REG - Lords Group Trading - Final Results
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RNS Number : 0657F Lords Group Trading PLC 20 May 2026
20 May 2026
Lords Group Trading plc
('Lords', the 'Company' or the 'Group')
Final Results
Continued strategic progress with increased diversification and operational
leverage through greater national and digital presence
Lords (AIM:LORD), a leading distributor of building materials in the UK, today
announces its audited final results for the year ended 31 December 2025
('FY25' or the 'year').
FY25 Financial Performance
ADJUSTED RESULTS FY25 FY24 Change
Revenue £472.8m £436.7m +8.3%
Adjusted EBITDA(2) £21.0m £22.4m (6.2)%
Adjusted EBITDA margin 4.4% 5.1% (70) bps
Adjusted operating profit(3) £9.2m £10.4m (11.5)%
Adjusted profit before tax(3) £2.8m £3.8m (26.3)%
Adjusted diluted basic earnings per share(3) 1.14p 1.84p (38.0)%
Total dividend per share 0.52p 0.84p (38.0)%
STATUTORY RESULTS FY25 FY24 Change
Revenue £472.8m £436.7m +8.3%
Operating profit £1.1m £4.3m (74.4)%
Loss before tax £(5.2)m £(2.6)m £2.6m increase
Basic loss per share (2.68)p (1.19)p 1.49p increase
Net debt(4) £13.4m £32.4m £19.0m reduction
FY25 Highlights
Resilience in a tough market with financial progress
· Record revenue of £472.8 million, up 8.3%, with positive LFL(1)
growth (+0.7%) despite subdued end markets
· Merchanting LFL revenue growth of +3.1% driven by customer service
led model, reflecting market share gains alongside disciplined pricing
· Plumbing and Heating ('P&H') margins improved by 60bps, driven by
product mix and margin management
· Renewables revenue up 57%, increasing margin quality
· Adjusted EBITDA(2) of £21.0 million
· Net debt(3) reduced by 59% to £13.4 million, significantly
strengthening the balance sheet
Strategic progress and platform strengthened - strongly positioned for market
recovery
· Market leading e-commerce platform, CMO, acquired in June 2025,
materially accelerating digital capability and national reach
· Three new branch openings during the year, further expanding Lords
national network
· Structural cost actions taken, in particular following the P&H
strategic review, to streamline the business
· Increased operating leverage as volumes recover
Post Period End
· Opened a further dual site in Bury St Edmunds in March, housing
Lords Builders Merchants and Advance Roofing
· Agreed a new three-year, £65 million banking facility to provide
the financial flexibility to support our strategy to invest in organic growth
and pursue selective acquisitions, in a market where consolidation
opportunities are increasing
(1) Like-for-like (LFL) sales is a measure of growth in sales, adjusted for
new, divested and acquired locations such that the periods over which the
sales are being compared are consistent.
(2) Adjusted earnings before interest, tax, depreciation and amortisation and
impairment charges, inclusive of property gains and losses, excluding
adjusting items (note 6).
(3) Adjusted operating profit, adjusted profit before tax and adjusted diluted
earnings per share is operating profit, profit before tax and diluted earnings
per share excluding adjusting items.
(4) Net debt defined as cash less borrowings before lease liabilities
Shanker Patel, Chief Executive Officer of Lords, commented:
"Despite a challenging backdrop, Lords made further progress in positioning
the Group for growth. We grew revenue by 8.3%, reduced net debt by 59%, opened
three new Merchanting branches and completed the acquisition of CMO, which
broadened our customer reach and significantly strengthened our digital
capability.
"Whilst market conditions are likely to remain subdued in the near term, with
ongoing uncertainty around inflation and interest rates, we have built a more
diversified, more scalable business and the Group is now better positioned
operationally and strategically than at any point in its recent history.
Supported by our new banking facilities, we have the financial flexibility to
continue investing selectively as opportunities arise.
"As the market recovers, we expect a disproportionate improvement in
profitability driven by operating leverage across both our branch network and
digital platform. We are confident that the strategic progress made in FY25
will translate into enhanced returns and sustainable shareholder value
creation over the medium term."
FOR FURTHER ENQUIRIES:
Lords Group Trading plc Via Burson Buchanan
Shanker Patel, Chief Executive Officer Tel: +44 (0) 20 7466 5000
Stuart Kilpatrick, Chief Financial Officer
Cavendish Capital Markets Limited Tel: +44 (0)20 7220 0500
(Nominated Adviser and Joint Broker)
Ben Jeynes / Seamus Fricker (Corporate Finance)
Julian Morse / Matt Lewis / Henry Nicol (Sales and ECM)
Berenberg (Joint Broker) Tel: +44 (0)20 3207 7800
Matthew Armitt / Harry Nicholas / Detlir Elezi
Burson Buchanan Tel: +44 (0) 20 7466 5000
Henry Harrison-Topham / Stephanie Whitmore / Abby Gilchrist LGT@buchanan.uk.com (mailto:LGT@buchanan.uk.com)
Notes to Editors:
Lords is a specialist distributor of building, plumbing, heating and DIY
goods. The Group principally sells to local tradesmen, small to medium sized
plumbing and heating merchants, construction companies and retails directly to
the general public.
The Group operates through the following three divisions:
Merchanting: supplies building materials and DIY goods through its network of
merchant businesses and online platform capabilities. It operates both in the
'light side' (building materials and timber) and 'heavy side' (civils and
landscaping), through 33 locations in the UK.
Plumbing and Heating: a specialist distributor in the UK of plumbing and
heating products to a UK network of independent merchants, installers and the
general public. The division offers its customers an attractive proposition
through a multi-channel offering. The division operates over 16 locations
enabling nationwide next day delivery service.
Digital: CMO Superstores provides an online route to market from nine
specialist websites for construction and plumbing & heating customers.
Lords was established in 1982 as a family business with its first retail unit
in Gerrards Cross, Buckinghamshire. Since then, the Group has grown to a
business operating from 51 sites.
For additional information please visit www.lordsgrouptradingplc.co.uk
(http://www.lordsgrouptradingplc.co.uk/)
CHAIR'S STATEMENT
Overview
This was a year of strategic and operational progress for the Group,
contributing to a resilient financial performance in a market where other
market participants have struggled. Our customer-service led model
differentiates us and has enabled the Group to grow revenue without having to
chase volume through aggressive pricing.
Even so, inflationary pressures on some key costs, notably Employer's National
Insurance, the National Minimum Wage and property costs, have affected our
profitability and cash flow in the year. The Board and management have
therefore remained tightly focused on costs, managing cash and on
strengthening the balance sheet.
At such times, it can be tempting to pause strategic investment. However, we
believe strongly that the Group has substantial growth potential and it is
incumbent on us to continue to deploy our capital selectively, so we are in an
even better position as the market recovers. The three new Merchanting
branches we opened in the year, and a fourth location opened post period end,
are testament to this.
The Board was also pleased to approve the acquisition of CMO, which has
significantly accelerated the Group's digital strategy, and we are excited by
the possibilities it presents. The UK building materials market remains
highly fragmented and underpenetrated from a digital perspective. We believe
CMO presents a compelling opportunity to capture market share through a hybrid
model, combining local service excellence with national digital reach.
Dividends
The Board recognises the importance of dividends to our shareholders, as well
as our obligation to balance the dividend payout as part of a wider capital
allocation policy in managing cash and continuing to invest such that the
business delivers greater returns to shareholders in the years ahead. We
have therefore maintained our policy of scaling the dividend in line with
adjusted earnings per share. While this inevitably means dividends are lower
in more difficult years, it will also result in dividend progression as the
market recovers.
At the half year, we held the interim dividend steady at 0.32 pence per
share. Adjusted diluted earnings per share for the year was 38% lower at
1.14 pence (FY24: 1.84 pence) and the Board has therefore recommended a final
dividend of 0.20 pence per share (FY24: 0.52 pence), to give a total in
respect of the year of 0.52 pence (FY24: 0.84 pence). Information on payment,
record and ex‑dividend dates can be found in the Financial Review.
People and culture
Our people and culture provide significant competitive advantages for us.
While the number of colleagues we employ has nearly doubled over the last five
years, Shanker Patel and his team have worked hard to maintain the family and
entrepreneurial culture of the business and with it the high levels of
employee engagement and motivation. This in turn enables us to deliver
consistently strong service, so our customers keep coming back.
As Shanker explains in more detail in his Review, we have continued to invest
in our senior leadership and this is delivering real benefits. The
investment has largely been self-funded through efficiencies and has given us
greater strength in depth, supporting current performance, our ability to
identify and secure growth opportunities and our longer-term succession
planning.
