Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Lords Group revenue rises, earnings slip in volatile market
(Sharecast News) - Building materials distributor Lords Group said in a trading update on Wednesday that despite ongoing subdued trading conditions, it progressed its growth strategy in 2023. The AIM-traded firm said it made significant operational advancements in both its merchanting and its plumbing and heating divisions.
It also expanded its presence with the addition of seven new sites across the UK, contributing estimated annualised revenue of £25m at maturity.
As a result, Lords anticipated reporting 2023 revenue of £463m, compared to £450m in 2022, and adjusted EBITDA of £26.6m, down from £30m year-on-year, in line with market expectations.
Adjusted profit before tax was set to be £11m, falling from £17.4m in 2022.
Despite market headwinds, the group said it achieved total sales growth of 2.8% during the year.
The company said it maintained a cautious approach to inorganic growth, prioritising balance sheet discipline in 2024.
Additionally, Lords said it had strategically extended its product range in the renewables sector, well-positioned to benefit from the Clean Heat Market Mechanism (CHMM) set to start in the second quarter.
The government initiative would incentivise the adoption of renewable energy sources in UK housing, particularly air-source heat pumps.
Lords said it had fostered strong trading relationships with six air source heat pump manufacturers, and achieved 60% revenue growth in its renewables range in 2023.
As of 31 December, the group's net debt stood at £28.5m - a significant reduction from the £38m it recorded on 30 June.
The reduction in debt was achieved through prudent financial management controls and working capital normalisation.
It added that its freehold property portfolio was estimated to be worth at least £15m.
Looking ahead, Lords acknowledged the challenging market conditions expected to persist into 2024.
While some improvements in customer demand had been observed, intermittent signals and price deflation continued to influence the market.
As a result, the group said it remained cautious in its approach to the year, allowing time for market dynamics to recalibrate as economic volatility gradually reduced.
"Like many of our peers it has been a challenging year but the fundamentals of our business have underpinned a resilient performance that I'm incredibly proud of," said chief executive officer Shanker Patel.
"Our scale and profitability in both merchanting, and plumbing and heating, have benefitted from our organic growth levers as we build our geographic footprint, extend our product range and build our digital sales expertise."
Patel said the firm maintained an ongoing ability to execute earnings-enhancing mergers and acquisitions, but balance sheet discipline remained a core consideration.
"In that regard it is pleasing to report net debt reduction ahead of market expectations.
"As market conditions improve we are confident that we are exceptionally well positioned for growth."
Lords Group said it would publish its 2023 final results in May.
At 1019 GMT, shares in Lords Group Trading were down 3.65% at 40.95p.
Reporting by Josh White for Sharecast.com.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.