Lords Group FY25 trading update: revenue up 8.3%, net debt down 55% – here’s what matters
Lords Group Trading PLC has posted a solid FY25 trading update in a tough market. Revenue rose 8.3% to £473 million, adjusted EBITDA is expected to be in line with market expectations, and net debt fell sharply to £14.5 million – a 55% reduction year-on-year. That combination of top-line growth, profit resilience and tighter balance sheet management is exactly what investors want to see in a challenging construction cycle.
That said, the nuance sits beneath the headline: like-for-like (LFL) growth was modest at 0.7%, reflecting a subdued Repairs, Maintenance and Improvement (RMI) market and pre-Budget uncertainty in H2 that deferred customer decisions. The uplift was helped by new branches and the acquisition of CMO, the online-only builders’ merchant.
Headline numbers and consensus check
| Metric | FY25 / Update | Comparison | Notes |
|---|---|---|---|
| Group revenue | £473 million | +8.3% vs FY24 (£437 million) | LFL +0.7% |
| Merchanting revenue | £227 million | +6.0% vs FY24 | LFL +3.1%; three new branches |
| Plumbing & Heating revenue | £220 million | £222 million in FY24 | LFL -1.6%; renewables +57% |
| Digital (CMO) revenue | £26 million | Since acquisition in June 2025 | Profitable in H2 FY25 |
| Adjusted EBITDA | In line with consensus | Consensus £20.1m – £20.4m | Per company footnote |
| Net debt (year-end) | £14.5 million | Down 55% YoY | Reduction of £17.9 million |
| Facility headroom | £60.5 million | As at 31 Dec 2025 | Provides liquidity flexibility |
On expectations: revenue of £473 million is slightly below the stated consensus of £480 million, but adjusted EBITDA is expected to land within the £20.1 million to £20.4 million range. In plain terms, volumes and mix were softer than hoped, but profitability held up – a respectable outcome given the end-market conditions.
Merchanting: new branches deliver, LFL respectable in a soft RMI market
The merchanting division grew revenue by 6.0% to £227 million. LFL sales rose 3.1%, which is a decent result in a subdued RMI market – RMI being the bread-and-butter spend on repairs, maintenance and improvement rather than new build. Lords opened three branches in Bicester, Aylesford and Mansfield and they performed in line with plan.
Why it matters: positive LFL growth suggests customer retention and pricing discipline are holding up. New sites are contributing without overreaching. This is the sort of steady execution that compounds when the cycle turns.
Plumbing & Heating: margins improve, renewables up 57%, LFL down modestly
Plumbing and Heating revenue was £220 million (FY24: £222 million). The division maintained market share and improved gross margin despite boiler volumes being flat for the year and down 5% in H2 versus the prior year, according to HHIC data. LFL revenue fell 1.6% as the market softened into the second half.
The standout is renewables, up 57% year-on-year, supported by a broadened range and progress at specialist provider Ultimate Renewables. That mix shift towards higher-growth, policy-supported categories is strategically important.
A strategic review of the division has concluded, with initiatives to be implemented in Q1 2026. Details are not disclosed yet and will come with the FY25 results. Watch for actions on network optimisation, product mix, sourcing, and digital enablement – areas that typically drive margin and working capital benefits.
Digital (CMO): profitable in H2 and building momentum
CMO, acquired in June 2025, delivered £26 million of revenue and grew week-by-week despite the market. Crucially, it was profitable in H2 FY25. Management sees CMO as a unique online-only proposition that can leverage Lords’ branch network and supply chain relationships.
Integration matters here. If Lords can funnel branch inventory and supplier terms through a scalable digital front-end, conversion and basket size should improve while customer acquisition costs stay in check. Early profitability is a good sign.
Cash and balance sheet: debt down, headroom strong
Year-end net debt was £14.5 million, down 55% year-on-year, with a stated reduction of £17.9 million driven by capital allocation discipline and tighter working capital. Facility headroom at year-end was £60.5 million, giving ample liquidity to keep investing selectively in organic openings and bolt-ons.
In a cyclical sector, this is the standout positive. Lower leverage plus available headroom means Lords can stay on the front foot as demand normalises, without over-stretching.
Outlook: control the controllables, position for a recovery
Lords heads into FY26 with a slimmer balance sheet and growth levers in renewables and digital. The Board remains focused on things within its control – cost management, efficiencies, and selective strategic initiatives – while positioning for a broader construction recovery.
The market backdrop remains challenging as we enter 2026, but the Group’s platform is more diversified, with infrastructure capable of supporting a higher-growth merchanting business when volumes return.
Josh’s take: positives, watch-outs, and what to track next
What’s positive
- Debt down 55% to £14.5 million with £60.5 million headroom – clear financial discipline.
- Adjusted EBITDA in line with consensus despite softer revenue – margin resilience.
- Merchanting LFL +3.1% in a subdued RMI market – good execution and pricing.
- Renewables up 57% – exposure to structural growth within P&H.
- CMO profitable in H2 – early validation of the digital strategy.
What to watch
- Revenue vs consensus: FY25 revenue (£473 million) trails the £480 million consensus cited. Closing that gap in FY26 will likely hinge on volumes, not just mix.
- P&H strategic review: the Q1 2026 initiatives need to translate into sustained LFL growth and continued margin gains.
- CMO integration and scalability: sustained profitability and cross-sell into trade accounts will be key KPIs.
- Market conditions: the RMI market and macro policy uncertainty weighed on H2 – a stabilisation would be a tailwind.
Bottom line
This is a disciplined update from Lords: sensible growth, protected profitability, and a much stronger balance sheet. While top-line was a touch light versus the company-stated consensus, the combination of renewables momentum, improving digital performance and tight cash management puts the Group in a good place to benefit from any cyclical upturn. Delivery on the P&H plan in early 2026 will be the next important proof point.
Jargon buster
- LFL (like-for-like): growth on a comparable basis, excluding the impact of new sites and acquisitions.
- Adjusted EBITDA: earnings before interest, tax, depreciation, amortisation and impairment, adjusted to exclude exceptional items and share-based payments (inclusive of property gains/losses as defined by the company).
- Net debt: borrowings less cash and cash equivalents, before lease liabilities.
- RMI: Repairs, Maintenance and Improvement – day-to-day construction spend, typically less cyclical than new build.
- Facility headroom: available undrawn borrowing capacity.
