Good morning, everyone, and welcome to Luceco's interim results presentation. My name is Thorsten Müller, and I was recently appointed as CEO of the company, joining at the start of September. I have previously worked at Halma, where I led one of the divisions within the safety sector. Before that, I served in senior leadership roles at ABB, Osram, and Bosch. Let's turn to the agenda for today. Will is later going to take you through the details of the first half that the team has delivered. I will then share with you my first impressions and initial priorities, as well as the outlook for the result of the year, followed by any questions you may have. Let me take the opportunity to express how excited I am to be joining such a high-quality business.
The Luceco team has continued to deliver strong results during the first half, building on the momentum achieved in 2025. Starting with the headline numbers, H1 was a strong first half, with performance accelerating across the group. Revenue was up 13.4% to GBP 142.6 million, driven by energy transition, where revenue more than doubled. This also means that the energy transition contribution to the half-year revenue increased from GBP 2 million back in 2022 to GBP 18 million in 2026. That growth is converting into profit, with adjusted operating profit up 14.5% to GBP 15.8 million, resulting in a return on capital invested improvement by 50 basis points to 20.5%. Leverage remains comfortable at 1.5x bank EBITDA, allowing headroom for future M&A, in line with our capital allocation policy. Reflecting the performance and our confidence in the outlook, we have increased the interim dividend by 16.7%.
With that, I will pass to Will to take you through the performance during the period.
Thank you, Thorsten. Good morning, everybody. I will take you through the first half performance, starting with the financial review before moving on to the business review and the growth opportunities that support our medium-term outlook. Revenue for the first half, as Thorsten mentioned, was GBP 142.6 million, an increase of 13.4% on the prior year. Growth accelerated through the period, with like-for-like growth of 12.9% in the first quarter and 14.9% in the second quarter. Energy transition activity was the principal driver, with revenue up 119.5%, while the remainder of the core business grew by 6.5%. All three operating segments, all four sales channels, and each geography delivered growth. Adjusted gross profit increased to GBP 59.8 million, and adjusted gross margin was 41.9%, broadly in line with the prior year, despite increases in key material costs.
We continue to benefit from strong manufacturing productivity and close cost control while maintaining a disciplined approach to pricing. We are working with our customers to pass through higher commodity costs. Adjusted operating costs increased by approximately GBP 5 million to GBP 44 million. The increase reflects targeted investments in EV infrastructure, marketing, and technical capability, together with wage and salary increases. We are also simplifying the operating footprint following recent M&A, including the consolidation of D-Line warehousing and associated labor into the wider group during the first half. Adjusted operating profit increased by 14.5% to GBP 15.8 million, and adjusted operating margin improved by 10 basis points to 11.1%. Adjusted net finance expense was broadly stable at GBP 2.9 million, resulting in adjusted profit before tax of GBP 12.9 million, an increase of 19.4%.
The effective tax rate was higher than in the prior period, when we benefited from the utilization of previously unrecognized tax losses. We expect the full-year adjusted effective tax rate to remain below the U.K. corporation tax rate of 25%. Adjusted earnings per share increased by 13.6% to GBP 0.067. Reflecting the group's strong first half performance and momentum for the full year, the board will pay an interim dividend of GBP 0.021 per share, an increase of 16.7%. This slide provides more detail on the composition of the 13.4% revenue growth in the first half. Currency was a GBP 0.6 million or 0.5% headwind, giving constant currency revenue of GBP 143.2 million, an underlying like-for-like growth of 13.9%. Wiring Accessories revenue increased by GBP 3.8 million, contributing 3% to group like-for-like growth, a robust performance aided by CMD. It is pleasing to report that CMD enters H2 with a healthy order book.
Integration synergies are flowing through and aided by Luceco's competitive manufacturing and product sourcing. The excellent CMD sales team are winning key tenders. Portable Power was the standout contributor, adding GBP 12.8 million, driven by energy transition activity. The strength of our established wholesaler relationships are helping us bring our expanding energy transition range to a broader contractor base. LED lighting added GBP 0.9 million, which included a strong first half performance from DW Windsor. We have seen some recovery in our overseas operations. As you would expect, our business based in Dubai has had a challenging six months from an operational standpoint. The team there did a great job over this period and still delivered growth in the first half. However, we do note that events in the region could delay significant investment projects in the second half.
