A good recommendation18 Sep 2025 09:57
A very good fund manager in interview Laurence Hulse has recommended LST as a very good investment in a boom business.
ortfolios.
PFP’s solution is proven, more cost-effective and less disruptive
LST provides a practical and cost-effective solution to rectify non-compliant public and private buildings with regard to fire safety regulations - a challenge addressed by a £6.1bn allocation from the UK government (only c.£1.1bn spent). LST’s system is retroactively installed within building cavities, reinstating fire-resistant performance and containing the spread of fire and smoke, compliant with regulatory requirements. This innovative solution stands out as an appealing alternative to the more costly and disruptive method of removing external facades and installing traditional fire barriers. Noting, PFP has grown revenue and profits rapidly since it was acquired in late 2023.
Backlog is now starting to unblock
LST has also flagged that some of the backlog that built up in Q2 FY25A, primarily a result of delays in the Building Safety Regulator signing off on fire safety in tall buildings, is now starting to unblock, with the Company already seeing initial follow-on activity with one customer. Management continues to expect this to be unblocked over the short to medium term and is confident that the pipeline conversion will rapidly grow.
Building Safety Regulation reforms, a major short-term growth driver to PFP
A recently created body under the Ministry of Housing, Communities and Local Government is to assume the functions of the Building Safety Regulator, which is expected to fast-track the process for fire safety work in new builds and remediation projects. The Board believes that once implemented, there will be further significant opportunities to scale its current operations, with PFP already in active talks (especially for larger projects) with a number of potential and existing customers. Thus, it provides the Board with greater confidence in securing further new contracts in the near term.
We note the comment that with strong potential for follow-up contracts from existing clients, whilst also focusing on converting contracts for new customers, the Board believes there is significant potential to drive near-term revenue and cash generation at the same time as increasing visibility for the Group (i.e. lowering its risk profile). PFP has the capability to quickly and cost-effectively ramp up its capacity to meet this expected demand. We would also expect the news of the recent durability test results for Injectaclad (50-year lifespan, c.3x the industry standard) to further increase awareness of the solution and the sales pipeline in due course. We flagged in our Trading Comment on 13/08 LST - H1 results, focused on sustained profitability that the Group’s quoted sales pipeline across PFP (c.£24m) and AGT (c.£34m) is currently worth over £58m, on which management expects to see an increased conversion rate going for
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