Interim report
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30 September 2026 Lords Group Trading plc (‘Lords’ , the ‘Company’ or the ‘Group’) Interim Results ‘Resilient H1 revenue, with operational actions underway to improve performance and reduce leverage’ Lords (AIM:LORD), a leading distributor of building materials in the UK, today announces its unaudited Interim Results for the six months ended 30 June 2026 (‘H1 2026’ or the ‘Period’). H1 2026 Summary Financial performance • Group revenue for the Period remained stable at £232.1 million (H1 2025: £232 .1 million ), with contributions from new Merchanting branches and CMO offsetting weaker underlying demand in end markets. • • Group like -for-like revenue declined by 6.8%, reflecting continued weakness in construction , RMI and plumbing and heating markets. Gross margin increased to 20.2% (H1 2025: 19.3%) • Adjusted EBITDA1 before property gains of £8.4 million (H1 2025: £10.4 million), with a margin of 3.6% (H1 2025: 4.5%). • Net debt3 of £26.5 million at 30 June 2026 (30 June 2025: £20.9 million) Operational progress • Merchanting improved sequentially, with the like-for-like decline moderating from 4.9% for H1 2026 to 2.3% in Q2 2026. • CMO revenue increased by approximately 17.5% and the business delivered positive EBITDA. • Plumbing & Heating spares revenue increased by approximately 8%. • Decisive restructuring actions implemented within Plumbing & Heating, including depot rationalisation, reducing operating expenses by £1.5 million annualised. Priorities and outlook • Focused improvement plans are in place across every operating business, with emphasis on market-share increase, margin discipline, working capital improvement, carefully controlled capital expenditure and net debt reduction. H1 2026 Financial Performance ADJUSTED RESULTS H1 2026 H1 2025 Change Revenue £232.1m £232.1m - Adjusted EBITDA1 before property gains £8.4m £10.4m (19.2%) Adjusted EBITDA margin before property gains 3.6% 4.5% (90 bps) Adjusted operating profit before property gains2 £2.3m £4.5m (48.9%) Adjusted (loss)/profit before tax2 (£1.2m) £3.1m n/a Adjusted diluted (loss)/earnings per share2 (0.70p) 1.35p n/a Interim dividend per share - 0.32p n/a STATUTORY RESULTS H1 2026 H1 2025 Change Revenue £232.1m £232.1m - Operating (loss)/profit (£3.1m) £3.7m n/a (Loss)/profit before tax (£6.9m) £0.6m n/a Basic (loss)/earnings per share (3.30p) 0.14p n/a Net debt3 £26.5m £20.9m 26.6%
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1 Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation and impairment charges, excluding adjusting items (note 7). 2 Adjusted operating profit, adjusted profit before tax and adjusted diluted earnings per share is operating profit, profit before tax and diluted earnings per share excluding adjusting items. 3 Net debt defined as cash less borrowings before lease liabilities. Shanker Patel, Chief Executive Officer of Lords, commented: “The Group delivered resilient revenue in the first half despite continued weakness across a number of our end markets and a particularly challenging period for Plumbing & Heating. Encouragingly, Merchanting performance improved through the second quarter, CMO delivered positive EBITDA and our Spares business continued to grow. “We have responded decisively to the slower market recovery. In Plumbing & Heating, we have rationalised the depot network, reducing costs and implementing a focused customer recovery programme aimed at improving service levels, re -engaging inactive accounts and recovering market share. Across the Group, our immediate priorities are improving operational execution, converting profit into cash and reducing leverage. “Market conditions are challenging and the timing of a market recovery remains uncertain, the actions now underway are intended to strengthen the Group and position Lords to deliver sustainable shareholder value as demand recovers. Whilst full details of the recently announced UK government help to buy home scheme, and its potentially positive impacts on the Group's end markets, remain to be confirmed, the Board continues to expect the Group performance for the full year to be in line with market expectations." - Ends - FOR FURTHER ENQUIRIES: Lords Group Trading plc Via Burson Buchanan Shanker Patel, Chief Executive Officer Tel: +44 (0) 20 7466 5000 Stuart Kilpatrick, Chief Financial Officer Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker) Tel: +44 (0)20 7220 0500 Ben Jeynes / Seamus Fricker/ Andrea Callaghan (Corporate Finance) Julian Morse / Henry Nicol / Matt Lewis (Sales and ECM) Berenberg (Joint Broker) Tel: +44 (0)20 3207 7800 Matthew Armitt / Harry Nicholas / Detlir Elezi Burson Buchanan Tel: +44 (0) 20 7466 5000 Henry Harrison-Topham / Sophie Wills / Will Chamberlain LGT@buchanan.uk.com Notes to editors: Lords is a specialist distributor of building, plumbing, heating and DIY goods. The Group principally sells to local tradesmen, small to medium sized plumbing and heating merchants, construction companies and retails directly to the general public. The Group operates through the following three divisions: • Merchanting: supplies building materials and DIY goods through its network of merchant businesses and online platform capabilities. It operates both in the ‘light side’ (Building Materials and Timber) and ‘heavy side’ (Civils and Landscaping), through 33 locations in the UK. • Plumbing and Heating: a specialist distributor in the UK of plumbing and heating products to a UK network of independent merchants, installers and the general public. The division offers its customers an
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attractive proposition through a multi -channel offering, operating in 15 locations enabling nationwide next-day delivery service. • Digital: CMO Superstores provides an online route to market from nine specialist websites for construction and plumbing & heating customers. Lords was established in 1982 as a family business with its first retail unit in Gerrards Cross, Buckinghamshire. Since then, the Group has grown to a business operating from 50 sites. For additional information, please visit www.lordsgrouptradingplc.co.uk