Moving to adjusted operating profit, the group delivered an increase of GBP 2 million or 14.5% to GBP 15.8 million. Portable Power contributed an additional GBP 2.3 million and was the principal driver of group profit growth. The benefit from substantially higher energy transition volumes more than offset the additional investment in infrastructure, marketing, and capability required to support this opportunity. Wiring Accessories reduced by GBP 0.4 million. Although we saw strong top-line revenue growth, profitability was temporarily affected by the timing of material cost increases. We expect this effect to reverse over the forthcoming quarters as pricing actions take effect. LED lighting added GBP 100,000 and was broadly stable. Taken together, the bridge demonstrates that strong revenue growth was converted into a slightly improved group operating margin while we continued to invest for future growth.
As normal, in our business, we expect our operational leverage to improve in the second half as a result of seasonal growth in our order book. Turning to cash flow. Adjusted free cash flow was an outflow of GBP 2.1 million in the first half, compared with an inflow of GBP 10.3 million in the prior period. You might recall that 2025 benefited from unusual timing of working capital movements between December 2024 and January 2025. This makes 2025 a tough comparative when reviewing 2026. Adjusted EBITDA increased GBP 2.1 million to GBP 20.4 million. Working capital was a GBP 10.1 million headwind. We have consciously invested in the first half as we built stock to support expected second half trading. We increased capital expenditure by GBP 1.1 million to GBP 4.9 million in line with our capital allocation policy.
Interest paid was unchanged at GBP 2.9 million, and tax paid was GBP 2.9 million, compared with a GBP 0.4 million receipt in the prior period. We expect the usual stronger second half cash generation, though lower than 2025 due to timing of accounts receivable collection. Finishing on the numbers. This slide brings together our cash flow track record, working capital metrics, and leverage. The group generated approximately GBP 52 million of adjusted free cash flow over the last three completed financial years. The phasing has varied, but cash generation has consistently been weighted towards the second half. Average inventory days increased to 145 from 136, and inventory rose to GBP 71.2 million, reflecting higher volumes, the stock build to support second half trading, and increasing mix of higher value energy transition products. Debtor days improved to 76 from 78, demonstrating continued discipline in receivables management.
Bank net debt was GBP 69.6 million at the half year, compared with GBP 68 million a year earlier. Bank leverage improved to 1.5 x EBITDA from 1.6 x and remains in the middle of our target range of 1x -2x . The group had GBP 44.4 million of undrawn facilities, and the facility matures in May 2029. We remained comfortably within our banking requirements, providing capacity to invest organically and pursue selective bolt-on acquisitions in line with our capital allocation policy. Now I can talk about some of the long-term structural growth markets in which we are participating. On the left, electricity is expected to account for a materially greater share of consumer energy demand over time as transport and heating electrify. The big ticket items include EV chargers, heat pumps, solar panels, and batteries. However, these installations also require associated electrical infrastructure.
Products such as enclosures, isolators, metering, and circuit protection increase the electrical product content of a renewables-ready home by an estimated GBP 200 - GBP 300, compared with a traditional home. On the right, the U.K. EV charger market is forecast to grow at a sustained double-digit rate. Forecasts predict a compound annual growth rate in charger installations of 13% to 2030, and continued growth beyond this time, with the potential to be another three times larger. New electric vehicle sales regained momentum in the first half, supporting the long-term requirement for residential and commercial charging infrastructure. Crucially, Luceco can participate in both parts of this opportunity, directly through Sync Energy charging products and through the broader range of electrical accessories required to enable the transition. Demand Flexibility provides an additional recurring revenue opportunity from the installed base of connected chargers.
As more transport and heating are electrified, peak electricity demand will rise significantly unless consumption can be shifted to different times. an EV battery can hold several days' worth of the electricity used by a typical home, which illustrates both the load created by widespread charging and the value of managing when the charging takes place. Managed EV charging, including vehicle-to-grid capability, is therefore expected to be an important source of flexibility for the electricity system. The regulatory framework for distributed assets is now in place following changes to the Balancing and Settlement Code in November 2024 and November 2025. We moved to an in-house charger management platform in the fourth quarter of 2024 and achieved COP-11 metering certification in the first quarter of 2026, with the certification applicable to the installed base. More than 30,000 chargers are currently active in demand flexibility.
