No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Building materials distributor Lords Group has backed its full-year expectations as it said trading remains challenging.
In a statement released on Wednesday but to be made on Thursday at the company's annual meeting, non-executive chairman Gary O'Brien said that ongoing macroeconomic uncertainty and geopolitical tensions are continuing to weigh on market confidence and activity levels.
Lords pointed out that the latest Builders Merchant Building Index (BMBI) reported that builders' merchants' like-for-like volumes in the first quarter of 2026 were 8.1% below the previous year, while higher selling prices resulted in LFL revenue being 3.2% lower.
The Heating and Hotwater Industry Council (HHIC) reported boiler volumes down 4.2% on the prior year in Q1.
Against this backdrop, group revenue in the first five months of the year dipped to 195m from 196.3m a year earlier, with the addition of four new branches since the beginning of 2025 and the acquisition of CMO in June 2025 helping to offset the impact of subdued end markets.
O'Brien said: "Merchanting experienced a slow start to the year with prolonged wet weather in January and early February affecting trading activity. Conditions improved in subsequent months resulting in revenue being 4% lower at the end of May 2026.
"The division sought, where appropriate, to recover higher fuel and product costs from supply chain pressures and geopolitical developments in the Middle East, while maintaining a disciplined approach to operating expenses."
He also said the plumbing & heating division did not benefit from the exceptional levels of demand seen last March, when customers brought forward purchases ahead of industry-wide price hikes. As a result, revenue at the end of May was 14% below the previous year, but broadly in line with May 2024.
Lords said the division also experienced softer market demand amid subdued levels of consumer spending on discretionary heating upgrades, only partly offset by increased demand for spares.
"Looking forward, the board's expectations for the year remain unchanged and it is closely monitoring the potential impact of the ongoing softness in trading as expressed earlier in this statement," O'Brien said.
"To counter this backdrop, the group continues to prioritise customer service excellence, gross margin, tight control of operating expenses and effective working capital management. When market conditions improve, we expect a disproportionate improvement in profitability, driven by operating leverage across both our branch network and digital platform."
See latest RNS on Investegate