LPA Group returns to profit in first half

(Sharecast News) - LPA Group reported a return to profit in its first half on Monday as revenue rose sharply, with the engineering group saying it expected full-year results to be in line with market expectations.

The AIM-traded company, which designs and manufactures electronic and electro-mechanical components and systems, said revenue for the six months ended 31 March rose 45% to £13.8m from £9.5m a year earlier.

Adjusted EBITDA improved to £1.0m from a loss of £0.5m in the prior-year period, while the group swung to a pre-tax profit of £0.4m from a £0.5m loss.

Basic earnings per share were 2.89p, compared with a loss of 1.49p a year earlier.

Order entry fell to £10.6m from £17.0m, while the order book stood at £29.3m at the end of March, compared with £32.8m a year earlier and £32.5m at the end of September.

Net assets per share increased to 124.0p from 116.9p, while gearing rose to 34.8% from 24.1%.

Chairman Robert Horvath said the company had delivered a strong first-half performance, with robust sales volumes in line with budget expectations despite awaiting updates on several longer-term contracts.

"We are actively collaborating with a number of customers to develop tailored products, while maintaining a clear focus on fulfilling shorter-term orders to support immediate delivery requirements," he said.

"Looking ahead, the outlook for the second half of the year is encouraging."

Chief executive officer Philo Daniel-Tran said the improved performance seen in the second half of the 2025 financial year had continued into the first half of 2026, supported by the resilience of LPA's multi-site operations and long-term customer relationships.

The company said rail remained central to the business, although UK aftercare projects had slowed as the sector awaited new funding decisions and investment, particularly amid uncertainty around Great British Railways and renationalisation.

Existing project wins moved into production in the first half, but several projects had been deferred in the second half.

LPA said aerospace and defence had made a solid start to the year, supported by new customer orders and continued call-offs from existing programmes.

The group said it was working with emerging eVTOL and new airline manufacturers, while further growth was expected in defence land vehicle solutions.

The company also said demand for aviation products remained strong, with the Red Box power supply programme progressing and certification across the range more than 80% complete.

It said most of the enhanced Red Box range had already been released, with the remaining products expected to be finalised by August.

Industrial and infrastructure demand was also positive, with strong growth from LPA's specialist Niphan connectors and ATEX lighting.

The group said it planned to invest in dedicated business development capability in the fourth quarter to support further growth in the 2027 financial year.

LPA said it had refinanced its debt facilities in January through a three-year revolving credit facility with Arbuthnot Latham.

The facility provided about £2m of additional headroom, supporting expansion while the company focused on generating future cash profits to reduce debt levels.

Daniel-Tran said the group was continuing to pursue significant growth, including potential acquisitions aligned with its strategic priorities.

"With rising global demand for aviation, aerospace and defence technologies, alongside expanded opportunities in global rail refurbishment and new build markets, we are well-positioned to unlock growth opportunities in the current year and the years ahead," she said.

At 1411 BST, shares in LPA Group were up 5.11% at 72p.

Reporting by Josh White for Sharecast.com.

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