REG - Genuit Group PLC - Final Results
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RNS Number : 9479V Genuit Group PLC 10 March 2026
Genuit Group plc
Audited results for the year ended
31 December 2025
Disciplined strategy execution delivering continued growth in challenging
market conditions
Genuit Group plc ('Genuit', the 'Company' or the 'Group'), the UK's largest
provider of sustainable water and climate products and solutions for the built
environment, today announces its audited results for the year ended 31
December 2025.
Financial Results FY 2025 FY 2024 Change
Revenue (£m) 602.1 561.3 7.3%
Alternative Performance Measures(1)
Underlying operating profit (£m) 94.4 92.2 2.4%
Underlying operating margin (%) 15.7 16.4 (70 bps)
Underlying profit before tax (£m) 82.9 79.3 4.5%
Underlying earnings per share (basic - pence) 26.0 24.6 5.7%
Underlying operating cash conversion (%)(2) 102.0 107.6 (560 bps)
Leverage (times pro-forma EBITDA)(3) 1.5 0.9 0.6
Statutory Measures
Operating profit (£m) 69.7 59.2 17.7%
Profit before tax (£m) 58.2 46.3 25.7%
Earnings per share (basic - pence) 18.2 13.5 34.8%
Cash generated from operations (£m) 114.1 115.5 (1.2%)
Dividend per share (pence) 12.9 12.5 3.2%
(1) (Alternative performance measures (APMs) are used by the Group to assess
the underlying performance of the business. A definition of all the APMs is
set out) (in note 1 on page 24.)
(2) (Underlying operating cash conversion has been restated for both periods
to a pre-capex and lease payments basis, previously calculated as underlying
operating cash flow after payments for capital expenditure excluding
non-underlying proceeds of sale and lease liabilities. The Group believes this
is a more appropriate measure of cash conversion as it demonstrates working
capital cash management efficiency before capital investment, and allows for
alignment with the Group's strategic investment profile in the medium-term.)
(3) (Pro-forma EBITDA is reconciled in note 14 on page 39.)
Joe Vorih, Chief Executive Officer, said:
"Genuit has again demonstrated its ability to grow and outperform in
challenging markets. Against a backdrop of subdued market activity, we
delivered organic revenue growth, driven by the adoption of new solutions in
structurally attractive segments and targeted market share gains.
We grew underlying profits year-on-year despite cost headwinds from National
Insurance and National Living Wage increases. This reflects operational
actions taken through the year, the growing impact of the Genuit Business
System, and the contribution from recent bolt-on acquisitions. As expected,
Group underlying margin strengthened in the second half.
Our strategy remains unchanged despite uncertain market conditions. We remain
focused on operational excellence, exposure to sustainability-led growth
drivers and disciplined, strategic bolt-on M&A. With a resilient
portfolio, cash generative model and a strong balance sheet, we are well
positioned to continue outperforming through the cycle."
Financial Highlights
· Full year revenue of £602.1m increased 7.3% year-on-year,
including contribution from the acquisitions of Monodraught and Davidson
Holdings; revenue rose 3.2% on a like-for-like basis, driven by the adoption
of new solutions and targeted market share gains.
· Full year underlying operating profit of £94.4m was in line with
expectations and increased by 2.4% year-on-year, broadly flat on a
like-for-like basis.
· Full year underlying operating margin decreased by 70 bps to
15.7% (60 bps decrease on a like-for-like basis), impacted by National
Insurance and National Living Wage increases; margin improvement in SBS offset
softer margins in CMS and WMS.
· Second half underlying operating margin of 16.4% was 140 bps
ahead of the first half, driving a 11.7% increase in underlying operating
profit versus the first half and demonstrating continued margin progression
despite headwinds.
· Reported operating profit of £69.7m (2024: £59.2m) increased
17.7% year-on-year due to higher gross profit and lower exceptional items.
· Continuous improvement through application of the Genuit Business
System (GBS) once again delivered strong underlying operating cash generation
of £126.4m pre-capex, representing 102.0% cash conversion on a pre-capex
basis.
· Leverage of 1.5 times underlying pro-forma EBITDA at the year-end
(2024: 0.9 times) includes the funding for two strategic bolt-on acquisitions
completed in H2 2025.
· Underlying EPS increased by 5.7% to 26.0 pence.
· The Board is proposing a total dividend per share of 12.9 pence
(2024: 12.5 pence), an increase of 3.2%, in line with the Group's progressive
dividend policy and reflecting continued profit progression, a robust balance
sheet and confidence in the Group's future prospects.
Divisional Simplification
· Following the end of 2025, Genuit further simplified its
structure and will now manage the Group as two Divisions.
· The Water Division, led by Steve Currier, results from the
combination of the SBS and WMS Business Units. This division will focus on
products and solutions that address water distribution, conservation,
collection and attenuation in a world experiencing increasingly extreme
rainfall patterns. Growth and cost synergies are also targeted from this
streamlining.
· The Climate Division, formerly CMS and led by Lee Mellor, will
continue to focus on products and solutions that address ventilation and
heating markets, supporting the transition to sustainable buildings with clean
and healthy air and the adaptation of the built environment to higher
temperatures.
· The rest of this document reports segments on the prior basis.
Business Unit Performance
· Climate Management Solutions (CMS)
o Revenue increased 10.7% to £178.9m (5.9% like-for-like), reflecting
strong year-on-year growth in ventilation, more than offsetting softness in
underfloor heating, with a resilient performance in water filtration.
o Underlying operating profit increased 1.7% to £24.4m on a reported basis
at an underlying operating margin of 13.6% (2024: 14.9%). Growth in
ventilation margins year-on-year and gains from GBS were partly offset by
weaker margins from underfloor heating given lower volumes.
· Water Management Solutions (WMS)
o Revenue increased 5.3% to £169.5m (0.5% like-for-like), reflecting a
resilient performance in Civils, growth in blue-green roofs and in stormwater
attenuation sales.
o Underlying operating profit decreased 29.4% to £9.6m on a reported basis
at an underlying operating margin of 5.7% (2024: 8.5%), impacted by the
National Insurance increase and a slow-moving inventory provision reported in
H1.
o The implementation of price, cost and GBS actions resulted in a sequential
increase in underlying operating margin from 4.6% in H1 to 6.7% in H2, with
further benefits expected to drive continued margin expansion in 2026.
· Sustainable Building Solutions (SBS)
o Revenue increased 6.5% to £246.8m (3.3% like-for-like), driven by market
share gains in drainage products and growth in commercial markets, more than
offsetting soft market volumes in both new housebuilding and RMI markets which
were adversely impacted in H2 by political and economic conditions.
o Underlying operating profit increased by 10.1% to £59.9m on a reported
basis, at an underlying operating margin of 24.3% (2024: 23.5%), driven by
improved operational gearing and cost management in the commercial segment, as
well as productivity benefits across the Business Unit from GBS, which helped
to offset the impacts of the National Insurance increase.
Strategic and operational highlights
Growth - Focusing on higher-growth, sustainability-driven markets, via organic growth and disciplined M&A opportunities.
With market volumes remaining soft in 2025 and adversely impacted in H2 by
prevailing political and economic conditions, the Group's resilient
performance reflects its continued focus on:
· Higher growth market segments: In CMS, ventilation sales grew by
c.10% year-on-year, driven by the adoption of MVHR with cooling in
multi-occupancy residential developments. In WMS, there was strong demand in
the year for blue-green roofs, driven by urban re-greening and the need for
biodiversity gains in urban environments. In SBS, the commercial segment grew
by c.10%, supported by market share gains in drainage and demand for
prefabricated 'low labour' solutions.
· Targeted opportunities to grow market share: SBS was awarded over
£20m per annum of drainage business following the exit of a competitor from
the UK market. SBS also increased its share of the merged Barratt Redrow
developer business
· End-markets with regulatory-driven growth drivers: Residential
ventilation sales benefited as landlords anticipated Awaab's Law. The latest
regulated investment cycle within the water utility sector saw an increase in
activity as the sector invests £104bn over the five-year cycle; the Group
achieved initial framework wins in 2025 and expects increasing revenue through
this cycle.
· Disciplined M&A: In H2 2025, Genuit completed the
acquisitions of Monodraught and Davidson Holdings, both of which bring highly
complementary product portfolios and an opportunity to leverage the Group's
routes to market. Both acquisitions are on track to meet our Group
profitability target and will be margin accretive in 2026.
Sustainability - Providing the lowest-carbon choice for our customers and maximising exposure to structural growth drivers.
· Continued improvement on reducing scopes 1 & 2 carbon
intensity to 0.105 tCO₂e per tonne of production (2024: 0.124 tCO₂e).
· The Group's strong position in recyclate use continues with
recycled materials forming 50.6% of polymer inputs (2024: 52.0%) enabling
customers to cost-effectively de-carbonise the built environment.
Genuit Business System - Creating value and growth through lean transformation and operational excellence.
· Over 75 GBS kaizen events held in 2025 (2024: circa 20), driving
improvements in productivity, capacity utilisation, working capital, and
customer centricity.
· GBS growth marketing toolkit developed to provide a structured
approach to market analysis, market expansion, and the generation of deeper
customer insights to drive innovation.
· Over 90% of the Genuit Leadership Team have now participated in
GBS kaizen events and 23% of total employees have also participated in lean
kaizen events or training.
People and Culture - Creating value and enabling growth through the capability, expertise and development of our employees.
· Continued investment in accredited Earn and Learn programmes for
employees, with 18.9% of UK colleagues participating as we improve our
commitment to The 5% Club (2024: 18.5%).
· The Group promoted 94 colleagues during 2025 of which c.40% were
female. A third of senior leadership positions are held by women, reflecting a
continued commitment to diversity and inclusion in the construction industry.
Outlook
· Subdued market conditions in Q4 2025 have continued into Q1 2026
as expected, albeit with some positive signs on order intake.
· Prolonged wet weather has impacted construction site activity in
January and February.
· The potential business impact of the evolving situation in the
Middle East, including any wider macroeconomic or geopolitical effects, is
difficult to assess at this time.
· The Group is targeting continued market outperformance by
focusing on higher growth segments, regardless of macroconditions.
· Further progress with the Genuit Business System is strengthening
the business through continuous improvement.
· We are confident in achieving our medium-term targets and with
a strong balance sheet, the Group will continue to invest for the future.
Enquiries:
Joe Vorih, Chief Executive Officer Tim Pullen, Chief Financial Officer
+44 (0) 1138 315315
Headland Consultancy:
Matt Denham Telephone: 020 3805 4822
Email: genuit@headlandconsultancy.com (mailto:genuit@headlandconsultancy.com)
Chloe Francklin
A copy of this report will be available on our website www.genuitgroup.com
(http://www.genuitgroup.com/) today from 0700hrs (BST).
