Building products manufacturer Genuit Group shares slumped after the firm cut its 2026 underlying operating profit forecast to £84m, below analyst expectations of £91m to £96m, as unseasonably warm weather and weak demand hit its heating businesses.

The FTSE 250 group said challenging market conditions had persisted since its interim results in August, with conditions worsening in some areas. Its shares fell around 13% to 15% in early trading, making it one of the index’s biggest fallers.

Revenue rose 3.5% to £464.5m in the nine months to 30 September on a reported basis, although like-for-like revenue fell 4.3%.

The climate division recorded revenue of £135.2m, up 3.5% on a reported basis but down 7.2% like for like. Weak heating volumes have been exacerbated by warmer weather delaying autumn stock replenishment at Adey, while Nu-Heat has suffered from subdued demand in its repair, maintenance and improvement market amid expectations of higher interest rates.

The water division generated revenue of £328.5m, up 4% on a reported basis and down 3.3% like for like. Residential demand benefited from pricing and a strong performance at Manthorpe, while commercial and civil engineering markets remained subdued.

Genuit said growing orders linked to the water industry’s AMP8 investment programme provided good visibility of projects for 2027. Integration of its Monodraught and Davidson Holdings acquisitions is complete, while simplification measures are on track to deliver £4m of cost savings in 2027.

CEO Joe Vorih said: “While the majority of the Group has delivered a resilient performance, conditions have worsened in some specific markets due to unseasonally warm weather and the prevailing economic environment.

"Looking ahead, whilst we expect challenging conditions to continue into the new year, Genuit remains well-placed in markets with regulatory and sustainability-related growth drivers."

AJ Bell investment director Russ Mould, said: “Building products outfit Genuit was on the receiving end of some heat from investors as unseasonably warm weather affected its heating business and prompted a profit warning.

“Blaming the weather is up there with the dog ate my homework in the pantheon of excuses but Genuit is also having to contend with difficult trading conditions, with a subdued property market hitting demand for repair, maintenance and improvement work. Additionally, Genuit’s use of polymer, particularly in its water-related products, means it has been particularly exposed to the spike in oil prices this year resulting from conflict in the Middle East.

“Genuit will look ahead with some hope to drivers linked to regulatory spending in the water sector and UK housing policy in the coming years, but the reaction to today’s update shows the market is running out of patience.”

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