Looking forward
While near-term market visibility remains limited and with the macroeconomic
uncertainty facing the whole world the near-term economic recovery supported
by interest rate reductions is uncertain. The Group however is significantly
better positioned than a year ago and capable of managing through these
difficult periods.
We have
· strengthened the Group's balance sheet, with banking facilities
for the medium term;
· expanded our network and capabilities;
· accelerated our digital strategy; and
· increased exposure to higher-growth, higher-margin categories
such as renewables.
As a result, and with enhanced capacity, we expect a disproportionate
improvement in profitability as demand recovers driven by operating leverage
across both our branch network and digital platform.
We believe the actions taken during FY25 will enable the Group to emerge from
the cycle as a stronger, more scalable business with structurally improved
earnings potential.
Gary O'Brien
Independent Non-Executive Chairman
19 May 2026
CHief executive officer's review
Structurally stronger, more diversified and positioned for growth
The actions we have taken during the year have significantly strengthened the
Group operationally and structurally. We are now a more diversified, more
scalable business, with enhanced capabilities that position us to capture
market share and improve returns when conditions normalise.
Navigating a cyclical downturn while upgrading the platform
FY25 was a challenging year, characterised by subdued construction activity,
sustained pricing pressure and higher employment costs. Against this
backdrop, we focused on what we could control: protecting margins, managing
costs, strengthening the balance sheet and investing selectively for growth.
While market conditions constrained short-term profitability, they also
provided an opportunity to upgrade the business. The result is that the Group
is better positioned operationally and strategically than at any point in its
recent history.
Resilient performance and disciplined execution
Group revenue increased by 8.3% to £472.8 million, supported by a 0.7%
like-for-like('LFL') uplift and contributions from new branches and CMO. This
reflects the strength of our customer relationships and the effectiveness of
our decentralised operating model.
Merchanting delivered revenue growth of 6.0% (+3.1% LFL) despite softer
trading conditions in the second half, while Plumbing & Heating revenues
were resilient as the core boiler market remained flat. Revenues increased
by 57% in renewables, as Ultimate Renewables continues to perform strongly and
is becoming an increasingly important contributor to the division's mix and
margin profile.
Adjusted EBITDA (including property gains) was £21.0 million (FY24: £22.4
million), with margin at 4.4% (FY24: 5.1%). The margin reduction reflects a
combination of market-driven pricing pressure, increased employment costs and
targeted investment to position the Group for improved profitability as
volumes recover.
Building a multi-channel platform
The acquisition of CMO in June 2025 was a key strategic milestone and a
transformational step in our evolution. CMO is a market‑leading e-commerce
platform serving homeowners and trade customers nationwide. It provides
scalable digital infrastructure, advanced data capability and national reach,
enabling us to serve customers beyond our physical branch footprint.
We are building a multi-channel distribution platform that combines:
· local branch density and service excellence;
· national digital reach; and
· an expanding specialist product range.
This model enhances customer experience while improving asset utilisation and
margin potential. Integration is already creating opportunities to:
· expand product ranges across channels;
· leverage Group supplier relationships;
· improve pricing through data insight; and
· selectively fulfil digital demand through our branch network.
Strategy
Our long-term strategy remains unchanged: growing our geographical footprint,
product range and digital revenues through disciplined organic expansion and
selective acquisitions, and continued investment in our '3Ps' - people, plant
and premises. We allocate capital conservatively, targeting attractive
returns while maintaining prudent leverage.
Geographical expansion
During FY25, we opened three Merchanting branches in Mansfield (A.W. Lumb),
Maidstone (George Lines) and Bicester (a dual site housing Lords Builders
Merchants and Advance Roofing). Post year end, we opened a further dual site
in Bury St Edmunds. All branches have traded in line with expectations,
reinforcing our confidence in measured network expansion.
Product range extension
Our decentralised structure enables branches to identify and introduce locally
differentiated products, supporting customer retention and margin resilience.
In P&H, distribution agreements signed in FY24 have strengthened our
boiler mix and supported rapid growth in renewables, including air source heat
pumps.
CMO enhances our product breadth considerably. On acquisition by the Group,
CMO offered over 140,000 SKUs; we have since expanded this by approximately
15,000 products, incorporating boilers and spares from the P&H
portfolio. Leveraging Group supplier relationships will further broaden the
range and improve purchasing efficiency.
Enhancing digital capabilities
Digital capability is central to our evolution. We continue to invest in
e-commerce and process automation, with the objective of increasing digital
revenues as a proportion of Group sales over the medium term. For example,
the customer portal introduced in APP in FY24 gained traction during FY25,
improving customer experience and driving operational efficiency.
CMO materially accelerates our digital agenda. It brings scalable technology
infrastructure, advanced data analytics capability and expertise in
performance marketing. To embed best practice across the Group, we have
established a technology forum led by CMO, facilitating cross-divisional
collaboration in areas such as pricing insight, customer data utilisation and
AI-enabled workflow tools.
Our 3Ps - People, Plant and Premises
Our people remain the foundation of the Group. I thank all colleagues for
their commitment during a demanding year. We welcomed over 100 new
colleagues from CMO, whose digital expertise complements our existing
operational strengths.
We continued to strengthen our senior leadership capability. Steve
Durdant-Hollamby leads Merchanting, Matt Webber joined as COO of P&H in
September 2025 and has already enhanced commercial focus within the division,
and Dean Murray, CEO of CMO, joined the Group's Operating Board, broadening
digital and e-commerce expertise at Group level.
Investment in plant includes ongoing deployment of systems and digital tools
to drive efficiency. In P&H, Podfather was introduced to enhance delivery
tracking, customer communication and workflow management, reducing
administrative friction and improving service quality.
In premises, we are investing to support growth and rationalisation. Ultimate
Renewables is relocating to a substantially larger site in 2026 to accommodate
expansion.
Following a strategic review of P&H completed at the start of 2026, we
will rationalise distribution centres from seven to four. This programme will
enhance stock control, improve service consistency and increase operating
efficiency.
Strong financial position
Cash generation and balance sheet management were priorities throughout the
year. Net debt, excluding leases, reduced significantly in more than halving
to £13.4 million (31 December 2024: £32.4 million). The sale and leaseback
of four operating properties generated £13.1 million of gross proceeds and
working capital was carefully managed during the year. On 2 April 2026, with
the support of our banking group, we agreed a new three-year, £65 million
refinancing, which provides the financial flexibility to support our strategy
to invest in organic growth and pursue selective acquisitions, in a market
where consolidation opportunities are increasing. The Group enters FY26 with a
substantially strengthened balance sheet and significant liquidity.
Clear priorities for FY26
Our priorities for FY26 are clear:
· driving like-for-like sales growth in Merchanting;
· enhancing P&H margins through mix and efficiency;
· scaling CMO and embedding digital capability across the Group;
and
· maintaining disciplined capital allocation.
Outlook and medium-term potential
Market conditions remain subdued in the near term, with ongoing uncertainty
around inflation and interest rates. However, the Group is materially better
positioned than a year ago. We have:
· strengthened our balance sheet;
· expanded our digital capability;
· accelerated renewables growth; and
· rationalised our cost base.
As volumes recover, we expect to benefit from significantly increased
operating leverage as a result of the strategic progress made during the
year. With much of our cost base now established, incremental revenue should
translate into a disproportionate increase in profitability.
We are therefore confident that the strategic progress made in FY25 will
translate into enhanced returns and sustainable shareholder value creation
over the medium term.
Shanker Patel
Chief Executive Officer
19 May 2026
Financial review
The Group delivered a solid financial performance in FY25 despite challenging
market conditions, particularly in the second half of the year. Our focus on
pricing discipline and customer service helped to protect gross margins and we
continued to carefully control overheads, in the face of cost pressures. We
ended the year with a strong balance sheet, following the sale and leaseback
transaction in April 2025, giving us the financial strength to continue
selective investment in organic and acquisitive growth initiatives.
Revenue
Group revenue was a record at £472.8 million (FY24: £436.7 million), up
8.3%. On a LFL basis, revenue was 0.7% higher, with the difference reflecting
the acquisition of CMO in June 2025 and three new branches opened during the
year.
Merchanting had a strong first six months in FY25 but trading was affected by
the market backdrop, combined with prolonged pre-Budget uncertainty in H2 FY25
that ultimately led to the deferral of end-customer decisions. Revenue in the
year grew by 6.0% to £227.1 million (FY24: £214.3 million), with the
division's LFL growth of 3.1% indicating increased market share.
