Lords Group Trading PLC’s shares fell on Thursday despite reporting record revenue, as it warned of slower demand in its key end markets.

The London-based building materials distributor said persistent high levels of inflation, increasing interest rates and weaker consumer confidence have continued to reduce demand in its key end markets of private repairs, maintenance and improvements and new build housing, and consequently demand for the group’s products.

Shares fell 8.0% to 63.00 pence in London on Thursday afternoon.

Given the continuing challenging backdrop, Lords now anticipates that demand will remain at current levels throughout the remainder of the second half of the financial year.

It expects to deliver full-year revenue of around £450 million and adjusted earnings before interest, tax, depreciation and amortisation of around £27 million.

For the six months ended June 30, Lords reported record revenue of £222.6 million, up 3.9% from £214.2 million the year prior, although a decrease of 4.4% on a like-for-like basis.

Plumbing and Heating revenue rose 4.5% to £113.2 million from £108.3 million before, in what Lords called a solid first half despite the prevailing trading environment.

Pretax profit fell to £5.6 million from £5.8 million and adjusted basic earnings per share decreased to 3.39p from 3.87p.

Lords reported an adjusted Ebitda margin of 6.8%, improved from 6.6%, and remains on track to reach the 7.5% medium-term target.

The half-year payout to shareholders was left unchanged at 0.67p.

Lords said it remains confident of delivering its strategic targets of £500 million revenue by 2024, alongside the improved Ebitda margin.

The acquisition pipeline remains active, offering potential for further market share gains, enhanced profitability and further diversified revenue streams, it added.

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