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Investing.com -- Genuit Group (LON:GENG) shares fell more than 7% on Tuesday after the company maintained its full-year earnings guidance despite posting higher first-half sales, with pressure from costs and limited market growth weighing on the outlook.
The company reported like-for-like sales growth of 6.1% in the first half of 2025, an acceleration from the 5.3% gain in the first four months of the year. The increase reflected about 4% volume growth, all of it from outperforming a flat underlying market, and about 2% price inflation.
The Climate Management Solutions division recorded the strongest growth, supported by demand for mechanical ventilation with heat recovery systems with cooling modules in social housing and residential new-build markets.
Adey, part of the same division, benefited from an 8% rise in boiler installations. Sustainable Building Solutions also grew, helped by market share gains following Aliaxis’s exit from the UK.
Genuit ended the period with net debt at one time its earnings before interest, taxes, depreciation and amortisation, leaving capacity for acquisitions, though no new transactions were announced.
Management projected underlying earnings before interest and tax for 2025 to be in line with the consensus range of £93 million to £97.7 million, close to the midpoint.
For the full year, the company expects flat market volumes, continued 4% volume outperformance, and price inflation of 2% to 3%, compared with about 2% in the first half.
The increase in pricing is expected to come mainly from the Water Management Solutions business, where costs are typically passed through with a delay.
Genuit forecast an operating margin of about 16% for 2025, down from 16.4% in 2024.
“Given JEFe sat at the upper end of the consensus range, we have trimmed our forecasts by low single digits to be more in line with consensus, which we expect to see limited change,” Jefferies said.