Genuit Group (GEN) H2 2024 earnings summary

Executive summary

• Operating margin increased to 16.4% despite a 4.3% revenue decline year-over-year, reflecting improved business quality and execution of the Sustainable Solution for Growth strategy.

• Strong cash generation with 99.3% cash conversion and £91.6m underlying operating cash, reducing leverage to 0.9x and enhancing investment flexibility.

• Dividend per share increased to 12.5p, supported by board confidence in midterm execution and growth prospects.

• Strategic acquisitions (Omnie, Timoleon, Sky Garden) strengthened positions in underfloor heating and green-blue roof markets.

• Net debt reduced to 0.9x pro-forma EBITDA, providing significant capacity for M&A and organic investment.

Financial highlights

• Revenue down 4.3% year-over-year to £561.3m, outperforming broader market declines in key segments.

• Underlying operating profit at £92.2m, down 2% year-over-year, with gross margin up 220bps to 44.5% due to improved purchasing and productivity.

• Net finance costs reduced due to lower borrowing; strong cash flow with £91.6m generated.

• Capital expenditure at £26m, below guidance due to timing, with 2025 guidance reiterated at £30m–£35m.

• Underlying basic EPS at 24.6p, down 2.4% year-over-year, impacted by higher tax rate.

Outlook and guidance

• Trading for 2025 started in line with expectations; market conditions remain similar to late 2024.

• Targeting to offset £5m in cost headwinds from National Insurance and Minimum Wage increases through price and productivity.

• Committed to achieving over 20% operating margin midterm and maintaining over 90% cash conversion.

• Expecting mid-to-long-term growth from regulatory drivers (Future Homes Standard, AMP8) and market recovery.

• Confident in medium-term growth prospects due to exposure to structural growth drivers.