Genuit Group (LON:GEN) reported fiscal 2025 results showing revenue growth and resilient profitability amid what management repeatedly characterized as a “challenging” trading environment. Chief executive Joe Vorih and CFO Tim Hext said performance benefited from a mix of organic growth, market share gains, and contributions from two acquisitions completed late in the year, while higher employment costs weighed on margins.
FY2025 financial performance
Group revenue increased about 7% to £602 million, which management said included roughly 3% organic growth. Underlying operating profit rose 2.4% to £94.4 million (described as broadly flat on a like-for-like basis). Underlying operating margin declined 70 basis points to 15.7%, which Hext attributed largely to increased national insurance and national living wage costs—also quantified as roughly 70 basis points of margin impact.
The board declared a 12.9p dividend, up 0.4p, with Hext pointing to strong cash generation and a balance sheet leverage ratio of about 1.5x—within the company’s 1–2x target range.
Divisional results under the prior three-unit structure
Hext reviewed performance across the company’s historical segment reporting structure—Climate Management Solutions, Water Management Solutions, and Sustainable Building Solutions—before the company transitions to a simplified two-division model.
- Climate Management Solutions: Revenue increased over 10% year-over-year (about 6% like-for-like). Ventilation grew over 10%, with strong performance in mechanical ventilation heat recovery (MVHR), including a cooling module in multi-story residential. Management cited resilient performance in the Adey filtration business despite a subdued boiler market, and noted softness in underfloor heating tied to the RMI market, with an expected route to margin improvement as volumes scale and as Monodraught is integrated.
- Water Management Solutions: Revenue rose about 5% year-over-year but was described as flat like-for-like. Growth areas included stormwater attenuation and blue-green roofs (characterized as small but rapidly growing). Profit declined due to an inventory provision flagged at the half year and the impact of higher employment costs, which management said was harder to pass on at lower volumes.
- Sustainable Building Solutions (SBS): Revenue grew 6.5% (about 3% like-for-like). Management said the group captured about £20 million annually of drainage business following the exit of a competitor. SBS profitability improved, with margin up about 80 basis points, attributed to commercial market performance and continuous improvement efforts.
Portfolio moves, restructuring, and two-division simplification
Genuit spent over £100 million on acquisitions, including Monodraught (ventilation) and Davidson Holdings (brands cited included Cistermiser, Keraflo, Salamander, and Talon). Vorih said both acquisitions were integrating well, were expected to be accretive in the current year, and were on track to reach 20%+ mid-term operating targets.
Non-underlying items totaled £25 million, down year-over-year, including about £14 million of amortization of intangibles. The company recorded about £5 million of restructuring costs, partly related to the move to two divisions and actions intended to improve the water business. It also incurred about £3 million in acquisition-related costs and noted impairments related to holding the Polydeck business for sale. Management said Polydeck was considered non-strategic and that it aimed to divest it in H1.
Under the new structure, management described:
- A Climate division of over £170 million in revenue with return on sales of over 13% in 2025, with ventilation representing about 55% of the division and characterized as the fastest-growing component.
- A Water division of over £400 million in revenue with return on sales of nearly 17%, including a civils and infrastructure component described as lower margin but positioned for growth as AMP8-related activity ramps.
Strategy, operational initiatives, and market drivers
Vorih reiterated the company’s “sustainable solutions for growth” strategy, emphasizing sustainability-driven end markets and the Genuit Business System (Lean-based) as central to productivity and, increasingly, growth. He cited 75 Kaizen events during the year (nearly four times 2024 levels) and said over 23% of employees had participated in Kaizen or Lean training. The company also highlighted sustainability metrics, including a 15.7% decrease in carbon intensity and recycled polymer content remaining around 50%.
On people and talent development, Vorih said 18.9% of employees participated in “earn and learn” programs, the group promoted 94 colleagues internally, and 40% of those promoted were female leaders. He added that about a third of the senior leadership team is now female.
Outlook: subdued start to FY2026, hedging, and medium-term targets
Hext said the subdued environment seen in Q4 continued into January and February and was compounded by wet UK weather that reduced site activity, though management noted positive signs in order intake suggesting construction sites were “gearing up” for spring activity. He said first-half comparisons would be tougher than the second half because trading weakened later in FY2025.
In Q&A, Hext said the margin run rate entering 2026 was “more akin” to the 16.4% achieved in the second half. He also addressed exposure to energy price volatility, stating the group was 90% hedged for the summer and 80% hedged for the winter, and said he did not expect energy costs to “hit” the company hard in 2026. Management said about 3.5% of revenue comes from the Middle East and noted its primary concern was employee safety, with around 30 people in the region.
On input costs, Hext said Genuit buys about £80 million of polymers each year, including £50 million virgin and £30 million recycled, with virgin polymer costs more closely correlated to oil and gas prices. He said the company has historically been able to pass on price changes in what he described as a rational industry, though with a potential lag.
Management reiterated confidence in its medium-term targets, including outperforming the market by 2%–4% and growing operating margin to over 20% over the medium term. In response to a question on operating leverage, Hext said the group generally targets 30%–35% drop-through on incremental business and maintained it has at least 25% capacity to manufacture more as volumes recover.
About Genuit Group (LON:GEN)
Genuit Group plc is the UK’s largest provider of sustainable water, climate and ventilation products for the built environment. Genuit’s solutions allow customers to mitigate and adapt to the effects of climate change and meet evolving sustainability regulations and targets.
The Group is divided into three Business Units, each of which addresses specific challenges in the built environment:
– Climate Management Solutions – Addressing the drivers for low carbon heating and cooling, and clean and healthy air ventilation.
