Genuit Group has seen its profit before tax drop annually by 48.5% to £15.3m in the six months to 30 June, as the drainage, air conditioning and heating market "remains subdued".

The provider of sustainable water, climate and ventilation solutions also saw its operating profit fall by 41.5% to £21.3m in the same period, while its revenue dropped by 10.6% to £272.4m.

Despite this, the firm said its operating margin improved by 60 basis points year-on-year, reflecting the completion of its business simplification programme, a normalising cost inflation environment, cost management and emerging operating efficiencies.

Chief executive officer at Genuit Group, Joe Vorih, said: "Whilst the market remains subdued in 2024, the group demonstrated continued operating margin improvement in the first half over prior year, as the benefits of our strategic actions continue.

"I'm particularly pleased at the momentum building in the embedding of the Genuit business system through our businesses. I'm also delighted to welcome new colleagues from our two recent acquisitions into the group as we advance our sustainable solutions for growth strategy."

Looking ahead, Genuit said its operating profit is to remain in line with expectations for the full year, despite "low volumes of new housebuilding and a softer commercial sector".

It added that the acquisitions of Sky Garden and Omnie & Timoleon will increase H2 revenue by £6-7m, without a material impact on its operating profit.

Genuit said that it "remains well positioned" for market recovery, with UK Government policy and reducing interest rates expected to "stimulate the construction sector".

Investment director at AJ Bell, Russ Mould, added: "Results from drainage, air conditioning and heating systems maker Genuit are indicative of the recent negative trends in the construction market.

"The positives for the company are the progress it has made on getting its own operations up to speed and that’s reflected in progress in the underlying operating margin.

"However, ultimately the company is reliant on an improvement in the wider backdrop and it will hope some of the recent green shoots in the housebuilding sector come to fruition."

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