Lifco, a Swedish conglomerate with a significant presence in the UK, has reported a widening of its first-half operating margins, driven by acquisitions and cost-cutting measures. The company's profit rose 12% to SEK 1.3 billion (GBP 105 million) in the six months to 30 June 2026, with operating margins expanding to 14.8% from 13.2% a year earlier.
The company's tools unit, which accounts for a significant portion of its sales, saw a 15% decline in sales, reflecting weak demand in the sector. However, Lifco's management attributed the decline to the unit's efforts to reduce its reliance on cyclical markets and focus on higher-margin products. The unit's operating margin contracted to 3.5% from 7.6% a year earlier.
Lifco has been expanding its presence in the UK through strategic acquisitions, including its purchase of a majority stake in the UK-based engineering firm, Atlas Copco. The company's acquisition strategy has been driven by its goal of creating a more diversified business with a stronger presence in the UK market.
The company's results are likely to be viewed positively by investors, who have been seeking signs of a turnaround in the economy. However, the weakness in the tools unit is a concern, and investors will be watching closely to see how the company addresses this issue in the second half of the year.