Key facts
- Lords Group shares dropped 20.61% to 13p, marking its largest single-day stock fall.
- The company cited reduced market confidence, high interest rates, and rising national insurance costs as primary pressures.
- Chief financial officer Stuart Kilpatrick stated that no significant market recovery is expected in the second half of 2026.
- Lords Group reported first-half revenue of £232m, a slight decrease from the previous year.
- The firm expects full-year revenue between £475m and £495m, with adjusted pre-tax earnings of £17m to £18m.
- The company has restructured its plumbing and heating divisions, anticipating £1.5m in savings.
Lords Group, a London-based builders' merchant, experienced its largest-ever single-day stock fall, with shares plummeting 20.61% to 13p on Thursday. The company attributed the decline to a combination of reduced market confidence, high interest rates, and increased employment costs due to rising national insurance.
Chief financial officer Stuart Kilpatrick expressed concern over the lack of confidence from both markets and individuals, leading to a cautious approach in spending. He urged the government to streamline planning processes, restore economic stability, and alleviate financial pressures on businesses, specifically mentioning a reduction in employers' national insurance contributions. Kilpatrick also highlighted high interest rates and the economic impact of the Iran conflict as ongoing concerns for the construction sector.
The construction industry, a significant contributor to the UK's economy at seven percent of GDP and employing over two million people, is currently facing cost increases not seen in three decades. Other firms in the sector have also voiced concerns; homebuilder Berkeley previously warned of the need for government intervention, and Crest Nicholson reported a £35 million loss due to rising costs, interest rates, and consumer confidence erosion linked to the Iran conflict. The industry has also seen job losses, with S&P Global's Purchasing Managers' Index (PMI) indicating sustained shedding of jobs, particularly in civil engineering.
Prime Minister Andy Burnham has announced plans for a significant council housing program. Meanwhile, Lords Group reported revenue of £232 million in the first half of the year, a marginal decrease from £232.8 million in the same period last year. While its digital and spares divisions saw revenue increases, and trading in the merchanting division improved in the second quarter, the company sees no indication of a substantial market recovery in the latter half of 2026. The firm anticipates full-year revenue between £475 million and £495 million, with adjusted pre-tax earnings projected at £17 million to £18 million. The most significant downturn was observed in the repairs, maintenance, and improvement (RMI) and building materials business. To navigate the challenging environment, Lords Group has restructured its plumbing and heating divisions, expecting to save £1.5 million, and is focused on maintaining market share and controlling costs.