Lords Group Trading (LORD) H2 2024 earnings summary

Executive summary

• Delivered a resilient performance in 2024 despite challenging macroeconomic conditions, including high interest rates, sticky inflation, and a restrictive budget.

• Revenue declined 5.6% to £436.7m in FY24, reflecting challenging market conditions, but management actions protected profitability and cashflow.

• Strategic actions included cost savings of £3.7m, product range expansion, digital investments, and a sale and leaseback of four sites for £13.1m to boost liquidity.

• Three new branches opened in 2025 to date, with further investment in digital and product range expansion.

Financial highlights

• Adjusted EBITDA fell 16.5% to £22.4m; excluding property gains, adjusted EBITDA was £20.6m.

• Adjusted operating profit was £10.4m, down from £16.5m in 2023; adjusted profit before tax was £3.8m, impacted by exceptional items and amortisation.

• EPS dropped to £0.0185 from £0.0435; dividend per share reduced to 0.84p, maintaining a 2.2x cover.

• Free cash flow was £3.1m, down from £8.7m, mainly due to working capital outflow and lower EBITDA; operating cash conversion was 71%, down from 92.9%.

• Net debt increased to £32.4m from £28.5m; leverage at 2.73x, well below the 3.75x covenant.

Outlook and guidance

• Medium-term outlook is positive, with expectations of market recovery as interest rates ease and government policy becomes more supportive.

• Q1 2025 revenues are strong: P&H up 22% (due to boiler volume pull-forward) and merchanting up 11% year-over-year.

• £500m revenue target remains credible in the medium term.

• Headwinds include increased payroll, taxes, and minimum wage from April 2025.