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Chief Executive Officer’s Review On behalf of the Board, I am pleased to report the Group’s unaudited Interim Results for the six months ended 30 June 2026. Overview The first half of 2026 was characterised by continued challenging conditions across a number of the Group’s end markets. Activity in new housing remained subdued and repair, maintenance and improvement (‘RMI’) demand was softer than anticipated, while conditions within the wholesale plumbing market were particularly difficult. Against this backdrop, Group revenue was £232.1 million, in line with the £232 .1 million reported in H1 2025, with c ontributions from new branches opened since the beginning of 2025 and CMO substantially offse tting weaker underlying demand ; Group like -for-like (’LFL’) revenue, adjusted for trading days, declined by 6.8%. Profitability was lower year -on-year due to lower volumes , increasing the importance of cash generation and balance-sheet discipline. As reported on publication of the Company’s 2025 final results in May, our end markets have remained subdued. Management has therefore increased the pace of operational improvement activity, with a clear focus on sales execution, margin, cost, working capital and capital discipline. As volumes recover, we expect to benefit from significantly increased operating leverage as a result of the strategic progress made. With much of our cost base now established, incremental future revenue increases should translate into a disproportionate increase in profitability. Merchanting Merchanting experienced a challenging start to the year, reflecting poor weather conditions and the continued weakness in construction activity, particularly in markets with greater exposure to new-build housing. Revenue for the division was £112.3 million compared with £117 .7 million in H1 2025. LFL revenue improved progressively after February 2026, and the rate of decline moderated to 2.3% in the second quarter, compared to a reduction of 4.9% for H1 2026, as a whole. This improving trajectory reflects a gradual stabilisation in customer activity alongside the benefits of commercial and operational initiatives implemented across the division. Performance varied across the portfolio. Lords Builders Merchants and George Lines both delivered positive LFL growth during the period, supported by their customer propositions and local market positions, while businesses with greater exposure to new-build housing remained more challenging. The division is focused on increasing sales intensity, improving gross margin discipline, tightly controlling operating costs and ensuring that each branch delivers an appropriate return on capital employed. Plumbing and Heating The Plumbing & Heating division had a challenging first half. Revenue reduced to £96. 4 million from £112. 2 million in the comparable period, representing a LFL decline of 13.3%. As previously highlighted, the division did not benefit from the exceptional boiler market volumes experienced in March 2025, while the wider UK boiler market is estimated to have contracted by approximately 3% to 4%. Within APP , performance was impacted b y lower market share as we targeted value over volume . We have responded with a depot rationalisation, which reduces operating expenses by £1.5 million annualised, and strengthened the commercial team. A focused customer recovery programme is being implemented to improve service levels, re-engage inactive accounts and recover market share.
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Importantly, the Plumbing & Heating division operates more broadly than just in traditional boiler activities. Spares revenue increased by approximately 8% during the period, benefitting from the resilient nature of repair and maintenance demand. Renewables also continued to progress, reflecting increasing customer adoption of low-carbon heating technologies. These specialist categories remain strategically important and increase the division’s exposure to markets with stronger structural characteristics. Digital CMO has made significant progress since its acquisition in June 2025. Revenue increased by approximately 17.5% compared to H1 2026 and the business delivered positive EBITDA. The initial integration programme focused on restoring volumes, simplifying the operating model and reducing the cost base. Management is now focused on sustainable revenue growth, further margin improvement and increased operational efficiency. The return to positive EBITDA is an important milestone and reflects a more efficient cost base, greater operational discipline and the actions taken to restore the business following acquisition. Further opportunity remains to improve profitability, develop the product proposition and increase operational efficiency as the business moves into the next phase of its development. Cash generation and operational improvement Given the slower -than-anticipated market recovery, we have increased the pace and intensity of the Group’s operational improvement programme. Each operating business has developed a focused improvement plan covering sales growth, gross margin, cost reduction, working capital and organisational effectiveness, with clearer ownership and regular Executive team review of delivery. Capital allocation is also being tightly managed . Near-term priorit ies are to improve operational execution, convert profit into cash and reduce leverage through working capital discipline, restricted capital expenditure and delivery of the business improvement plans. These actions are intended to strengthen returns and balance sheet resilience while preserving the Group’s ability to benefit from improving market conditions. Our people Periods of difficult trading place additional demands on our colleagues, and I would like to thank everyone across Lords for their continued commitment and hard work. Our decentralised operating model remains an important strength. Our businesses succeed through the relationships our colleagues build with customers and suppliers with nimble decision making based on deep knowledge of the markets we serve. At the same time, we are strengthening accountability across the Group, with clearer ownership of performance improvement initiatives and more frequent measurement of delivery. Outlook Trading in Merchanting improved during Q2 2026, but activity across our markets remains below the levels we had anticipated at the beginning of the year. We expect the recovery across our end markets to be more gradual than previously assumed. Our priorities for the remainder of the year are to increase market share within Plumbing & Heating, build on the improving momentum within Merchanting, deliver further benefits from CMO, grow our specialist businesses and convert profit into cash.
