Latest Results

FY25 Financial Performance

FY25 Highlights

Resilience in a tough market with financial progress

• Record revenue of £472.8 million, up 8.3%, with positive LFL¹ growth (+0.7%) despite subdued end markets
• Merchanting LFL revenue growth of +3.1% driven by customer service led model, reflecting market share gains alongside disciplined pricing
• Plumbing and Heating (‘P&H’) margins improved by 60bps, driven by product mix and margin management
• Renewables revenue up 57%, increasing margin quality
• Adjusted EBITDA² of £21.0 million
• Net debt³ reduced by 59% to £13.4 million, significantly strengthening the balance sheet

Strategic progress and platform strengthened – strongly positioned for market recovery

• Market leading e-commerce platform, CMO, acquired in June 2025, materially accelerating digital capability and national reach
• Three new branch openings during the year, further expanding Lords national network
• Structural cost actions taken, in particular following the P&H strategic review, to streamline the business
• Increased operating leverage as volumes recover

Post Period End

• Opened a further dual site in Bury St Edmunds in March, housing Lords Builders Merchants and Advance Roofing
• Agreed a new three-year, £65 million banking facility to provide the financial flexibility to support our strategy to invest in organic growth and pursue selective acquisitions, in a market where consolidation opportunities are increasing

¹ Like-for-like (LFL) sales is a measure of growth in sales, adjusted for new, divested and acquired locations such that the periods over which the sales are being compared are consistent.

² Adjusted earnings before interest, tax, depreciation and amortisation and impairment charges, inclusive of property gains and losses, excluding adjusting items (note 6).

³ Adjusted operating profit, adjusted profit before tax and adjusted diluted earnings per share is operating profit, profit before tax and diluted earnings per share excluding adjusting items.

⁴ Net debt defined as cash less borrowings before lease liabilities

Shanker Patel, Chief Executive Officer of Lords, commented:

“Despite a challenging backdrop, Lords made further progress in positioning the Group for growth. We grew revenue by 8.3%, reduced net debt by 59%, opened three new Merchanting branches and completed the acquisition of CMO, which broadened our customer reach and significantly strengthened our digital capability.

“Whilst market conditions are likely to remain subdued in the near term, with ongoing uncertainty around inflation and interest rates, we have built a more diversified, more scalable business and the Group is now better positioned operationally and strategically than at any point in its recent history. Supported by our new banking facilities, we have the financial flexibility to continue investing selectively as opportunities arise.

“As the market recovers, we expect a disproportionate improvement in profitability driven by operating leverage across both our branch network and digital platform. We are confident that the strategic progress made in FY25 will translate into enhanced returns and sustainable shareholder value creation over the medium term.”

Chairman's statement

Overview

This was a year of strategic and operational progress for the Group, contributing to a resilient financial performance in a market where other market participants have struggled. Our customer-service led model differentiates us and has enabled the Group to grow revenue without having to chase volume through aggressive pricing.

Even so, inflationary pressures on some key costs, notably Employer’s National Insurance, the National Minimum Wage and property costs, have affected our profitability and cash flow in the year. The Board and management have therefore remained tightly focused on costs, managing cash and on strengthening the balance sheet.

At such times, it can be tempting to pause strategic investment. However, we believe strongly that the Group has substantial growth potential and it is incumbent on us to continue to deploy our capital selectively, so we are in an even better position as the market recovers. The three new Merchanting branches we opened in the year, and a fourth location opened post period end, are testament to this.

The Board was also pleased to approve the acquisition of CMO, which has significantly accelerated the Group’s digital strategy, and we are excited by the possibilities it presents. The UK building materials market remains highly fragmented and underpenetrated from a digital perspective. We believe CMO presents a compelling opportunity to capture market share through a hybrid model, combining local service excellence with national digital reach.

Dividends

The Board recognises the importance of dividends to our shareholders, as well as our obligation to balance the dividend payout as part of a wider capital allocation policy in managing cash and continuing to invest such that the business delivers greater returns to shareholders in the years ahead. We have therefore maintained our policy of scaling the dividend in line with adjusted earnings per share. While this inevitably means dividends are lower in more difficult years, it will also result in dividend progression as the market recovers.