A live webcast of the Final Results presentation, hosted by Joe Vorih, Chief
Executive Officer, and Tim Pullen, Chief Financial Officer, will be broadcast
at 0830 on Tuesday 10 March 2026. To access the live presentation on that
date, participants will be required to register in advance using the following
webcast link:
https://www.investis-live.com/genuit-group/6989c99ce7583500133b1b3b/ksngt
(https://url.uk.m.mimecastprotect.com/s/mj-wClxRqILGAYzhGfgIzq8YI?domain=investis-live.com)
We recommend you register by 0815hrs (GMT). The webcast will be recorded, and
a replay will be available shortly after the webcast ends via the same link
above. A recording of the presentation and a copy of the slides will be
available following the event on the Company's website at Results,
(https://protect-eu.mimecast.com/s/FREECWLPMuyQR04ixpCR7?domain=genuitgroup.com)
Reports & Presentations - Genuit Group plc
(https://protect-eu.mimecast.com/s/FREECWLPMuyQR04ixpCR7?domain=genuitgroup.com)
Notes to Editors:
About Genuit Group plc
Genuit Group plc is the UK's largest provider of sustainable water and climate
management products for the built environment. Genuit's solutions enable
customers to mitigate and adapt to the effects of climate change, while
meeting evolving sustainability regulations and standards.
The Group delivers its Sustainable Solutions for Growth strategy via two
divisions:
Climate - low carbon heating and cooling systems, and clean and healthy air
ventilation.
Water- products and solutions for water distribution, conservation, storage
and attenuation.
Genuit's portfolio includes some of the industry's most established and
innovative brands, including Polypipe, Nuaire and Adey.
The Group serves built environment markets with strong climate-related growth drivers, primarily in the UK and with an increasing focus on international diversification.
Chief Executive Officer Review
Our Results: Outperformed subdued markets
During 2025, Genuit continued to deliver on its Sustainable Solutions for
Growth strategy, enabling another year of steady progress despite tough market
conditions. By harnessing the strength of our Group, we made targeted market
share gains and expanded our product and solution offering through range
launches and acquisitions. We continued to focus on operational excellence,
including through the deployment of the Genuit Business System (GBS),
investing in our people and reducing our carbon footprint - all of which has
helped to strengthen our position going into 2026. I would like to take this
opportunity to thank our Genuit Leadership Team and our 3,274 colleagues for
their hard work and dedication in delivering this performance.
After a promising first half of 2025, market volumes were adversely impacted
in the second half by uncertainty surrounding the UK Government Budget. This
uncertainty impacted business and consumer confidence and contributed to a
reduction in volumes year-on-year, particularly in the fourth quarter. Despite
this, the Group benefited from its focus on higher growth segments of the
construction market, including residential ventilation and blue-green roofs,
which helped to offset softness in core residential newbuild and RMI markets.
Against this backdrop, the Group continued to outperform the market, with an
organic revenue increase of 3.2% and growth in underlying profits, despite
cost headwinds. Our annual underlying operating profit increased to £94.4m
from £92.2m on a reported basis, including the contribution of recent bolt-on
acquisitions, and was broadly flat on a like-for-like basis.
Our ongoing Group-wide deployment of GBS has contributed lean productivity and
efficiency savings, which have helped partially offset the impact of National
Insurance and National Living Wage increases. As expected, second half margins
were higher than the first half and, as a result of further price and cost
actions taken in the second half, we will continue to make progress towards
our medium-term margin target. With strong operational gearing and sufficient
available capacity to increase production by c.25%, the Group is
well-positioned to support a material increase in construction activity.
Underlying operating cash conversion was strong at 102.0%, which exceeds our
over 90% medium-term target. Net debt to underlying pro-forma EBITDA as at the
end of December 2025 was 1.5 times following our acquisitions in 2025, with
both cash conversion and net debt levels enabling us to continue investing in
long-term growth.
In line with the Group's progressive dividend policy, we are pleased to be
able to propose an increase in our full-year dividend to 12.9 pence per share,
reflecting continued profit progression, a robust balance sheet and confidence
in the Group's future prospects.
Our Strategy: Sustainable Solutions for Growth
Our Sustainable Solutions for Growth strategy is built around four key
pillars:
· Growth - Focusing on higher-growth, sustainability-driven
markets, via organic growth and disciplined bolt-on M&A opportunities.
· Sustainability - Providing the lowest-carbon choice for our
customers and maximising exposure to structural growth drivers.
· Genuit Business System- Creating value and growth through lean
transformation, operational excellence and continuous improvement.
· People and Culture - Creating value and enabling growth through
the diversity, capability, expertise and development of our employees.
Growth
Genuit is focused on markets with sustainability-linked growth drivers,
supporting customers to mitigate climate change and adapt to its effects. Our
portfolio of low-carbon, labour-saving and energy-efficient solutions,
spanning heating, cooling, ventilation and water management, underpins our
growth strategy.
The Group delivered organic revenue growth in the year, despite the softness
in the UK construction sector, benefiting from its exposure to higher growth
market segments, and supported by the adoption of new solutions and targeted
market share gains.
Ventilation sales were particularly encouraging in the year, driven by the
adoption of MVHR with cooling in multi-occupancy residential developments and
as landlord's anticipated the introduction of Awaab's Law. There was also
strong demand for blue-green roofs, driven by the need for biodiversity gains
in urban environments, and for prefabricated 'low labour' solutions -
particularly in commercial building.
We achieved market share gains in our drainage portfolio, taking advantage of
the exit of a competitor from the UK market and winning a greater share of the
merged Barratt Redrow business, the full impact of which will be realised in
2026. We hold number one or two positions in key segments with clear scope to
expand further. This reflects our strong brand recognition which, combined
with the launch of tiered product ranges, has further strengthened our market
position. We remain focused on leading the market with innovation that drives
sustainability in the built environment.
Our end markets continue to benefit from legislative tailwinds, including the
Future Homes Standard, the Warm Homes Plan and the transition from CF21 to
CF25 in schools, providing structural growth opportunities across key product
ranges such as MVHR and underfloor heating. Evolving regulation addressing
damp and mould in social housing, schools and hospitals is also imperative to
drive better ventilation. In addition, the AMP8 regulatory cycle is driving
opportunities as the water utility sector invests £104bn over a five-year
period; Genuit achieved initial framework wins in 2025 and expects increasing
revenue through the AMP8 cycle.
Complementing a strong organic pipeline, Genuit has also continued to
strengthen its portfolio via bolt-on M&A, taking a disciplined, value-led
approach.
In August and September 2025, we welcomed new colleagues from two
acquisitions, Monodraught and Davidson Holdings, both of which bring highly
complementary product portfolios and an opportunity to leverage the Group's
routes to market, as well as having clear pathways to meet our Group
profitability target.
Monodraught was acquired for an enterprise value of £55.6m on a debt-free and
cash-free basis, and was funded through existing facilities. It is a UK leader
in sustainable ventilation cooling and heating solutions for new and
refurbished commercial buildings with a strong presence in education and now
forms part of our Climate Division. The business is highly complementary to
Nuaire and Domus, with minimal overlap, and provides clear opportunities to
leverage the Group's scale and routes to market as well as leverage broader
solutions powered by their proprietary Acuity controls.
Davidson Holdings was acquired for an enterprise value of £49.0m, also on a
debt-free and cash-free basis and funded through existing facilities. Its
leading plumbing and heating brands, which include Salamander, Cistermiser
& Keraflo and Talon, hold strong positions in the UK RMI markets across
residential and commercial sectors. The portfolio aligns with our
sustainability-led growth drivers, particularly water conservation and
efficiency, and now forms part of our Water Division. We see clear revenue
synergies through leveraging Genuit's routes to market, demand creation and
specification selling model.
We remain active in pursuing further bolt-on, strategic acquisitions that
enhance organic growth potential and support long-term shareholder returns.
Sustainability
There is an increasing need for climate mitigation and adaptation solutions to
meet the urgent challenges facing our infrastructure, buildings, communities
and planet. This is demonstrated by an increase in the prevalence of extreme
weather events and addressed by both established and emerging legal and
regulatory frameworks.
Sustainability is at the heart of our business, and the Group remains focused
on sustainability-driven growth, enabling the built environment to respond to
climate adaptation and mitigation challenges, whilst staying committed to
reducing our overall impact on the environment.
During 2025, we published our second Group Sustainability Report which
enhanced our sustainability disclosures and showcased our progress in
improving our performance across a wide range of sustainability topics.
We continue to lead the industry as the largest user of recycled polymers, at
over 50% of our total tonnage in the year and we have held the Green Economy
Mark since 2019 with over 75% green revenues.
We achieved a 11.0% reduction in carbon emissions across scopes 1 and 2
(market-based) and a 9.9% decrease in scope 3: category 1 (purchased goods and
services), supporting our customers who are increasingly focused on the
environmental impact of their supply chain.
During the year we increased by nearly fourfold our use of biodiesel in our
HGV fleet to 385,789 litres in 2025 (2024: 105,564 litres), enabling strong
carbon reductions against scope 1 emissions.
We have continued to accelerate our adoption of Environmental Product
Declarations (EPDs) with 57% revenue coverage at year end.
Our ambition is to be the lowest-carbon choice for our customers to maximise
exposure to structural growth drivers. During 2025 we undertook an assessment
comparing our EPD values to those of key competitors. Of more than 540 carbon
comparisons performed, Genuit's products were the lowest-carbon option in 64%
of instances.
Further, we continued to improve reducing scopes 1 and 2 carbon intensity, on
a rolling twelve-month basis, to 0.105 tCO₂e per tonne of production (2024:
0.124 tCO₂e).
Public disclosure is a cornerstone of responsible manufacturing and business
practices, and we continued to enhance our disclosures with CDP, S&P CSA
Global and EcoVadis along with other ratings and disclosure agencies.
Genuit Business System
In 2025, 93% of our Genuit Leadership Team (GLT) participated in kaizen
events. This action contributes to meaningful operational improvements and
provides hands‑on experience with GBS methodologies.
During the year, the Group saw strong adoption of Daily Management practices,
with over 50% of our sites now using Daily Management tools to evaluate
performance and engage the workforce in resolving issues at source. This
structured approach provides clarity for colleagues at every level, supports
better decision‑making and reinforces a culture where continuous improvement
becomes part of day‑to‑day work.
In 2025, the Group broadened the scope of kaizen events to focus on strategic
workstreams and realise further operational efficiencies, like more effective
strategy deployment across its Business Units, and the launch of a series of
growth tools including market-mapping with our marketing, sales and product
development teams.
People and Culture
In 2025, we ran two 'Your Voice' engagement surveys for our colleagues; a
pulse survey with a reduced question set in April, and a full survey in
October. The Group had an increase in overall engagement from 7.0 in 2024 to
7.1 in 2025.
Feedback from our Your Voice survey made it clear that colleagues want more
opportunities to grow, progress, and make an impact. We now have 70 colleagues
who have completed our Genuit Leadership Programme (GLP), designed to create
empowered, skilled leaders who lead and inspire their teams to success. We are
also proud of our continued achievement of Gold member status of The 5% Club,
with 18.9% of our UK colleagues in recognised Earn & Learn programmes
across several levels and disciplines.