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The Group retains established positions in fragmented markets. The operational improvements now underway, together with exposure to the long -term drivers of housing repair and maintenance, infrastructure and lower- carbon heating, are intended to position Lords for sustainable value creation as demand recovers. Shanker Patel Chief Executive Officer 30 September 2026
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Chief Financial Officer Review Financial review Group revenue for the six months ended 30 June 2026 was flat at £232.1 million (H1 2025: £232.1 million), with contributions from four new branches opened since the beginning of 2025 and CMO, acquired in June 2025 , substantially offsetting weaker underlying trading . Group LFL revenue, adjusted for trading days, declin ed by 6.8%. Lower volumes were only partly offset by price and mix, resulting in lower profitability compared with both the prior year and our expectations entering 2026. Adjusted EBITDA before property gains for the period was £8.4 million compared with £10.4 million in H1 2025, with adjusted EBITDA margin reducing to 3.6% from 4.5% . Adjusted operating profit was £ 2.3 million and adjusted loss before tax was £1.2 million. Reported operating loss was £3.1 million after charging adjusting items of approximately £5.7 million, principally relating to restructuring activities, depot consolidation in P&H, redundancy costs and acquisition-related non- cash amortisation. Gross margin and operating expenses Group gross margin was 20.2% compared to 19.3% in the prior period reflecting pricing discipline and improved gross margin in Plumbing & Heating . Management continued to focus on improving procurement, product mix and branch-level gross margin management as part of the business improvement plans. Cost control remained a significant focus . On an underlying basis, excluding the impact of new branches and CMO, the Group’s operating cost base reduced year-on-year by 1.9%. Adjusting items Adjusting items during the period are set out below: H1 2026 H1 2025 £m £m Business combination charges and amortisation of acquired intangibles 2.0 2.1 Depot rationalisation in P&H 2.1 - Restructuring and redundancy 1.3 - Share-based payments - 0.4 Arrangement fees following refinancing 0.3 - 5.7 2.5 Business combination charges and amortisation of acqui red intangibles were similar to prior period at £2. 0 million. In H1 2026, the Group incurred costs associated with the depot rationalisation at P&H of £2.1 million and restructuring, redundancy costs as Condell was rationalised, and further costs initiatives implemented across all divisions. The Board continues to assess adjusting items carefully to ensure that the presentation of adjusted results provides shareholders with a clear understanding of underlying trading performance. Cash flow, working capital and capital expenditure Cash management remains a significant priority. Net debt increased as the December 2025 position unwound and as a result of the typical first half seasonal investment in working capital. A proportion of the first half working capital investment is expected to unwind during the second half. June 2026 delivered a strong working capital inflow, and further initiatives are underway across the Group to optimise inventory, enhance receivables collection and improve supplier terms.
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Capital expenditure is being tightly controlled, and, for the remainder of 2026, expenditure will be prioritised towards essential maintenance and projects offering clear financial returns. Net debt and liquidity Net debt at 30 June 2026 was £2 6.5 million, compared with £20.9 million on 30 June 2025. On 2 April 2026, the Group refinanced its banking facilities, which are committed until 1 April 2029, with extension options. The facilities comprise a £20.0 million committed revolving credit facility ( ‘RCF’) and a £45.0 million receivables financing facility. At the period end, the Group had £32.4 million of available liquidity headroom. Current leverage is above the Board’s medium-term target and reducing net debt is a key priority. This is being supported by inventory optimisation, enhanced receivables collection, supplier -term initiatives, restricted capital expenditure, delivery of operating improvement plans and the Group’s expected second-half seasonal cash profile. The Group continues to receive the support of its lending banks and other key stakeholders. Taxation and earnings per share The tax credit for the period was £1.4 million, representing an effective tax rate of 20.9%. Adjusted basic loss per share was 0.70 pence compared with 1.35 pence in H1 2025. Reported basic loss per share was 3.30 pence. Capital allocation and dividend Given the current trading environment and the Board’s priority on strengthening the balance sheet and reducing leverage, capital allocation is disciplined. Immediate priorities are to support the operating requirements of the Group, invest selectively where returns are compelling and reduce net debt. No interim dividend will be declared for H1 2026 (H1 2025: 0.32p). The Board recognises the importance of dividends to shareholders and intends to review distributions in light of trading performance, cash generation and progress in reducing net debt. Summary Balance Sheet H1 2026 H1 2025 £m £m Tangible assets 10.6 9.0 Working capital 33.0 40.1 Operating capital employed 43.6 49.1 Deferred consideration (1.7) (2.9) Other net assets 92.5 90.7 Leases (71.4) (67.2) Net debt (26.5) (20.9) Net assets 36.5 48.8 Working capital at 30 June 2026 was £ 33.0 million (30 June 2025: £ 40.1 million) and represented 7.0% of sales (30 June 2025: 8.7%). The movement reflects the Group’s continued focus on inventory optimisation and receivables collection together with the normal seasonal working capital profile. Lease liabilities in respect of right -of-use assets were £ 71.4 million (30 June 2025: £67 .2 million ). Deferred consideration of £1.7 million at the period end (30 June 2025: £2.9 million). Stuart Kilpatrick Chief Financial Officer 30 September 2026
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Condensed consolidated statement of comprehensive income For the six months ended 30 June 2026 Six months ended 30 June 2026 (unaudited) Six months ended 30 June 2025 (unaudited) Adjusted Adjusting items (note 7) Total Adjusted Adjusting items (note 7) Total Note £’000 £’000 £’000 £’000 £’000 £’000 Revenue 5 232,055 – 232,055 232,109 – 232,109 Cost of sales (185,123) – (185,123) (187,322) – (187,322) Gross profit 46,932 – 46,932 44,787 – 44,787 Administrative expenses (38,559) (3,652) (42,211) (34,424) (802) (35,226) Property gains – – – 1,714 – 1,714 Depreciation, amortisation and impairment (6,098) (1,716) (7,814) (5,866) (1,700) (7,566) Operating profit/(loss) 2,275 (5,368) (3,093) 6,211 (2,502) 3,709 Finance income 100 – 100 276 – 276 Finance expense 8 (3,541) (364) (3,905) (3,361) (46) (3,407) (Loss)/profit before taxation (1,166) (5,732) (6,898) 3,126 (2,548) 578 Taxation 9 39 1,404 1,443 (679) 515 (164) (Loss)/profit for the period and total comprehensive (expense)/income (1,127) (4,328) (5,455) 2,447 (2,033) 414 Total comprehensive (expense)/income attributable to: Equity owners of the Parent (1,162) (4,328) (5,490) 2,270 (2,033) 237 Non-controlling interest 35 - 35 177 – 177 Total comprehensive (expense)/income (1,127) (4,328) (5,455) 2,447 (2,033) 414 Earnings per share Basic and diluted (loss)/earnings per share (pence) (0.70) (2.60) (3.30) 1.35 (1.21) 0.14 The results for the period arise solely from continuing activities. The condensed consolidated financial statements should be read in conjunction with the accompanying notes.