P&H was resilient in a flat boiler market, with revenue 1.1% lower in FY25
at £219.9 million (FY24: £222.4 million). LFL revenue was 1.6% down on the
prior year. Renewables revenues continued to grow strongly, with a 57%
increase.
The Group acquired CMO on 6 June 2025. It successfully implemented its plan to
rebuild its supply chain post-acquisition, resulting in an improving trends in
revenues and a profitable second half of the year. In total, the Digital
division contributed £25.8 million to Group revenue for the year.
Gross margin
Gross margins across the Group improved slightly to 19.7% (FY24: 19.5%). At a
divisional level, gross margin improved by 60 basis points in Plumbing &
Heating following strategic positioning. Merchanting margin reduced by 70
basis points as our competition looked to gain market share, particularly in
the second half.
Operating expenses
Adjusted operating expenses in the year were £73.4 million (FY24: £64.6
million) and the main movements are set out below.
£m
2024 64.6
Acquisitions / new branches 7.0
ER's National Insurance / NMW 0.7
LFL increase 1.1
2025 73.4
Strategic expansion of the business added £7.0 million to overheads, through
the three new Merchanting branches opened in FY25, the addition of operating
expenses from CMO (acquired in June 2025) and the full-year impact of Ultimate
Renewables (acquired in October 2024). Changes in the rate of Employer's
National Insurance and National Minimum Wage increases increased operating
expenses by £0.7 million. Excluding these items, underlying costs increased
by 1.7%, despite inflationary pressure as our supply chain sought to pass on
their own cost increases.
Adjusted EBITDA
Adjusted EBITDA was £21.0 million (FY24: £22.4 million). This includes
property gains of £1.4 million (FY24: £1.8 million), shown on the face of
the income statement. The gain in FY25 arose from the sale and leaseback of
four operating properties, for gross proceeds of £13.1 million. In FY24,
the gain of £1.8 million primarily related to a lease surrender premium for
our Park Royal site. Excluding property gains and losses, adjusted EBITDA
was £19.6 million (FY24: £20.6 million).
The table below shows adjusted EBITDA by division:
FY25 FY25 FY24 FY24
£m margin £m margin
Merchanting 12.5 5.5% 14.4 6.7%
Plumbing and Heating 8.5 3.9% 8.0 3.6%
Digital - - - -
Total Group 21.0 4.4% 22.4 5.1%
Adjusted operating profit which includes the charge for depreciation and
amortisation, was £9.2 million in FY25 (FY24: £10.4 million).
Adjusting items
Adjusting items before tax amounted to £8.0 million (FY24: £6.4 million),
comprising:
· Amortisation of acquired intangibles: £3.4 million (FY24: £3.3
million);
· Share-based payments: £0.2 million (FY24: £0.8 million);
· Exceptional items: £1.3 million (FY24: £0.5 million), which
primarily related to restructuring costs;
· Branch right of use asset impairment charges in relation to 9
branches where the carrying value of the branch's tangible and right of use
assets exceeded the forecast value of future cash flows. The total non-cash
impairment charge was £2.7 million (FY24: £1.5 million). The majority of
these branches are forecast to deliver a positive EBITDA contribution in FY26
and beyond, based on prudent planning assumptions over the remaining lease
period;
· Non-cash goodwill and trade name impairment charge of £0.4
million (FY24: £nil) in respect of Chiltern Timber, which is being
repositioned under the Lords Builders' Merchants brand.
Net finance costs
Net finance costs were £6.3 million (FY24: £6.9 million), comprising:
· £3.1 million (FY24: £4.1 million) in respect of bank
borrowings, less bank interest received of £0.3 million (FY24: £0.3 million)
· £3.6 million (FY24: £2.8 million) related to lease liabilities
· a credit of £0.1 million (FY24: charge of £0.3 million) to
unwind discounted future liabilities
The sale and leaseback transaction in April 2025 contributed to reduced
interest on bank borrowings, as a result of lower net debt, and higher
interest on lease liabilities, due to the new leases on these properties.
Profit before tax and earnings per share
Adjusted profit before tax, which excludes the adjusting items above, was
£2.8 million (FY24: £3.8 million). Statutory loss before tax for the year
was £5.2 million (FY24: £2.6 million) reflecting non-cash impairments in
respect of right-of-use assets, goodwill and trade names referred to above
within adjusting items.
Adjusted diluted earnings per share was 1.14 pence (FY24: 1.84 pence). Basic
diluted loss per share was 2.68 pence (FY24: 1.19 pence).
Dividend
The Board has carefully considered the interests of the Group's stakeholders
and continued to follow its policy of scaling the full-year dividend in line
with adjusted earnings per share.
The Board has therefore recommended a final dividend of 0.20 pence per share
(FY24: 0.52 pence per share), which will be paid on 6 July 2026 to
shareholders on the register at the close of business on 29 May 2026. The
Company's shares will be marked ex-dividend on 28 May 2026.
We paid an unchanged interim dividend of 0.32 pence per share (H1 FY24: 0.32
pence per share) in October 2025. The total dividend declared in respect of
FY25 is therefore 0.52 pence per share (FY24: 0.84 pence per share), which is
2.2 times covered by adjusted earnings per share (FY24: 2.2 times). The cash
cost of the total dividend in respect of FY25 is £0.9 million (FY24: £1.4
million).
At the year end, the Company had distributable reserves of £13.6 million (31
December 2024: £14.2 million).
Debt financing and liquidity
On 2 April 2026 the Group refinanced its banking facilities, which are
committed until 1 April 2029, with two one-year extension options. The
facilities comprise a £20.0 million committed revolving credit facility
('RCF') and a £45.0 million receivables financing facility.
At 31 December 2025, the Group had net debt (defined as borrowings less cash
and cash equivalents, and before recognising lease liabilities) of £13.4
million (31 December 2024: £32.4 million), headroom of £46.5 million within
its debt facilities (31 December 2024: £52.3 million) and a further £15.0
million of accessible cash (31 December 2024: £10.3 million). Had the new
facilities been in place, the Group would have had £51.5 million of available
liquidity.
Cash flow
Net cash generated by operating activities was £29.4 million (FY24: £16.8
million). Operating cash conversion, which is the ratio of operating cash flow
to adjusted operating profit was 317% (FY24: 71%) due to strong working
capital management and reflecting the proceeds of property disposals.
The net inflow from investing activities was £6.3 million (FY24: £1.0
million outflow), which comprised inflows of £13.1 million (FY24: £4.2
million) from the sale and leaseback, interest and a business disposal, net of
outflows on current and prior‑year acquisitions of £2.6 million (FY24:
£1.3 million). Capital expenditure was £3.1 million (FY24: £2.8 million),
largely relating to the three branch openings in the year. Investment in
systems and digital tools totaled £1.1 million (FY24: £1.1 million).
Overall, the Group achieved a reduction in net debt, before leases of £19.0
million (FY24: increase of £3.9 million).
Summary Balance sheet
31 December 31 December
2025 2024
£m £m
Tangible assets 9.6 14.1
Inventory 51.3 49.3
Trade receivables 54.8 61.9
Other working capital (81.7) (72.3)
Operating capital employed 34.0 53.0
Deferred consideration (1.2) (3.3)
Right-of-use and other net assets 94.1 90.3
Lease liabilities (71.5) (60.0)
Net debt (13.4) (32.4)
Net assets 42.0 47.6
Tangible assets reduced from £14.1 million at 31 December 2024 to £9.6
million. This largely reflects the sale and leaseback of freehold properties,
which was offset by an increase in other net assets. The Group also acquired a
long leasehold property valued at £1.2 million through the CMO acquisition.
Net debt reduced by £19.0 million to £13.4 million, reducing the ratio of
net debt to operating capital employed to 39.4% (31 December 2024: 61.1%).
Trade receivables of £54.8 million (31 December 2024: £61.9 million)
underpin the refinanced bank facilities and strong working capital management
reduced the ratio of working capital to sales to 5.2% (FY24: 9.0%).