In September 2025, we took a major step forward in how we connect as a
business. When Meta retired Workplace, we seized the opportunity to unify our
communications and strengthen collaboration across Genuit. We successfully
transitioned everyone to Microsoft Viva Engage, extending the power of Teams
and SharePoint to all colleagues, whether on a PC, shared device or personal
device.
We are continually working to create an environment where all employees can be
their authentic selves and in 2025 we proudly launched five new diversity and
inclusion colleague networks. Each network is led and managed by passionate
colleagues, with a dedicated chair and co-chair who meet regularly with our
Chief People Officer. The networks are open to everyone, fostering allyship
and understanding across our business.
Summary
Since launching our Sustainable Solutions for Growth strategy in November
2022, we have continued to lay the foundation for growth and success, while
making solid progress towards our medium-term targets. We have a better-led,
more engaged and inclusive team and GBS to share best practices and drive
continuous improvement, creating a leaner, more agile and streamlined business
than ever before. We remain focused on higher-growth, sustainability-led
markets augmented by strategic bolt-on acquisitions that add solution depth
and scale.
The strong progress we made as a Group on simplifying our organisational
structures over the past four years has helped unlock more opportunity. As a
further simplification, we took the decision to move to a two divisional
structure from the beginning of 2026. This allows us to focus on two segments,
Climate and Water, enabling the Group to deliver even more value to our
customers and optimise synergies to reinvest in growth for the future.
As a result, the Group is well positioned for market recovery following a
solid performance in 2025 as we delivered above-market organic growth and
increased profits through operational excellence and balanced price and cost
management despite the previously mentioned labour cost headwinds.
Whilst market conditions have been uncertain, the team at Genuit have
continued to strive for excellence as 'Together, we create sustainable
living'. The commitment and dedication of all of our colleagues underpins the
Group's success and I thank them for all their hard work.
Group Results
Revenue and profitability
Group revenue for the year ended 31 December 2025 was £602.1m (2024:
£561.3m), which was an increase of 7.3% year-on-year. On a like-for-like
basis, excluding the impact of 2024 and 2025 acquisitions, revenue was 3.2%
higher than prior year. For the year, UK revenue increased 7.4% and
international revenue increased by 6.0%, the latter representing 10.9% of
revenue in the year (2024: 11.0%). Second-half revenue increased 5.3%
year-on-year (0.4% increase excluding August and September 2025 acquisitions)
following a 9.3% increase in the first half, reflecting the decrease in market
activity in the lead up to the UK Government Budget.
Underlying operating profit was £94.4m (2024: £92.2m), an increase of 2.4%
on a reported basis (0.4% reduction like-for-like), supported by the growth in
revenue but offset by National Insurance headwinds, and some margin softness
in WMS and CMS. The Group's underlying operating margin decreased by 70 basis
points to 15.7% (2024: 16.4%) as a result.
Profit before tax was £58.2m (2024: £46.3m), an increase of 25.7%.
The Group continued to invest in product development and innovation throughout
the year. In 2025, operating profit benefited from £1.6m of HMRC approved
Research and Development expenditure credit (2024: £1.5m).
Underlying profit after tax was higher than the prior year at £64.6m (2024:
£61.1m). Underlying basic earnings per share increased by 5.7% to 26.0 pence
(2024: 24.6 pence).
Including non-underlying items, profit after tax was £45.2m (2024: £33.5m),
and basic earnings per share was 18.2 pence (2024: 13.5 pence).
Revenue, operating profit and margin 2025 2024 Change
£m £m %
Revenue 602.1 561.3 7.3
Underlying operating profit 94.4 92.2 2.4
Underlying operating margin 15.7% 16.4% (70 bps)
Revenue by geographic destination 2025 2024 Change
£m £m %
UK 536.4 499.3 7.4
Europe 35.7 32.9 8.5
Rest of World 30.0 29.1 3.1
Group 602.1 561.3 7.3
Revenue 2025 2024 Change LFL Change
£m £m % %
Climate Management Solutions 178.9 161.6 10.7 5.9
Water Management Solutions 169.5 160.9 5.3 0.5
Sustainable Building Solutions 246.8 231.7 6.5 3.3
595.2 554.2 7.4 3.2
Other* 6.9 7.1 (2.8) (2.8)
Total Group 602.1 561.3 7.3 3.2
* Relates to Polypipe Italia SRL which does not form part of the Group's
strategic Business Units in 2024 and 2025 but will form part of the Water
Division for 2026 onwards.
Underlying operating profit 2025 ROS* 2024 ROS* Change
£m % £m % bps
Climate Management Solutions 24.4 13.6 24.0 14.9 (130)
Water Management Solutions 9.6 5.7 13.6 8.5 (280)
Sustainable Building Solutions 59.9 24.3 54.4 23.5 80
93.9 15.8 92.0 16.6 (80)
Other** 0.5 7.2 0.2 2.8 440
Total Group 94.4 15.7 92.2 16.4 (70)
* Return on sales (ROS) is equivalent to underlying operating margin
(underlying operating profit/ revenue).
** Relates to Polypipe Italia SRL which does not form part of the Group's
strategic Business Units in 2024 and 2025 but will form part of the Water
Division for 2026 onwards.
Business Unit Review
Climate Management Solutions
The Climate Management Solutions (CMS) Business Unit is focused on addressing
the need for clean healthy air and low carbon heating and cooling.
Revenue of £178.9m (2024: £161.6m) in CMS increased by 10.7% versus 2024
(5.9% on a like-for-like basis) reflecting strong year-on-year growth in
ventilation, more than offsetting softness in underfloor heating, with a
resilient performance in water filtration.
CMS reported an underlying operating margin of 13.6% in 2025, 130 basis points
lower than 2024. Growth in ventilation margins year-on-year and gains from GBS
in water filtration were offset by lower margins from underfloor heating.
Integration of the Monodraught ventilation business (acquired August 2025) is
proceeding well with a focus on go-to-market strategy and sales synergies.
Monodraught is a market leader in hybrid ventilation systems and is positioned
to capitalise on regulatory and structural drivers related to energy
efficiency and cleaner, healthier air in the nation's schools and higher
educational establishments.
Going forward, the Group will refer to this segment as the Climate Division.
The Climate Division will benefit from the evolution in regulations and
standards for homes and buildings that aim to de-carbonise the built
environment and adapt to climate change.
Water Management Solutions
The Water Management Solutions (WMS) Business Unit enables the upgrade of the
stormwater and wastewater infrastructure to adapt to increasingly extreme
rainfall patterns and address the demand for re-greening urban areas and
increasing biodiversity.
Revenue of £169.5m (2024: £160.9m) in WMS increased by 5.3% versus 2024
(0.5% on a like-for-like basis) reflecting a resilient performance in civils,
growth in blue-green roofs and stormwater attenuation sales.
WMS reported an underlying operating margin of 5.7% during the year,
representing a 280 basis points decline versus prior year, but with margin
increasing from 4.6% in H1 to 6.7% in H2 as a result of pricing and cost
actions as well as the deployment of GBS productivity improvements.
The WMS medium-term growth strategy is underpinned by focused commercial
activity and product solutions. Going forward in 2026, WMS will be reported as
part of the Water Division. The combined Water Division expects to benefit
from changes in water management, biodiversity legislation, more effective
rainwater collection and reuse, and attenuation of flooding and stormwater
runoff in an environment where extreme rainfall events are more prevalent than
ever.
Sustainable Building Solutions
The Sustainable Building Solutions (SBS) Business Unit provides its customers
with a range of market-leading products in plumbing and water supply, drainage
and other building accessories which enable the decarbonisation of the built
environment, the collection and conservation of water in an environment of
increasing scarcity and provides solutions that reduce labour requirements in
an economy where skills shortages are prevalent.
SBS delivered revenue of £246.8m (2024: £231.7m), 6.5% higher than prior
year (3.3% on a like-for-like basis).
Despite market-driven volume challenges, underlying operating profit margin
improved by 80 basis points, driven primarily by effective cost management and
the impact of GBS projects on productivity and efficiency.
Integration of the acquired Davidson Holdings businesses is proceeding well
and the three acquired businesses are expected to generate over 20% underlying
operating profit in 2026, in line with the Group's medium-term profit
target.
Going forward, SBS will be reported as part of the newly formed Water
Division.
Acquisitions
Monodraught
On 29 August 2025, the Group acquired 100% of the voting rights and shares of
Monodraught Topco Limited ('Monodraught') for an enterprise value of £55.6m
on a debt-free and cash-free basis, fully funded via the Group's existing debt
facilities. Monodraught is a UK market leader in solutions covering the
design, manufacture, commission and maintenance of sustainable ventilation,
cooling and heating solutions for new and refurbished commercial buildings,
with advanced controls and data management capability and a strong presence in
the education sector.
Davidson Holdings
On 26 September 2025, the Group acquired 100% of the voting rights and shares
of Davidson Holdings Limited ('Davidson'), a group of three businesses, for an
enterprise value of £49.0m on a debt-free and cash-free basis, fully funded
via the Group's existing debt facilities. The businesses comprise leading
brands in the plumbing and heating sectors including Salamander, Cistermiser
& Keraflo and Talon. These brands have strong market positions, primarily
in the UK repair, maintenance and improvement sectors of the residential and
commercial segments, and benefit from sustainability-led growth drivers.
Non-underlying items
Non-underlying items decreased to £24.7m (2024: £33.0m) before tax. These
included non-cash amortisation of £13.7m (2024: £14.4m), restructuring costs
of £5.1m to complete targeted actions to increase the efficiency of
operations and reduce the cost base, and acquisition costs of £3.1m. The
prior year included non-cash impairment charges of £12.4m in respect of the
Adey business which had encountered prolonged delays to recovery in market
conditions, and no further impairment has been identified in the current
year.
In November 2025, the Group began a process to divest Polydeck Limited within
the next 12 months and therefore this business is held-for-sale as at 31
December 2025. This resulted in a one-off Polydeck customer relationship
impairment of £1.2m and a fair value adjustment of £0.3m to property, plant
and equipment.
The Group incurred £1.3m of costs associated with cloud-based systems
transformation. The Group expects this investment to increase in coming years
as it modernises core systems and transforms the management of data, with the
goal of transforming operational efficiency and productivity, in combination
with GBS and enabling future artificial intelligence (AI) based automation.
Non-underlying items comprised:
2025 2024
£m £m
Amortisation of intangible assets 13.7 14.4
Impairment of goodwill - 12.4
Impairment of intangible assets held-for-sale 1.2 -
Impairment of property, plant and equipment held-for-sale 0.3 -
Impairment of right-of-use property 0.2 -
Unwind of inventory fair value adjustments 1.5 -
Restructuring costs 5.1 1.8
Acquisition related costs 3.1 1.1
Systems and transformation costs 1.3 1.1
Software supplier dispute - 4.3
Employment matters - (1.1)
Product liability claim (0.2) 0.1
Profit on disposal of property, plant and equipment (1.5) (1.1)
Non-underlying items before taxation 24.7 33.0
Tax effect on non-underlying items (5.3) (5.4)
Non-underlying items after taxation 19.4 27.6
Exchange rates
The Group trades predominantly in Sterling but has some revenue and costs in
other currencies, mainly the US Dollar and the Euro, and takes appropriate
forward cover on these cash flows using forward currency derivative contracts
in accordance with its hedging policy.