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Condensed consolidated statement of financial position As at 30 June 2026 30 June 2026 30 June 2025 31 December 2025 (unaudited) (unaudited) (audited) Note £’000 £’000 £’000 Non-current assets Intangible assets 11 42,288 43,219 43,688 Property, plant and equipment 12 10,568 9,021 9,625 Right-of-use assets 13 56,931 55,337 56,755 Investments 4 243 104 Other receivables 244 130 244 110,035 107,950 110,416 Current assets Inventories 49,766 48,093 51,342 Trade and other receivables 65,018 71,238 70,492 Cash and cash equivalents 14 9,089 16,631 15,049 123,873 135,962 136,883 Total assets 233,908 243,912 247,299 Current liabilities Trade and other payables (83,758) (81,990) (97,834) Borrowings 14 (35,267) (17,261) (9,046) Lease liabilities (9,387) (8,414) (8,845) Current tax liabilities (110) (892) (276) Provisions (993) - (114) (129,515) (108,557) (116,115) Non-current liabilities Other payables (126) (343) (573) Borrowings 14 - (19,764) (19,520) Lease liabilities (61,981) (58,779) (62,708) Provisions (1,857) (1,917) (1,842) Deferred taxation (3,925) (5,665) (4,574) (67,889) (86,468) (89,217) Total liabilities (197,404) (195,025) (205,332) Net assets 36,504 48,887 41,967 Equity Share capital 831 831 831 Share premium 28,530 28,530 28,530 Merger reserve (9,980) (9,980) (9,980) Share-based payments reserve 1,180 1,849 1,180 Retained earnings 15,126 25,662 20,162 Equity attributable to owners of the Parent company 35,687 46,892 40,723 Non-controlling interests 817 1,995 1,244 Total equity 36,504 48,887 41,967
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Condensed consolidated statement of changes in equity For the six months ended 30 June 2026 Share capital Share premium Merger reserve Share- based payment reserve Retained earnings Equity attributable to owners of the Parent company Non- controlling interest Total equity £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 At 1 January 2026 831 28,530 (9,980) 1,180 20,162 40,723 1,244 41,967 (Loss)/profit for the period and total comprehensive (expense)/income - - - - (5,490) (5,490) 35 (5,455) Put and call options over non-controlling interests - - - - (8) (8) - (8) Acquisition of non-controlling interests - - - - 462 462 (462) - Transactions with owners of the Company - - - - 454 454 (462) (8) At 30 June 2026 (unaudited) 831 28,530 (9,980) 1,180 15,126 35,687 817 36,504 Share capital Share premium Merger reserve Share- based payment reserve Retained earnings Equity attributable to owners of the Parent company Non- controlling interest Total equity £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 At 1 January 2025 829 28,412 (9,980) 1,459 25,078 45,798 1,818 47,616 (Loss)/profit for the period and total comprehensive (expense)/income - - - - 237 237 177 414 Share-based payments - - - 390 - 390 - 390 Share capital issued 2 118 - - - 120 - 120 Put and call options over non-controlling interests - - - - 347 347 - 347 Transactions with owners of the Company 2 118 - 390 347 857 - 857 At 30 June 2025 (unaudited) 831 28,530 (9,980) 1,849 25,662 46,892 1,995 48,887
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Condensed consolidated statement of cash flows For the six months ended 30 June 2026 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Cash flows from operating activities Profit/(loss) before taxation (6,898) 578 Adjusted for: Amortisation of intangible assets 2,034 1,907 Depreciation of property, plant and equipment 1,058 1,029 Depreciation of right-of-use assets 4,701 4,608 Impairment charge 21 22 Profit on disposal of property, plant and equipment (52) (1,680) Gain on lease modifications (148) - Share-based payment expense - 390 Movement in provisions (696) - Finance income (100) (276) Finance expense 3,905 3,407 Exceptional non-cash 1,363 - Operating cash flows before movements in working capital 5,188 9,985 Decrease in inventories 1,575 1,800 Decrease in trade and other receivables 5,474 5,299 Decrease in trade and other payables (13,738) (7,339) Cash generated by operations (1,501) 9,745 Income taxes 627 (132) Net cash generated by operating activities (874) 9,613 Cash flows from investing activities Purchase of intangible assets (409) (230) Business acquisitions (net of cash acquired) - (1,975) Deferred consideration paid (600) (480) Purchase of property, plant and equipment (1,950) (1,225) Proceeds on disposal of property, plant and equipment 49 12,832 Proceeds on disposal of business - 685 Proceeds on disposal of investment 100 - Interest received 100 276 Net cash (used in)/received from investing activities (2,710) 9,883 Cash flows from financing activities Principal paid on lease liabilities (4,737) (4,765) Interest paid on lease liabilities (1,946) (1,665) Purchase of non-controlling interest (545) - Proceeds from borrowings, net of transaction costs 26,128 36,900 Repayment of borrowings (19,900) (41,940) Bank interest paid (621) (1,270) Interest paid on invoice discounting facilities (755) (437) Net cash outflow from financing activities (2,376) (13,177) Net increase/(decrease) in cash and cash equivalents (5,960) 6,319 Cash and cash equivalents at the beginning of the period 15,049 10,312 Cash and cash equivalents at the end of the period 9,089 16,631
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Notes to the condensed consolidated interim financial statements For the six months ended 30 June 2026 1. General information Lords Group Trading plc (‘Lords’ , the ‘Company’) is a public limited company incorporated in England and Wales. The registered office is 2nd Floor, 12-15 Hanger Green, London W5 3EL. These condensed consolidated interim financial statements (the ‘interim financial statements’) as at and for the six months ended 30 June 2026 comprise the Company and its subsidiaries (together referred to as the ‘ Group’). The Group is a specialist distributor of building, plumbing, heating and DIY goods principally selling to local tradesmen, small to medium sized plumbing and heating merchants, construction companies and retailing directly to the general public. 