Lords Group Trading PLC (AIM:LORD) shares plunged 21.6% to 12.94p after the building materials distributor warned that a recovery in construction and plumbing markets was taking longer than expected.
The company forecast revenue of between £475 million and £495 million for the 2026 financial year, with adjusted earnings before interest, tax, depreciation and amortisation of £17 million-£18 million.
Lords said there were no signs of a significant market recovery during the second half, with demand particularly weak in new housing and wholesale plumbing.
First-half revenue was broadly flat at £232 million, compared with £232.8 million a year earlier. However, like-for-like revenue fell 7.1%, with new branches and the acquisition of online building materials retailer CMO masking weaker underlying trading.
Revenue from the plumbing and heating division dropped 15% to £96.3 million, or 13.9% on a like-for-like basis, following exceptional boiler market volumes in March last year.
Lords has reduced the division's distribution centres from seven to four in response to a structural decline in the UK boiler market. The changes are expected to deliver annual savings of around £1.4 million.
Merchanting revenue fell 4.6% to £112.3 million, although its like-for-like decline eased to 2.3% in the second quarter.
CMO revenue increased 17.5% and the business moved into profit after its acquisition in June 2025.
Chief executive Shanker Patel said: "Although the recovery in our end markets is taking longer than expected, we remain focused on cash generation, operational execution and delivering sustainable shareholder value."