Finance costs
Underlying net finance costs decreased to £11.5m (2024: £12.9m) primarily
due to lower interest rates during 2025 than 2024, offset by higher net debt
post August 2025 due to acquisitions. Group net debt excluding lease
liabilities increased from £101.6m as at 31 December 2024 to £179.3m as at
31 December 2025, with a corresponding increase in net debt to EBITDA leverage
from 0.9 times to 1.5 times. Interest cover was 9.7 times for the year (2024:
8.3 times).
During the year interest was payable on the RCF at SONIA plus an interest rate
margin ranging from 1.425% to 1.825%. The interest rate margin at 31 December
2025 was 1.825% (2024: 1.625%).
Pensions
The Group does not have any defined benefit pension schemes and only has
defined contribution pension arrangements in place. Pension costs for the year
amounted to £9.1m (2024: £6.3m) reflecting the full year impact of the
introduction of a salary sacrifice scheme in July 2024 and increased up-take
enhancing our employee value proposition.
Taxation
Underlying taxation
The underlying tax charge in 2025 was £18.3m (2024: £18.2m) representing an
effective tax rate of 22.1% (2024: 23.0%). This was below the composite UK
standard tax rate of 25.0% (2024: 25.0%) due to the benefit of Patent Box
relief.
Taxation on non-underlying items
The non-underlying taxation credit of £5.3m (2024: £5.4m) represents an
effective rate of 21.5% (2024: 16.4%).
Earnings per share
2025 2024
Pence Pence
Basic 18.2 13.5
Underlying basic 26.0 24.6
Diluted 17.8 13.3
Underlying diluted 25.4 24.3
The Directors consider that the underlying basic earnings per share (EPS)
measure provides a better and more consistent indication of the Group's
underlying financial performance and more meaningful comparison with prior and
future periods to assess trends in our financial performance.
Underlying basic EPS increased by 5.7% in 2025.
Dividend
The final dividend of 8.7 pence (2024: 8.4 pence) per share is being
recommended for payment on 3 June 2026 to shareholders on the register at the
close of business on 1 May 2026, in line with the Group's progressive dividend
policy. The ex-dividend date will be 30 April 2026. The full year dividend of
12.9 pence per share reflects the strength of the balance sheet and the
Board's confidence in the Group's medium-term strategy.
The Group aims to pay a progressive dividend, based on dividend cover of 2.0
times or greater, over the business cycle. The Directors intend that the Group
will pay the total annual dividend in two tranches, an interim dividend and a
final dividend, announced at the time of publication of the interim and
preliminary results.
Balance sheet
The Group's balance sheet is summarised below:
2025 £m 2024 £m
Property, plant and equipment 191.4 183.7
Right-of-use assets 29.1 27.0
Goodwill 509.6 451.5
Other intangible assets 163.4 128.7
Net working capital 33.8 27.3
Taxation (57.2) (45.8)
Other current and non-current assets and liabilities 0.9 (0.2)
Net debt (loans and borrowings, and lease liabilities, net of cash and cash (208.1) (129.2)
equivalents)
Net assets 662.9 643.0
The net value of property, plant and equipment has increased by £7.7m with
continued investment in targeted capital expenditure.
Cash flow and net debt
The Group's cash flow statement is summarised below:
2025 £m 2024 £m
Operating cash flows before movement in net working capital 112.5 106.5
Add back non-underlying cash items 12.3 12.7
Underlying operating cash flows before movement in net working capital 124.8 119.2
Movement in net working capital 1.6 9.0
Underlying cash generated from operations (before net capital expenditure) 126.4 128.2
Net capital expenditure excluding non-underlying proceeds of sale (29.7) (26.0)
Settlement of lease liabilities (9.6) (10.6)
Underlying cash generated from operations after net capital expenditure 87.1 91.6
excluding non-underlying proceeds of sale
Income tax paid (11.9) (10.4)
Interest paid (9.7) (11.4)
Interest received 0.9 -
Non-underlying proceeds of sale 2.1 4.9
Other non-underlying cash items (12.3) (12.7)
Settlement of deferred and contingent consideration - (1.6)
Debt issue costs (0.4) -
Acquisition of businesses net of cash at acquisition (105.6) (5.2)
Dividends paid (31.3) (30.8)
Proceeds from exercise of share options net of purchase of own shares 3.8 0.8
Other (0.4) (0.9)
Movement in net debt - excluding IFRS 16 (77.7) 24.3
Movement in IFRS 16 (1.2) (3.3)
Movement in net debt - including IFRS 16 (78.9) 21.0
Delivery of strong cash generation remains core to the Group's strategy. The
Group's pre-capex underlying operating cash conversion was 102.0% (2024:
107.6%) calculated as underlying operating cash flow divided by underlying
EBITDA.
A positive working capital movement in the year was achieved through lower
levels of inventory and improved debtor position, achieved through strategic
buying and improvements generated by GBS. In 2026, the Group will focus on
continuing to achieve over 90% pre-capex operating cash conversion.
Net capital expenditure investment (excluding non-underlying proceeds of sale)
increased to £29.7m (2024: £26.0m). The Group has continued to focus on
investing in targeted manufacturing facility development, capacity and key
strategic and innovative projects.
Financing
Net debt of £208.1m (2024: £129.2m) comprised:
2025 2024
£m £m
Bank borrowings (225.0) (146.5)
Cash and cash equivalents 44.8 43.6
Net debt (excluding unamortised debt issue costs) (180.2) (102.9)
Unamortised debt issue costs 0.9 1.3
IFRS 16 (28.8) (27.6)
Net debt (208.1) (129.2)
Net debt (excluding IFRS 16 and unamortised debt issue costs): pro-forma 1.5 0.9
EBITDA
On 22 July 2025, the Group exercised the option to extend the
Sustainability-Linked Revolving Credit Facility (RCF) to 9 August 2028,
securing a facility of £310.3m to August 2027 and £285.6m to August 2028,
with an uncommitted accordion facility of up to £50.0m. Subsequently an
agreement was signed on 25 September 2025 that increased the committed RCF
facility to £350.0m for the term. At 31 December 2025, the amount drawn on
the RCF was £175.0m (2024: £121.5m).
On 24 September 2025, the Note Purchase and Private Shelf Agreement originally
dated 10 August 2022 was amended and restated, extending the uncommitted
facility to 9 August 2028 for an amount of $180.0m, c.£133m (previously
£125.0m). The Group has £25.0m issued loan notes from the original
agreement dated 10 August 2022 with a repayment date of 9 August 2029, and on
20 October 2025, a further £25.0m of loan notes were issued from the amended
shelf agreement, with a repayment date of 20 October 2032, leaving an
uncommitted facility of c.$145m at 31 December 2025 (c.£107m).
The Group is subject to two financial covenants. At 31 December 2025, there
was significant headroom. Facility interest cover and net debt to EBITDA
(leverage) covenants were comfortably achieved:
Covenant requirement Position at 31 December
2025
Covenant
Interest cover >4.0:1 9.7:1
Leverage <3.0:1 1.5:1
Going concern
The Group continues to meet its day-to-day working capital and other funding
requirements through a combination of long-term funding and cash deposits. The
Group's bank financing facilities consist of a £350.0m Sustainability-Linked
RCF until August 2028, with an uncommitted accordion facility of up to
£50.0m. In addition, there are two seven-year private placement loan notes of
£25.0m each, with an uncommitted c.£107m shelf facility. At 31 December
2025, liquidity headroom (cash and undrawn committed banking facilities) was
£219.8m (2024: £272.1m).
The Group's focus will continue to be on de-leveraging, and its net debt to
EBITDA ratio stood at 1.5 times pro-forma EBITDA at 31 December 2025 (2024:
0.9 times). This headroom means the Group is well positioned with a strong
balance sheet.
As a result, the Directors have satisfied themselves that the Group has
adequate financial resources to continue in operational existence for a period
of at least the next 22 months to 31 December 2027. Accordingly, they continue
to adopt the going concern basis in preparing the consolidated financial
statements.
Forward-looking statements
This report contains various forward-looking statements that reflect
management's current views with respect to future events and financial and
operational performance. These forward-looking statements involve known and
unknown risks, uncertainties, assumptions, estimates and other factors, which
may be beyond the Group's control, and which may cause actual results or
performance to differ materially from those expressed or implied from such
forward-looking statements. All statements (including forward-looking
statements) contained herein are made and reflect knowledge and information
available as of the date of preparation of this report and the Group disclaims
any obligation to update any forward-looking statements, whether as a result
of new information, future events or results or otherwise. There can be no
assurance that forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue reliance on
forward-looking statements due to the inherent uncertainty therein. Nothing in
this report should be construed as a profit forecast.
Directors' Responsibilities
Each of the Directors confirms that, to the best of their knowledge, the
consolidated financial statements, prepared in accordance with UK-Adopted
International Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group and
undertakings included in the consolidation taken as a whole; and the Group
Results, Chief Executive Officer Review and Business Unit Review includes a
fair review of the development and performance of the business and the
position of the Group and undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and uncertainties
that they face.
Annual General Meeting
The Annual General Meeting is scheduled to be held on 22 May 2026. By order of
the Board:
Joe Vorih Tim Pullen
Chief Executive Officer Chief Financial Officer
Group Income Statement for the year ended 31 December 2025
2025 2024
Notes Non- underlying Non- underlying
Underlying £m Total Underlying £m Total
£m £m £m £m
Revenue 2 602.1 - 602.1 561.3 - 561.3
Cost of sales (335.7) (1.3) (337.0) (311.5) 1.0 (310.5)
Gross profit 266.4 (1.3) 265.1 249.8 1.0 250.8
Selling and distribution costs
(81.3) - (81.3) (75.2) - (75.2)
Administration expenses (89.9) (8.5) (98.4) (81.7) (7.2) (88.9)
Amortisation of intangible assets
(0.8) (13.7) (14.5) (0.7) (14.4) (15.1)
Impairment of intangible assets - (1.2) (1.2) - - -
Impairment of goodwill - - - - (12.4) (12.4)
Operating profit 2 94.4 (24.7) 69.7 92.2 (33.0) 59.2
Finance costs 5 (12.4) - (12.4) (12.9) - (12.9)
Finance revenue 5 0.9 - 0.9 - - -
Profit before tax 82.9 (24.7) 58.2 79.3 (33.0) 46.3
Income tax 6 (18.3) 5.3 (13.0) (18.2) 5.4 (12.8)
Profit for the year attributable to the owners of the parent company
64.6 (19.4) 45.2 61.1 (27.6) 33.5
Basic earnings per share (pence) 7
18.2 13.5
Diluted earnings per share (pence) 7 17.8 13.3
Dividend per share (pence) - interim 8 4.2 4.1
Dividend per share (pence) - final 8 8.7 8.4
12.9 12.5
Non-underlying items are presented separately and are detailed in note 4.
