REG - LPA Group PLC - Final Results for year ended 30 September 2025
30/01/2026 07:00
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RNS Number : 9945Q LPA Group PLC 30 January 2026
30 January 2026
LPA GROUP PLC
("LPA", the "Company" or the "Group")
Final Results for year ended 30 September 2025
LPA Group plc, the innovation‑led engineering specialist in electronic and
electro‑mechanical components and systems, is pleased to announce its Final
Results for the year ended 30 September 2025.
Financial Highlights
2025 2024
£000 £000
Order Entry 28,770 17,259
Order Book 32,498 25,274
Revenue 21,546 23,546
Operating Loss (592) (626)
Adjusted EBITDA* (50) 840
Loss before Tax (602) (593)
Basic Loss Per Share (2.64)p (2.46)p
Gearing** 21.5% 13.1%
(
*) Adjusted EBITDA is Operating Loss before Share Based Payments, Negative
Goodwill, Non-recurring items, Depreciation and Amortisation
** Net Debt as a % of Total Equity
Operating Highlights
New Chief Executive Officer: Philo Daniel-Tran joined the Group on 2 January
2025.
Acquisition: Successful acquisition of Eaton's Powertron business in March
2025, followed by the integration of the business into the Group.
Market diversification: Increased revenue from Aviation, Aerospace and Defence
to 28% (previously 25% in 2024 and 20% in 2023).
"One LPA": Since January 2025, the Group has focused on streamlining and
consolidating functions across all sites to be a more operationally effective
business. Through the reorganisation, LPA Group has eliminated the divisional
structure and created a unified company under the "One-LPA" vision, leveraging
capabilities groupwide and creating a solid foundation to accelerate growth.
Rebrand and new Executive team: The Group has also energised its executive
team with new appointments, and together with our rebrand, it resets our
strategic focus on innovation, quality and delivery of cost-effective
engineering solutions globally.
Delivering profitability: The reorganisation and harmonisation into a unified
multisite group is already yielding impressive results. For the first time in
over four years the business was profitable in the first quarter. This
progress gives us confidence that we will align with expectations for this
fiscal year.
Robert B Horvath - Chairman commented:
"This has been a formative year for the LPA Group as we rebalanced,
restructured and refinanced the Company. We secured £28m of new orders, a
large part of which will be deliverable in 2026. We have focused on
operational resilience, reducing the back orders and getting product out to
our customers, on time and in full. We traditionally have a stronger second
half of the year but for the first time in 4 years we can see our business
plan bearing fruit as we have started 2026 on budget and profitable.
Philo Daniel-Tran, our CEO has worked hard to re-energise the business; and
her work and that of her team is being rewarded. We have made significant
changes within our senior leadership teams and this transition is now largely
complete. Our Sales and Marketing team are proactively identifying
opportunities, and in collaboration with our Technical and Engineering
teams, are delivering innovative solutions to our global network of
customers. The UK rail market is stabilising as Great British Railways (GBR)
is more than halfway through its acquisition of the operating companies.
Aerospace and Defence is now 28% of our turnover and rising - 3 years ago it
was 13%. The Board's strategy to rebalance the business emphasising products
rather than projects is the right one and the recent acquisitions will support
this.
Although our gearing has increased because of the 2025 losses, it is still
low. The balance sheet remains strong, our headroom, post the refinancing, is
comfortable to withstand the slow payment of some of our major customers. The
near-term pipeline visibility is good, and we are looking forward to 2026 with
optimism and enthusiasm."
Enquires:
LPA Group plc +44 (0) 1799 512 800
Robert B Horvath, Chairman
Philo Daniel-Tran, Chief Executive Officer
Stuart Stanyard, Chief Financial Officer
Cavendish Capital Markets Ltd (Nominated Advisor and Broker) +44 (0) 20 7220 0500
Corporate Finance
Ed Frisby / Elysia Bough / Joe Smith
Corporate Broking
Tim Redfern
About LPA
LPA Group plc (AIM: LPA) is an innovation-led engineering specialist in
electronic and electro-mechanical components and systems.
Focused on transport (rail and aviation), aerospace, defence, infrastructure
and industrial markets and supplying into hostile and challenging
environments, LPA is known for engineering solutions to improve product
reliability, reducing maintenance and life cycle costs.
The Group has four sites across the UK, selling to customers in the UK and
overseas. Three of these are design and manufacturing sites: Saffron Walden,
Essex - electro-mechanical systems for rail, aviation and industrial;
Knapwell, Cambridge - power supplies for the rail market, Normanton, Yorkshire
- LED lighting and electronic systems for rail and infrastructure. The fourth
site is Newbury, Berkshire - value-added distribution of engineered components
for rail, aerospace and defence.
With over 150 years of UK design and manufacture, and with origins in the
first ever light installed in 'Electric Avenue', Brixton; innovation is core
to LPA and to the products and services supplied to our customers worldwide.
For more information visit www.lpa-group.com (http://www.lpa-group.com)
STRATEGIC REPORT
Chairman's Statement
Introduction
The year ending September 2025 marked a significant paradigm shift with the
transformation of LPA into a single business entity. It was never going to be
an easy task and I am pleased to report the work is almost complete. Our
recently appointed CEO, Philo Daniel-Tran, took on the challenge with energy
and her passion and commitment to delivering the business plan was soon
apparent. Recovering from the shortfall in sales before coming into post was
always going to be a big ask but the progress in the second half has been
rapid and the start of this new financial year is encouragingly on track and
demonstrating good profitability.
Reducing and redistributing the managerial overhead focusing on our sales and
customers has delivered £28.8m of orders in 2025, a great deal of which is
being delivered in the coming financial year. We are achieving this through
our new organisational structure as our two principal manufacturing facilities
are now controlled by a Group Operations Director working closely with the
Group Technical Director. Sales and Marketing is no longer siloed and is
working comprehensively across all the product lines with a clear path for
group wide customer relationship management. The investment in our new ERP
systems is driving new benefits in operational planning, stock control and
delivery especially as with the growth in Aerospace and Defence we will be
manufacturing more product lines in the future through our existing factories.
Our goal in 2026 will be to turn the Saffron Walden factory into a centre of
excellence.
We negotiated the transfer of the Eaton Electrical Products power supply
business "Martek" in January 2025. Their power supply products are
complementary to our own and will assist us in developing new products. Most
applications in our marketplace require some form of controlled power supply
and already our technical teams are combining their expertise to solve LPA
existing customer needs.
The business plan has always been about less dependency on rail and on major
projects within rail. We need to keep the manufacturing facilities busy with
creating off the shelf product for daily demand and paying the fixed overhead
costs. We do value projects and we will work with our customers to deliver new
projects. A good example is the new rolling stock for the TFL Deep Tube
Upgrade project, which is now well into production, and we are working with
our customer to meet their revised delivery schedules. This work was won in
2022. We are now also beginning discussion about the follow-on project for the
next underground train line rolling stock. These long-term projects will
create the order volumes we need to enhance our earnings and enable us to plan
and scale up as required.
Aerospace and Defence is a growing market for LPA and we have a number of
significant opportunities that will balance our historical reliance on the
Rail market. We have seen significant demand for our Aviation products
following a proactive nurturing of our customer base, leading to customer
focused product development plans for the global market. This means our
inventory has increased to cover our expanded product lines.
We have worked hard to run the business within our existing facilities but the
pace of our growth has caused strain on our liquidity after previous year's
losses. Our preference, and that of our advisors was to solve our growth plan
with new Equity (and perhaps increase liquidity though institutional
investment). However we could not find an acceptable solution with our largest
shareholder; so we have refinanced the business with debt. This refinance was
completed in January 2026 through a 3-year revolving credit and a CID
(customer invoice discounting) facility with Arbuthnot. This facility will
create circa £2m of headroom of banking facilities for us to expand more
quickly and to manage growth while we generate cash profits in the future to
repay the debt.
