AGM Statement

Lords, a leading distributor of building materials in the UK, announces that at the Company's Annual General Meeting ('AGM') due to be held tomorrow at 2:00 pm (BST) at the office of Burson Buchanan, Rose Court, 2 Southwark Bridge Road, London SE1 9HS, Gary O'Brien, the Group's Independent Non-Executive Chairman, will make the following statement:

"Trading conditions across the Group's markets remain challenging with ongoing macroeceonomic uncertainty and geopolitical tensions continuing to weigh on market confidence and activity levels. The latest Builders Merchant Building Index ('BMBI') reported that builders' merchants' like-for-like ('LFL') volumes in Q1 2026 were 8.1% below prior year comparator while higher selling prices resulted in LFL revenue being 3.2% lower. The Heating and Hotwater Industry Council ('HHIC') reported boiler volumes were 4.2% below the prior year in Q1 2026.

"Against this backdrop, Group revenue in the first five months of the year was £195.0 million (2025: £196.3 million), with the addition of four new branches since the beginning of 2025 and the acquisition of CMO in June 2025 helping to offset the impact of subdued end markets.

"Merchanting experienced a slow start to the year with prolonged wet weather in January and early February affecting trading activity. Conditions improved in subsequent months resulting in revenue being 4% lower at the end of May 2026. The division sought, where appropriate, to recover higher fuel and product costs from supply chain pressures and geopolitical developments in the Middle East, while maintaining a disciplined approach to operating expenses.

"Plumbing & Heating did not benefit from the exceptional levels of demand experienced in March 2025, when customers brought forward purchases ahead of industry-wide price increases. As a result, revenue at the end of May was 14% below prior year comparator, although broadly in line with May 2024. The division also experienced softer market demand, reflecting subdued levels of consumer spending on discretionary heating upgrades, only partly offset by increased demand for spares. The strategic review to reduce the distribution network from seven locations to four was implemented at the end of March and is expected to realise annualised cost savings of £1.4 million.

"CMO continued to progress well with revenue at the end of May being 7% ahead of the prior year comparator. Following the acquisition of a loss-making business from pre-pack administration, supplier product availability has been restored, customer refunds reduced to industry norms and operating expenses lowered resulting in positive EBITDA during the first five months of 2026.

"Looking forward, the Board's expectations for the year remain unchanged and it is closely monitoring the potential impact of the ongoing softness in trading as expressed earlier in this statement. To counter this backdrop, the Group continues to prioritise customer service excellence, gross margin, tight control of operating expenses and effective working capital management. When market conditions improve, we expect a disproportionate improvement in profitability, driven by operating leverage across both our branch network and digital platform."