Stuart Kilpatrick
Chief Financial Officer
19 May 2026
Consolidated statement of comprehensive income
For the year ended 31 December 2025
2025 2024
Adjusted Adjusting items Total Adjusted Adjusting items Total
(note 6) (note 6)
Note £m £m £m £m £m £m
Revenue 5 472.8 - 472.8 436.7 - 436.7
Cost of sales (379.8) - (379.8) (351.5) - (351.5)
Gross profit 93.0 - 93.0 85.2 - 85.2
Operating expenses (73.4) (1.5) (74.9) (64.6) (1.3) (65.9)
Property gains 1.4 - 1.4 1.8 - 1.8
Depreciation, amortisation and impairment (11.8) (6.6) (18.4) (12.0) (4.8) (16.8)
Operating profit 5 9.2 (8.1) 1.1 10.4 (6.1) 4.3
Finance income 0.3 - 0.3 0.3 - 0.3
Finance expense 7 (6.7) 0.1 (6.6) (6.9) (0.3) (7.2)
Profit/(loss) before tax 2.8 (8.0) (5.2) 3.8 (6.4) (2.6)
Tax 8 (0.5) 1.5 1.0 (0.5) 1.3 0.8
Profit/(loss) after tax 2.3 (6.5) (4.2) 3.3 (5.1) (1.8)
Other comprehensive income - - - - - -
Total comprehensive income 2.3 (6.5) (4.2) 3.3 (5.1) (1.8)
Total comprehensive income attributable
to:
Equity owners of the parent 2.1 (6.5) (4.4) 3.1 (5.1) (2.0)
Non-controlling interest 0.2 - 0.2 0.2 - 0.2
Total comprehensive income 2.3 (6.5) (4.2) 3.3 (5.1) (1.8)
Earnings per share
Basic earnings per share (pence) 9 1.14 (3.82) (2.68) 1.85 (3.04) (1.19)
Diluted earnings per share (pence) 9 1.14 (3.82) (2.68) 1.84 (3.03) (1.19)
The results for the period arise solely from continuing activities.
The condensed consolidated financial statements should be read in conjunction
with the accompanying notes.
Consolidated statement of financial position
As at 31 December 2025
31 December 2025 31 December 2024
Note £m £m
Non-current assets
Intangible assets 10 43.7 44.3
Property, plant and equipment 11 9.6 14.1
Right-of-use assets 12 56.8 52.7
Other receivables 0.2 0.1
Investments 0.1 0.2
110.4 111.4
Current assets
Inventories 51.3 49.3
Trade and other receivables 70.5 76.2
Cash and cash equivalents 13 15.0 10.3
136.8 135.8
Total assets 247.2 247.2
Current liabilities
Trade and other payables (97.8) (88.2)
Borrowings 13 (9.0) (12.0)
Lease liabilities 12 (8.8) (8.3)
Current tax liabilities (0.3) -
Provisions (0.1) -
(116.0) (108.5)
Non-current liabilities
Other payables (0.6) (1.6)
Borrowings 13 (19.5) (30.1)
Lease liabilities 12 (62.7) (51.7)
Provisions (1.8) (1.6)
Deferred tax liability (4.6) (6.1)
Total non-current liabilities (89.2) (91.1)
Total liabilities (205.2) (199.6)
Net assets 42.0 47.6
Equity
Share capital 0.8 0.8
Share premium 28.5 28.4
Merger reserve (10.0) (10.0)
Share-based payment reserve 1.3 1.5
Retained earnings 20.2 25.1
Equity attributable to owners 40.8 45.8
of the Parent Company
Non-controlling interest 1.2 1.8
Total equity 42.0 47.6
Consolidated statement of changes in equity
For the year ended 31 December 2025
£m Share capital Share premium Merger reserve Share-based payment reserve Retained earnings Equity attributable to owners of the parent company Non-controlling interest Total equity
At 1 January 2024 0.8 28.3 (10.0) 1.0 29.4 49.5 1.6 51.1
(Loss)/profit for the period and total
comprehensive (expense)/income - - - - (2.0) (2.0) 0.2 (1.8)
Share-based payments - - - 0.8 - 0.8 - 0.8
Exercise of share options - - - (0.3) 0.3 - - -
Issue of Ordinary share capital - 0.1 - - - 0.1 - 0.1
Put and call options over non-controlling interests - - - - 0.1 0.1 - 0.1
Dividends paid - - - - (2.7) (2.7) - (2.7)
As at 31 December 2024 0.8 28.4 (10.0) 1.5 25.1 45.8 1.8 47.6
(Loss)/profit for the period and total
comprehensive (expense)/income - - - - (4.4) (4.4) 0.2 (4.2)
Share-based payments - - - 0.2 - 0.2 - 0.2
Deferred tax recognised in equity - - - - 0.1 0.1 - 0.1
Exercise of share options - - - (0.4) 0.4 - - -
Issue of Ordinary share capital - 0.1 - - - 0.1 - 0.1
Put and call options over non-controlling interests - - - - 0.4 0.4 - 0.4
Acquisition of non-controlling interests - - - - - - (0.4) (0.4)
Dividends paid - - - - (1.4) (1.4) (0.4) (1.8)
As at 31 December 2025 0.8 28.5 (10.0) 1.3 20.2 40.8 1.2 42.0
Consolidated statement of cash flows
For the year ended 31 December 2025
2025 2024
£m £m
Cash flows from operating activities
Loss before tax (5.2) (2.6)
Adjusted for:
Depreciation of property, plant and equipment 2.1 2.3
Depreciation of right-of-use assets 9.3 9.4
Amortisation of intangible assets 3.8 3.7
Impairment charge 3.2 1.5
Profit on disposal of property, plant and equipment (1.5) (0.3)
Profit on sale of business - (0.4)
Share-based payment expense 0.2 0.8
Movement in provisions 0.2 -
Finance income (0.3) (0.3)
Finance expense 6.6 7.2
Operating cash flows before movements in working capital 18.4 21.3
(Increase)/decrease in inventories (1.5) 0.2
Decrease in trade and other receivables 5.9 5.8
Increase/(decrease) in trade and other payables 6.8 (10.0)
Cash generated by operations 29.6 17.3
Corporation tax paid (0.2) (0.5)
Net cash generated by operating activities 29.4 16.8
Cash flows from investing activities
Purchase of intangible assets (1.1) (1.1)
Business acquisitions (net of cash acquired) (2.1) (0.6)
Deferred consideration paid (0.5) (0.7)
Purchase of property, plant and equipment (3.1) (2.8)
Proceeds on disposal of property, plant and equipment 12.8 3.9
Interest received 0.3 0.3
Net cash received from investing activities 6.3 (1.0)
Cash flows from financing activities
Principal paid on lease liabilities (8.5) (8.4)
Interest paid on lease liabilities (3.6) (2.8)
Issue of share capital 0.1 -
Dividends paid to shareholders (1.4) (2.7)
Dividends paid to non-controlling interest (0.4) -
Purchase of non-controlling interest - (1.6)
Proceeds from borrowings 46.5 33.6
Repayment of borrowings (60.8) (39.4)
Bank interest paid (2.0) (3.2)
Interest paid on invoice discounting facilities (0.9) (0.8)
Net cash outflow from financing activities (31.0) (25.3)
Net increase/(decrease) in cash and cash equivalents 4.7 (9.5)
Cash and cash equivalents at start of year 10.3 19.8
Cash and cash equivalents at end of year 15.0 10.3
Notes to the financial statements
For the year ended 31 December 2025
1. General information
Lords Group Trading plc (the 'Company') is a public company limited by shares,
listed on AIM and incorporated and domiciled in England. The address of the
Company's registered office and principal place of business is Second Floor,
12-15 Hanger Green, London, England, W5 3EL.
The principal activity of the Company, together with its subsidiary
undertakings (the 'Group') throughout the period, is the distribution of
building materials, heating goods and DIY goods to local tradesmen,
large-scale developers, small and medium construction companies and retail
customers.
2. Accounting policies
2.1. Basis of preparation of Financial Statements
The consolidated Financial Statements have been prepared in accordance with
UK-adopted International Accounting Standards (IFRS).
The Financial Statements have been prepared on a going concern basis under the
historical cost convention, unless otherwise specified within these accounting
policies. The financial information is presented in Pounds Sterling and all
values are rounded to the nearest one hundred thousand (£0.1 million), except
when otherwise indicated.
The preparation of Financial Statements requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group and Company accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Financial Statements, are
disclosed in note 3.
The financial information set out in this document does not constitute the
Group's statutory accounts for the years ended 31 December 2025 or 2024 but is
derived from those accounts. Statutory accounts for 2024 have been delivered
to the registrar of companies. The auditors have reported on those accounts;
their reports were (i) unqualified, and (ii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006. Statutory accounts for 2025
will be delivered to the registrar of companies in due course. The auditors
have reported on those accounts; their reports were (i) unqualified, and (ii)
did not contain a statement under section 498 (2) or (3) of the Companies Act
2006. The financial statements for the year ended 31 December 2025 were
approved and authorised for issue by the Board of Directors on 19 May 2026.
This results announcement for the year ended 31 December 2026 was also
approved by the Board on 19 May 2026.