Changes to the regulated mechanism have been phased in during Q3. Growth in the active base more than offset changes in the mechanics. This remains an evolving regulatory market, so the value per charger may change over time. Nevertheless, demand flexibility is strategically attractive because it adds a recurring revenue stream to the initial hardware sale, with the opportunity growing as we expand the installed base and the functionality of the platform. Bringing the financial and business review to a close, this slide shows the progress made since 2022 and the profile implied by the market consensus for 2026 before today. Revenue increased from GBP 206.3 million in 2022 to GBP 271.4 million in 2025, while adjusted operating profit increased from GBP 22 million to GBP 33.8 million. Over that period, adjusted operating margin improved from 10.7% to 12.5%.
The consensus figures shown for 2026 before this morning's announcement are approximately GBP 310 million of revenue, GBP 41 million of adjusted operating profit, and a 13% adjusted operating margin. Including self-funded acquisitions, this represents a four-year revenue compound annual growth rate of 10.8% and a 230-basis point improvement in adjusted operating margin since 2022. The progression reflects the combination of continued growth in the core business, the increasing contribution from energy transition, and disciplined management of the cost base. Further operational consolidation and efficiency opportunities provide additional support to the margin over time. Our objective is to sustain this combination of growth and improving returns while retaining the balance sheet capacity to invest in the most compelling organic and inorganic opportunities. With that, I will hand you back to Thorsten for his first impressions of the group and his initial priorities.
Thank you, Will.
Thank you, Thorsten.
Thank you, Will. As you will be aware, I started in post three weeks ago, but I thought it would be beneficial for you to run through my first impressions and the priorities for the next few weeks. As Will outlined, Luceco has built significant momentum over the last few years and has delivered consistent compounding growth during that time. The business benefits from its strong foundation, generating sustainable commercial advantages. This is based on four pillars: an innovative portfolio of products, services, and brands across all its segments. Well-established routes to market with a profound understanding of our customers and their needs. A highly agile, vertically integrated supply chain that allows us to respond to market conditions at pace, bringing new products to customers at a remarkable speed. Finally, a strong team with entrepreneurial and customer-centric mindset. These four pillars drive an attractive financial profile.
Our market position in established categories provide a sustainable and predictable base of revenue and cash flow. This allows us to address and invest into any attractive structural growth opportunities offered by the energy transition. This is evident in the work the team has done in EV charging, a segment that has its origin in the highly accretive targeted acquisition of SyncEV four years ago. Since then, we organically grew the segment through focused and agile product development, which has unlocked recurring revenue streams that provide additional upside, albeit in an evolving regulatory environment. Product innovation has been core to Luceco's growth strategy for many years. This slide highlights the breadth of the 2026 pipeline across our core categories, supported by product development teams in both the U.K. and China.
With energy transition, the pipeline now includes high-power DC charging, as well as vehicle-to-grid capable and a smart portable EV charger. DC charging broadens our proposition beyond our established AC residential offering. While vehicle-to-grid capability reflects the expected future direction of the market, allowing the vehicle battery to support household energy use as well as transport. In wiring accessories and portable power, launches include three phase and HVAC circuit protection, grid light modular as well as luxury switches, 65 W integrated USB charging, and home office power products. These developments extend the range into further attractive professional and consumer applications and create additional opportunities through our established customer relationships and routes to market. DYNAMIS stadium lighting and hinged trunking are different products that demonstrate the same approach. Applying our product development and sourcing capabilities to adjacent categories where our brands and channel access can support growth.
This momentum, underpinned by Luceco's business model, market position, and financial profile, provide a strong platform for us to build on in the coming months and years. I will present my thoughts more fully in March at our full year results. In the meantime, my three priorities over the coming months are going to be focus and stringent capital allocation, ensuring that Luceco is focused on the most compelling opportunities for future growth across all our markets, products, and channels. Process excellence by defining and implementing best-in-class processes and technology to serve our customers and partners in an efficient and accommodating manner, making sure that these systems reflect the group's scale and future growth prospects. Structure, ensuring that Luceco is a team-led organization, having a decentralized and lean operating model and a strong talent base in place that allows seamless scaling to facilitate our future growth ambitions.
Let me turn to the outlook for the full year. The group continues to experience strong demand across key product categories, channels, and territories, with revenue in our core business growing 6.5% in the first half of the year. Demand Flexibility is delivering a recurring revenue stream. Our success in delivering growth of EV charger sales will also improve our Demand Flexibility revenue. We therefore expect that our adjusted operating profit will be ahead of market expectations.