Group Statement of Comprehensive Income for the year ended 31 December 2025
2025 2024
£m £m
Profit for the year 45.2 33.5
Other comprehensive (expense)/income:
Items which may in the future be reclassified to the income statement:
Effective portion of changes in fair value of forward foreign currency 0.2 (0.3)
derivatives
Effective portion of changes in fair value of interest rate derivatives (0.5) 0.1
Exchange differences on translation of foreign operations - (0.1)
Other comprehensive expense for the year net of tax (0.3) (0.3)
Total comprehensive income for the year 44.9 33.2
Group Balance Sheet at 31 December 2025
2024
Notes 2025 £m
£m
Non-current assets
Property, plant and equipment 9 191.4 183.7
Right-of-use assets 10 29.1 27.0
Intangible assets 11 673.0 580.2
Total non-current assets 893.5 790.9
Current assets
Inventories 69.6 73.5
Trade and other receivables 89.0 81.8
Income tax receivable 3.6 3.2
Cash and cash equivalents 44.8 43.6
Assets held-for-sale 13 1.1 -
Total current assets 208.1 202.1
Total assets 1,101.6 993.0
Current liabilities
Trade and other payables (124.8) (128.2)
Lease liabilities 10 (9.9) (7.4)
Liabilities held-for-sale 13 (0.2) -
Total current liabilities (134.9) (135.6)
Non-current liabilities
Loans and borrowings 14 (224.1) (145.2)
Lease liabilities 10 (18.9) (20.2)
Deferred income tax liabilities (60.8) (49.0)
Total non-current liabilities (303.8) (214.4)
Total liabilities (438.7) (350.0)
Net assets 662.9 643.0
Capital and reserves
Equity share capital 0.3 0.2
Share premium 97.4 93.6
Capital redemption reserve 1.1 1.1
Hedging reserve (0.4) (0.1)
Foreign currency retranslation reserve (0.2) (0.2)
Other reserves 116.5 116.5
Retained earnings 448.2 431.9
Total equity 662.9 643.0
Group Statement of Changes in Equity for the year ended 31 December 2025
Equity share capital Capital redemption Foreign currency retranslation
£m Share premium reserve Hedging reserve reserve Other reserves Retained earnings Total equity
£m £m £m £m £m £m £m
At 31 December 2024 0.2 93.6 1.1 (0.1) (0.2) 116.5 431.9 643.0
Profit for the year - - - - - - 45.2 45.2
Other comprehensive expense
- - - (0.3) - - - (0.3)
Total comprehensive (expense)/income for the year - - - (0.3) - - 45.2 44.9
Dividends paid - - - - - - (31.3) (31.3)
Issue of share capital 0.1 3.8 - - - - - 3.9
Share-based payments charge - - - - - - 2.5 2.5
Share-based payments excess tax benefit - - - - - - (0.1) (0.1)
At 31 December 2025 0.3 97.4 1.1 (0.4) (0.2) 116.5 448.2 662.9
At 31 December 2023 0.2 93.6 1.1 0.1 (0.1) 116.5 425.2 636.6
Profit for the year - - - - - - 33.5 33.5
Other comprehensive expense
- - - (0.2) (0.1) - - (0.3)
Total comprehensive (expense)/income for the year - - - (0.2) (0.1) - 33.5 33.2
Dividends paid - - - - - - (30.8) (30.8)
Share-based payments charge - - - - - - 2.9 2.9
Share-based payments settled - - - - - - 0.8 0.8
Share-based payments excess tax benefit - - - - - - 0.3 0.3
At 31 December 2024 0.2 93.6 1.1 (0.1) (0.2) 116.5 431.9 643.0
Group Cash flow Statement
for the year ended 31 December 2025
2025 2024
Notes £m £m
Operating activities
Cash generated from operations 15 114.1 115.5
Income tax paid (11.9) (10.4)
Interest received 0.9 -
Net cash flows from operating activities 103.1 105.1
Investing activities
Settlement of deferred and contingent consideration 12 - (1.6)
Acquisition of businesses net of cash at acquisition 12 (105.6) (5.2)
Proceeds from disposal of assets held-for-sale - 4.9
Proceeds from disposal of property, plant and equipment 2.6 0.7
Purchase of property, plant and equipment (27.6) (25.6)
Purchase of intangible assets (2.6) (1.1)
Net cash flows from investing activities (133.2) (27.9)
Financing activities
Debt issue costs (0.4) -
Drawdown of bank borrowings 235.0 69.4
Repayment of bank borrowings (156.6) (68.0)
Interest paid (9.7) (11.4)
Dividends paid (31.3) (30.8)
Proceeds from exercise of share options 3.8 0.8
Settlement of lease liabilities (9.6) (10.6)
Net cash flows from financing activities 31.2 (50.6)
Net change in cash and cash equivalents 1.1 26.6
Cash and cash equivalents at 1 January 2024 43.6 17.0
Net foreign exchange difference 0.1 -
Cash and cash equivalents at 31 December 2025 44.8 43.6
1. Basis of preparation
The preliminary results for the year ended 31 December 2025 have been prepared
in accordance with UK-Adopted International Accounting Standards (UK-adopted
IAS). Whilst the financial information included in this preliminary
announcement has been computed in accordance with the recognition and
measurement requirements of IFRS, this announcement does not itself contain
sufficient information to comply with IFRS. The accounting policies adopted
have been consistently applied in all material aspects to all the periods
presented.
The financial information set out in this announcement does not constitute the
statutory accounts for the Group within the meaning of Section 435 of the
Companies Act 2006. The statutory accounts for the year ended 31 December 2024
have been filed with the Registrar of Companies. The statutory accounts for
the year ended 31 December 2025 will be filed in due course. The auditor's
report on these accounts was not qualified or modified and did not contain any
statement under Sections 498(2) or (3) of the Companies Act 2006 or any
preceding legislation.
There were no accounting standards or interpretations that have become
effective in the current reporting period which had an impact on disclosures,
financial position, or performance.
The Directors have made enquiries into the adequacy of the Group's financial
resources, through a review of the Group's budget and medium-term financial
plan, including cash flow forecasts. The Group has modelled a range of
scenarios, with the base forecast being one in which, over the 22 months
ending 31 December 2027, sales volumes grow in line with or moderately above
external construction industry forecasts. In addition, the Directors have
considered several downside scenarios, including adjustments to the base
forecast, a period of significantly lower like-for-like sales, profitability
and cash flows. Consistent with our principal risks and uncertainties, these
downside scenarios included, but were not limited to, loss of production, loss
of a major customer, product failure, recession, increases in interest rates
and increases in raw material prices. Downside scenarios also included a
combination of these risks and reverse stress testing. The Directors have
considered the impact of climate-related matters on the going concern
assessment and they are not expected to have a significant impact on the
Group's going concern.
At 31 December 2025, the Group had available £175.0m of undrawn committed
borrowing facilities in respect of which all conditions precedent had been
met. These borrowing facilities are available until at least August 2028,
subject to covenant headroom. The Directors are satisfied that the Group has
sufficient liquidity and covenant headroom to withstand reasonable variances
to the base forecast, as well as the downside scenarios. In addition, the
Directors have noted the range of possible additional liquidity options
available to the Group, should they be required.
As a result, the Directors have satisfied themselves that the Group has
adequate financial resources to continue in operational existence for a period
to 31 December 2027. Accordingly, they continue to adopt the going concern
basis in preparing the consolidated financial statements.
Four non-statutory measures have been used in preparing the consolidated
financial statements:
· Underlying profit and earnings measures exclude certain
non-underlying items (which are detailed in note 4) and, where relevant, the
tax effect of these items. The Directors consider that these measures provide
a better and more consistent indication of the Group's underlying financial
performance and more meaningful comparison with prior and future periods to
assess trends in the Group's financial performance.
· Underlying operating cash conversion on a pre-capex basis is
defined as cash generated from operations, adjusted for non-underlying cash
items and after movement in net working capital, divided by underlying EBITDA.
· Leverage is defined as net debt divided by pro-forma EBITDA (both
are reconciled in note 14). Net debt within the leverage calculation is
defined as loans and borrowings net of unamortised issue costs less cash and
cash equivalents, excluding the effects of IFRS 16.
· Pro-forma EBITDA is defined as pre-IFRS 16 underlying operating
profit before depreciation, amortisation and share-based payment charges, for
the 12 months preceding the balance sheet date, adjusted where relevant, to
include a full year of EBITDA from acquisitions made during those 12 months.
2. Segment information
The Group's operating segments are aligned with the Group's Sustainable
Solutions for Growth strategy, comprising three strategic Business Units -
Climate Management Solutions (CMS), Water Management Solutions (WMS) and
Sustainable Building Solutions (SBS). The reporting segments are organised
based on the nature of the end markets served. The Group's reporting segments
are its operating segments, so no aggregation has been performed under IFRS 8
to arrive at reportable segments. Inter-segment sales are on an arm's length
basis in a manner similar to transactions with third parties. Other segments
relates to Polypipe Italia SRL which does not form part of the Group's
strategic Business Units in 2024 and 2025 but will form part of the Water
Division for 2026 onwards.
2025
Climate Management Solutions Water Management Solutions Sustainable Building Solutions Other Total
£m £m £m £m £m
Segmental revenue 180.2 188.1 267.4 8.1 643.8
Inter-segment revenue (1.3) (18.6) (20.6) (1.2) (41.7)
Revenue 178.9 169.5 246.8 6.9 602.1
Underlying operating profit* 24.4 9.6 59.9 0.5 94.4
Non-underlying items - (12.4) (5.3) (3.0) - (20.7)
segmental
Non-underlying items - Group (4.0)
Segmental operating profit 12.0 4.3 56.9 0.5 69.7
Finance costs (12.4)
Finance revenue 0.9
Profit before tax 58.2
2024
Climate Management Solutions Water Management Solutions Sustainable Building Solutions Other Total
£m £m £m £m £m
Segmental revenue 164.8 183.3 252.7 7.8 608.6
Inter-segment revenue (3.2) (22.4) (21.0) (0.7) (47.3)
Revenue 161.6 160.9 231.7 7.1 561.3
Underlying operating profit * 24.0 13.6 54.4 0.2 92.2
Non-underlying items - segmental (24.9) (0.2) (1.7) - (26.8)
Non-underlying items - Group (6.2)
Segmental operating profit (0.9) 13.4 52.7 0.2 59.2
Finance costs (12.9)
Finance revenue -
Profit before tax 46.3
* Underlying operating profit is stated before non-underlying items as defined in the Group Accounting Policies in the Annual Report and Accounts and is the measure of segmental profit used by the Group's chief operating decision maker. Details of the non-underlying items of £24.7m (2024: £33.0m) are detailed in note 4.