Shareholders and Investors
We have started an active campaign to reach out and communicate our long-term
plans to more of our shareholders; inviting many to visit our facilities and
understand our products. For those that cannot take up this offer I would
like to highlight the investor presentations made by our Executive Directors
that are regularly posted on our website. They focus on who we are, our
technology, our strong order book, global reach and passionate staff. We will
deliver shareholder value in line with our vision and mission and our
continuing commitment to our reputation. We are planning to restore our
dividend in the near future.
Pension fund
The government are recognising that some schemes have overfunded their pension
liabilities and there are surpluses which could be more usefully used in the
business to support growth and opportunity. We have such a fund and as soon as
the pathway is clear we shall recoup some of our surplus funding to reduce our
borrowings.
Board and Management, Employees
We are a small business and striving to get the balance right by basing our
reward mechanisms on more moderate salaries and increasing the performance
related elements in our remuneration packages. We have held back salary
increases for our managers and senior staff over the last 2 to 3 years. We
need to encourage, promote and train our staff to be better managers and we
have a programme of recruitment focused on apprentices and young engineers
which we need to expand and develop. The substantial impact of inflation over
the last 18 months is evident and the Remuneration Committee have instigated a
more reward-based mechanism based on performance and results. This will be
reflected in 2026.
I express my thanks to all our employees, past and present, for their hard
work and diligence during 2025 and for their commitment to our future.
Board
Board members' biographies and relevant experience are set out within Company
Information on Page 34 of the Annual Report and are published on the Group's
website www.lpa-group.com (http://www.lpa-group.com) .
Philo Daniel-Tran (CEO) heads up the Executive Team and together with the
Group CFO Stuart Stanyard are the Group Board Executive Directors. Andrew
Jenner, as Senior Independent Director, and Chair of the Audit Committee has
been in post throughout the year under review as has Gordon Wakeford who is
Chairman of our Remuneration Committee.
Outlook
We still have major projects to bid for particularly in the rail industry and
specifically for the roll out of new underground train sets; but these will
always be dictated by our customer's scheduling needs. Our belief is that
these project wins should be on top of creating sustainable products that can
be sold month in month out. The aftercare market in rail is an important one
to us and the bedrock of the current business product lines.
The great work done in 2025 to build up our order book has created a platform
for us to be confident that our sales targets for 2026 are realistic and we
have started the new year well on budget and for the first time in 4 years the
first quarter has shown good profitability. We will continue to drive our
order books, create opportunities with new products and work hard to keep our
factories efficient.
Robert B Horvath
Chairman
Chief Executive Officer's Review
Introduction
It has been a privilege to take on the role of CEO at LPA Group plc in Q2 of
FY25, continuing our 160-year legacy. In FY25, LPA Group focused on reshaping
the business for efficiency and growth through a group-wide reorganisation
under the "One-LPA" vision. This transition eliminated the divisional
structure and established a unified company led by a new executive team
overseeing functional departments.
The "One-LPA" vision merges the existing divisions - LPA Connection Systems,
LPA Lighting Systems, and LPA Channel Electric, along with the Martek Power
acquisition, creating a cohesive identity that showcases the Group's
expertise.
Throughout 2025, LPA Group strategically repositioned itself to emphasise the
importance of Aviation, Aerospace, and Defence, which now comprise 28% of the
business alongside the Rail market.
Our improved performance and delivery in the second half of FY25 highlights
the resilience of our multisite operations and the trust we've built with our
customers. Our team's passion and dedication will continue to drive growth and
deliver value in FY26.
LPA has a strong heritage defined by agility and innovation over the decades.
Our focus for the second to fourth quarter of FY25 has been to return the
business to that core ethos and innovative spirit, which forms the foundation
of the strategy and vision I have shared with my executive team. Our
diversification strategy, focusing on market adjacencies and innovation, will
allow us to confidently navigate market dynamics, even in the face of the
uncertain global political landscape.
We have concentrated on continuous improvement, technical and engineering
rigour, and utilising our ERP (Enterprise Resource Planning) system's
capabilities to enhance supply chain integrity, product quality, and
reliability throughout FY25.
FY25 strategic priorities also included improved intergroup and customer
communication, harmonisation of our IT infrastructure and systems, and a
rebrand to align with our revised vision, mission and values.
Our target for profitable growth has started to deliver favourable results
from the fourth quarter of FY25 into the first quarter of FY26. Ongoing
product rationalisation of acquired and existing products, together with
innovation for product enhancement, is opening doors to new opportunities
across all our market sectors with new and existing customers.
Markets
Aerospace and Defence was below our expectation in FY25, with main
manufacturers' building rates such as Spirit paused because of the
Boeing/Airbus takeover of the Belfast based business. With the Airbus takeover
of the Spirit A220 wings programme that relates to LPA now finalised we expect
a ramp up of builds in 2026, from 118 aircraft per year to 140 aircraft per
year.
LPA is working closely with the emerging eVTOL (electric vertical takeoff and
landing) and new airline manufacturers, and we are supporting the delivery of
new engineered solutions, focusing on driving down weight as well as
increasing power delivery from source to propulsion. Supporting and being
'designed in' to these prototypes will support growth for LPA products in the
coming years as they get formally certified and go into production.
FY25 has been a successful year for Defence land vehicle solutioning, and we
see significant opportunities in both new and refurbishment projects in this
sub-sector.
Aviation products include the Plane Power connector range for Ground Support
Units, the cable carrier systems (crocodiles) and the Red Box power supply
range. In 2025 we aimed to improve our supplier quality for the aviation
Plane Power connectors, which has now been restored to the superior
world-class product that it is with OTD (on time delivery), and we will
benefit further in 2026. The Red Box acquisition has enabled us to open new
market channels and have ongoing conversations with our distributors and
customers. We are systematically enhancing the Red Box product range based on
customer demand and releasing a newly enhanced range to the market. Building
on this success, our engineering team will continue the development of the
aviation range with new product features to be released in 2026.
Rail aftercare projects in the UK have slowed as we await new funding
decisions and subsequent investment, especially with uncertainty around GBR
(Great British Railways) and the renationalisation of the railways in the UK.
It is pleasing, however, to see some of the existing project wins finally
moving into production and output into 2026 and beyond. Delivery to Siemens
for the Deep Tube Upgrade programme (DTUP) for the Piccadilly Line is now
reliably ramping up. DTUP is an important infrastructure programme for London
that should extend into new fleets for the Bakerloo and Central lines over the
next few years. Rail exports represent 50% of the Group's rail revenue, and we
continue to secure opportunities across international markets.
Our business development presence in the DACH region has successfully driven
growth and captured opportunities across German-speaking and Eastern European
markets, working directly with customers like Stadler and Newag with support
from our regional distributors. We will further enhance our business
development capabilities in global growth markets in 2026.
Our LED lighting and electronics business, together with our newly acquired
power converter business, are developing new electronics and software
technology products for customers for train doors, sleeping cabins and seat
manufacturers.
Industrial and Infrastructure market progression was mostly achieved through
our niche range of specialist electrical 'Niphan' connectors, which continues
to broaden its applicability to new engineering projects and has gained
approvals in infrastructure that over the coming years are expected to lead to
modest increases in volume. This is coupled with costing in engineering work
in supply chain to support margins & capacity as volumes increase.
Strategic Innovation Outlook
We continue to make significant progress as we invest in long-term success.