2. Material accounting policies 2.1. Basis of preparation These interim financial statements have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted for use in the United Kingdom. They do not include all of the information required in the annual financial statements and should be read in conjunction with the Group’s most recent audited consolidated financial statements for the year ended 31 December 2025 (the ‘Annual Financial Statements’) which have been prepared in accordance with UK-adopted International Accounting Standards. The Annual Financial Statements constitute statutory accounts as defined in section 434 of the Companies Act 2006 and a copy of these statutory accounts has been d elivered to the Registrar of Companies. The auditor’s report on the Annual Financial Statements was not qualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under section 498(2) or (3) of the Companies Act 2006. The consolidated financial statements of the Group for the year ended 31 December 202 5 are available at www.lordsgrouptradingplc.co.uk. These interim financial statements have been prepared on a going concern basis and under the historical cost convention. The half year financial information is presented in Sterling and all values are rounded to the nearest one thousand pounds (£1k) except where otherwise indicated. The interim financial statements were approved for issue by the Board of Directors on 29 September 2026. The accounting policies adopted in the preparation of the interim financial statements are consistent with those applied in the preparation of the Annual Financial Statements and the corresponding interim reporting period. 2.2. Going concern The Group's interim financial statements have been prepared on a going concern basis. In assessing the appropriateness of this basis, the Board has undertaken a detailed review of the Group's cash flow forecasts, liquidity, available financing facilities and the financial covenants applicable to those facilities. The assessment covers the period to at least 12 months from the date of approval of these interim financial statements and includes the Group's latest Board -approved forecast together with a range of severe but plausible downside scenarios. At 30 June 2026, the Group had committed banking facilities of £65.0 million, comprising a £20.0 million committed revolving credit facility and a £45.0 million invoice financing facility, which are scheduled to mature on 1 April 2029. At 30 June 2026, the Group had cash and cash equivalents of £9.1 million and £23.3 million of undrawn facilities. The borrowings at 30 June 2026 comprise amounts drawn under the invoice financing facility. No amounts were drawn under the revolving credit facility at the reporting date. The Group maintains constructive relationships with its lending banks and continues to receive their ongoing support. Following discussions with its lending banks, an amendment to its existing financing arrangements has been credit committee approved but is subject to formal documentation at the date of approval of these interim financial statements. The Directors have taken into account the proposed amendment’s ability, on conclusion,
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to meet the Group’s ongoing liquidity requirements, the progress towards completion of the formal amendment documentation and the Group's ongoing relationship with its lenders in assessing the Group's liquidity and financing position. The Group's forecasts indicate that the Group has sufficient liquidity to meet its obligations as they fall due throughout the going concern assessment period. The Directors have also considered severe but plausible downside scenarios, including sensitivit ies to revenue, margins, cash generation and working capital. These scenarios have been considered alongside the mitigating actions available to the Group which, include, inter alia, further cost reductions, working capital management, control of capital expenditure and continued focus on cash generation. Having reviewed the above the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future and that it remains appropriate to prepare the interim financial statements on a going concern basis. 2.3. Taxation Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. 3. Critical accounting judgements and estimates When preparing the Group’s interim financial statements, management makes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses. 3.1. Significant management judgements Assessment of who has the risk and reward of ownership of non -controlling interests with put and call options A key area of judgement applied in the preparation of these interim financial statements is determining whether the risk and rewards of ownership reside with the non-controlling interests or the Group when an acquisition has put and call options. Where the pricing is at a variable price, the Group assesses the risks and rewards that reside with the non - controlling interests. This is because the exposure to any increase or decrease in the value of the business resides with the non -controlling interest, as they will either retain the investment indefinitely (if neither party exercises) or they can recover the fair value of the business through the exercise price. Where the exercise price is a fixed amount (or an amount that varies only for the passage of time), then the risks and rewards reside with the Group. This is because once the put and call become exercisable, one party will be incentivised to exit because they benefit from doing so. 3.2. Estimation uncertainty Information about estimates and assumptions that may have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different. Impairment of goodwill, intangible assets, tangible assets and right-of-use assets Under IAS 36, at the end of each reporting period the Group is required to assess whether there is any indication that goodwill, property, plant and equipment and right -of-use assets may be impaired. For impairment testing purposes, the Group has determined that each branch is a separate cash -generating unit (‘CGU’) on the basis that each branch has distinct assets at each location which are able to generate cash inflows. No indicators of impairment have been found to exist as at 30 June 2026. 4. Alternative performance measures The Group uses various measures which are not defined by Generally Accepted Accounting Principles (‘GAAP’) under International Financial Reporting Standards (‘IFRS’). The alternative performance measures (‘APMs’) should be considered in addition to , and not as a substitute for, or superior to, the information presented in accordance with IFRS, as APMs may not be directly comparable with similar measures used by other companies.