At the half year, we held the interim dividend steady at 0.32 pence per share. Adjusted diluted earnings per share for the year was 38% lower at1.14 pence (FY24: 1.84 pence) and the Board has therefore recommended a final dividend of 0.20 pence per share (FY24: 0.52 pence), to give a total in respect of the year of 0.52 pence (FY24: 0.84 pence). Information on payment, record and ex‑dividend dates can be found in the Financial Review.

People and culture

Our people and culture provide significant competitive advantages for us. While the number of colleagues we employ has nearly doubled over the last five years, Shanker Patel and his team have worked hard to maintain the family and entrepreneurial culture of the business and with it the high levels of employee engagement and motivation. This in turn enables us to deliver consistently strong service, so our customers keep coming back.

As Shanker explains in more detail in his Review, we have continued to invest in our senior leadership and this is delivering real benefits. The investment has largely been self-funded through efficiencies and has given us greater strength in depth, supporting current performance, our ability to identify and secure growth opportunities and our longer-term succession planning.

Looking forward

While near-term market visibility remains limited and with the macroeconomic uncertainty facing the whole world the near-term economic recovery supported by interest rate reductions is uncertain. The Group however is significantly better positioned than a year ago and capable of managing through these difficult periods.

We have

• strengthened the Group’s balance sheet, with banking facilities for the medium term;
• expanded our network and capabilities;
• accelerated our digital strategy; and
• increased exposure to higher-growth, higher-margin categories such as renewables.

As a result, and with enhanced capacity, we expect a disproportionate improvement in profitability as demand recovers driven by operating leverage across both our branch network and digital platform.

We believe the actions taken during FY25 will enable the Group to emerge from the cycle as a stronger, more scalable business with structurally improved earnings potential.

Gary O’Brien
Independent Non-Executive Chairman
19 May 2026

Chief Executive Officer's review

Structurally stronger, more diversified and positioned for growth

The actions we have taken during the year have significantly strengthened the Group operationally and structurally. We are now a more diversified, more scalable business, with enhanced capabilities that position us to capture market share and improve returns when conditions normalise.

Navigating a cyclical downturn while upgrading the platform

FY25 was a challenging year, characterised by subdued construction activity, sustained pricing pressure and higher employment costs. Against this backdrop, we focused on what we could control: protecting margins, managing costs, strengthening the balance sheet and investing selectively for growth.

While market conditions constrained short-term profitability, they also provided an opportunity to upgrade the business. The result is that the Group is better positioned operationally and strategically than at any point in its recent history.

Resilient performance and disciplined execution

Group revenue increased by 8.3% to £472.8 million, supported by a 0.7% like-for-like(‘LFL’) uplift and contributions from new branches and CMO. This reflects the strength of our customer relationships and the effectiveness of our decentralised operating model.

Merchanting delivered revenue growth of 6.0% (+3.1% LFL) despite softer trading conditions in the second half, while Plumbing & Heating revenues were resilient as the core boiler market remained flat. Revenues increased by 57% in renewables, as Ultimate Renewables continues to perform strongly and is becoming an increasingly important contributor to the division’s mix and margin profile.

Adjusted EBITDA (including property gains) was £21.0 million (FY24: £22.4 million), with margin at 4.4% (FY24: 5.1%). The margin reduction reflects a combination of market-driven pricing pressure, increased employment costs and targeted investment to position the Group for improved profitability as volumes recover.

Building a multi-channel platform

The acquisition of CMO in June 2025 was a key strategic milestone and a transformational step in our evolution. CMO is a market‑leading e-commerce platform serving homeowners and trade customers nationwide. It provides scalable digital infrastructure, advanced data capability and national reach, enabling us to serve customers beyond our physical branch footprint.

We are building a multi-channel distribution platform that combines:

• local branch density and service excellence;
• national digital reach; and
• an expanding specialist product range.

This model enhances customer experience while improving asset utilisation and margin potential. Integration is already creating opportunities to:

• expand product ranges across channels;
• leverage Group supplier relationships;
• improve pricing through data insight; and
• selectively fulfil digital demand through our branch network.

Strategy

Our long-term strategy remains unchanged: growing our geographical footprint, product range and digital revenues through disciplined organic expansion and selective acquisitions, and continued investment in our ‘3Ps’ – people, plant and premises. We allocate capital conservatively, targeting attractive returns while maintaining prudent leverage.