Increasing investments in core technologies of connectivity, digital and power
electronics (via our acquisition of Martek Power converter solutions from
Eaton) to support customer requirements for reliability, longevity and
economic value. Our commitment to supporting customers goes beyond the initial
sale with lifetime service options via refurbishment contracts and new
enhancements via innovative solutions such as digital.
By leveraging these core technologies, we're helping our customers navigate
the evolving landscape with solutions that together with industry and academic
partnerships, can deliver flexibility and improve efficiency and productivity.
Our diversified portfolio of increasingly solution focused products helps
customers achieve their requirements for increasing availability and
reliability objectives.
We have commenced enhancing our software engineering capabilities to establish
and execute our digital product strategy, especially in equipment management
and control applications. In FY26 we continue to cultivate a digital ecosystem
together with industry and academic partnerships. Our focus will be to provide
connectivity to assets to help customers improve uptime and seamlessly manage
our products and solutions.
Our robust, strong balance sheet will allow us to execute the strategy for the
Group over the FY26-FY28 strategic period.
Our Global Partnerships
In FY25, we reengaged our distribution network to identify longer-term
strategic partners and opportunities to expand our global sales operation. We
continue to offer our network of partners and suppliers support in their
marketing plans for our products and solutions so that they can scale up their
activity and align their performance with market demands.
Partnership is also the backbone of our Supply Chain Transformation Plan,
launched during FY25 with further savings expected in FY26. We are leveraging
that plan to support and advise our suppliers so that they can meet our
increasingly stringent requirements. We are also focusing on supply chain
resilience, supplier quality, groupwide harmonisation of suppliers, and
harnessing greater buying power.
Developing our People
Supporting the career development of all team members has been a top priority
for me to underpin our teams' commitment, dedication and passion for learning
and innovating. Together with my leadership team, we drilled down into the
existing capabilities across all functions, developing a plan to strengthen
them, to ensure clear career progression and pathways, and to build effective
succession planning. This initiative began in FY25 and will continue in FY26,
with ongoing efforts to create individual training plans that promote personal
growth and development within LPA and the industry.
LPA have been committed to a manufacturing apprenticeship programme over the
past few years, with several apprentices completing and starting the programme
in FY25. We are excited to launch the LPA STEM (Science, Technology,
Engineering and Maths) Ambassadors Outreach Programme in January 2026, which
together with strategic partnerships with local secondary schools, will
attract and retain the next generation of talent in STEM fields.
Committed to our Communities
In FY25, we continued to have a positive impact on our communities beyond our
product and solution offerings. The legacy of the LPA charity golf day was
well attended, raising funds for our charities, St Claire Hospice and Dig It
(Saffron Walden). This annual event is an opportunity for the LPA team to host
our customers and partners across all our sectors to raise awareness and funds
for these charities. In the fourth quarter of FY25 we identified additional
charities aligned with each of our sites, with the Group now supporting a
total of 5 local UK charities. The 3 new charities are Lifecraft (Cambridge),
Newbury Cancer Care and Prince of Wales Hospice (Normanton). The LPA Charity
Committee are focused on raising funds and awareness via various initiatives
to support the causes the LPA community are most affected by and feel
passionate about.
Our Vision for the Future
Our mission is to collaborate to help solve our customers and partners'
challenges with pride and passion for our future. I am honoured and energised
to lead our talented team as we build upon that tradition, to achieve our
Vision to become a Global leader in the design and manufacturing of engineered
solutions in our chosen market sectors.
With rising global demand for Aviation, Aerospace and Defence technologies
alongside expanded opportunities to meet the world's rail new build market
needs, we are well-positioned and ready to unlock opportunities in 2026 and
the years ahead.
Thank you for your trust and partnership as I shape the new LPA Group. We are
committed to innovating with purpose and shaping solutions that drive customer
success and create lasting value for our customers and shareholders.
Philo Daniel-Tran
Chief Executive Officer
Business Model and Strategy
The LPA Group plc is a quoted Small and Medium-sized Enterprise (SME),
admitted to trading on the AIM Market of the London Stock Exchange, and
industry classified in the Electronic and Electrical Equipment FTSE sector.
The Group is an innovation-led engineering and manufacturing specialist in
electronic and electro-mechanical systems and solutions, operating within
mission and safety critical environments in rail, aviation, aerospace and
defence, infrastructure and industrial markets. Significant growth markets are
seen primarily in aviation, aerospace and defence, with rail providing nominal
growth and baseline stability in the UK and globally. Since the reorganisation
there is an increase in resources working across sites and encouraged
insourcing of manufacturing for projects.
The Group has built a strong reputation for its innovation, offering cost
effective solutions to customers' challenges. The group prides itself on being
a global leader in specific markets with its products and solutions, which are
known for their reliability and reducing maintenance and life cycle costs,
with aspirations of being the technology partner for the digital
transformation of our customers. Four distinct sites are operated across the
UK, namely:
LPA operations Market segment Products, solutions, and technologies
Light & Power House Electro-mechanical systems Rail rolling stock and infrastructure
Shire Hill A designer and manufacturer of electro-mechanical systems and solutions to the · Inter-car jumpers & connection boxes
rail, aviation, infrastructure and industrial markets.
Saffron Walden
· Metal plugs, sockets & harnesses
CB11 3AQ, UK
· Auxiliary power systems
Bespoke agile manufacturing facility with high investment in machining,
Tel: +44 (0)1799 512800 welding & fabrication. Industrial applications
· Metal plugs & sockets (Niphan range)
connectionsystems@lpa-group.com · Fire-resistant connection boxes
Aircraft support
redbox@lpa-group.com · Ground power plugs & harnesses (Plane Power)
· Cable carrying systems (Crocodiles)
Ground Power Units (Red Box)
Unit 22 Kingfisher Court Value Add Distribution Rail Depots and Rolling stock
Newbury
Berkshire Specialist value-add distributor of high-performance electro-mechanical · Circuit breakers
RG14 3SJ, UK products for harsh environment applications. Serving aerospace, defence and
rail markets. Delivering seamless integration of distribution and engineering, · Connectors
Tel: +44 (0)1635 864886 design partner to our customers, from prototype to production.
· Fans & motors
· Relays & contactors
distribution@lpa-group.com
· Switches
· USB charging units
Aerospace and Defence
· Connectors
· Backshells
· Cable accessories
· Relays
· Circuit breakers
· Fans
LPA House Lighting and electronic systems Rail rolling stock
Ripley Drive · End to end rolling stock interior lighting
Normanton High performance on-board electronics solutions for railway rolling stock and · Electronic control systems
hazardous environment. End to end solutions from concept design through to
West Yorkshire manufacture in LPA's purpose-built facility. · Electronic monitoring systems
WF6 1QT, UK · Light Control Unit (LCU) - dimming, ambient light control, remote
condition monitoring
Tel: +44 (0)1924 224100 Power Converters
· Seat control electronics solutions
Design, manufacture & support of high performance, high reliability power
supplies, DC/DC converters designed for rail applications. Supplier to all · Driver cabin audible system
lighting@lpa-group.com major European train builders & their tier 1 OEMs
· Door locking systems
Hazardous environment (i.e. oil & gas)
Glebe Farm Campus
· LED light engine
Knapwell
· Power supply integrated into explosion proof enclosures
Cambridge
Power Converters
CB23 4GG, UK
• Power range 10W - 500W
Tel: +44 (0)1799 512800
• Applications for any electronic equipment on rail vehicles
including passenger information displays, Wi-Fi, USB charging, train
management system, CBTC
powersystems@lpa-group.com
Group revenues are derived from both large value medium to long term projects
and smaller value shorter timescale recurring product sales, with the route to
market a combination of direct and indirect. The Group partners with
distributors particularly in overseas markets, although larger projects
continue to require direct contact.
