Flat sales as merchanting and CMO offset Plumbing & Heating weakness.
Lords Group reported first-half revenue of £232.1 million, unchanged from the same period last year despite continued weakness across construction, repair, maintenance and improvement (RMI), and plumbing and heating markets.
Growth from new merchant branches and digital business CMO helped offset softer underlying demand, although like-for-like revenue declined by 6.8%. Gross margin improved to 20.2%, while adjusted EBITDA before property gains fell to £8.4 million from £10.4 million. Net debt increased to £26.5 million.
Commenting on the results, Shanker Patel, Chief Executive Officer of Lords, said:"The Group delivered resilient revenue in the first half despite continued weakness across a number of our end markets and a particularly challenging period for Plumbing & Heating. Encouragingly, Merchanting performance improved through the second quarter, CMO delivered positive EBITDA and our Spares business continued to grow."
Within Merchanting, revenue slipped to £112.3 million from £117.7 million, although trading improved as the half progressed, with the rate of like-for-like decline easing to 2.3% in the second quarter. Lords Builders Merchants and George Lines both delivered positive like-for-like growth during the period.
Plumbing & Heating remained the Group's most challenging division. Revenue fell to £96.4 million from £112.2 million in H1 2025, with like-for-like sales down 13.3%. In response, the business has implemented a depot rationalisation programme expected to reduce operating expenses by £1.5 million on an annualised basis, while strengthening its commercial team and launching a customer recovery initiative. Revenue from its spares operation increased by around 8%, while renewables continued to show progress.
CMO, acquired in June 2025, continued its recovery with revenue increasing by approximately 17.5% and the business returning to positive EBITDA. Management said the focus has now shifted from stabilisation to driving profitable growth and operational efficiency.
Patel added: "We have responded decisively to the slower market recovery. In Plumbing & Heating, we have rationalised the depot network, reducing costs and implementing a focused customer recovery programme aimed at improving service levels, re-engaging inactive accounts and recovering market share. Across the Group, our immediate priorities are improving operational execution, converting profit into cash and reducing leverage."
Looking ahead, Lords has intensified its operational improvement programme across all divisions, focusing on market share growth, margin discipline, working capital management, cost control and debt reduction. The Group has also confirmed that no interim dividend will be paid as it prioritises strengthening the balance sheet and reducing leverage.
Despite ongoing uncertainty around the timing of a market recovery, the Board said it remains confident that full-year performance will be in line with market expectations.
Patel concluded: "Market conditions are challenging and the timing of a market recovery remains uncertain, the actions now underway are intended to strengthen the Group and position Lords to deliver sustainable shareholder value as demand recovers."