Geographical expansion

During FY25, we opened three Merchanting branches in Mansfield (A.W. Lumb), Maidstone (George Lines) and Bicester (a dual site housing Lords Builders Merchants and Advance Roofing). Post year end, we opened a further dual site in Bury St Edmunds. All branches have traded in line with expectations, reinforcing our confidence in measured network expansion.

Product range extension

Our decentralised structure enables branches to identify and introduce locally differentiated products, supporting customer retention and margin resilience. In P&H, distribution agreements signed in FY24 have strengthened our boiler mix and supported rapid growth in renewables, including air source heat pumps.

CMO enhances our product breadth considerably. On acquisition by the Group, CMO offered over 140,000 SKUs; we have since expanded this by approximately 15,000 products, incorporating boilers and spares from the P&H portfolio. Leveraging Group supplier relationships will further broaden the range and improve purchasing efficiency.

Enhancing digital capabilities

Digital capability is central to our evolution. We continue to invest in e-commerce and process automation, with the objective of increasing digital revenues as a proportion of Group sales over the medium term. For example, the customer portal introduced in APP in FY24 gained traction during FY25, improving customer experience and driving operational efficiency.

CMO materially accelerates our digital agenda. It brings scalable technology infrastructure, advanced data analytics capability and expertise in performance marketing. To embed best practice across the Group, we have established a technology forum led by CMO, facilitating cross-divisional collaboration in areas such as pricing insight, customer data utilisation and AI-enabled workflow tools.

Our 3Ps – People, Plant and Premises

Our people remain the foundation of the Group. I thank all colleagues for their commitment during a demanding year. We welcomed over 100 new colleagues from CMO, whose digital expertise complements our existing operational strengths.

We continued to strengthen our senior leadership capability. Steve Durdant-Hollamby leads Merchanting, Matt Webber joined as COO of P&H in September 2025 and has already enhanced commercial focus within the division, and Dean Murray, CEO of CMO, joined the Group’s Operating Board, broadening digital and e-commerce expertise at Group level.

Investment in plant includes ongoing deployment of systems and digital tools to drive efficiency. In P&H, Podfather was introduced to enhance delivery tracking, customer communication and workflow management, reducing administrative friction and improving service quality.

In premises, we are investing to support growth and rationalisation. Ultimate Renewables is relocating to a substantially larger site in 2026 to accommodate expansion.

Following a strategic review of P&H completed at the start of 2026, we will rationalise distribution centres from seven to four. This programme will enhance stock control, improve service consistency and increase operating efficiency.

Strong financial position

Cash generation and balance sheet management were priorities throughout the year. Net debt, excluding leases, reduced significantly in more than halving to £13.4 million (31 December 2024: £32.4 million). The sale and leaseback of four operating properties generated £13.1 million of gross proceeds and working capital was carefully managed during the year. On 2 April 2026, with the support of our banking group, we agreed a new three-year, £65 million refinancing, which provides the financial flexibility to support our strategy to invest in organic growth and pursue selective acquisitions, in a market where consolidation opportunities are increasing. The Group enters FY26 with a substantially strengthened balance sheet and significant liquidity.

Clear priorities for FY26

Our priorities for FY26 are clear:

• driving like-for-like sales growth in Merchanting;
• enhancing P&H margins through mix and efficiency;
• scaling CMO and embedding digital capability across the Group; and
• maintaining disciplined capital allocation.

Outlook and medium-term potential

Market conditions remain subdued in the near term, with ongoing uncertainty around inflation and interest rates. However, the Group is materially better positioned than a year ago. We have:

• strengthened our balance sheet;
• expanded our digital capability;
• accelerated renewables growth; and
• rationalised our cost base.

As volumes recover, we expect to benefit from significantly increased operating leverage as a result of the strategic progress made during the year. With much of our cost base now established, incremental revenue should translate into a disproportionate increase in profitability.

We are therefore confident that the strategic progress made in FY25 will translate into enhanced returns and sustainable shareholder value creation over the medium term.