A wide range of leading organisations form our customer base, including
Airbus, Alstom, Avanti, BAA, BAE Systems, Boeing Distribution, CompinFainsa,
Downer EDI, Grammer, Heathrow Airport, Hitachi, Hubbell, ITW GSE, Kinki
Sharyo, Knorr Bremse, Leonardo, Siemens, SNCF, Stadler, Spirit Aerospace,
Taiwan Rolling Stock Company, Transport for London, Vertical and Zeroavia.
We aim to strengthen the Group's position globally by expanding our customer
base, introducing new products and pursuing strategic acquisitions. This
strategy is underpinned by our Vision, Mission, Purpose and Values as detailed
below along with the strategic business planning and objectives that we set
out each year.
Vision, Mission & Purpose
Vision
· To be a global leader in design and manufacturing of engineered
solutions.
Mission
· Collaborating to help solve your challenges with pride and passion
for our future.
Purpose
· LPA has been innovating with agility for more than 160 years. This
ability to reinvent and innovate continues to drive us today, underpinned by
our steadfast values and culture.
Values and Culture
Investment in our people is paramount to our success and we have created clear
communication and development strategies to enhance skills and ensure that we
all understand and align to Group values, culture and best practice. This is
supported by the Board and Executive teams and demonstrated by their
visibility and accessibility across the Group.
Our core values are promoted throughout the Group. These are set out below and
published on our website www.lpa-group.com (http://www.lpa-group.com) .
Core Values
· Accountability -whatever you do, own it and do it well.
· Integrity - honesty and respect are key to who we are.
· Teamwork - work with your colleagues not against them.
· Courage - believe in your ability and back yourself.
· Respect - treat colleagues as you would be expected to be treated
yourself.
Environmental, Social and Governance
Environment. The board is committed to minimising its impact on the
environment and ensuring that each of our sites provide a positive impact on
their local environment. The product ranges of the Group have long been
focused on long life reliability, which reduce waste and recycling for our
customers. Our manufacturing sites are modern with efficient heating and
ventilation systems installed that assist to minimise the carbon footprint,
whilst our machinery and processes do not require overly high energy inputs,
thus our CO outputs are minimised. Our manufacturing sites are certified
under ISO 14001 and are carbon neutral.
Social activities and engagement with community is encouraged throughout the
Group. Our annual charity golf day is a key event within the calendar and
one much appreciated by attendees. Donations received are matched by the
Group and used in the support of several charities. We continue to review our
marketing activities to combine, where practical, business promotion with
support for our local communities. In the fourth quarter of FY25 we set out to
work with additional local charities chosen by the teams at each of our 4
sites, and LPA Group plc now support 5 local charities across the UK and raise
funds via various initiatives to support the causes the LPA community are most
affected by and feel passionate about.
Governance is outlined across our Annual Report and remains a core value of
the Group, both as an AIM listed entity, but as part of the DNA of our
activities. These areas have long been core to the Company. Additional
areas of focus in recent years have included risks posed through digital and
cyber channels. The Group maintains Cyber best practice and contracts
external IT support to ensure current and constant IT support, with monitoring
and prevention paramount to the continuance of our business and safeguarding
of our data, assets and those of our customers and employees.
Our Corporate and Social Responsibility (CSR) policy sets out the basis on
which the Group seeks to be a responsible business that meets the highest
standards of ethics and professionalism. Our Group's social responsibility
falls under two categories: compliance and proactiveness. Compliance refers
to our Group's commitment to legality and willingness to observe community
values. Proactiveness is every initiative to promote human rights, help
communities, protect our natural environment and resources.
The full CSR policy is set out on the Group's website -
www.lpa-group.com/investor-information/company-information/ with other key
governance policies including the Group's approach to ethical trading, code of
conduct, Criminal Finances Act 2017 and Whistle Blowing.
Health, Safety & Wellbeing
It is Group policy to provide and maintain healthy and safe working conditions
and to consider its employees wellbeing, whilst operating in a responsible
manner to the environment. The Group operates Health & Safety Committees
to encourage and facilitate participation by all its employees in improvement,
awareness and development of a safe working environment. Reporting of
opportunities for improvement and near misses, including suggestions,
observations, concerns, or potential improvements are encouraged and requested
from all staff and visitors to our sites. Monthly reporting outlining all
accidents or matters reported are KPIs, published through use of health &
safety notice boards, together with site committee meeting activities. Each
site has volunteer fire marshals and first aiders who are provided with the
requisite training and a qualified health and safety representative, supported
by external expertise.
The wellbeing of our staff is paramount to the Group. Provisions are in
place that provide all employees and their families direct access to
wellbeing, medical and advisory services, linked to our Group Life Assurance
provisions.
The Group encourages employees to plan for their future and provides a defined
contribution pension provision which meets or exceeds the UK's Auto Enrolment
requirements. The Group also funds advisory sessions, arranges onsite access
to its advisors, and facilitates induction sessions for all employees so they
can discuss their retirement provisions and fully understand the benefits and
options available to them within the Group's pension scheme.
Employment Policies
The importance of promoting and maintaining good communications with the
Group's employees is recognised and its policy is to keep employees regularly
informed on matters relating to their employment through circulars and team
briefings.
Applications for employment from all, regardless of disability, ethnicity,
gender or beliefs are considered without prejudice. In the event of members
of staff becoming disabled or where individuals require reasonable adjustment,
every effort is made to ensure that their employment with the Group continues,
and that appropriate adaptation and training is provided. It is the policy of
the Group that the training, career development and promotion of disabled
persons should, as far as possible, be identical with that of other employees.
Chief Financial Officer's Review
2025 Summary
· Order entry led sales at £28.8m (2024: £17.3m) resulting in the
order book increasing to £32.5m (2024: £25.3m), an increase of 28.4%
· Revenue of £21.5m down 8.5% (2024: £23.5m) with Electro-mechanical
revenues down £0.5m, Value add distribution revenues down £0.5m, Lighting
and electronics revenues down £1.0m
· Added Value reduced by 0.8% at 48.7% (2024: 49.5%) as a result of
product mix
· Gross margins 22.1% (2024: 23.3%), was slightly down due to increased
labour costs
· Adjusted EBITDA loss of £0.1m (2024: profit of £0.8m)
· Loss before tax at £0.6m (2024: £0.6m)
· Net cash outflow from operating activities £0.7m (2024: inflow
£1.3m).
Trading Results
The second half of the year showed significant improvement, providing strong
momentum in both our value-add distribution and our electro-mechanical
businesses. This turnaround enabled us to curb the losses experienced in the
first half. However, our lighting and electronics business continues to face
challenges due to delays, from both refurbishment and new build projects in
the UK and internationally (i.e. Central line for London Underground, and TGV
contracts via Grammer).
Order entry improved significantly in the period to £28.8m (2024: £17.3m)
with strong contributions from rail projects across both our lighting and
electronics and our electro-mechanical businesses, offsetting a lower intake
from our value-add distribution business which was primarily caused by the
delay in contracts from Spirit with their change of ownership to Airbus. It
is envisaged that these will materialise during the coming 2 years and we
remain well placed to deliver on these.
Revenues reduced to £21.5m (2024: £23.5m) with the rail inter - car jumper
business along with the lighting and electronics business for new rail builds
and refurbishment both picking up in the second half of the year but overall
slightly underperforming and not achieving target. Lower aviation product
sales were due to supplier quality issues and slower integration of the Red
Box product range, therefore missing the year-end target considerably.
