Lords Group Trading (LON:LORD) is building on its strong foundation with an encouraging performance in the first half of FY25, according to a detailed research note from Cavendish. The specialist distributor of building, plumbing, and heating products continues to demonstrate resilience, growth, and strategic focus across its core divisions.
Cavendish maintains a target price of 72.0p, which offers substantial upside from current levels. Analyst Edward Stacey highlighted that “Lords has reported positive 1H25 results with continued improving market share in the Merchanting division and a return to more normal activity in Plumbing and Heating (P&H).”
Highlights from 1H25 Results:
- Revenue grew by 8.4% year-on-year to £232.1 million
- Like-for-like growth stood at 7.0%
- Adjusted EBITDA came in at £12.0 million, showing a like-for-like improvement over last year once one-offs are excluded
- Net debt reduced significantly to £20.9 million
- Interim dividend maintained at 0.32p per share
Lords’ performance was further enhanced by organic initiatives such as the opening of three new branches, while its acquisition strategy continues to bear fruit. The CMO Group acquisition, completed in June 2025, has already begun contributing to revenue growth and is expected to strengthen future profitability.
According to the report, “The Merchanting division reported a 12.5% increase in revenue or 11.5% like-for-like with growth coming from product lines including Civils and Dry Lining.” Meanwhile, the Plumbing and Heating division saw like-for-like growth of 2.8%, with a notable 57% year-on-year surge in renewables revenue, bolstered by the Ultimate Renewables acquisition.
On the outlook for the full year, Stacey noted, “The company remains on track for FY25 adj. EBITDA expectations.” He also mentioned that while the business isn’t banking on a broad-based recovery in end markets during the second half, Lords is still expected to deliver a 15.2% rise in revenue for the full year, reaching £503 million.
Key Forecast Metrics for FY25 and FY26:
- FY25 Revenue: £503m (up from £436.7m in FY24)
- FY26 Revenue forecast: £540m
- Adjusted EPS forecast for FY26: 3.4p
- Net debt forecast to fall to £10.5m by year-end FY26
Cavendish’s valuation is based on an EV/Sales multiple of 0.5x, at the lower end of the typical range for the sector. The firm believes that as market sentiment improves and EBITDA margins expand, Lords’ valuation could significantly rerate. In a hypothetical scenario where EBITDA margins reach the company’s target of 7.5%, the implied P/E would fall to just 3.9x from the current 10.9x.
On a Final Note:
Lords Group Trading is proving itself to be a steady hand in a choppy market. With a strong balance sheet, a track record of successful acquisitions, and increasing revenue visibility, it remains well-positioned for future growth. The company’s ability to balance strategic expansion with operational discipline is likely to underpin continued investor interest.
