Genuit Group H1 Earnings Call Highlights

Genuit maintained its full-year outlook despite challenging construction markets: first-half reported revenue rose 3%, while like-for-like revenue fell about 5% and underlying operating profit declined 1.6% to £43.9 million.

Cost pressures and operational issues weighed on performance, including polymer inflation, a £1.5 million Adey stock provision and an approximately £0.8 million supplier-related impact.

Management expects pricing actions, productivity gains and the resolution of Adey issues to support second-half margins.

The group is advancing strategic growth and efficiency initiatives, including Davidson site consolidation expected to deliver more than £4 million in annualised savings from 2027, expanding stormwater opportunities under AMP8, and investments in ventilation, water management and lower-carbon products.

Genuit Group LON: GEN said first-half trading remained challenging amid subdued construction demand, higher polymer costs and uncertainty linked to the Middle East conflict, but maintained its full-year expectations after reported revenue rose 3% and underlying operating profit declined only modestly.

Chief Executive Officer Joe Vorih said the company had responded with “balanced cost and price action,” simplification initiatives and continued investment in growth areas including ventilation, water management and lower-carbon products.

He said the group expects its simplification programme to generate more than £4 million in annualised savings, primarily from 2027 onward.

Chief Financial Officer Tim Pullen reported revenue growth of 3% on a reported basis, supported by acquisitions completed in 2025.

On a like-for-like basis, revenue declined about 5%, though this improved from an approximately 8% decline reported in the four months to April.

Underlying operating profit was £43.9 million, down 1.6% from the prior year, while EBIT margin declined by around 70 basis points.

Pullen said gross margins remained resilient, reflecting cost control and price management, although results were affected by a lag between polymer cost inflation in March and April and price increases that took effect in May.

Water represented about 70% of group revenue, while climate represented just under 30%.

Housebuilding accounted for roughly one-third of revenue, with repair, maintenance and improvement representing nearly another third.

Non-housing markets, including commercial, civil engineering and infrastructure, contributed about 27% of revenue.

International operations represented around 10% of revenue.

Cash conversion exceeded 70% in the first half, in line with normal seasonal phasing, and the company remains on track for more than 90% cash conversion for the full year.

Net debt was about £190 million, resulting in leverage of 1.6 times, within Genuit’s targeted range of one to two times.

The interim dividend was held at 4.2 pence per share.

Climate division revenue rose 2.4% on a reported basis but fell 8% on a like-for-like basis.

Pullen said ventilation had been among the group’s stronger markets, helped by commercial demand, particularly from schools, and residential demand linked to addressing damp and mould in social housing.

That performance was offset by weaker demand in heating-related repair, maintenance and improvement activity.

Genuit’s Adey business, which supplies water treatment and filtration products associated with heating systems, faced lower renovation and refurbishment activity during the period.

Adey also incurred two specific first-half issues: a £1.5 million slow-moving stock provision and a supplier issue with an approximately £0.8 milli...