenue contribution was not disclosed.

CMO's move into profit is a meaningful positive

CMO delivered the clearest operational progress in the update. Revenue was 17.5% ahead of the comparative period, matching the growth reported for the Group's Digital operations.

More importantly, CMO generated positive EBITDA during H1 2026 after being loss-making when Lords acquired it in June 2025.

That indicates integration and turnaround measures are producing tangible results. It also supports management's aim of shifting the Group's revenue mix towards categories it considers structurally growing.

The announcement did not disclose CMO's revenue, EBITDA contribution or margin. Investors will therefore need to wait for September's interim results to judge the scale and quality of the improvement.

Debt, liquidity and the full-year outlook

Net debt stood at £29 million at the period end, reflecting what the company described as normal seasonal investment in working capital. Available liquidity was approximately £30 million.

These figures suggest Lords retains financial headroom, but the update did not provide comparative net debt, financing costs or detailed cash-flow data. Those will be important areas to examine in the interim accounts.

The full-year guidance implies that conditions are expected to remain challenging. The Board sees revenue reaching £475 million to £495 million and adjusted EBITDA of £17 million to £18 million, with no indication of a significant market recovery during the second half.

The width of the revenue range reflects uncertainty around demand. The comparatively narrow EBITDA range suggests cost reductions and operational actions may provide some support, although the announcement did not disclose an adjusted EBITDA margin target.

What should investors watch next?

September's interim results should provide the detail needed to test the investment case. The main areas to watch are:

• whether Merchanting's sequential improvement continues;
• CMO's revenue, EBITDA and cash contribution;
• progress towards the £1.4 million of annualised Plumbing & Heating savings;
• cash conversion and the direction of net debt after seasonal working-capital movements;
• evidence that the reduced distribution network is preserving service levels;
• performance against the £475 million to £495 million revenue range; and
• the profitability gap between reported EBITDA and adjusted EBITDA.

For now, this is a mixed update. Headline revenue was resilient, Merchanting improved during the second quarter and CMO reached positive EBITDA. Against that, underlying group revenue remained under pressure, Plumbing & Heating declined sharply and management is not anticipating a meaningful near-term recovery.

The next test is whether self-help measures can protect earnings and cash generation until demand improves, without weakening the Group's ability to participate in an eventual construction-market recovery.