Geographical analysis
Revenue by destination 2025 2024
£m £m
UK 536.4 499.3
Rest of Europe 35.7 32.9
Rest of World 30.0 29.1
Total Group 602.1 561.3
3. Operating Profit
2025 2024
£m £m
Income statement charges
Depreciation of property, plant and equipment 21.0 19.2
Depreciation of right-of-use assets 7.7 7.1
Cost of inventories recognised as an expense 264.4 251.1
Research and development costs expensed 7.6 7.4
Income statement credits
Research and development expenditure credit 1.6 1.5
4. Non-underlying items
Non-underlying items comprised:
2025 2024
Gross Tax Net Gross Tax Net
£m £m £m £m £m £m
Cost of sales:
Unwind of inventory fair value adjustment
1.5 (0.4) 1.1 - - -
Employment matters - - - (1.1) 0.1 (1.0)
Product liability claim (0.2) 0.1 (0.1) 0.1 - 0.1
Administration expenses
Restructuring costs 5.1 (1.3) 3.8 1.8 (0.5) 1.3
Acquisition related costs 3.1 - 3.1 1.1 - 1.1
Systems and process transformation costs 1.3 (0.4) 0.9 1.1 (0.3) 0.8
Software supplier dispute - - - 4.3 (1.1) 3.2
Profit on disposal of property,
plant and equipment (1.5) 0.5 (1.0) (1.1) - (1.1)
Amortisation of intangible
assets 13.7 (3.4) 10.3 14.4 (3.6) 10.8
Impairment of intangible
Assets held-for-sale 1.2 (0.3) 0.9 - - -
Impairment of property, plant and equipment held-for-sale
0.3 (0.1) 0.2 - - -
Impairment of right-of-use property
0.2 - 0.2 - - -
Impairment of goodwill - - - 12.4 - 12.4
Total non-underlying items 24.7 (5.3) 19.4 33.0 (5.4) 27.6
The unwind of the inventory fair value adjustment relates to the fair value
uplift of the inventory acquired through the Monodraught and Davidson
acquisitions that has been sold in the period since acquisition.
In a prior year, provision was made for a product liability claim which in
this year was settled. The balance remaining has been credited back to
non-underlying items.
Restructuring costs incurred in both years are in relation to the
reorganisation of the Group. The Group had finished its review of its
operating footprint which resulted in the closure of two sites and other costs
in the prior year. A new project was undertaken in the current year which
was separate to the original review resulting in further restructuring costs.
This included the sale of two properties which accounts for the profit on
disposal of £1.5m.
Acquisition related costs in the year ended 31 December 2025 relate to the
acquisitions of Monodraught and Davidson (2024: Sky Garden and Genuit UFH), as
well as costs associated with other merger and acquisition activity.
Systems and process transformation costs relate to the design and
configuration of software projects that are significant and support the
Group's medium-term strategy, this includes those in respect to the Group-wide
ERP implementation which commenced in the second half of the year ending 31
December 2025.
During the year ended 31 December 2025, the Board approved a plan to sell
Polydeck Limited, a subsidiary of the Genuit Group. The assets and liabilities
of the disposal group have been impaired to fair value resulting in an
impairment to plant and equipment of £0.3m and intangible assets of £1.2m.
An impairment of £0.2m has been recognised against a leased property that has
been vacated in the year, see note 10.
Amortisation charged in both years relates to intangible assets arising on
business combinations.
Prior year impairment of goodwill of £12.4m related to a 2021 acquisition, no
further impairment has been identified in the current year.
In the prior year to 31 December 2024, the Group incurred a one-off cost of
£4.3m in respect of a dispute with a third party back-office software
supplier that was settled in that same year.
5. Finance revenue and costs
2025 2024
£m £m
Interest receivable on cash and cash equivalents (0.9) -
Finance revenue (0.9) -
Interest on bank borrowings 9.7 10.4
Debt issue cost amortisation 0.9 0.9
Unwind of discount on lease liabilities 1.8 1.6
Finance costs 12.4 12.9
6. Income tax
(a) Tax expense reported in the income statement
2025 2024
£m £m
Current income tax:
UK income tax 13.8 13.8
Overseas income tax - 0.1
Current income tax 13.8 13.9
Adjustment in respect of prior years (0.7) (0.3)
Total current income tax 13.1 13.6
Deferred income tax:
Origination and reversal of timing differences - (0.7)
Adjustment in respect of prior years (0.1) (0.1)
Total deferred income tax (0.1) (0.8)
Total tax expense reported in the income statement 13.0 12.8
Details of the non-underlying tax credit of £5.3m (2024: £5.4m) are set out
in note 4.
(b) Reconciliation of the total tax expense
The Group has reported an effective tax rate of 22.3% (2024: 27.6%) for the
year which is below the standard rate of UK corporation tax of 25.0% (2024:
25.0%).
The differences are explained as follows:
2025 2024
£m £m
Accounting profit before tax 58.2 46.3
Accounting profit multiplied by the UK standard rate of income tax of 25.0%
(2024: 25.0%)
14.6 11.6
Expenses not deductible for income tax 1.3 2.6
Adjustment in respect of prior years (1.3) (0.4)
Effects of patent box (1.6) (1.1)
Effects of deferred tax not recognised - (0.8)
Effects of other tax rates/credits - 0.9
Total tax expense reported in the income statement 13.0 12.8
If the impact of non-underlying items is excluded, the underlying income tax
rate would be 22.1% (2024: 23.0%).
(c) Deferred income tax
The deferred income tax included in the Group balance sheet is as follows:
2025 2024
£m £m
Deferred income tax liabilities/(assets)
Short-term timing differences:
- DTL arising on acquired intangible assets 39.6 29.9
- Other short-term timing differences (0.4) -
Capital allowances in excess of depreciation 27.9 25.5
Share-based payments (2.3) (2.5)
Tax losses (4.0) (3.9)
60.8 49.0
The Group offsets tax assets and liabilities if, and only if, it has a legally
enforceable right to set off current income tax assets and current income tax
liabilities and the deferred income tax assets and deferred income tax
liabilities relate to income taxes levied by the same tax authority.
(d) Unrecognised tax losses
No deferred income tax has been recognised on non-trading losses and other
timing differences of
£nil (2024: £0.3m) as the Directors do not consider that they will be
utilised in the foreseeable future.
7. Earnings per share
Basic earnings per share amounts are calculated by dividing profit for the
year attributable to the owners of the parent company by the weighted average
number of ordinary shares outstanding during the year.
The diluted earnings per share amounts are calculated by dividing profit for
the year attributable to the owners of the parent company, by the weighted
average number of ordinary shares outstanding during the year plus the
weighted average number of potential ordinary shares that would be issued on
the conversion of all the dilutive share options into ordinary shares.
The calculation of basic and diluted earnings per share is based on the
following:
2025 2024
Number Number
Weighted average number of ordinary shares for the purpose of basic earnings
per share
248,786,339 248,459,018
Effect of dilutive potential ordinary shares 5,644,798 2,480,464
Weighted average number of ordinary shares for the purpose of diluted earnings
per share
254,431,137 250,939,482
Underlying earnings per share is based on the result for the year after tax
excluding the impact of non-underlying items of £19.4m (2024: £27.6m). The
Directors consider that this measure provides a better and more consistent
indication of the Group's underlying financial performance and more meaningful
comparison with prior and future periods to assess trends in the Group's
financial performance. The underlying earnings per share is calculated as
follows:
2025 2024
Underlying profit for the year attributable to the owners of the parent
company (£m) 64.6 61.1
Underlying basic earnings per share (pence) 26.0 24.6
Underlying diluted earnings per share (pence) 25.4 24.3
8. Dividend per share
2025 2024
£m £m
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2024 of 8.4p per share (2023:
8.3p)
20.9 20.6
Interim dividend for the year ended 31 December 2025 of 4.2p per share (2024:
4.1p)
10.4 10.2
31.3 30.8
Proposed final dividend for the year ended 31 December 2025 of 8.7p per share
(2024: 8.4p)
21.8 20.9
The proposed final dividend is subject to approval by shareholders at the
Annual General Meeting and has not been included as a liability in these
consolidated financial statements.
9. Property, plant and equipment
Freehold land and buildings Plant and other equipment
£m £m Total
£m
Cost
At 1 January 2024 61.2 219.0 280.2
Additions 2.7 22.9 25.6
Acquisitions - 0.5 0.5
Disposals (0.2) (14.3) (14.5)
Transfer from assets held-for-sale - 6.5 6.5
Exchange adjustment - (0.3) (0.3)
At 31 December 2024 63.7 234.3 298.0
Additions 1.3 26.3 27.6
Acquisitions - 2.5 2.5
Disposals (1.6) (6.4) (8.0)
Transfer to assets held-for-sale - (0.5) (0.5)
Exchange adjustment - 0.3 0.3
At 31 December 2025 63.4 256.5 319.9
Depreciation and impairment losses
At 1 January 2024 9.9 93.9 103.8
Provided during the year 1.8 17.4 19.2
Disposals (0.1) (13.1) (13.2)
Transfer from assets held-for-sale - 4.3 4.3
Exchange adjustment - 0.2 0.2
At 31 December 2024 11.6 102.7 114.3
Provided during the year 1.8 19.2 21.0
Impairment - 0.3 0.3
Disposals (1.3) (5.6) (6.9)
Transfer to assets held-for-sale - (0.4) (0.4)
Exchange adjustment - 0.2 0.2
At 31 December 2025 12.1 116.4 128.5
Net book value
At 31 December 2025 51.3 140.1 191.4
At 31 December 2024 52.1 131.6 183.7
Included in freehold land and buildings is non-depreciable land of £16.2m
(2024: £16.2m).
Plant and equipment with a fair value of £0.1m has been transferred to assets
held-for-sale. Prior to transfer, the carrying value was impaired by £0.3m
to record the assets at the lower of carrying amount and fair value less costs
to dispose (FVLCD).
Capital commitments
At 31 December 2025, the Group had commitments of £6.0m (2024: £5.0m)
relating to plant and equipment purchases.
