Lords Group Trading (LORD) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 declined 3.8% to £214.2m, with like-for-like revenue down 6.1% amid challenging market conditions and CHMM disruption in Plumbing and Heating.

• Gross margin held steady at 20.2% (vs. 20.4% prior year), reflecting focus on customer service and margin discipline.

• Adjusted EBITDA was £12.6m, down 16.6% year-over-year, impacted by market headwinds and operational leverage.

• Cost-saving actions and management overhead reductions expected to deliver £2.6m annualised savings in FY25.

• 2023 acquisitions (Alloway Timber, Chiltern Timber) fully rebranded and integrated; air source heat pump sales up 492% year-over-year.

Financial highlights

• Revenue declined to £214.2m from £222.6m (down 3.8% year-over-year); like-for-like revenues decreased 6.1%.

• Gross margin at 20.2%, slightly down from 20.4% last year.

• Adjusted EBITDA margin decreased to 5.9% (target remains 7.5%).

• Adjusted EPS was 1.57p (down 52.4% YoY); statutory diluted EPS was 0.39p.

• Interim dividend reduced to 0.32p per share, aligned with EPS.

• Net debt at £36.3m, 4.5% lower year-over-year, with substantial facility headroom.

• Free cash flow conversion in FY23 was 59%; H1 2024 net cash outflow of £7.8m, with improved working capital management.

Outlook and guidance

• H2 trading conditions expected to remain unchanged; medium-term outlook positive, supported by industry fundamentals and anticipated interest rate cuts.

• Adjusted EBITDA for FY24 anticipated to be in line with expectations.

• Renewables, especially air source heat pumps, seen as a near-term growth lever.

• Operational gearing expected to benefit from market recovery; 5% sales increase could add £4–5m to earnings.