By comparison to 2024, H1 2025 revenues reduced by 18.1% to £9.5m (2024:
£11.6m), as predicted due to new project delays, delivering an underlying
operating loss of £1.1m (2024: loss of £0.3m). H2 revenues were less
impacted by project delays and delivered revenues of £12.0m (2024: £11.9m),
representing a increase of 0.3% against H2 2024 sales. This resulted in an H2
underlying loss of £0.1m (2024: profit of £0.1m).
Stronger trading in the second half of the year resulted in a small operating
loss of £0.1m and delivered a full year operating loss of £0.6m (2024: loss
£0.6m). At an adjusted EBITDA level there was a full year loss of £0.1m
(2024: £0.8m profit), with the main differences being the negative goodwill
and the profit on sale of the Thatcham property in the current year, with a
small reduction in similar non-recurring expenses being offset by an increase
in depreciation and amortisation in the current year. Within the period, we
successfully integrated the acquisition of Eaton's Powertron business, leading
to negative goodwill of £0.6m, resulting in a final loss before tax for the
year of £0.6m (2024: £0.6m).
Excluding non-recurring costs, distribution costs and administrative expenses
increased by 5.6% to £6.1m (2024: £5.7m). The main contributors to this
were economic cost pressures seen across the industry. Group employment
costs remained stable at £7.3m (2024: £7.3m), with increasing national
insurance contributions partly offset by reduced headcount.
The key drivers related to the business performance in the year and position
at 30 September 2025, together with the explanation of the financial Key
Performance Indicators as summarised on page 19.
During the year, 197,500 share options at an exercise price of 50p subject to
three increasingly targeted performance hurdles which are related to earnings
per share and market capitalisation were awarded to a Director. In addition,
the performance hurdles in relation to 125,000 share options issued in 2023
were adjusted for them to remain attractive. No cost was allocated to
these awards based on the latest forward projections. (2024: no awards).
Macro-economic factors
During 2025, whilst the overall economy remained tight post the Autumn Budget
tax rises, we saw a significant increase in activity in rail, our main market
and evidenced by an increase in our order intake of 28.4%. Despite
this three major rail projects across our two main businesses moved to the
right, which resulted in two trading updates during the year, with H1
significantly affected as previously advised and H2 less so. We continue to
seek to optimise our Red Box acquisition and in March completed the
acquisition of the trading assets for Martek Power.
Inflation continues to become less of an issue and efforts to mitigate any
increases have been ongoing and where possible fed through to the market.
Our Added Value business reduced slightly during the year and is broadly
expected to remain at this level as we move forward.
Overall both the supply chain and employment markets remains tight.
Non-recurring Items
Non-recurring items in the year totalled a profit of £0.7m (2024: loss of
£0.4m). Key items comprised:
(i) Profit on the sale of a property £0.3m (2024:
£Nil)
(ii) Non-recurring costs relating to acquisitions of
£0.1m (2024: £0.2m)
(iii) Reorganisation costs / staff changes of £0.1m (2024:
£0.2m)
Negative Goodwill
Negative goodwill of £0.6m (2024: £Nil) arose following a fair value
adjustment on acquisition of the UK power supply business from Eaton
Electrical Products Ltd in March 2025 ( see note 24).
Finance Costs
Within finance costs, the interest on borrowings increased to £0.24m (2024:
£0.16m). The weighted average interest rate increased by 0.2% from 7.3% to
7.5%. The Group's overdraft facility was utilised throughout the year with
an average balance of £600k. The UK base rate eased during the year, reducing
on four occasions from 5.0% to 4.0%.
Profit Before Tax, Taxation and Earnings Per Share
After net finance costs of £0.01m (2024: net income £0.03m) a loss before
tax of £0.6m was recorded (2024: £0.6m). A tax credit of £0.3m (2024:
£0.3m) is recognised, reporting a loss after tax of £0.3m (2024: loss after
tax £0.3m). This resulted in a basic loss per share of 2.64p (2024: loss
per share 2.46p).
The average UK corporation tax rate for the year was 25% (2024: 25%). The
main differences to the standard rate of corporation tax are due to losses and
R&D tax credits.
Treasury
The Group's treasury policy remained unchanged in the year. Further details
on the Group's borrowings, financial instruments, and its approach to
financial risk management are given in notes 15 and 17 to the Annual Report.
Balance Sheet
· Gearing (net debt as a % of total equity) increased to 21.5% (2024:
13.1%) due to the recent acquisition and trading losses;
· Net debt increased by £1.3m to £3.4m (2024: £2.1m) due to trading
losses and an increase in trade receivables;
· Working capital, as defined as inventory, trade & other
receivables less trade & other payables, increased 21% to £6.4m (2024:
£5.3m) due to the timing of sales and receipts; and
· Pension asset surplus recognised increased by 7% to £4.1m (2024:
£3.8m).
Shareholders' funds include Investment in Own Shares (Treasury Shares),
unchanged at £0.32m, representing ordinary shares held in the Company by the
LPA Group Plc Employee Benefit Trust ("EBT").
Intangible assets, which comprise goodwill related to the Group's investment
in Excil Electronics Ltd, the fair value of the intellectual property,
capitalised development costs and software purchases were £4.0m (2024:
£4.3m). Additions in the year reduced to £0.1m (2024: £0.7m), being the
residual investment in the ERP systems across the two sites. After
assessment for impairment the goodwill on the Group's investment in Excil
Electronics remains unchanged at £1.1m. Development costs capitalised in
the year, representing the continued development of the Group's technologies
and new product development ("NPD"), were £Nil (2024: £0.1m).
The net book value of property, plant and equipment as at 30 September 2025,
including right of use assets, totalled £5.2m (2024: £5.5m), of which
property represented £3.7m (2024: £3.7m), plant, equipment and motor
vehicles £1.4m (2024: £1.8m). Additions in the year were slightly up at
£0.5m - including the £0.4m on acquisition of the trading assets of Martek
(2024: £0.4m). Disposals in the year totalled £0.4m with a net book value
of £0.1m including right of use lease terminations (2024: £0.2m with a net
book value of £0.1m including right of use lease terminations). The
depreciation charge was slightly higher at £0.8m (2024: £0.7m).
Net Debt and Financing
The Group's main bank finance is a bank loan drawn down in 2025 at £2.5m and
repayable over 5 years. Repayments are quarterly over the term with a bullet
repayment in March 2029 of £2.0m (quarterly repayments calculated at draw
down on a 15-year repayment term). As at 30 September 2025 the amount
outstanding was £2.4m (2024: £2.5m). Interest is payable at base rate plus
2.25%.
We refinanced the company's debt facilities in January 2026. This was
through a 3 year revolving credit and a CID (customer invoice discounting)
facility with Arbuthnot. This facility will create circa £2m of headroom for
us to expand more quickly and to manage growth while we generate cash profits
in the future to repay the debt.
Cash Flow
Net cash outflow from operating activities was £(0.7)m (2024: cash inflow of
£1.3m) made up of a trading cash outflow of £(0.2)m (2024: £0.5m) and an
increase in working capital of £(0.4)m (2024: decrease of £0.7m). Overall,
there was a net reduction in the Group's cash position of £1.5m (2024:
£0.5m).
During the year £0.1m (2024: £nil) was spent on the acquisition of the UK
trade and assets of a power supply provider, £0.28m (2024: £0.55m) was
spent on the acquisition of Red Box International with £0.27m deferred
consideration payable next year. There was no change in capital expenditure
outflows on property, plant and equipment £0.2m (2024: £0.2m), excluding the
ERP system and assets financed through lease arrangements. Capitalised
development expenditure amounted to £Nil (2024: £0.1m), we are aiming to
increase this in the next financial year.