Change to the presentation of the consolidated statement of comprehensive
income
During the year, the Directors decided to change the way they present the
consolidated statement of comprehensive income to provide the reader with
supplemental data relating to the results of operations. The principal change
adopted is the presentation of the profits/losses in a three‑column format,
showing 'Underlying', 'Adjusting items' and 'Total' numbers. Items of income
and expense that are material by their size and/or nature and are not
considered to be incurred in the normal course of business are classified as
adjusting items on the face of the income statement within their relevant
category. Further details are provided later in this note and in note 6.
The Group presents profit/loss for the year before adjusting items as the
Directors believe that this shows the trends in the Group's business and gives
an indication of the Group's ongoing sustainable performance. The Directors
believe the changes also helps to simplify the reconciliation to the Group's
alternative performance measures (APMs). The APMs are consistent with how the
businesses' performance is planned and reported within the internal management
reporting to the Board.
2.2. Going concern
At 31 December 2025, the Group had £46.5 million of undrawn facilities and
£15.0 million of cash. In line with accounting standards, the Board has
considered cash flow projections over an extended period greater than 12
months from the date of approval of the Financial Statements, until December
2027.
The cash flow forecasts have been stress tested by considering the most likely
risks impacting the Group in a severe but plausible scenario and a reverse
stress test scenario. These are considered to be sales below the base case,
interest rate changes and additional operating expenses. The Group's cash flow
projections indicate covenants on facilities will not be breached unless,
instead of the anticipated growth, the Group's projected EBITDA falls by 38%
relative to the base case over a twelve month period. While unlikely to
occur, the Group also has mitigating actions at its disposal that it can take
in downside scenarios, such as delaying capital expenditure, restructuring to
reduce costs, improving inventory turns, exiting branches with below target
returns and to sell long leasehold properties. In considering the
sensitivity analysis, the Board was also mindful of the complementary
characteristics of the two divisions, with a seasonally stronger Merchanting
division between March and October, whereas Plumbing and Heating is typically
stronger during the winter months. The Board considers that this natural hedge
reduces the likelihood of the downside sensitivities.
Cash flow forecasts are reforecast in the event of a potential acquisition not
already in the forecast. The Group prepares weekly cash flow projections,
daily sales reports and monthly management accounts compared to budget with
key performance indicators, which together will provide an early warning
system to indicate whether any mitigating actions are necessary in any part of
the Group. In all reasonable scenarios, with timely mitigating actions, the
Group is projected to be compliant with its banking covenants with no material
uncertainties and the Board is satisfied that the Group has adequate resources
to continue operations for the foreseeable future. The Board therefore
considers it appropriate to continue to adopt the going concern basis in
preparing the Group and Company Financial Statements.
3. Significant management judgement in applying accounting policies and
estimation uncertainty
When preparing the Group's consolidated Financial Statements, management makes
a number of judgements, estimates and assumptions about the recognition and
measurement of assets, liabilities, revenue and expenses.
3.1. Significant management judgements
The following are the judgements made by management in applying the accounting
policies of the Group that have the most significant effect on these
consolidated Financial Statements.
Assessment of who has the risk and reward of ownership of non-controlling
interests with put and call options
A key area of judgement applied in the preparation of these Financial
Statements is determining whether the risks and rewards of ownership reside
with the non-controlling interests or the Group when an acquisition has put
and call options.
Where the pricing is at a variable price, the Group assesses the risks and
rewards that reside with the non-controlling interests. This is because the
exposure to any increase or decrease in the value of the business resides with
the non-controlling interest, as they will either retain the investment
indefinitely (if neither party exercises) or they can recover the fair value
of the business through the exercise price.
Where the exercise price is a fixed amount (or an amount that varies only for
the passage of time), then the risks and rewards reside with the Group. This
is because once the put and call become exercisable, one party will be
incentivised to exit because they benefit from doing so.
3.2. Estimation uncertainty
Information about estimates and assumptions that may have the most significant
effect on recognition and measurement of assets, liabilities, income and
expenses is provided below. Actual results may be substantially different.
Impairment of goodwill, intangible assets, tangible assets and right-of-use
assets
Under IAS 36, the Group is required to test goodwill annually for impairment,
and to assess its right‑of-use assets and property, plant and equipment for
any indicators of impairment. For impairment testing purposes, the Group has
determined that each branch is a separate cash‑generating unit (CGU) on the
basis that each branch has distinct assets at each location which are able to
generate cash inflows. As a result of continued softer market conditions and
in order to eliminate the judgement in assessing the indicators of impairment,
management has performed an impairment test for all CGUs by assessing whether
the carrying amount exceeds its recoverable amount.
As part of its review, the Group calculates the recoverable amount of
cash-generating units by estimating future cash flows using the latest
forecast information. The key assumptions involved in estimating the
recoverable amount include future performance and growth rates of the CGUs and
the discount rates used. These are underpinned by a number of judgements based
on management's expectation, historic performance, understanding of the market
environment, and assessment of the macroeconomic and industry conditions. The
future revenue and cash flow projections of the CGUs are inherently uncertain
and are considered most sensitive to changes in sector demand and wider market
conditions, which have been subdued over the last 12 months. Changing the
assumptions selected by management could significantly affect the amount of
any impairment.
For the individual branch right-of-use asset and property, plant and equipment
impairment assessment, the cash flows are extrapolated to cover the period to
the end of the lease term.
The results of the review indicated that £0.1m of goodwill and £0.3m of
intangible assets related to the acquisition of Chiltern Timber Supplies were
impaired. Impairment charges were also recorded against right-of-use assets at
seven branches within the Merchanting division and two branches within the
Plumbing and Heating division. Further details are set out in note 11.
4. Alternative performance measures
The Group uses various measures which are not defined by Generally Accepted
Accounting Principles (GAAP) under International Financial Reporting Standards
(IFRS). The alternative performance measures (APMs) should be considered in
addition to, and not as a substitute for, or superior to, the information
presented in accordance with IFRS, as APMs may not be directly comparable with
similar measures used by other companies. The Group believes that APMs, when
considered together with IFRS results, provide the readers of the Financial
Statements with complementary information to better understand and compare the
financial performance and position of the Group from period to period. The
adjustments are usually items that are significant in size and/or
non-recurring in nature. These measures are also used by management for
planning, reporting and performance management purposes. Some of the measures
form part of the covenant ratios calculation required under the terms of the
Group's borrowings. As APMs include the benefits of restructuring programmes
or the use of the acquired intangible assets but exclude certain significant
costs, such as amortisation of intangible assets, litigation, material
restructuring and transaction items, they should not be regarded as a complete
picture of the Group's financial performance, which is presented in its IFRS
results. The exclusion of adjusting items may result in underlying
profits/(losses) being materially higher or lower than IFRS earnings.
4.1. Income statement APMS
4.1.1. Adjusted EBITDA
2025 2024
£m £m
Operating profit 1.1 4.3
Depreciation 11.4 11.6
Amortisation 3.8 3.7
Impairment charge 3.2 1.5
EBITDA 19.5 21.1
Exceptional items 1.3 0.5
Share-based payments 0.2 0.8
Adjusted EBITDA 21.0 22.4
Less: Property gains (1.4) (1.8)
Adjusted EBITDA excluding property gains 19.6 (20.6)
4.1.2. Adjusted operating profit
2025 2024
£m £m
Operating profit 1.1 4.3
Amortisation of acquired intangible assets 3.4 3.3
Impairment charge 3.2 1.5
Exceptional items 1.3 0.5
Share-based payments 0.2 0.8
Adjusted operating profit 9.2 10.4
4.1.3. Adjusted profit before tax
2025 2024
£m £m
Loss before tax (5.2) (2.6)
Unwinding of discounting on deferred consideration and put and call options (0.1) 0.3
Amortisation of acquired intangible assets 3.4 3.3
Impairment charge 3.2 1.5
Exceptional items 1.3 0.5
Share-based payments 0.2 0.8
Adjusted profit before tax 2.8 3.8
4.2. Balance sheet and cash flow APMS
4.2.1. Net debt
2025 2024
£m £m
Borrowings (28.5) (42.1)
Cash and cash equivalents 15.0 10.3
Effective interest rate adjustment 0.1 (0.6)
Net debt (13.4) (32.4)
4.2.2. Adjusted cash generated by operating activities
2025 2024
£m £m
Net cash generated by operating activities 29.6 13.6
Exceptional items (1.3) 0.5
Adjusted cash generated by operating activities 28.3 14.1
4.2.3. Free cash flow
2025 2024
£m £m
Adjusted EBITDA 21.0 22.4
Working capital movement 11.2 (4.0)
Net capital expenditure 8.6 -
Principal and interest paid on lease liabilities (12.1) (11.2)
Operating cash flow 28.7 7.2
Corporation tax paid (0.2) (0.5)
Net interest paid (2.6) (3.7)
Free cash flow 25.9 3.0
4.2.4. Operating cash flow conversion
2025 2024
£m £m
Operating cash flow 28.7 7.2
Adjusted operating profit 9.2 10.4
Operating cash flow conversion 317.4% 71.0%
5. Segmental analysis
The Group operates through the following three divisions:
· Merchanting: supplies building materials and DIY goods through its
network of merchant businesses and online platform capabilities. It operates
both in the 'light side' (Building Materials and Timber) and 'heavy side'
(Civils and Landscaping), through 33 locations in the UK.