Shanker Patel
Chief Executive Officer
19 May 2026

Financial review

The Group delivered a solid financial performance in FY25 despite challenging market conditions, particularly in the second half of the year. Our focus on pricing discipline and customer service helped to protect gross margins and we continued to carefully control overheads, in the face of cost pressures. We ended the year with a strong balance sheet, following the sale and leaseback transaction in April 2025, giving us the financial strength to continue selective investment in organic and acquisitive growth initiatives.

Revenue

Group revenue was a record at £472.8 million (FY24: £436.7 million), up 8.3%. On a LFL basis, revenue was 0.7% higher, with the difference reflecting the acquisition of CMO in June 2025 and three new branches opened during the year.

Merchanting had a strong first six months in FY25 but trading was affected by the market backdrop, combined with prolonged pre-Budget uncertainty in H2 FY25 that ultimately led to the deferral of end-customer decisions. Revenue in the year grew by 6.0% to £227.1 million (FY24: £214.3 million), with the division’s LFL growth of 3.1% indicating increased market share.

P&H was resilient in a flat boiler market, with revenue 1.1% lower in FY25 at £219.9 million (FY24: £222.4 million). LFL revenue was 1.6% down on the prior year. Renewables revenues continued to grow strongly, with a 57% increase.

The Group acquired CMO on 6 June 2025. It successfully implemented its plan to rebuild its supply chain post-acquisition, resulting in an improving trends in revenues and a profitable second half of the year. In total, the Digital division contributed £25.8 million to Group revenue for the year.

Gross margin

Gross margins across the Group improved slightly to 19.7% (FY24: 19.5%). At a divisional level, gross margin improved by 60 basis points in Plumbing & Heating following strategic positioning. Merchanting margin reduced by 70 basis points as our competition looked to gain market share, particularly in the second half.

Operating expenses

Adjusted operating expenses in the year were £73.4 million (FY24: £64.6 million) and the main movements are set out below.

Strategic expansion of the business added £7.0 million to overheads, through the three new Merchanting branches opened in FY25, the addition of operating expenses from CMO (acquired in June 2025) and the full-year impact of Ultimate Renewables (acquired in October 2024). Changes in the rate of Employer’s National Insurance and National Minimum Wage increases increased operating expenses by £0.7 million. Excluding these items, underlying costs increased by 1.7%, despite inflationary pressure as our supply chain sought to pass on their own cost increases.

Adjusted EBITDA

Adjusted EBITDA was £21.0 million (FY24: £22.4 million). This includes property gains of £1.4 million (FY24: £1.8 million), shown on the face of the income statement. The gain in FY25 arose from the sale and leaseback of four operating properties, for gross proceeds of £13.1 million. In FY24, the gain of £1.8 million primarily related to a lease surrender premium for our Park Royal site. Excluding property gains and losses, adjusted EBITDA was £19.6 million (FY24: £20.6 million).

The table below shows adjusted EBITDA by division:

Adjusted operating profit which includes the charge for depreciation and amortisation, was £9.2 million in FY25 (FY24: £10.4 million).

Adjusting items

Adjusting items before tax amounted to £8.0 million (FY24: £6.4 million), comprising:

• Amortisation of acquired intangibles: £3.4 million (FY24: £3.3 million);
• Share-based payments: £0.2 million (FY24: £0.8 million);
• Exceptional items: £1.3 million (FY24: £0.5 million), which primarily related to restructuring costs;
• Branch right of use asset impairment charges in relation to 9 branches where the carrying value of the branch’s tangible and right of use assets exceeded the forecast value of future cash flows. The total non-cash impairment charge was £2.7 million (FY24: £1.5 million). The majority of these branches are forecast to deliver a positive EBITDA contribution in FY26 and beyond, based on prudent planning assumptions over the remaining lease period;
• Non-cash goodwill and trade name impairment charge of £0.4 million (FY24: £nil) in respect of Chiltern Timber, which is being repositioned under the Lords Builders’ Merchants brand.

Net finance costs

Net finance costs were £6.3 million (FY24: £6.9 million), comprising:

• £3.1 million (FY24: £4.1 million) in respect of bank borrowings, less bank interest received of £0.3 million (FY24: £0.3 million)
• £3.6 million (FY24: £2.8 million) related to lease liabilities
• a credit of £0.1 million (FY24: charge of £0.3 million) to unwind discounted future liabilities

The sale and leaseback transaction in April 2025 contributed to reduced interest on bank borrowings, as a result of lower net debt, and higher interest on lease liabilities, due to the new leases on these properties.

