Alumasc Group (ALU) H2 2026 earnings summary

Executive summary

• Revenue declined 5.6% year-on-year to £107.1m amid a challenging UK construction market, with two divisions outperforming sector trends and gaining market share.

• Underlying profit before tax fell from £14.2m to £10m, with gross margin down 150bps to 36.4% and operating margin at 10.5%.

• Strong cash conversion above 100% enabled continued investment and a stable dividend at 11.1p per share.

• Leadership transition occurred with the CEO's departure and appointment of an interim executive chair, strengthening the management team.

• Strategic priorities and operational improvements are driving continued market outperformance and margin recovery.

Financial highlights

• Revenue dropped to £107.1m from £113.4m year-on-year, mainly due to a large prior-year Hong Kong contract; excluding this, revenues were broadly flat.

• Non-Hong Kong export sales grew 36%, offsetting a 2% decline in UK revenues.

• Gross margin decreased to 36.4% (down 150bps), and operating margin fell to 10.5% from 13.7%.

• Operating cash conversion remained strong at 103%, with free cash flow of £3.3m.

• Full year dividend maintained at 11.1p per share, covered 1.9x by underlying earnings.

Outlook and guidance

• Order book at June 2026 was 49% higher year-on-year; by August, it was 56% higher than the previous August.

• Revenues for the first two months of FY 2027 are 5% ahead of last year.

• Board expects margin improvement in FY 2027, especially in Water Management, and reaffirms medium-term operating margin target of 15%-20%.

• Long-term outlook remains positive due to regulatory tailwinds, government spending, and chronic UK housing undersupply.