· Plumbing and Heating: a specialist distributor in the UK of heating
and plumbing products to a UK network of independent merchants, installers and
the general public. The division offers its customers an attractive
proposition through a multi-channel offering. The division operates from 16
locations enabling nationwide next day delivery service.
· Digital: CMO Superstores provides an online route to market from nine
specialist websites for construction and plumbing & heating customers.
Management currently identifies the Group's three service lines as its
operating segments. The Group's CODM is its Executive Directors, and they
monitor the performance of these operating segments, as well as deciding on
the allocation of resources to them. Segmental performance is monitored using
adjusted segment operating results. Inter-segmental sales are conducted on an
arm's length basis and are immaterial.
All of the Group's revenue was generated from the sale of goods in the UK for
both periods. No one customer makes up 10% or more of revenue in any period.
Merchanting Plumbing and Heating Digital Total
2025 £m £m £m £m
Revenue 227.1 219.9 25.8 472.8
Gross profit 59.1 28.8 5.1 93.0
Operating expenses (48.0) (20.3) (5.1) (73.4)
Adjusted EBITDA before property gains 11.1 8.5 - 19.6
Property gains 1.4 - - 1.4
Adjusted EBITDA 12.5 8.5 - 21.0
Depreciation, amortisation and impairment (8.3) (3.5) - (11.8)
Adjusted operating profit 4.2 5.0 - 9.2
Adjusting items (5.7) (2.2) (0.2) (8.1)
Operating profit/(loss) (1.5) 2.8 (0.2) 1.1
Finance income 0.3
Finance expense (6.6)
Loss before taxation (5.2)
Taxation 1.0
Loss for the year (4.2)
Additions to non-current assets 16.5 2.7 0.3 19.5
Merchanting Plumbing and Heating Total
2024 £m £m £m
Revenue 214.3 222.4 436.7
Gross profit 57.3 27.9 85.2
Operating expenses (44.7) (19.9) (64.6)
Adjusted EBITDA before property gains 12.6 8.0 20.6
Property gains 1.8 - 1.8
Adjusted EBITDA 14.4 8.0 22.4
Depreciation, amortisation and impairment (8.7) (3.3) (12.0)
Adjusted operating profit 5.7 4.7 10.4
Adjusting items (4.7) (1.4) (6.1)
Operating profit/(loss) 1.0 3.3 4.3
Finance income 0.3
Finance expense (7.2)
Loss before taxation (2.6)
Taxation 0.8
Loss for the year (1.8)
Additions to non-current assets 13.9 5.0 18.9
6. Adjusting items
Merchanting Plumbing and Heating Digital Total
2025 £m £m £m £m
Share-based payments 0.2 - - 0.2
Exceptional items:
Restructuring 0.2 0.3 - 0.5
Business combinations - 0.1 0.2 0.3
Adjustments to contingent consideration 0.2 0.3 - 0.5
Adjusting items within EBITDA 0.6 0.7 0.2 1.5
Amortisation of acquired intangible assets 2.3 1.1 - 3.4
Impairment charge 2.8 0.4 - 3.2
Adjusting items within operating loss 5.7 2.2 0.2 8.1
Unwinding of deferred consideration and put and call options (0.1)
Adjusting items within loss before taxation 8.0
Tax on adjusting items (1.5)
Adjusting items within loss after taxation 6.5
Merchanting Plumbing and Heating Total
2024 £m £m £m
Share-based payments 0.6 0.2 0.8
Exceptional items:
Restructuring 0.6 0.3 0.9
Profit on disposal of business - (0.4) (0.4)
Business combinations 0.1 0.1 0.2
Retention employment costs on acquisitions 0.1 0.2 0.3
Adjustments to contingent consideration (0.4) (0.1) (0.5)
Adjusting items within EBITDA 1.0 0.3 1.3
Amortisation of acquired intangible assets 2.2 1.1 3.3
Impairment charge 1.5 - 1.5
Adjusting items within operating loss 4.7 1.4 6.1
Unwinding of deferred consideration and put and call options 0.3
Adjusting items within loss before taxation 6.4
Tax on adjusting items (1.3)
Adjusting items within loss after taxation 5.1
During 2025, the Group restructured back-office functions in Merchanting and
Plumbing & Heating at a cost of £0.5 million (2024: £0.9 million),
mainly relating to redundancy settlements.
The costs associated with the business combinations have been expensed and
disclosed as adjusting items. The total expense, which amounts to £0.3
million (2024: £0.2 million), also includes costs associated with other
potential acquisitions which will not occur or had not occurred before the
balance sheet date. Where the business combinations include retention payments
to key staff as part of the acquisitions, the cost of these is expensed over
the period to which it relates. No costs were recognised in the year (2024:
£0.3 million).
In 2025, adjustments to contingent consideration payable in relation to
historic acquisitions resulted in a charge of £0.5 million (2024: credit of
£0.5 million) in the income statement. This includes the movement in put and
call options.
Further details of the impairment charge are set out in note 11.
The unwinding of deferred consideration and put and call options related to
acquisitions of A.W. Lumb, Direct Heating & Plumbing, Condell, and
Ultimate Renewables Supplies in previous years and amounted to a credit of
£0.1 million (2024: charge of £0.2 million).
7. Finance expense
2025 2024
£m £m
Bank loans and overdrafts 2.2 3.3
Invoice discounting facilities 0.9 0.8
Lease interest 3.6 2.8
Unwinding of discounting on deferred consideration and put and call options (0.1) 0.2
Unwinding of discounting on dilapidation provisions - 0.1
6.6 7.2
8. Taxation
8.1. Amounts recognised in the income statement
2025 2024
£m £m
Corporation tax
Current tax on loss for the year 0.8 1.3
Adjustments in respect of previous periods (0.5) (0.8)
0.3 0.5
Deferred tax
Originating and reversal of temporary differences (1.6) (1.7)
Adjustments in respect of previous periods 0.3 0.4
(1.3) (1.3)
Total tax credit for the year (1.0) (0.8)
The standard rate of corporation tax applied to reported profits/(losses) is
25% (2024: 25%).
8.2. Reconciliation of effective tax charge
The tax on the Group's profit before tax differs from the theoretical amount
that would arise using the rate applicable under UK corporation tax rules as
follows:
2025 2024
£m £m
Loss before taxation (5.2) (2.6)
Tax credit at 25% (2024: 25%) (1.3) (0.6)
Adjustments in respect of previous periods (0.2) (0.4)
Expenses not deductible 0.7 0.8
Income not taxable (0.2) (0.4)
Share-based payments - (0.2)
Total tax credit for the year (1.0) (0.8)
9. Earnings per share and dividends
9.1. Earnings per share
2025 2024
Basic and diluted earnings per share:
Loss from continuing activities (pence) (2.68) (1.19)
Weighted average number of shares for basic earnings per share (m) 166.2 165.8
Number of dilutive share options (m) 0.2 0.8
Weighted average number of shares for basic earnings per share (m) 166.4 166.6
Loss attributable to equity holders of the parent (4.4) (2.0)
Both the basic and diluted earnings per share have been calculated using the
earnings attributable to shareholders of the Parent Company, as the numerator,
meaning no adjustment to loss was necessary in either year. Statutory diluted
earnings per share calculation uses 166.2 million shares as the denominator as
dilutive shares would not increase loss per share.
The Group has also presented adjusted earnings per share. Adjusted earnings
per share have been calculated using earnings attributable to shareholders of
the Parent Company, adjusted for the after-tax effect of adjusting items (see
note 6).
