Lords Group Trading plc (AIM: LORD), a specialist UK distributor of building materials, plumbing, heating and DIY products, has confirmed completion of amendments to its existing banking facilities, securing a revised covenant package through to March 2029. The company simultaneously released a trading update covering the four months ended 31 October 2026, revealing contrasting performances across its three divisions. The Board has revised its full-year adjusted EBITDA guidance to approximately £16 million, while warning that a market recovery in Plumbing and Heating is now expected to be delayed until later into FY 2027.

Key Points

  • Lords Group Trading plc (AIM: LORD) — specialist UK distributor of building, plumbing, heating and DIY goods operating across 50 sites
  • Banking facility covenant amendments completed, covering the Group's requirements through to March 2029; dividends suspended while leverage exceeds 3.5x bank-calculated Adjusted EBITDA
  • FY 2026 Adjusted EBITDA now expected to be approximately £16 million; Group like-for-like revenue down 3.1% in the four-month period and down 5.2% cumulatively to October 2026
  • Investors may be watching for signs of Plumbing and Heating stabilisation and further progress on cost-saving targets heading into the winter season

Revised Covenant Package Secured Through March 2029 as Lords Suspends Dividends Above 3.5x Leverage

Lords has completed amendments to the covenant packages on its existing banking facilities, with quarterly testing thresholds designed to support the Group as it focuses on cash generation and balance sheet strengthening. The amended terms include a leverage threshold of 3.0x bank-calculated Adjusted EBITDA at 31 March 2028 and beyond. Crucially, the company has undertaken that no dividends will be paid for as long as Group leverage remains above 3.5x bank-calculated Adjusted EBITDA. Chief Executive Shanker Patel welcomed the continued support of the Group's lending partners, describing the completion as a positive step for the business's financial footing.

Digital Division Posts 11.8% Like-for-Like Growth While Plumbing and Heating Revenues Slide 11.1%

The Group's three divisions produced sharply divergent results in the four months to 31 October 2026. The Digital division, which operates nine specialist websites through CMO Superstores, delivered like-for-like revenue growth of 11.8% in the period and 15.3% cumulatively over ten months, driven by market share gains. Merchanting, which operates across 33 UK locations supplying building materials and DIY goods, recorded LFL growth of 0.5% in the four-month period. By contrast, the Plumbing and Heating division reported a LFL revenue decline of 11.1% in the period and 12.5% cumulatively, with muted trading attributed to cost-of-living pressures and weakness across the repair, maintenance and improvement sector.

Annualised Cost Savings of £1.6 Million from Merchanting Restructuring and £1.5 Million from APP Distribution Centre Rationalisation

The company has moved to offset revenue pressures through operational restructuring. In Merchanting, restructuring completed in August 2026 is expected to deliver annualised savings of £1.6 million. Within the Plumbing and Heating division, wholesale business APP reduced its distribution centre network from seven sites to four, a rationalisation completed in the second quarter of this year, with anticipated annualised cost savings of approximately £1.5 million. Elsewhere within Plumbing and Heating, the spares and trade counter businesses DH&P and HRP delivered combined revenue growth of 11.5% during the period, while renewables revenue more than doubled compared with the prior period.

FY 2026 Adjusted EBITDA Guidance Set at Approximately £16 Million as Market Recovery Pushed to Later in FY 2027

The Board now anticipates FY 2026 Adjusted EBITDA of approximately £16 million, reflecting the more challenging than expected start to the Plumbing and Heating winter season. In light of current interest rate expectations, the anticipated recovery in demand has been pushed back to later in FY 2027. Management stated its priorities as improving profitability, generating cash, managing costs, and positioning the Group to benefit from an eventual market recovery. Investors may be watching whether the structural cost savings and Digital momentum can adequately offset continued weakness in the Plumbing and Heating market.