Lords Group shares tank as weak trading prompts profit warning

6th Nov 2026 07:08

(Sharecast News) - Shares in Lords Group Trading plunged on Friday morning after the building materials distributor warned that full-year profits would be hit by weaker-than-expected trading in its plumbing and heating division, while pushing back expectations for a market recovery.

The AIM-listed company said it now expects adjusted EBITDA of approximately £16m for 2026, with an improvement in trading delayed until later in 2027 due to the outlook for interest rates and subdued demand.

Group like-for-like revenues fell 3.1% in the four months to 31 October, taking the decline for the first ten months of the year to 5.2%.

The biggest weakness came from Plumbing & Heating, where like-for-like sales dropped 11.1% over the four-month period and 12.5% over ten months, reflecting continued pressure on household spending and the repairs, maintenance and improvement market.

Merchanting delivered modest like-for-like growth of 0.5% over the four months, while Digital revenues increased 11.8%, supported by market share gains.

Lords also announced that it had completed amendments to its banking facilities, introducing revised quarterly covenant tests through March 2029. Under the new terms, the group must reduce leverage to 3.0 times bank-calculated adjusted EBITDA by March 2028 and will be unable to pay dividends while leverage exceeds 3.5 times.

Meanwhile, restructuring measures implemented in August are expected to generate £1.6m in annualised savings, with a further £1.5m anticipated from the consolidation of distribution centres.

Chief executive Shanker Patel said: "With current interest rate expectations pointing to a slower recovery in demand, we now expect the improvement in trading during FY 2027 to be delayed."

He added: "Our priorities remain improving profitability, generating cash and strengthening the Group's financial position, while positioning the business to benefit from a recovery in our markets."

The stock was down 15.2% at 9.75p by 0949 GMT.

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