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The Group believes that APMs, when considered together with IFRS results, provide the readers of the interim financial statements with complementary information to better understand and compare the financial performance and position of the Group from period to period. The adjustments are usually items that are significant in size and/or non -recurring in nature. These measures are also used by management for planning, reporting and performance management purposes. Some of the measures form part of the covenant ratios calculations required under the terms of the Group’s borrowings. As APMs include the benefits of restructuring programmes or the use of acquired intangible assets but exclude certain significant costs, such as amortisation of intangible assets, litigation, material restructuring and transaction items, they should not be regarded as a complete picture of the Group’s financial performance, which is presented in IFRS results. The exclusion of adjusting items may result in underlying profits/(losses) being materially higher or lower than IFRS earnings. For further information on the Group’s adjusting items, see note 7. 4.1. Income statement APMs 4.1.1. EBITDA 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Operating (loss)/profit (3,093) 3,709 Depreciation 5,759 5,637 Amortisation 2,034 1,907 Impairment charge 21 22 EBITDA 4,721 11,275 Exceptional items 3,652 412 Share-based payments - 390 Adjusted EBITDA 8,373 12,077 Less: property gains - (1,714) Adjusted EBITDA excluding property gains and losses 8,373 10,363 4.1.2. Adjusted operating profit 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Operating (loss)/profit (3,093) 3,709 Amortisation of acquired intangible assets 1,695 1,678 Impairment charge 21 22 Exceptional items 3,652 412 Share-based payments - 390 Adjusted operating profit 2,275 6,211 Deduct: property gains - (1,714) Adjusted operating profit excluding property gains and losses 2,275 4,497 4.1.3. Adjusted profit before tax 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 (Loss)/profit before tax (6,898) 578 Unwinding of discounting on deferred consideration and put and call options 59 46 Amortisation of acquired intangible assets 1,695 1,678 Unamortised loan arrangement fees on refinancing 305 - Impairment charge 21 22 Exceptional items 3,652 412 Share-based payments - 390 Adjusted (loss)/profit before tax (1,166) 3,126
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4.2. Balance sheet and cash flow APMs 4.2.1. Net debt 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Borrowings 35,267 37,025 Cash and cash equivalents (9,089) (16,631) Unamortised loan arrangement fees 330 547 Net debt 26,508 20,941 4.2.2. Adjusted cash generated by operating activities Adjusted cash generated from operating activities is defined as net cash generated by operating activities plus exceptional items. Further detail on exceptional items can be found in note 7. 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Net cash generated by operating activities (1,501) 9,745 Exceptional items 3,652 412 Non-cash exceptional items (1,363) - Adjusted cash generated by operating activities 788 10,157 4.2.3. Free cash flow 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Adjusted EBITDA 8,373 12,077 Working capital movement (6,689) (240) Net capital expenditure (1,901) 11,607 Principal and interest paid on lease liabilities (6,756) (6,430) Operating cash flow (6,973) 17,014 Income taxes 627 (132) Net interest paid (521) (994) Free cash flow (6,867) 15,888 4.2.4. Operating cash flow conversion 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Operating cash flow (6,973) 17,014 Adjusted operating profit 2,275 6,211 Operating cash flow conversion n/a 939.8% 5. Revenue All of the Group’s revenue was generated from the sale of goods in the UK and was recognised at a point in time (rather than over time). No one customer makes up 10% or more of revenue in any period.