10. Right-of-use assets and lease liabilities
Freehold Plant and Motor vehicles Lease liabilities
land and buildings other equipment Total
£m £m £m £m £m
At 1 January 2024 11.6 8.1 3.2 22.9 (23.4)
Additions 1.7 5.7 5.6 13.0 (13.0)
Disposals (3.8) (3.7) (0.6) (8.1) -
Depreciation of right-of- use assets
(2.0) (3.0) (2.1) (7.1) -
Depreciation on disposal
of right-of-use assets 2.8 3.0 0.4 6.2 -
Transfer from assets-held-for-sale
- 0.2 - 0.2 (0.2)
Exchange adjustment - (0.1) - (0.1) -
Unwind of discount on
lease liabilities - - - - (1.6)
Settlement of lease
liabilities - - - - 10.6
At 31 December 2024 10.3 10.2 6.5 27.0 (27.6)
Additions 1.5 1.0 2.0 4.5 (4.5)
Acquisitions 5.0 0.3 0.5 5.8 (4.7)
Disposals (0.5) (3.0) (0.7) (4.2) -
Depreciation of right-of-
use assets (2.3) (2.9) (2.5) (7.7) -
Depreciation on disposal
of right - of - use assets 0.1 2.9 0.6 3.6 -
Reassessment of lease term
0.3 - - 0.3 0.2
Impairment (0.2) - - (0.2) -
Unwind of discount on
lease liabilities - - - - (1.8)
Settlement of lease
liabilities - - - - 9.6
At 31 December 2025 14.2 8.5 6.4 29.1 (28.8)
During the year, the Group vacated a property at one of the sites in the WMS
segment. As a result of this decision, management determined that the
break-option in the lease would be exercised and therefore, the lease term has
been reassessed reducing the lease liability at 31 December 2025 by £0.2m,
with a corresponding reduction in the carrying value of the right-of-use
asset. The property right-of-use asset has then been fully impaired as the
value-in-use is deemed to be £nil. The impairment of £0.2m has been
recognised as non-underlying.
11. Intangible assets
Goodwill Patents Brand names Customer relationships Licences Customer order book Development Total
£m £m £m £m £m £m costs £m
£m
Cost
At 1 January 2024 466.1 40.4 66.5 114.3 0.8 - 5.0 693.1
Additions 5.3 0.5 - - - - 0.6 6.4
Transfer from assets held-for-sale 4.5 - - - - - 4.5
-
At 31 December 475.9 40.9 66.5 114.3 0.8 - 5.6 704.0
2024
Additions - 0.4 0.4 - - - 1.8 2.6
Acquisitions 58.1 3.2 7.3 35.4 - 1.9 - 105.9
At 31 December 534.0 44.5 74.2 149.7 0.8 1.9 7.4 812.5
2025
Amortisation and impairment losses
At 1 January 2024 12.0 23.1 30.3 29.3 0.5 - 1.1 96.3
Charge for the - 3.4 5.0 6.1 0.1 - 0.5 15.1
year
Impairment losses 12.4 - - - - - - 12.4
At 31 December 24.4 26.5 35.3 35.4 0.6 - 1.6 123.8
2024
Charge for the year - 2.9 4.2 6.7 - 0.3 0.4 14.5
Impairment losses - - - 1.2 - - - 1.2
At 31 December 24.4 29.4 39.5 43.3 0.6 0.3 2.0 139.5
2025
Net book value
At 31 December 509.6 15.1 34.7 106.4 0.2 1.6 5.4 673.0
2025
At 31 December 451.5 14.4 31.2 78.9 0.2 - 4.0 580.2
2024
Brand names and customer relationships which arise from business combinations
are amortised over their estimated useful lives of between five and twenty
years. Brands that have a significant carrying value include Adey (£19.4m)
with remaining estimated useful lives of between 5 and 15 years, as well as
the newly acquired Monodraught brand (£1.8m) and the four Davidson brands
acquired being Salamander, Cistermiser & Keraflo and Talon, (total £5.4m)
all with remaining estimated useful lives of 15 years. Customer relationships
that have a significant carrying value are those in the following businesses:
Adey (£63.6m), remaining estimated useful lives of between 6 and 15 years,
Manthorpe (£4.7m) with a remaining estimated useful life of 7 years,
Monodraught (£11.2m), remaining estimated useful life of 13 years and those
from the Davidson acquisition (£23.5m), remaining estimated useful life of 19
years. The customer order book was acquired with the Monodraught acquisition
(£1.6m) and has a remaining estimated useful life of two years.
Impairment testing of goodwill
Goodwill is not amortised but is subject to annual impairment testing.
Goodwill has been allocated for impairment testing purposes to a number of
Cash Generating Units (CGUs) which represent the lowest level in the Group at
which goodwill is monitored for internal management purposes.
The carrying amount of goodwill allocated to each of the CGUs is as follows:
31 December 31 December
2025 2024
CGU £m £m
Building Services & International 39.9 33.6
Infrastructure & Landscape 45.9 45.9
Residential Systems 185.4 169.6
CMS 233.2 -
Others 5.2 5.3
Climate & Ventilation - 93.7
Nu-Heat - 20.3
Adey - 83.1
509.6 451.5
Following the internal announcement of a CMS organisational change, management
reviewed the Group's CGUs and determined that the CMS Business Unit, which
consists of the following CGUs to which goodwill is allocated: Climate &
Ventilation, Nu-Heat and Adey, is, effective from 1 November 2025, the lowest
level in the Group at which this goodwill is monitored for internal management
purposes in accordance with the requirements of IAS 36. As such, the goodwill
of the entities allocated to these CGUs, including that arising on the
acquisition of Monodraught, has been reported in the newly combined CMS CGU
for the year ended 31 December 2025.
An impairment test as at 31 October 2025, immediately prior to the creation of
the new CMS CGU, was performed for all existing CGUs that included CMS
entities, and no impairments were identified.
The goodwill arising on the Monodraught acquisition of £36.0m primarily
represents the assembled workforce, technical expertise, market share and
expected synergies with other Group companies in the CMS business unit. The
goodwill was initially allocated to the Climate & Ventilation CGU, which,
as explained above, has since been combined with Nu-Heat and Adey to form the
CMS CGU grouping with effect from 1 November 2025.
The goodwill arising on the Davidson acquisition of £22.1m, which primarily
represents the assembled workforce, technical expertise and market share, has
been allocated to two existing CGUs as follows: Talon and Salamander (£6.8m
and £9.0m of goodwill respectively) have been allocated to the Residential
Systems CGU and Woodley (£6.3m of goodwill) has been allocated to the
Building Services & International CGU. The Group determined that it was
appropriate to allocate the goodwill to these CGUs on the basis that these are
the CGUs expected to benefit from the synergies of the acquisition and
represent the lowest levels within the Group at which the respective goodwill
arising from the acquisition is monitored for internal management purposes in
accordance with the requirements of IAS 36.
Key assumptions used for value-in-use calculations:
The recoverable amounts of all CGUs are determined from value-in-use
calculations, being the net present value of future pre-tax cash flows,
discounted at a mid-year position, covering a five-year period. These pre-tax
cash flows are based on budgeted cash flow information for a period of one
year, and Board approved management forecast growth of between 3.0% to 21.2%
for years two to five (2024: 4.0% to 31.2%). Terminal growth rates of 2.0%
(2024: 2.0% to 2.4%) have been applied beyond this, based on historical
macroeconomic performance and projections of the sector served by the CGUs. A
pre-tax discount rate of 14.1% (2024: 13.8%) has been applied in determining
the recoverable amounts of CGUs. The pre-tax discount rate is estimated based
on the Group's risk adjusted cost of capital.
When assessing for impairment of goodwill, management have considered the
impact of climate change and have not identified any material short-term
impacts from climate change that would impact the carrying value of goodwill.
Over the longer term, the risks and opportunities are more uncertain, and
management will continue to assess the quantitative impact of risks at each
balance sheet date.
Recoverable amounts and sensitivities:
The Group has applied sensitivities to assess whether any reasonably possible
changes in assumptions could cause an impairment that would be material to
these consolidated financial statements and is satisfied that there is
sufficient headroom against the carrying value of all the CGUs.
12. Acquisitions
Monodraught
On 29 August 2025, the Group acquired 100% of the voting rights and shares of
Monodraught Topco Limited ('Monodraught'), a market leading solutions business
who design, manufacture and maintain sustainable ventilation systems, for an
enterprise value of £55.6m on a debt-free and cash-free basis, fully funded
via the Group's existing debt facilities. Monodraught is a leading provider of
commercial ventilation solutions in the UK, with advanced controls and data
management capability focused on the UK education sector.
Monodraught joined the CMS business unit, sitting alongside the Group's
existing CMS brands of Nuaire, Domus, Nu-Heat and ADEY to drive commercial
scale and market access, with synergies arising from the acquisition being
able to be applied to Nuaire immediately (e.g. utilising Monodraught´s
controls capability) and in the medium-term to interoperable cash-generating
solutions across CMS as part of the new CMS Connected Solutions operational
and go to market model.
The acquisition significantly enhanced the Group's capability in service
provision, controls and data management, bringing additional innovation
capability to CMS. This has accelerated the development of integrated heating
and cooling solutions across the Group's portfolio and underpinned the
significant growth opportunities across CMS, driven by environmental and
regulatory tailwinds, consistent with the Group's strategic focus on segments
that provide above-market growth rates.
The cash consideration amounted to £58.9m, which included an initial cash payment on acquisition of £57.4m and further cash payments post-acquisition totalling £1.5m (which were paid pre-31 December 2025). The initial cash payment on acquisition of £57.4m was inclusive of the net cash acquired on completion of £2.8m, resulting in a net cash consideration of £56.1m.
The provisional fair value of the identifiable assets and liabilities at the
date of acquisition are as follows:
Fair
value
£m
Property, plant and equipment 0.8
Right-of-use assets 3.4
Intangible assets 18.5
Inventories 2.0
Trade and other receivables 4.7
Cash and cash equivalents 2.8
Corporation tax receivable 0.1
Deferred tax assets 0.4
Trade and other payables (1.8)
Lease liabilities (3.0)
Provisions (0.4)
Deferred tax liabilities (4.6)
Net identifiable assets 22.9
Goodwill on acquisition 36.0
Cash consideration 58.9
Customer relationships (£11.6m), customer order book (£1.9m), the
'Monodraught' brand (£1.8m) and patents/technology (£3.2m) have been
recognised as specific intangible assets as a result of this acquisition,
along with a corresponding deferred tax liability of £4.6m. The customer
relationships have been recognised with an estimated useful life of 13 years
due to the strength of Monodraught's relationships with key customers. The
remaining intangible assets have been recognised with estimated useful lives
of between 2 and 15 years, in line with Group policy and the Monodraught
business. Fair value adjustments principally relate to the recognition of
intangible assets and deferred tax arising on these adjustments.
The fair value of trade and other receivables was £4.7m. The gross amount of
trade and other receivables was £4.7m and it is expected that the full
contractual amounts can be collected.
Post-acquisition, Monodraught contributed £6.2m of revenue, £1.3m of
operating profit and £1.6m of EBITDA, which were included in the Group income
statement. If Monodraught had been acquired on 1 January 2025, the Group's
results for the twelve months ended 31 December 2025 would have shown revenue
of £614.9m, underlying operating profit of £96.6m and operating profit of
£70.2m.
Acquisition costs of £1.7m were expensed and are included in non-underlying
items in administration expenses, all of which were fully cash settled in the
year.
Davidson Holdings
On 26 September 2025, the Group acquired 100% of the voting rights and shares
of Davidson Holdings Limited ('Davidson'), a group of three businesses
consisting of Woodley (Reading), Talon (Gillingham) and Salamander
(Sunderland), for an enterprise value of £49.0m on a debt-free and cash-free
basis, fully funded via the Group's existing debt facilities.
