Lords Posts 'Resilient' H1 Trading; End Markets Remain Challenging

Lords, a leading distributor of building materials, plumbing, heating and DIY products, today provides a trading update in respect of the six months ended 30 June 2026 (‘H1 2026’ or the ‘Period’) ahead of publication of the Group’s interim results for the period in September 2026.

H1 2026 Summary

• Group revenue of £232.0 million (H1 2025: £232.8 million), a resilient performance in the context of market conditions and the comparative period benefiting from exceptional Plumbing & Heating (‘P&H’) market volumes in March 2025:
  
  o Merchanting revenue of £112.3 million (H1 2025: £117.7 million), with like for like revenues improving sequentially from Q1 2026 to Q2 2026;
  
  o P&H revenues of £96.3 million (H1 2025: £112.9 million), with spares revenues increasing 8% over the comparative period;
  
  o Digital revenues +17.5% on H1 2025.
  
  
• CMO continued to make excellent operational progress and delivered EBITDA profitability in the Period.

Trading during the Period reflected the widely publicised and continued challenging conditions across the Group's end markets, particularly in new housing and in the wholesale plumbing sector. Encouragingly, trading within Merchanting improved progressively through the second quarter of the Period and the Group continued to execute to plan against its operational priorities, including in improving profitability at CMO and in reducing the cost base within the P&H division.

Overall, Group revenue remained resilient at £232.0 million (H1 2025: £232.8 million), with increased revenue contributions from four new Merchanting branches opened since the beginning of 2025 and the acquisition of CMO substantially offsetting weaker underlying demand. On a like-for-like basis, adjusted for trading days, Group H1 2026 revenue was 7.1% below the prior year.

Merchanting experienced a slow start to the year but improved steadily after February 2026. Merchanting revenue for the Period was £112.3 million (H1 2025: £117.7 million), a like-for-like decline of 4.9% in the Period, albeit encouragingly improving to a reduced 2.3% decline in the second quarter when compared with the same quarter in the prior year. The Board is encouraged by these early signs of both improving customer activity and the benefits of actions taken to improve commercial performance. Management also continues to actively align the cost base with prevailing market activity through ongoing reviews of branch costs, staffing levels and overheads, ensuring the business remains appropriately positioned for current trading volumes while retaining the capacity to benefit from an eventual market recovery.

As previously indicated, P&H did not benefit from the exceptional market volumes experienced in March 2025 and revenue for the division was £96.3 million (H1 2025: £112.9 million), representing a like-for-like reduction of 13.9%. Recognising the structural decline in the UK boiler market over recent years, management has undertaken a comprehensive rationalisation of the wholesale distribution network, reducing the number of distribution centres from seven to four. These actions are expected to deliver annualised cost savings of approximately £1.4 million while preserving customer service levels and providing a more efficient platform from which to rebuild market share. Spares revenue increased by 8% during the Period.

CMO continued to deliver excellent operational progress and revenue was 17.5% ahead of the comparative period for 2025. Following its acquisition in June 2025, the business has successfully turned around from an initial loss-making position to generate positive EBITDA during the Period. Net debt at the Period end was £29 million, reflecting the normal seasonal investment in working capital during the period. The Group had approximately £30 million of available liquidity at 30 June 2026.

Outlook

Whilst trading in the Merchanting division improved in the second half of the Period, activity levels across the Group's end markets continue to be below the comparative period in 2025 and, with no indications of a significant market recovery in the second half of 2026, the Board now expects full year revenue will be in the range of £475m-£495m and adjusted EBITDA for the full year will be £17m-£18m. The Board remains confident in the Group's medium-term prospects. The actions taken over the past 18 months to simplify the business, improve operational efficiency, strengthen cash generation and shift the Group’s revenue mix towards structurally growing categories leave the Group well positioned to benefit as construction markets recover.

Shanker Patel, Chief Executive Officer, commented: “Whilst our end markets remain challenging, the Group has again demonstrated resilience during the first half. Merchanting improved steadily through the second quarter, CMO has moved to positive EBITDA and we have taken decisive action to improve the performance of our P&H business. Although the recovery in our end markets is taking longer than expected, we remain focused on cash generation, operational execution and delivering sustainable shareholder value as our markets recover.”

Source: Lords

Image: Lords

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