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6. Segmental analysis Management currently identifies the Group’s three service lines as its operating segments. The Group’s CODM is its Executive Directors, and they monitor the performance of these operating segments, as well as deciding on the allocation of resources to them . Segmental performance is monitored using adjusted segment operating results. Inter‑segmental sales are conducted on an arm ’s length basis and are immaterial. Further details on adjusting items can be found in note 7. Merchanting Plumbing and Heating Digital Total Six months ended 30 June 2026 £’000 £’000 £’000 £’000 Revenue 112,302 96,364 23,399 232,055 Gross profit 29,055 13,152 4,725 46,932 Administrative expenses (24,476) (9,619) (4,464) (38,559) Adjusted EBITDA before property gains 4,579 3,533 261 8,373 Property gains - - - - Adjusted EBITDA 4,579 3,533 261 8,373 Depreciation, amortisation and impairment (4,217) (1,719) (162) (6,098) Adjusted operating profit 362 1,814 99 2,275 Adjusting items (2,517) (2,723) (128) (5,368) Operating loss (2,155) (909) (29) (3,093) Finance income 100 Finance expense (3,905) Loss before taxation (6,898) Taxation 1,443 Loss for the period (5,455) Additions to non-current assets 2,614 1,639 1,656 5,909 Merchanting Plumbing and Heating Digital Total Six months ended 30 June 2025 £’000 £’000 £’000 £’000 Revenue 117,692 112,194 2,223 232,109 Gross profit 30,365 13,945 477 44,787 Administrative expenses (23,846) (10,008) (570) (34,424) Adjusted EBITDA before property gains 6,519 3,937 (93) 10,363 Property gains 1,714 - - 1,714 Adjusted EBITDA 8,233 3,937 (93) 12,077 Depreciation, amortisation and impairment (4,129) (1,737) - (5,866) Adjusted operating profit/(loss) 4,104 2,200 (93) 6,211 Adjusting items (1,557) (945) - (2,502) Operating profit/(loss) 2,547 1,255 (93) 3,709 Finance income 276 Finance expense (3,407) Loss before taxation 578 Taxation (164) Loss for the period 414 Additions to non-current assets 8,835 94 35 8,964
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7. Adjusting items Exceptional items are presented separately as one-off costs that are unlikely to reoccur or costs outside normal business trading. Merchanting Plumbing and Heating Digital Total Six months ended 30 June 2026 £’000 £’000 £’000 £’000 Exceptional items: Restructuring 1,242 2,122 102 3,466 Business combinations 120 66 - 186 Adjusting items within EBITDA 1,362 2,188 102 3,652 Amortisation of acquired intangible assets 1,134 535 26 1,695 Impairment charge 21 - - 21 Adjusting items within operating profit 2,517 2,723 128 5,368 Unwind of discount on deferred consideration and put and call options 59 Unamortised loan arrangement fees on refinancing 305 Adjusting items within profit/(loss) before tax 5,732 Tax on adjusting items (1,404) Adjusting items within profit/(loss) after taxation 4,328 Merchanting Plumbing and Heating Digital Total Six months ended 30 June 2025 £’000 £’000 £’000 £’000 Share-based payments 241 149 - 390 Exceptional items: Business combinations 309 261 - 570 Adjustment to contingent consideration (158) - - (158) Adjusting items within EBITDA 392 410 - 802 Amortisation of acquired intangible assets 1,143 535 - 1,678 Impairment charge 22 - - 22 Adjusting items within operating profit and profit/(loss) before tax 1,557 945 - 2,502 Unwind of discount on deferred consideration and put and call options 46 Adjusting items within operating profit and profit/(loss) before tax 2,548 Tax on adjusting items (515) Adjusting items within profit/(loss) after taxation 2,033 Adjusting items in the first half of 202 6 largely relate to depot rationalisation and restructuring costs of £2.1 million. Costs associated with business combinations included £1.7 million (H1 2025: £1.7 million) in relation to amortisation of acquired intangibles and £0.2 million (H1 2025: £0.4 million) of costs in relation to prior year acquisitions or deferred consideration. No charge was recognised in respect of share-based payments (H1 2025: £0.3 million). 8. Finance expense 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Bank loans and overdrafts 1,086 1,255 Invoice discounting facilities 755 437 Lease interest 1,946 1,665 Unwinding of discounting on deferred consideration and put and call options 59 16 Unwinding of discounting on dilapidations provisions 50 34 Other interest payable 9 - 3,905 3,407 9. Taxation Income tax in the first half of 2026 was a credit of £1.4 million (H1 2025: charge of £0.2 million) representing an effective tax rate of 20.9% (H1 2025: 28.4%).
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10. Earnings per share 30 June 2026 30 June 2025 (unaudited) (unaudited) (Loss)/profit attributable to equity holders of the parent (£’000) (6,795) 237 Weighted average number of shares (m) 166.2 166.1 Number of dilutive options (m) 0.5 0.9 Weighted average number of shares – diluted (m) 166.7 167.0 Basic earnings per share: (Loss)/earnings from continuing activities (pence) (3.30) 0.14 Diluted earnings per share: (Loss)/earnings from continuing activities (pence) (3.30) 0.14 Both the basic and diluted earnings per share have been calculated using the earnings attributable to shareholders of the Parent company , as the numerator, meaning no adjustment to the loss was necessary in either year. Statutory diluted earnings per share calculation uses the 166.2 million as a denominator as dilutive shares would not increase loss per share. The Group has also presented adjusted earnings per share which have been calculated using earnings attributable to shareholders of the Parent company, adjusted for the after-tax effects of adjusting items (see note 7). 30 June 2026 30 June 2025 (unaudited) (unaudited) (Loss)/profit attributable to equity holders of the parent (£’000) (5,490) 237 Adjusting items, net of tax 4,329 2,033 Adjusted earnings (1,161) 2,270 Adjusted basic earnings per share: (Loss)/earnings from continuing activities (pence) (0.70) 1.35 Adjusted diluted earnings per share: (Loss)/earnings from continuing activities (pence) (0.70) 1.35 11. Intangible assets Goodwill Customer relationships Trade names Software Total £’000 £’000 £’000 £’000 £’000 Cost At 1 January 2026 20,961 34,925 3,983 5,037 64,906 Additions - - - 409 409 Adjustments to business combinations 341 145 (241) - 245 Disposals - - - (99) (99) At 30 June 2026 (unaudited) 21,302 35,070 3,742 5,347 65,461 Accumulated amortisation and impairment At 1 January 2026 (125) (17,193) (2,104) (1,796) (21,218) Charge for the period - (1,533) (162) (339) (2,034) Impairment - - - (21) (21) Disposals - 12 - 88 100 At 30 June 2026 (unaudited) (125) (18,714) (2,266) (2,068) (23,173) Net book value (unaudited) 21,177 16,356 1,476 3,279 42,288