The key brands for each of the three businesses are as follows:
· Woodley - Cistermiser water saving sanitary solutions &
Keraflo cold water tank control valves
· Talon - Talon pipe clips and fixings
· Salamander - Salamander shower and boosting pumps
These brands occupy leading market positions, primarily in the UK repair,
maintenance and improvement sectors of the residential and commercial segments
and are sold through plumbing and heating distributors and merchants. The
businesses benefit from sustainability-led growth drivers and are increasingly
focused on products and solutions that reduce water usage, consistent with
Genuit's Sustainable Solutions for Growth strategy, which are in growing
demand to address scarcity of water supply due to climate change.
The acquisition increases the breadth of Genuit's portfolio sold through the
merchant channel to plumbing and heating engineers and commercial contractors.
Growth synergies are anticipated from leveraging Genuit's broad routes to
market and demand creation and specification selling model, while productivity
and cost synergies are expected to be unlocked from 2026 onwards via the
deployment of GBS and the utilisation of Genuit's purchasing scale.
Davidson joined the SBS business unit on acquisition, sitting alongside the
Group's existing SBS brands of Polypipe, MecFlow, Manthorpe, Effast and
Terrain. From 1 January 2026, the Group will report in the simplified
structure of two divisions and the Davidson businesses will report in the
Water Division, which represents the combination of the SBS and WMS Business
Units.
The cash consideration amounted to £60.6m, which included an initial cash
payment on acquisition of £58.7m and further cash payments post-acquisition
totalling £1.9m (which were paid pre-31 December 2025). The initial cash
payment on acquisition of £58.7m was inclusive of the net cash acquired on
completion of £11.1m, resulting in a net cash consideration of £49.5m.
Post-acquisition, Davidson contributed £7.4m of revenue, £1.1m of operating
profit and £1.5m of EBITDA, which were included in the Group income
statement. If Davidson had been acquired on 1 January 2025, the Group's
results for the twelve months ended 31 December 2025 would have shown
revenue of £625.6m, underlying operating profit of £96.4m and operating
profit of £70.4m.
Acquisition costs of £1.4m were expensed and are included in non-underlying
items in administration expenses, all of which were fully cash settled in the
year.
The provisional fair value of the identifiable assets and liabilities at the
date of acquisition are as follows:
Fair
value
£m
Property, plant and equipment 1.7
Right-of-use assets 2.4
Intangible assets 29.3
Inventories 4.6
Trade and other receivables 7.5
Cash and cash equivalents 11.1
Trade and other payables (8.0)
Lease liabilities (1.7)
Provisions (0.8)
Deferred tax liabilities (7.6)
Net identifiable assets 38.5
Goodwill on acquisition 22.1
Cash consideration 60.6
Customer relationships (£23.8m) and the key Davidson brands (£5.5m) have
been recognised as specific intangible assets as a result of this acquisition,
along with a corresponding deferred tax liability of £7.3m. Customer
relationships have been recognised with an estimated useful life of 19 years
due to the strength of Davidson's relationships with key customers. The brand
name intangible assets have been recognised with an estimated useful life of
15 years, in line with Group policy and the Davidson businesses. Fair value
adjustments principally relate to the recognition of these intangible assets
(and the corresponding deferred tax liability) and the fair value uplift of
inventories on acquisition of £1.2m, along with the deferred tax liability
arising on this adjustment of £0.3m.
The fair value of trade and other receivables was £7.5m. The gross amount of
trade and other receivables was £7.5m and it is expected that the full
contractual amounts can be collected.
If Monodraught and Davidson had been acquired on 1 January 2025, the Group's
results for the twelve months ended 31 December 2025 would have shown revenue
of £638.4m, underlying operating profit of £98.6m and operating profit of
£70.9m.
Acquisition-related cash flows comprised:
2025 2024
£m £m
Operating cash flows - settlement of acquisition costs
Monodraught 1.7 -
Davidson Holdings 1.4 -
Sky Garden - 0.3
Genuit UFH - 0.1
Plura - 6.5
Other - 0.7
3.1 7.6
2025 2024
£m £m
Investing cash flows - settlement of deferred and contingent consideration
Plura - 1.6
- 1.6
2025 2024
£m £m
Investing cash flows - acquisition of businesses net of cash at acquisition
Monodraught 56.1 -
Davidson Holdings 49.5 -
Sky Garden - 2.2
Genuit UFH - 3.0
105.6 5.2
12. Assets held-for-sale
2025 2024
Fair value Fair value
£m £m
Intangible asset - customer relationships - -
Property, plant and equipment 0.1 -
Inventories 0.7 -
Trade and other receivables 0.3 -
Assets held-for-sale 1.1 -
Trade and other payables (0.2) -
Liabilities held-for-sale (0.2) -
During the year ended 31 December 2025, the Board approved a plan to sell
Polydeck Limited, a subsidiary of the Genuit Group which is part of the WMS
segment, as it no longer meets the strategic objectives of the Group. The
entity has been actively marketed for sale and management are in discussion
with interested parties. Sale is expected within 12 months of the balance
sheet date, and as such, the assets and liabilities of the disposal group have
been classified as held-for-sale and presented as current on the consolidated
balance sheet.
The proceeds from the disposal are not expected to meet the carrying value of
the net assets and therefore an impairment loss has been recognised of £1.5m
to measure the assets and liabilities at FVLCD, this is presented as
non-underlying, see note 4. The carrying value of intangible assets
(customer lists) allocated to the disposal group of £1.2m has been impaired
to £nil with a £0.3m reduction in the corresponding deferred tax
liability. Property, plant and equipment have been impaired by £0.3m to
fair value of £0.1m.
13. Financial liabilities
31 December 31 December
2025 2024
£m £m
Non-current loans and borrowings:
Bank revolving credit facility - principal 175.0 121.5
- unamortised debt (0.9) (1.3)
issue costs
Private placement loan notes 50.0 25.0
Total non-current loans and borrowings 224.1 145.2
Cash and cash equivalents (44.8) (43.6)
Net debt (excluding lease liabilities) 179.3 101.6
31 December 31 December
2025 2024
£m £m
Other financial liabilities:
Trade and other payables 124.8 128.2
Lease liabilities 28.8 27.6
153.6 155.8
On 22 July 2025, the Group exercised the option to extend the
Sustainability-Linked Revolving Credit Facility (RCF) to 9 August 2028,
securing a facility of £310.3m to August 2027 and £285.6m to August 2028,
with an uncommitted accordion facility of up to £50.0m. Subsequently an
agreement was signed on 25 September 2025 that increased the committed RCF
facility to £350.0m for the term. At 31 December 2025, the amount drawn on
the RCF was £175.0m (2024: £121.5m). Interest is payable on the RCF
facility at SONIA plus a margin of between 1.15% and 2.85% dependant on the
Group's leverage and ESG targets. At 31 December 2025 this was SONIA plus
1.825% (2024: 1.625%).
On 24 September 2025 the Note Purchase and Private Shelf Agreement originally
dated 10 August 2022 was amended and restated, extending the uncommitted
facility to 9 August 2028 for an amount of $180.0m, c.£133m (previously
£125.0m). The Group has £25.0m issued loan notes from the original
agreement dated 10 August 2022 with a repayment date of 9 August 2029, and on
20 October 2025, a further £25.0m of loan notes were issued from the amended
shelf agreement, with a repayment date of 20 October 2032, leaving an
uncommitted facility of c.$145m at 31 December 2025 (c.£107m). Interest on
loan notes is fixed at 4.44% and 5.92% respectively per annum for the period
of the loan term.
Debt issue costs of £0.4m in respect to the above amendments have been
incurred during the year. These costs have been capitalised and are being
amortised to the income statement as finance costs over the term of the
facility.
At 31 December 2025, the Group had available, subject to covenant headroom,
£175.0m (2024: £228.6m) of undrawn committed borrowing facilities in respect
of which all conditions precedent had been met.
The Group is subject to a number of covenants in relation to its bank
borrowings which, if breached, would result in immediate repayment. These
covenants specify certain maximum limits in terms of net debt, excluding lease
liabilities, as a multiple of pro-forma EBITDA and interest cover.
2025 2024
£m £m
Pro-forma EBITDA (12 months preceding the Balance Sheet date)
Underlying operating profit 94.4 92.2
Depreciation of property, plant and equipment (owned) 21.0 19.2
Amortisation of intangible assets not arising on business combinations 0.8 0.7
Unwind of discount on lease liabilities (1.8) (1.6)
Share-based payments charge 2.5 2.9
116.9 113.4
Underlying EBITDA from acquisitions
6.3 (0.7)
123.2 112.7
At 31 December 2025, the Group was not in breach of any bank covenants. The
covenant position was as follows:
Covenant requirement Position at 31 December
Covenant 2025
Interest cover (Underlying operating profit excluding share-based payment >4.0:1.0 9.7:1.0
expense and including unwind of discount on lease liabilities: finance costs
excluding finance revenue, debt issue cost amortisation and unwind of discount
on lease liabilities)
Leverage (Net debt excluding lease liabilities and unamortised debt issue <3.0:1.0 1.5:1.0
costs: pro-forma EBITDA)
14. Reconciliation of profit before tax to cash generated from operations
2025 2024
£m £m
Operating activities
Profit before tax 58.2 46.3
Finance costs 5 12.4 12.9
Finance revenue 5 (0.9) -
Operating profit 69.7 59.2
Non-cash items:
Research and development expenditure credit (1.6) (1.5)
Software supplier dispute (underlying) - (0.9)
Employment matters (underlying) - (0.5)
Non-underlying items: 4
- unwind of inventory fair value adjustment 1.5 -
- employment matters - (1.1)
- product liability claim (0.2) 0.1
- restructuring costs 5.1 1.8
- acquisition related costs 3.1 1.1
- systems and process transformation costs 1.3 1.1
- software supplier dispute - 4.3
- profit on disposal of property, plant and equipment (1.5) (1.1)
- amortisation of intangible assets 13.7 14.4
- impairment of intangible assets held-for-sale 1.2 -
- impairment of property, plant and equipment held-for-sale 0.3 -
- impairment of right-of-use property 0.2 -
- impairment of goodwill - 12.4
Depreciation of property, plant and equipment 9 21.0 19.2
Depreciation of right-of-use assets 10 7.7 7.1
Amortisation of internally generated intangible assets 0.8 0.7
Share-based payments 2.5 2.9
Cash non-underlying items:
- settlement of acquisition related costs (3.1) (7.6)
- settlement of software supplier dispute (3.9) -
- settlement of restructuring costs (4.2) (2.2)
- settlement of other exceptional costs (1.1) (2.9)
Operating cash flows before movement in working capital 112.5 106.5
Movement in working capital:
Receivables 4.9 (5.1)
Payables (11.6) 11.0
Inventories 8.3 3.1
Cash generated from operations 114.1 115.5
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