FY25 guidance cut: revenue down to £21.5m and an adjusted PBT loss
LPA Group has issued a profit warning. Management now expects full year Group revenues for the year ending 30 September 2025 to be about £21.5m, down roughly £3.0m from prior expectations. Adjusted PBT (profit before tax, excluding one-off items) is guided to a loss of around £1.3m.
The drivers are twofold: lower sales at Martek Power and a customer-led delay to delivering an aerospace contract. In simple terms, revenue that LPA expected to book this year has slid to the right, and margins have come under pressure.
Reported vs adjusted: exceptional income cushions the blow
Despite the adjusted loss, reported PBT is still expected to be a loss of around £0.5m for FY25, which the company says is in line with previous expectations. The gap between adjusted and reported reflects exceptional income from two sources:
- Negative goodwill on the Martek acquisition – an accounting gain that can arise when the purchase price is below the fair value of net assets acquired.
- Profit on the sale of property (details below).
Remember: adjusted PBT strips out these one-off items to give a cleaner view of underlying trading. Reported PBT includes them.
Order intake of £27m provides a platform for recovery
Here is the good news. LPA highlights an “extremely strong” order intake of about £27m so far this financial year. That exceeds the updated FY25 revenue expectation and suggests the order book has expanded, providing a foundation for FY26.
Management also says the accelerated restructuring into “One LPA” is near completion and is already yielding benefits. This is helping them hold the FY26 adjusted PBT outlook steady despite slightly lower revenue expectations.
FY26 outlook: revenue trimmed, profit expectation maintained
For the year ending 30 September 2026, revenue is now expected to reduce slightly by about £1.5m to roughly £27m. However, earnings expectations are maintained, with adjusted PBT still guided at £0.6m. In other words, LPA is aiming to do more with slightly less – a margin resilience story driven by its restructuring.
Key guidance numbers at a glance
| Metric | FY25 (to 30 Sep 2025) | FY26 (to 30 Sep 2026) |
|---|---|---|
| Revenue | c.£21.5m | c.£27m |
| Adjusted PBT | Loss of c.£1.3m | £0.6m |
| Reported PBT | Loss of c.£0.5m | Not disclosed |
| Order intake (FY25 to date) | c.£27m | – |
Property disposal: Thatcham sale boosts cash and trims net debt
LPA has sold its freehold premises in Thatcham, Berkshire. Exchange took place on 25 September 2025, with completion expected on 26 September 2025. Consideration at completion is £355,000, and the cash will be used to reduce net debt (net debt not disclosed).
The asset’s net book value was about £86,000 as at 31 March 2025. The profit on disposal (net of sale costs) will be recognised as exceptional income in the current year – one of the items supporting reported PBT. Operations previously at Thatcham have been relocated to other LPA sites, with a smaller leased office retained in the area.
Property sale details
| Item | Detail |
|---|---|
| Site | Thatcham, Berkshire (freehold) |
| Consideration | £355,000 |
| Net book value (31 Mar 2025) | c.£86,000 |
| Use of proceeds | Reduce net debt |
| Accounting | Profit on disposal recorded as exceptional income in FY25 |
Why this matters for shareholders
- Near-term hit to earnings: The combination of weaker Martek sales and the delayed aerospace contract knocks FY25 into an adjusted loss. That is clearly negative.
- Quality of earnings vs reported result: The reported PBT is flattered by exceptional gains (negative goodwill and the property sale). Underlying trading is softer than the headline loss suggests.
- Order book strength: An order intake of around £27m this year to date is a real positive. It signals demand remains robust even as timing has gone against them in FY25.
- Restructuring benefits: Holding FY26 adjusted PBT guidance at £0.6m despite lower revenue points to efficiency gains from “One LPA”. Execution will be key.
- Cash discipline: Disposing of a non-core property to cut net debt is sensible housekeeping, though modest in quantum.
Macro backdrop: industry headwinds are real, but September improved
The Chairman notes UK manufacturing output has contracted over the last three months, tied to global factors including US import tariffs and domestic policy uncertainty. As a supplier into major manufacturing supply chains, LPA is feeling that chill.
Encouragingly, the company reports a more positive output in September. If that continues, it could help the business convert its strong order intake more smoothly in the coming quarters.
What to watch next
- Timing of the delayed aerospace contract: Delivery and revenue recognition will be important for FY26 visibility.
- Martek Power trajectory: Signs that sales stabilise or recover would de-risk the earnings outlook.
- “One LPA” execution: Evidence of sustained margin improvement consistent with the maintained FY26 adjusted PBT target of £0.6m.
- Order conversion: Turning the c.£27m FY25-to-date intake into shipments and cash.
- Balance sheet: Impact of the £355,000 proceeds on net debt and any further footprint rationalisation. Net debt figures were not disclosed.
My take: a clear profit warning, but foundations are laid
This is a straightforward profit warning: revenue guidance cut and an adjusted loss for FY25. The reliance on exceptional income to hold the reported loss to around £0.5m underlines a weak underlying year.
That said, the order intake of roughly £27m is the standout positive. It suggests the issues are timing- and mix-related rather than demand evaporating. If the “One LPA” restructuring delivers as promised, maintaining FY26 adjusted PBT at £0.6m on slightly lower revenue looks achievable.
Net-net: short-term pain, but not a broken story. Execution on deliveries, Martek stabilisation and continued discipline on costs will decide whether FY26 marks the turn.
