Among the various IPOs (initial public offerings) of the last few years, building materials distributor Lords Group Trading (LORD:AIM) seemed one of the more promising, but unfortunately the damage inflicted on the residential property market by 2022’s mini-budget and subsequent regulatory changes have undermined the firm’s business.

In the six months to the end of June the group posted a 6% drop in like-for-like revenue due to ‘the challenging economic backdrop’ and delays to the introduction of the Clean Heat Market Mechanism, which aims to dramatically increase the number of heat pumps installed each year.

Although management action to reduce costs has generated savings, adjusted operating profit fell 16% while earnings per share fell 83% leading the company to slash its dividend from 0.67p to 0.32p per share.

That sent investors scurrying for the exit, pushing the shares down another 2.7p or 7% to a new low of 36.3p compared with the listing price of 95p and a high of 146p shortly after the firm came to market in late 2021.

From a market value at IPO of £150 million, Lords is now valued at just £60 million, even though it has been a serial acquirer of property and other building supplies companies, in particular those providing timber products. 

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