2025 2024
£m £m
Loss attributable to equity holds of the parent (4.4) (2.0)
Adjusting items, net of tax 6.5 5.1
Adjusted earnings 2.1 3.1
Adjusted basic earnings per share
Earnings from continuing activities (pence) 1.14 1.85
Adjusted diluted earnings per share
Earnings from continuing activities (pence) 1.14 1.84
9.2. Dividends
During 2025, the Company paid dividends totalling £1.4 million (2024: £2.7
million) to its equity shareholders, representing a final dividend of 0.52
pence per share for 2024 (2024: 1.33 pence per share for 2023) and an interim
dividend of 0.32 pence per share (2024: 0.32 pence per share).
The Directors propose the payment of a final dividend for 2025 of £0.3
million (0.20 pence per share). As the distribution of dividends requires
approval at the shareholders' meeting, no liability in this respect is
recognised in these consolidated Financial Statements. No income tax
consequences are expected to arise as a result of this transaction at the
Parent Company level.
10. Intangible assets
Goodwill Customer relationships Trade names Software Total
£m £m £m £m £m
Cost
At 1 January 2024 18.4 34.7 3.7 2.5 59.3
Additions - - - 1.2 1.2
Acquired through business combinations 0.6 - - - 0.6
At 31 December 2024 19.0 34.7 3.7 3.7 61.1
Additions - - - 1.0 1.0
Acquired through business combinations 1.9 0.2 0.2 0.3 2.6
At 31 December 2025 20.9 34.9 3.9 5.0 64.7
Accumulated amortisation and impairment
At 1 January 2024 - (11.1) (1.1) (0.9) (13.1)
Amortisation charge - (3.0) (0.3) (0.4) (3.7)
At 31 December 2024 - (14.1) (1.4) (1.3) (16.8)
Amortisation charge - (3.0) (0.4) (0.4) (3.8)
Impairment (0.1) - (0.3) - (0.4)
At 31 December 2025 (0.1) (17.1) (2.1) (1.7) (21.0)
Net Book Value
At 31 December 2024 19.0 20.6 2.3 2.4 44.3
At 31 December 2025 20.8 17.8 1.8 3.3 43.7
Goodwill is systematically tested for impairment at each balance sheet date.
The Group has no assets with indefinite lives, other than goodwill. During
the year, goodwill was impaired by £0.1m and trade names by £0.3m in respect
of the Chiltern Timber business which will be merged into Lords Builders'
Merchants in 2026.
Software intangible assets include ERP, inventory management systems and other
related system enhancements of subsidiary undertakings, created by an external
development firm for the subsidiary's specific requirements. The assets on the
balance sheet as at 31 December 2025 have remaining amortisation periods of
between 2-10 years.
Cash-generating unit (CGU) assessment
Goodwill is tested annually for impairment and more frequently if indicators
of impairment arise. Other intangible assets are tested for impairment where
such indicators exist. Impairment is assessed by comparing the carrying amount
of each CGU (or group of CGUs) to its value-in-use, determined using
discounted cash flow projections.
Goodwill is allocated to the CGUs expected to benefit from the related
business combination. Where an acquired business operates under one of the
Group's established brands, goodwill is allocated to that branded CGU,
consistent with how synergies are realised and performance is monitored by
management. No individual CGU allocation is significant relative to the
Group's total goodwill balance.
The breakdown of the goodwill and related intangibles of each CGUs by
operating segment is:
2025 2024
£m £m
A.W.Lumb & Co. 11.3 12.0
Carboclass 15.0 16.4
Chiltern Timber 0.5 0.9
Condell 3.3 3.4
Merchanting 30.1 32.7
A P P Wholesale 4.7 5.4
Direct Heating & Plumbing 5.4 5.7
Ultimate Renewables 0.6 0.5
Plumbing and Heating 10.7 11.6
CMO 2.9 -
Digital 2.9 -
43.7 44.3
The total recoverable amount in relation to these CGUs at 31 December 2025 was
£173.3 million (2024: £253.5 million), which exceeds the market
capitalisation of the Group as at 31 December 2025. Chiltern Timber and
Condell CGUs have been valued based on fair value less costs of disposal
utilising a market based multiple valuation less transaction costs. All
other CGUs have been valued using their value-in-use. The value-in-use
calculations are based on five-year management forecasts with a terminal
growth rate applied thereafter, representing management's estimate of the
long-term growth rate of the sector served by the CGUs. The difference between
the recoverable amount and the market capitalisation is largely due to market
sentiment following challenging market conditions in the UK construction
sector and like-for-like revenue pressures impacting investor confidence.
The recoverable amounts of the CGUs in both 2025 and 2024 were in excess of
the carrying value of the net assets for all CGU's other than Chiltern Timber.
A goodwill was impairment of £0.1 million and trade name impairments of £0.3
million were recognised in respect of Chiltern Timber during the year.
The key assumptions, which are applicable to each CGU, in the cash flow
projections used to support the carrying amount of goodwill were as follows:
Merchanting Plumbing and Heating Digital
Five-year sales growth 7.9% - 8.5% 4.2% - 48.6% 23.4%
Terminal sales growth 2.0% 2.0% 2.0%
Discount rate 14.6% 14.6% 14.6%
The five‑year sales growth is based on the latest five‑year plans produced
by the businesses. This reflects the average growth rate each year over the
five years.
The terminal sales growth reflects the Group's overall growth expectations
based on the sectors in which the CGUs operate.
Management estimates the discount rate using pre-tax rates that reflect
current market assessments of the time value of money and risks specific to
the Group, being the pre-tax weighted average cost of capital (WACC). The
inputs used in the WACC calculation include risk-free rate, equity risk
premium and risk adjustment, and are based on information from third‑party
sources. The discount rates are stated on a nominal basis.
Sensitivity analysis
A reasonable change in a key assumption would not cause the carrying value of
any CGU to exceed its recoverable amount. The table below shows the amount of
headroom and the revised assumptions required to eliminate the headroom in
full at 31 December 2025. The headroom relates to the excess of the
recoverable amount over the carrying value of the goodwill, intangible assets
and other applicable net assets of the CGUs.
Recoverable amount of CGU Current headroom Terminal sales growth Discount rate
Merchanting £m £m % %
A.W.Lumb & Co. 34.4 19.1 14.1 15.3
Carboclass 51.4 16.5 8.8 10.7
Plumbing and Heating
A P P Wholesale 34.4 15.0 10.3 11.5
Direct Heating & Plumbing 11.5 3.4 1.8 2.2
Ultimate Renewables 24.9 23.7 19.8 20.8
Digital
CMO 12.7 13.0 11.2 11.7
11. Tangible assets
Land and buildings Land and building leasehold improvements Plant and equipment Total
£m £m £m £m
Cost
At 1 January 2024 13.5 7.5 10.3 31.3
Additions - 1.1 1.4 2.5
Reclassification 0.3 (0.3) -
Disposals (6.4) - (1.0) (7.4)
At 31 December 2024 7.1 8.9 10.4 26.4
Additions - 2.4 0.7 3.1
Acquired through business combinations - 1.2 0.1 1.3
Disposals (7.1) - (0.8) (7.9)
At 31 December 2025 - 12.5 10.4 22.9
Accumulated depreciation and impairment
At 1 January 2024 (0.6) (4.3) (6.2) (11.1)
Depreciation charge (0.2) (0.8) (1.3) (2.3)
Reclassification - 0.3 (0.3) -
Disposals 0.2 - 0.9 1.1
At 31 December 2024 (0.6) (4.8) (6.9) (12.3)
Depreciation charge - (0.7) (1.4) (2.1)
Impairment - - (0.1) (0.1)
Disposals 0.6 - 0.6 1.2
At 31 December 2025 - (5.5) (7.8) (13.3)
Net book value
At 31 December 2024 6.5 4.1 3.5 14.1
At 31 December 2025 - 7.0 2.6 9.6
In 2025, the Group disposed of freehold properties in Tamworth, Dewsbury,
Ilkeston and Luton within the Merchanting division, with a combined net book
value of £6.5 million at their fair value of £13.1 million and immediately
leased back at a market rental for a term of 15 years. In 2024, the freehold
property at Colnbrook site near Heathrow, with a book value of £6.0 million,
was sold at market value of £7.1 million and immediately leased back at a
market rental for a term of 15 years. These have been accounted for as a sale
at fair value, included within disposals, and as an addition to right-of-use
assets and lease liabilities.
Impairment test for property, plant and equipment, right-of-use assets and
other intangible assets
The Group reviews the carrying value of property, plant and equipment,
right-of-use assets and intangible assets (excluding goodwill) for indicators
of impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
The recoverable amount of the Group's CGUs is typically based on value-in-use
calculations. The value-in-use at 31 December 2025 was calculated using the
discounted present value of each CGU's expected future cash flows using
management's five‑year forecasts as the basis. Sales growth and increases
applied to costs are the key assumptions included when determining the
expected future cash flows of each CGU. These have been modelled based upon a
mixture of historical experience and expected future performance. A pre-tax
discount rate of 14.6% (2024: 16.6%) was used to calculate the present value.