Profit before tax and earnings per share

Adjusted profit before tax, which excludes the adjusting items above, was £2.8 million (FY24: £3.8 million). Statutory loss before tax for the year was £5.2 million (FY24: £2.6 million) reflecting non-cash impairments in respect of right-of-use assets, goodwill and trade names referred to above within adjusting items.

Adjusted diluted earnings per share was 1.14 pence (FY24: 1.84 pence). Basic diluted loss per share was 2.68 pence (FY24: 1.19 pence).

Dividend

The Board has carefully considered the interests of the Group’s stakeholders and continued to follow its policy of scaling the full-year dividend in line with adjusted earnings per share.

The Board has therefore recommended a final dividend of 0.20 pence per share (FY24: 0.52 pence per share), which will be paid on 6 July 2026 to shareholders on the register at the close of business on 29 May 2026. The Company’s shares will be marked ex-dividend on 28 May 2026.

We paid an unchanged interim dividend of 0.32 pence per share (H1 FY24: 0.32 pence per share) in October 2025. The total dividend declared in respect of FY25 is therefore 0.52 pence per share (FY24: 0.84 pence per share), which is 2.2 times covered by adjusted earnings per share (FY24: 2.2 times). The cash cost of the total dividend in respect of FY25 is £0.9 million (FY24: £1.4 million).

At the year end, the Company had distributable reserves of £13.6 million (31 December 2024: £14.2 million).

Debt financing and liquidity

On 2 April 2026 the Group refinanced its banking facilities, which are committed until 1 April 2029, with two one-year extension options. The facilities comprise a £20.0 million committed revolving credit facility (‘RCF’) and a £45.0 million receivables financing facility.

At 31 December 2025, the Group had net debt (defined as borrowings less cash and cash equivalents, and before recognising lease liabilities) of £13.4 million (31 December 2024: £32.4 million), headroom of £46.5 million within its debt facilities (31 December 2024: £52.3 million) and a further £15.0 million of accessible cash (31 December 2024: £10.3 million). Had the new facilities been in place, the Group would have had £51.5 million of available liquidity.

Cash flow

Net cash generated by operating activities was £29.4 million (FY24: £16.8 million). Operating cash conversion, which is the ratio of operating cash flow to adjusted operating profit was 317% (FY24: 71%) due to strong working capital management and reflecting the proceeds of property disposals.

The net inflow from investing activities was £6.3 million (FY24: £1.0 million outflow), which comprised inflows of £13.1 million (FY24: £4.2 million) from the sale and leaseback, interest and a business disposal, net of outflows on current and prior‑year acquisitions of £2.6 million (FY24: £1.3 million). Capital expenditure was £3.1 million (FY24: £2.8 million), largely relating to the three branch openings in the year. Investment in systems and digital tools totaled £1.1 million (FY24: £1.1 million). Overall, the Group achieved a reduction in net debt, before leases of £19.0 million (FY24: increase of £3.9 million).

Summary Balance sheet

Tangible assets reduced from £14.1 million at 31 December 2024 to £9.6 million. This largely reflects the sale and leaseback of freehold properties, which was offset by an increase in other net assets. The Group also acquired a long leasehold property valued at £1.2 million through the CMO acquisition.

Net debt reduced by £19.0 million to £13.4 million, reducing the ratio of net debt to operating capital employed to 39.4% (31 December 2024: 61.1%). Trade receivables of £54.8 million (31 December 2024: £61.9 million) underpin the refinanced bank facilities and strong working capital management reduced the ratio of working capital to sales to 5.2% (FY24: 9.0%).

Stuart Kilpatrick
Chief Financial Officer
19 May 2026

Consolidated statement of comprehensive income
For the year ended 31 December 2025

The results for the period arise solely from continuing activities.

The condensed consolidated financial statements should be read in conjunction with the accompanying notes.

Consolidated statement of financial position
As at 31 December 2025

Consolidated statement of changes in equity
For the year ended 31 December 2025

Consolidated statement of cash flows
For the year ended 31 December 2025