In the year new leasing arrangements led to right of use additions of £0.1m
(2024: £0.2m). Interest at 5.2% was charged on fixed rate borrowings (2024:
5.3%). Interest on the Group's overdraft facility is payable at base rate plus
2.0%. The facility was utilised £0.8m as at 30 September 2025 (
unutilised at 30 September 2024). The composite interest rate across both
borrowings and lease liabilities was 5.9% (2024: 6.4%).
Capital loan repayments of £0.1m were made in the year (2024: £0.2m).
Outflows repaying the principal elements of lease liabilities were £0.3m
(2024: £0.2m). Interest payments on borrowings amounted to £0.3m (2024:
£0.2m).
Defined Benefit Pension Asset
The LPA Industries Limited Defined Benefit Scheme was part of the ISIO
(previously Deloitte) Pensions Master Plan throughout the entire year under
review. The costs of running the scheme have been shared between the Company
and the scheme. Costs borne by the Group this year amounted to £0.1m (2024:
£0.1m).
A full Actuarial valuation of the Scheme was carried out in March 2024 which
indicated the Scheme was at a healthy 133% funding level. The benefit of the
change in investment strategy in January 2022, when the Trustees having
undertaken a review in 2021 agreed to lock in the gains and de risk the
scheme, has been beneficial. The key driver for the then improved funding
position has been the higher than assumed returns on the Scheme's assets and
the changes in financial conditions which have reduced the liabilities. It is
natural for the Scheme's funding level to fluctuate over time reflecting
changes in the financial markets.
The Trustees, under advice, did not seek any voluntary employer contributions
during the year from the Group (2024: £Nil). The IAS 19 position shown in the
note 21 to these accounts reflects the impact of rising interest rates on the
present value of the liability to pay pensions in the future.
Going Concern
In assessing going concern, the main considerations have been trading,
significant project delays and to a lesser extent inflationary pressures.
The Group continues to witness some price pressures from commodities,
utilities and wage inflation. These all pose risks to UK manufacturing
businesses.
In assessing the Group's going concern the directors also note that (i)
despite reporting a small adjusted EBITDA loss in the current year, the
Group is expected to return to profitability in 2026; (ii) has in place
adequate working capital facilities for its forecast needs with its recent
refinancing and strong cash management; (iii) has a strong order book with
significant further opportunities in its market place; and (iv) has proven
adaptable in past periods of adversity, as again proven through the 2025
challenges. Therefore, the directors believe that it is well placed to
manage its business risks successfully.
The directors believe the recent £8.75m refinancing completed on 16 January
2026 will create circa £2m of headroom of facilities for the group to expand
more quickly and to manage growth whilst also mitigating any additional
project delays, while we generate cash profits in the future to repay the
debt. The new facilities comprise of a Revolving Credit Facility secured
over property and receivables.
After making enquiries including but not limited to compiling updated
forecasts; sensitivities; and expectations, reviewing liabilities and risks
and following confirmation of ongoing support from the Group's bank, the
directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis in
preparing the annual report and accounts.
Stuart Stanyard
Chief Financial Officer
Key Performance Indicators
The Group uses the following key performance indicators to assess the
progression in its business: factors affecting them are discussed in the
Chairman's Statement, the Chief Executive Officer's Review and the Financial
Review on pages 3 to 17 with an Alternative Performance Measures glossary on
page 101.
KPI Basis of measurement 2025 2024
Health & Safety
Riddors · reportable incidents of disease or danger occurrences None None
Accidents · events that cause impact, damage or injury involving a person or 6 10
infrastructure, which are not a Riddor
Near misses · events that occurred which have not caused an Accident (1) 31 156
Financial
Orders to revenue · orders for the year expressed as a multiple of revenue as a measure 1.31 0.73
of prospective growth
Order entry · order intake confirmed £28.3m £17.3m
Order book · the measure of opening order book, plus order entry, less revenue £32.0m £25.3m
Revenue growth · increase year-on-year as a percentage of prior year (8.5%) 8.4%
Added value · the margin generated on revenue after deduction of material costs but 48.7% 49.5%
before other costs of sale and conversion
Gross margin · as a percentage of revenue 22.1% 23.3%
Profitability · underlying operating (loss) as a return on trading activities to (6.0%) (1.0%)
revenue
Cash generation · net decrease in cash and cash equivalents before financing activities (£0.2m) (£0.4m)
Gearing · the measure of net debt being borrowings and lease liabilities less 21.5% 13.1%
cash balances, to net assets
(1) Following team structural changes, HSE data capture and reporting
processes were strengthened, with increased focus on data quality and employee
engagement which is expected to improve visibility in HSE trends.
Consolidated Income Statement
For the year ended 30 September 2025
2025 2024
Note £000 £000
Revenue - Continuing operations 2 21,546 23,546
Cost of Sales (16,788) (18,068)
Gross Profit 4,758 5,478
Distribution Costs (2,104) (2,424)
Administrative Expenses (3,948) (3,304)
Administrative Expenses-Exceptional Items 3 62 (376)
Negative Goodwill 7 640 -
Operating Loss (592) (626)
Share Based Payments - 4
Negative Goodwill 7 (640) -
Non-recurring Items 3 (62) 376
Depreciation and Amortisation 1,244 1,086
Adjusted EBITDA (50) 840
Finance Income 248 225
Finance Costs (258) (192)
Loss Before Tax (602) (593)
Taxation 4 253 268
Loss for the Year (349) (325)
Attributable to:
- Equity Holders of the Parent (349) (325)
Loss per Share 5
Basic (2.64)p (2.46)p
Diluted (2.64)p (2.46)p
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2025
2025 2024
Note £000 £000
Loss for the Year (349) (325)
Other Comprehensive Income
Items that will not be reclassified to profit or loss:
Actuarial Gain on Pension Scheme 200 767
(Increase)/Decrease of Restriction of Pension Assets (93) 183
Other Comprehensive Income 107 950
Total Comprehensive (Expense) / Income for the Year (242) 625
Attributable to:
- Equity Holders of the Parent (242) 625
Consolidated Balance Sheet
At 30 September 2025
Company Registered Number: 00686429 2025 2024
£000 £000
Non-Current Assets
Intangible Assets 3,989 4,317
Plant, property and equipment 4,597 5,018
Right of Use Assets 573 518
Retirement Benefits 4,061 3,782
Deferred Tax Asset 109 -
13,329 13,635
Current Assets
Inventories 6,362 5,749
Trade and Other Receivables 6,474 5,389
Current Tax Receivable 23 34
Derivative Asset - 80
Cash and Cash Equivalents - 715
12,859 11,967
Total Assets 26,188 25,602
Current Liabilities
Bank Loan (109) (96)
Bank Overdraft (806) -
Lease Liabilities (222) (203)
Derivative Liability (70) -
Trade and Other Payables (6,696) (6,110)
(7,903) (6,409)
Non-Current Liabilities
Bank Loan (2,243) (2,359)
Trade and Other Payables - (275)
Deferred Tax Liabilities - (155)
Lease Liabilities (55) (175)
(2,298) (2,964)
Total Liabilities (10,201) (9,373)
Net Assets 15,987 16,229
Equity
Share Capital 1,351 1,351
Investment in Own Shares (324) (324)
Share Premium Account 959 959