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Goodwill Customer relationships Trade names Software Total £’000 £’000 £’000 £’000 £’000 Cost At 1 January 2025 19,030 34,722 3,741 3,708 61,201 Additions - - - 230 230 Acquired through business combinations 507 113 - - 620 Disposals - - - (18) (18) At 30 June 2025 (unaudited) 19,537 34,835 3,741 3,920 62,033 Accumulated amortisation and impairment At 1 January 2025 - (14,159) (1,470) (1,288) (16,917) Charge for the period - (1,506) (172) (229) (1,907) Disposals - - - 10 10 At 30 June 2025 (unaudited) - (15,665) (1,642) (1,507) (18,814) Net book value (unaudited) 19,537 19,170 2,099 2,413 43,219 12. Property, plant and equipment Land and building leasehold improvements Plant and equipment Total £’000 £’000 £’000 Cost At 1 January 2026 12,569 10,373 22,942 Additions 1,707 242 1,949 Disposals (3) (211) (214) At 30 June 2026 (unaudited) 14,273 10,404 24,677 Accumulated depreciation and impairment At 1 January 2026 (5,619) (7,698) (13,317) Charge for the period (408) (650) (1,058) Disposals 3 263 266 At 30 June 2026 (unaudited) (6,024) (8,085) (14,109) Net book value (unaudited) 8,249 2,319 10,568 Land and buildings Land and building leasehold improvements Plant and equipment Total £’000 £’000 £’000 £’000 Cost At 1 January 2025 7,076 8,955 10,474 26,505 Additions 4 874 359 1,237 Acquired through business combinations - 1,200 50 1,250 Disposals (7,080) - (63) (7,143) At 30 June 2025 (unaudited) - 11,029 10,820 21,849 Accumulated depreciation and impairment At 1 January 2025 (572) (4,848) (7,004) (12,424) Charge for the period (44) (319) (666) (1,029) Impairment - (15) (7) (22) Disposals 616 - 31 647 At 30 June 2025 (unaudited) - (5,182) (7,646) (12,828) Net book value (unaudited) - 5,847 3,174 9,021
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13. Right-of-use assets Leasehold property Plant and equipment Total £’000 £’000 £’000 Cost At 1 January 2026 74,401 22,339 96,740 Additions 2,395 1,156 3,551 Lease remeasurements and modifications 1,326 - 1,326 Disposals (680) (496) (1,176) At 30 June 2026 (unaudited) 77,442 22,999 100,441 Accumulated depreciation and impairment At 1 January 2026 (30,320) (9,665) (39,985) Charge for the period (2,636) (2,065) (4,701) Disposals 681 495 1,176 At 30 June 2026 (unaudited) (32,275) (11,235) (43,510) Net book value (unaudited) 45,167 11,764 56,931 Leasehold property Plant and equipment Total £’000 £’000 £’000 Cost At 1 January 2025 67,357 18,550 85,907 Additions 7,437 60 7,497 Disposals (1,266) (730) (1,996) At 30 June 2025 (unaudited) 73,528 17,880 91,408 Accumulated depreciation and impairment At 1 January 2025 (24,361) (8,892) (33,253) Charge for the period (2,940) (1,668) (4,608) Disposals 1,060 730 1,790 At 30 June 2025 (unaudited) (26,241) (9,830) (36,071) Net book value (unaudited) 47,287 8,050 55,337 14. Cash and borrowings 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Current Bank loans 35,267 17,261 35,267 17,261 Non-current Bank loans - 19,764 - 19,764 Total borrowings 35,267 37,025 Cash and cash equivalents (9,089) (16,631) Unamortised loan arrangement fees 330 547 Net borrowings 26,508 20,941 In 2025, borrowings on revolving credit facilities were classified as ‘non-current’ and at 30 June 2026, there were no borrowings on revolving credit facilities due to the refinancing on 2 April 2026 and all borrowings related to Invoice Financing, which is classified as current’ Total accrued interest of £38k (H1 2025: nil) has been added to bank loans and unamortised transaction costs of £368k (H1 2025: £547k) have been offset against the bank loans.
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Unrestricted access was available at the reporting date to the following lines of credit: 30 June 2026 30 June 2025 (unaudited) (unaudited) £’000 £’000 Total facilities Revolving credit facility 20,000 50,000 Invoice drawdown facility 45,000 25,000 65,000 75,000 Used at period end Revolving credit facility - 20,300 Invoice drawdown facility 35,597 17,300 Unused at period end Revolving credit facility 20,000 29,700 Invoice drawdown facility 3,260 7,700 23,260 37,400 Financing facilities comprise a £20.0 million revolving credit facility (‘RCF’) and £45.0 million invoice financing facility (‘IFF’) maturing on 1 April 2029. The facilities include two uncommitted extension options of one year each which would, subject to lender approval, extend the tenor of the RCF to four years or five years if exercised. The facilities contain covenants that require the ratio of adjusted EBITDA to net debt (excluding lease liabilities) and the ratio of adjusted EBITDA to net finance costs to remain within pre‑defined thresholds at each quarter‑end date. Each testing date covers the results for the previous 12 months. Funds borrowed under the RCF bear interest at an annual rate of between 2.0% and 3.4% above the compounded Sterling Overnight Index Average (‘SONIA’), dependent on the Group’s leverage covenant. Funds borrowed under the IFF bear interest at an annual rate of 1.75% above the Bank of England Base Rate. The banking facilities are subject to cross guarantees from the relevant Group undertakings and secured by fixed and floating charges over the land, tangible and other assets and insurances. - ENDS -