During the year, a total impairment charge of £3.2 million (2024: £1.5
million) was recognised. The majority of this related to branch right-of-use
assets in respect of nine sites (2024: three) amounting to £2.7 million
(2024: £1.5 million). The total recoverable amount of the affected CGUs was
£9.3 million (2024: £2.8 million).
The balance of the impairment charge relates to goodwill (£0.1 million) and
trade names (£0.3 million) and Chiltern Timber and £0.1 million (2024:
£nil) in respect of property, plant and equipment.
The impairment loss was allocated to the assets of the CGU on a pro-rata basis
to their carrying amount, subject to the limitation that the carrying amount
of an asset cannot be reduced below the highest of fair value less costs of
disposal, value-in-use or zero. The remaining amount of the impairment loss
that would otherwise have been allocated to the right-of-use asset was
allocated pro rata to the other assets of the unit.
12. Leases and right-of-use assets
The Group leases offices, retail branches and warehouses (property leases) and
also enters into lease agreements for plant and equipment (non-property
leases). Property leases are typically made for fixed periods of up to 15
years but may have extension options as well. Non-property leases are
typically made for fixed periods of up to five years. Both property and
non-property leases are recognised as a right-of-use asset with a
corresponding lease liability at the date at which the leased asset is
available for use by the Group.
12.1. Amounts recognised in the consolidated statement of financial
position
Property leases Non-property leases Total
£m £m £m
Cost
At 1 January 2024 57.8 14.7 72.5
Additions 7.7 6.7 14.4
Acquired through business combinations 0.1 0.1 0.2
Lease remeasurements and modifications 1.8 (3.0) (1.2)
At 31 December 2024 67.4 18.5 85.9
Additions 8.7 6.7 15.4
Lease remeasurements and modifications 0.8 - 0.8
Disposals (2.5) (2.9) (5.4)
At 31 December 2025 74.4 22.3 96.7
Accumulated depreciation and impairment
At 1 January 2024 (18.5) (6.6) (25.1)
Depreciation charge (5.1) (4.2) (9.3)
Impairment (1.5) - (1.5)
Lease remeasurements and modifications 0.7 2.0 2.7
At 31 December 2024 (24.4) (8.8) (33.2)
Depreciation charge (5.7) (3.6) (9.3)
Impairment (2.7) - (2.7)
Disposals 2.5 2.8 5.3
At 31 December 2025 (30.3) (9.6) (39.9)
Net book value
At 31 December 2024 43.0 9.7 52.7
At 31 December 2025 44.1 12.7 56.8
During the year, an impairment charge of £2.7 million (2024: £1.5 million)
was recognised in respect of the right-of-use assets of nine sites (2024:
three). See note 11 for further disclosure.
The split of lease liabilities between current and non-current is as follows:
2025 2024
£m £m
Current 8.8 8.3
Non-current 62.7 51.7
71.5 60.0
The total cash outflow for leases in the year was £12.1 million (2024: £11.1
million).
12.2. Amounts recognised in the consolidated statement of comprehensive
income
2025 2024
£m £m
Short-term and low-value operating lease rentals 1.6 0.2
Depreciation charge for right-of-use assets 9.3 9.3
Impairment of right-of-use assets 2.6 1.5
Interest expense (included in finance costs) 3.6 2.8
13. Cash and borrowings
2025 2024
£m £m
Current
Bank loans 0.5 -
Other loans 8.5 12.0
Non-current
Bank loans 19.5 30.1
Total borrowings 28.5 42.1
Cash and cash equivalents (15.0) (10.3)
Effective interest rate adjustment (0.1) 0.6
Net borrowings 13.4 32.4
A maturity analysis of the Group's borrowings is shown below:
2025 2024
£m £m
Less than one year 9.0 12.0
Greater than one year and less than five years 19.5 30.1
Total borrowings 28.5 42.1
Total accrued interest of £0.5 million (2024: nil) has been added to bank
loans and unamortised transaction costs of £0.4 million (2024: £0.6 million)
have been offset against the bank loans.
Unrestricted access was available at the reporting date to the following lines
of credit:
2025 2024
£m £m
Total facilities
Revolving credit facility 50.0 70.0
Invoice drawdown facility 25.0 25.0
75.0 95.0
Used at 31 December
Revolving credit facility 19.9 30.7
Invoice drawdown facility 8.5 12.0
28.4 42.7
Unused at 31 December
Revolving credit facility 30.1 39.3
Invoice drawdown facility 16.5 13.0
46.6 52.3
In 2025, financing facilities comprised a £70.0 million revolving credit
facility (RCF) and £25.0 million invoice financing facility (IFF) maturing on
5 April 2027. On 30 April 2025, in agreement with its banks, the Group reduced
the RCF by £20.0 million to £50.0 million.
On 2 April 2026, the Group successfully re-financed the RCF and the IFF with a
new £20.0 million revolving credit facility (the 'New RCF') and £45.0
million invoice financing facility (the New IFF) with two banks expiring on 1
April 2029. The new facilities include two uncommitted extension options of
one year each which would, subject to lender approval, extend the tenor of the
New RCF to four years or five years if exercised.
The RCF and New RCF contain covenants that require the ratio of adjusted
EBITDA to net debt (excluding lease liabilities) and the ratio of adjusted
EBITDA to net finance costs to remain within pre‑defined thresholds at each
quarter‑end date. Each testing date covers the results for the previous 12
months. As at 31 December 2025, the Group was in compliance with its most
recent covenant test and therefore continues to classify the borrowings under
the facility as non-current liabilities. The Group expects to comply with
the quarterly covenants within 12 months after the reporting date.
Funds borrowed under the RCF and New RCF bear interest at an annual rate of
between 2.0% and 2.8% and 2.0% and 3.4% respectively above the compounded
Sterling Overnight Index Average (SONIA), dependent on the Group's leverage
covenant. Undrawn funds on the RCF and New RCF bear interest at an annual rate
of between 0.70% and 0.98% and 0.70% and 1.19% respectively, both dependent on
the Group's leverage covenant.
Funds borrowed under the IFF and New IFF bear interest at an annual rate of
1.40% and 1.75% respectively above the Bank of England Base Rate.
The banking facilities are subject to cross guarantees from the relevant Group
undertakings, and secured by fixed and floating charges over the land,
tangible and other assets and insurances.
14. Business combinations
On 6 June 2025, the Group acquired the trade and assets of CMO Group Limited
('CMO'), following a CMO pre-pack administration process for cash
consideration of £1.8 million. CMO is a market-leading e-commerce platform
serving homeowners and trade professionals through a suite of specialist
superstore websites, disrupting the traditionally offline industry. The
acquisition brings a well-established digital platform, strong customer reach,
and a specialist product-led approach that complements both the Merchanting
and Plumbing and Heating divisions. This partnership allows us to blend
traditional merchanting strengths with cutting-edge digital capabilities.
The acquired business contributed revenues of £25.7 million and a loss before
tax of £0.3 million to the consolidated entity for the period from
acquisition to 31 December 2025. As a trade and asset acquisition of part of
the CMO Group, information is not available on CMO's contribution has the
acquisition had been completed on the first day of the financial year. The
following table summarises the fair value of assets acquired and liabilities
assumed at the acquisition date:
Fair Value
£m
Intangible assets 0.7
Property, plant and equipment 1.3
Inventories 0.6
Accruals (2.5)
Deferred taxation liability (0.2)
Total fair value (0.1)
Consideration 1.8
Goodwill 1.9
Acquisition costs totalled £0.2 million and are disclosed within operating
expenses in the statement of comprehensive income.
The net cash expended on the acquisition is as follows:
£m
Cash paid as consideration on acquisition 1.8
Less: cash acquired at acquisition -
Net cash movement 1.8
15. Post balance sheet events
On 2 April 2026, the Group successfully re-financed the RCF and the IFF with a
new £20.0 million Revolving Credit Facility (the 'New RCF') and £45.0
million invoice financing facility (the 'New IFF') with a syndicate of two
banks expiring on 1 April 2029. The new facilities include two uncommitted
extension options of one year each which would, subject to lender approval,
extend the tenor of the New RCF to four years or five years if exercised.
On 13 January 2026, the Group purchased the 3.6% minority interest held by one
of the former owners of Direct Heating and Plumbing for £0.5 million,
increasing the Group's ownership of this business to 93.6%.
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