Share Based Payment Reserve 62 62
Merger Reserve 230 230
Retained Earnings 13,709 13,951
Equity Attributable to Shareholders of The Parent 15,987 16,229
Consolidated Statement of Changes in Equity
For the year ended 30 September 2025
Share Capital Investment in Own Shares Share Premium Account Share Based Payment Reserve Merger Retained Earnings Total
Reserve
2025 £000 £000 £000 £000 £000 £000 £000
At 1 October 2024 1,351 (324) 959 62 230 13,951 16,229
Loss for the Year - - - - - (349) (349)
Other Comprehensive Income - - - - - 107 107
Total Comprehensive Income - - - - - (242) (242)
At 30 September 2025 1,351 (324) 959 62 230 13,709 15,987
Share Capital Investment in Own Shares Share Premium Account Share Based Payment Reserve Merger Retained Earnings Total
Reserve
2024 £000 £000 £000 £000 £000 £000 £000
At 1 October 2023 1,348 (324) 943 62 230 13,454 15,713
Loss for the Year - - - - - (325) (325)
Other Comprehensive Income - - - - - 950 950
Total Comprehensive Income - - - - - 625 625
- - - 4 - - 4
Share Based Payments
Dividends (Note 19) - - - - - (132) (132)
Transfer on Exercise of Share Options - - - (4) - 4 -
Proceeds from Issue of Shares 3 - 16 - - - 19
Transactions with Owners 3 - 16 - - (128) (109)
At 30 September 2024 1,351 (324) 959 62 230 13,951 16,229
Consolidated Cash Flow Statement
For the year ended 30 September 2025
2025 2024
£000 £000
Loss Before Tax (602) (593)
Finance Costs 258 192
Finance Income (248) (225)
Operating Loss (592) (626)
Adjustments for:
Amortisation of Intangible Assets 450 346
Depreciation of Plant, property and equipment 447 547
Depreciation of Right of Use Assets 347 193
Profit on Sale of Property (262) -
Loss on Sale of Plant and Equipment 25 80
Negative Goodwill (640) -
Equity Settled Share Based Payments - 4
Operating cash (outflow) /inflow before movements in working capital (225) 544
Movements in Working Capital:
(Increase) in Inventories (181) (986)
(Increase)/Decrease in Trade and Other Receivables (746) 511
Increase in Trade and Other Payables 424 1,138
Cash (loss)/generated from operations (728) 1,207
Income Taxes Received - 47
Net cash (outflow)/inflow from operating activities (728) 1,254
Investing activities
Purchase of Product Line - (250)
Purchase of Business Net of Cash Acquired (Note 7) (351) (503)
Purchase of Property, Plant & Equipment (74) (218)
Sale Proceeds from Sale of Assets 375 -
Expenditure on Intangible Assets (122) (615)
Expenditure on Capitalised Development Costs - (63)
Net cash outflow from investing activities (172) (1,649)
Financing activities
Repayment of Bank Loan (103) (2,046)
New Bank Loan - 2,500
Principal Elements of Lease Liabilities (260) (241)
Interest Paid (258) (192)
Dividend Paid - (132)
Proceeds from Issue of Share Capital - 19
Net cash outflow from financing activities (621) (92)
Net Decrease in Cash and Cash Equivalents (1,521) (487)
Cash and Cash Equivalents at Start of the Year 715 1,202
Cash and Cash Equivalents at End of the Year (806) 715
Consolidated Cash Flow Statement (continued)
For the year ended 30 September 2025
Net Debt
An analysis of the change in net debt is shown below:
Bank Loan Lease Liabilities Cash and Cash Equivalents Net Debt
£000 £000 £000 £000
At 1 October 2024 2,455 378 (715) 2,118
New Bank loan / Lease Obligations - 55 - 55
Acquired leases - 104 - 104
Interest Costs 241 17 - 258
Repayment of Borrowings/Lease Liabilities (344) (277) 621 -
Other Cash Used - - 900 900
At 30 September 2025 2,352 277 806 3,435
Bank Loan Lease Liabilities Cash and Cash Equivalents Net Debt
£000 £000 £000 £000
At 1 October 2023 1,949 457 (1,202) 1,204
New Bank loan / Lease Obligations 2,500 162 - 2,662
Acquired borrowings / (cash) 52 - (47) 5
Interest Costs 162 30 - 192
Repayment of Borrowings/Lease Liabilities (2,208) (271) 2,479 -
Other Cash Generated - - (1,945) (1,945)
At 30 September 2024 2,455 378 (715) 2,118
Notes
1. Information
In accordance with Section 435 of the Companies Act 2006, the Group confirms
that the financial information for the years ended 30 September 2025 and 2024
are derived from the Group's financial statements and that these are not
statutory accounts and , as such, do not contain all information required to
be disclosed in the financial statements in accordance with UK adopted
International Accounting Standards. The statutory accounts for the year ended
30 September 2024 have been delivered to the Register of Companies. The
statutory accounts for the year ended 30 September 2025 have been audited and
approved but have not been filed. The Group's audited financial statements for
the year ended 30 September 2025 received an unqualified audit opinion and the
auditor's report contained no statement under section 498(2) or 498(3) of the
Companies Act 2006. The financial information contained within this full year
results statement was approved and authorised for issue by the Board on 29
January 2025. The 2025 accounts, together with notice of the Annual General
Meeting, are expected to be posted to shareholders on 3 March 2026 and will be
available from the LPA website (www.lpa-group.com) from 4 March 2026. They
will be available from the Company Secretary, LPA Group Plc, Light & Power
House, Shire Hill, Saffron Walden, CB11 3AQ. The Group financial statements
have been prepared under the historical cost convention and under the basis of
going concern. The principal accounting policies adopted are consistent with
those disclosed in the financial statements for the year ended 30 September
2024.
2. Operating Segments
All of the Group's operations and activities are based in, and its assets
located in, the United Kingdom. The CODM does not review segmental assets and
liabilities by segment and therefore no reconciliations are disclosed. For
management purposes the Group comprises three divisions / product groups (in
accordance with IFRS 8) - Electro-mechanical, Value add distribution and
Lighting & electronics, which collectively design, manufacture and market
industrial electrical and electronic products. They operate across three
market segments - Rail; Aerospace & Defence and Other. It is on this basis
that the board of directors assess Group performance.
All revenue originates in the UK. An analysis by geographical markets and
market segments is given below:
2025 2024
£000 £000
Electro- mechanical 8,141 8,620
Value add distribution 5,293 5,800
Lighting and electronics 8,112 9,126
21,546 23,546
2025 2024
£000 £000
Revenue Recognised Over Time 403 86
Revenue Recognised at a Point in Time 21,143 23,460
21,546 23,546
All revenue originates in the UK. An analysis by geographical markets and
market segments is given below:
2025 2024
Rail 66% 69%
Aviation, Aerospace and Defence 28% 25%
Other 6% 6%
100% 100%
2025 2024
£000 £000
United Kingdom 11,342 13,843
Rest of Europe 7,581 6,390
Rest of World 2,623 3,313
21,546 23,546
One customer (2024: one) represented more than 10% of Group revenue, at 15%
(2024: 17%) of revenue.
3. Operating Loss
2025 2024
Non-recurring Items £000 £000
Profit on sale of property 262 -
Acquisition Costs (65) (190)
Reorganisation Costs/Staff Changes (135) (186)
62 (376)
The profit on sale of property relates to the sale of the Thatcham freehold
premises.
Acquisition costs of £65,000 primarily relate to the non-recuring costs of
the Martek Power acquisition in March 2025 (as note 7), and cover legal,
severance and move costs. In 2024, £190,000 primarily relate to the
non-recurring costs of the Red Box Int Holdings Limited acquisition in January
2024.
In both years there has been reorganisation costs including severance costs
relating to staff changes.
4. Taxation
2025 2024
A. Recognised in The Income Statement £000 £000
Current Tax Expense
UK Corporation Tax - (34)
Adjustment in Respect of Prior Years 11 (17)
11 (51)
Deferred Taxation
Origination and Reversal of Temporary Differences (181) (33)
Adjustment in Respect of Prior Years (83) (184)
(264) (217)
Total Corporation Tax Credit (253) (268)
2025 2024
B. Reconciliation of Effective Tax Rate £000 £000
Loss Before Tax (602) (593)
Tax at The Average UK Corporation Tax Rate of 25% (2024: 22%) (151) (148)
Effects of:
- Enhanced Deduction for Qualifying R&D Expenditure - (39)
- Losses Surrendered - 85
- Prior Period Adjustments (72) (201)
- Non-Taxable Negative Goodwill (160) -
- Losses Not Recognised 160 9
- Other Differences (30) 26
Total Income Tax Credit (253) (268)
5. Loss Per Share
The calculation of loss per share is based upon the loss for the year of
£602,000 (2024: £325,000) and the weighted average number of ordinary
shares in issue during the year of 13.503m (2024: 13.503m) less investment in
own shares of 0.3m (2024: 0.3m), of 13.203m (2024: 13.203m).
2025 2024
Loss Weighted Loss Per Loss Weighted Loss Per Share
Average Share Average
No of Shares No of Shares
£000 '000 Pence £000 '000 Pence
Basic Loss Per Share (349) 13,213 (2.64) (325) 13,203 (2.46)
Effect of Share Options - - - -
Diluted Loss Per Share (349) 13,213 (2.64) (325) 13,203 (2.46)
Basic and diluted loss per share are equal for the year ended to 30 September
2025, since where a loss is incurred the effect of outstanding share options
is considered anti-dilutive and is excluded for the purpose of the diluted
loss per share calculation.
6. Going Concern
In assessing going concern, the main considerations have been trading,
significant project delays and to a lesser extent inflationary pressures.
The Group continues to witness some price pressures from commodities,
utilities and wage inflation. These all pose risks to UK manufacturing
businesses.
In assessing the Group's going concern the directors also note that (i)
despite reporting a small adjusted EBITDA loss in the current year, the
Group is expected to return to profitability in 2026; (ii) has in place
adequate working capital facilities for its forecast needs with its recent
refinancing and strong cash management; (iii) has a strong order book with
significant further opportunities in its market place; and (iv) has proven
adaptable in past periods of adversity, as again proven through the 2025
challenges. Therefore, the directors believe that it is well placed to
manage its business risks successfully.
The directors believe the recent £8.75m refinancing completed on 16(th)
January will create circa £2m of headroom of facilities for the group to
expand more quickly and to manage growth whilst also mitigating any additional
project delays, while we generate cash profits in the future to repay the
debt.
After making enquiries including but not limited to compiling updated
forecasts; sensitivities; and expectations, reviewing liabilities and risks
and following confirmation of ongoing support from the Group's bank, the
directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis in
preparing the annual report and accounts.
7. Purchase of Business
0n 17 March 2025, the Group acquired from Eaton Electrical Products Limited
its UK trading Powertron business and asset, including its small
manufacturing capability. This resulted in the group acquiring fixed assets,
current assets and liabilities, the employment of approximately 20 members of
staff, and the business including worldwide rights to brands and product
designs.
The acquisition is complementary to a number of power supply products the
Group currently manufacturers for the rail industry and will provide a strong
addition to LPA Channel Electric, the Group's Newbury -based division, that
distributes engineered components. This acquisition supports our long-term
growth strategy of buying core products.
17 March 2025 Book Value 17 March 2025 Fair Value
£000 £000
Adjustments
£000
Assets and Liabilities Acquired
Right of Use Lease and dilapidations - 346 346
Tangible Assets 69 - 69
Inventories 432 - 432
Trade and Other Receivables 339 - 339
Trade and Other Payables (124) - (124)
Right of Use Lease and dilapidations - (346) (346)
Net Assets Acquired 716 - 716
Consideration
Cash (76)
Negative Goodwill (640)
In addition to the cash consideration, LPA agreed to settle lease dilapidation
obligations expected to be due in 2026, estimated at £200,000.
The gain (negative goodwill), has arisen primarily due a recent lack of
investment in the business and we will have to invest to support the long-term
viability of the product.
Acquisition- related costs have been expensed as non-recurring items in note
3.
LPA Martek contributed £780,000 revenue and a £300,000 loss to the Group's
loss for the period between the date of acquisition and 30 September 2025.
If LPA Martek had been part of the Group for the full financial year, there
would have been an additional £804,000 revenue and a £100,000 loss.
8. Purchase of Business
0n 4 January 2024, the Group acquired 100% of the issued share capital of Red
Box Int Holdings Limited.
Red Box is a leading UK manufacturer of aviation ground power equipment with
global reach and an established presence in the USA market. The acquisition
will provide a strong addition to LPA Connection Systems, the Group's Saffron
Walden-based division, that designs, manufactures and supplies high quality
specialist products for the aviation, rail, and infrastructure markets. This
acquisition supports our long-term growth strategy whilst also lessening the
Group's dependence on rail projects.
4 January 2024 Book Value 4 January 2024 Fair Value
£000 £000
Adjustments
£000
Assets and Liabilities Acquired
Intangible Assets - 829 829
Tangible Assets 221 (64) 157
Inventories 657 (197) 460
Trade and Other Receivables 58 (28) 30
Cash 47 - 47
Trade and Other Payables (164) - (164)
Bank Loan (52) - (52)
Deferred Tax on Intangible Assets - (207) (207)
Net Assets Acquired 767 333 1,100
Consideration
Cash 550
Deferred Consideration < 1 year 275
Deferred Consideration > 1 year 275
1,100
The value of intangible assets has been derived from the new technology that
the acquisition brings to the group and that this will open up new markets.
The intellectual property rights have been recognised since it is both
probable that there will be future economic benefits and the cost of the
assets can be measured reliably.
The book value of tangible assets was adjusted to take account of depreciation
in 2023 not in the book value on acquisition.
The fair value of acquired trade receivables and other receivables was
adjusted for proforma invoices. No provision was required for gross
contractable trade receivables.
The book value of inventory was adjusted for missing inventory £98,000 and
alignment with the Group's inventory stock provisioning policy £99,000.
Acquisition- related costs have been expensed as exceptional items in note 3.
Red Box contributed £800,000 revenue and a small loss to the Group's loss for
the period between the date of acquisition and 30 September 2024. If Red Box
had been part of the Group for the full financial year, there would have been
an additional £400,000 revenue and a small loss.
9. Post Balance Sheet Event
The group refinanced the company's debt facilities in January 2026. This
was through a 3 year revolving credit and a CID (customer invoice
discounting) facility with Arbuthnot Latham for a total of £8.75m. This
facility will create circa £2m of headroom of facilities for us to expand
quicker and to manage growth while we generate cash profits in the future to
repay the debt.
10. Annual General Meeting
The annual general meeting is to be held at 12:00 noon on Thursday 26 March
2026 at the offices of LPA Group Plc (the "Company"), Light and Power House,
Shire Hill, Saffron Walden, CB11 3AQ. The following resolutions are
proposed:
Routine Business
1) To receive the accounts for the year ended 30 September 2025,
together with the reports of the directors and the auditors thereon.
2) To re-elect as a director Gordon Wakeford who retires by rotation, in
accordance with the Company's Articles of Association.
3) To re-elect as a director Stuart Stanyard in accordance with the
Company's Articles of Association.
4) To re-appoint RSM UK Audit LLP as auditors to the Company, to hold
office until the end of the next general meeting at which accounts are laid
before the Company, and to authorise the directors to fix the auditors'
remuneration.
Special Business
5) To authorise the directors to allot shares (as defined in section 551 of
the Companies Act 2006) in the Company.
6) To authorise the Company to make market purchases (as defined in section
693(4) of Companies Act) of its own shares
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