Stelrad Group plc sees operating profit rise by 17.6 per cent
Stelrad Group plc, based in Newcastle, has announced its audited financial results for the year ending December 31, 2024.
The specialist manufacturer and distributor of steel panel and other designer radiators in the UK, Europe, and Turkey, reported an operating profit of £31.4 million, up by £4.7 million from 2023.
This increase was attributed to cost base optimisation initiatives, favourable materials pricing, strong product mix, and the impact of exceptional items in 2023.
Trevor Harvey (Image: Supplied)
The adjusted operating profit for the year was also up by 7.6 per cent, reaching £31.5 million, a rise of £2.2 million from 2023.
The contribution per radiator increased by 11.4 per cent to £20.15, marking the first time the group has achieved a figure in excess of £20.
This was driven by margin control, an increased volume of higher output radiators in the UK market, and an increase in overall premium panel sales mix to 5.7 per cent.
However, the group reported a revenue decline of 5.7 per cent to £290.6 million due to ongoing challenges in the RMI and new build markets, with high interest rates and inflation suppressing activity.
Despite these challenges, the group delivered a robust performance in 2024, which has continued into 2025, with trading since the period end remaining in line with management’s expectations.
Trevor Harvey, chief executive officer, said: “2024 largely saw a continuation of the challenging conditions that have characterised the wider marketplace in recent years.
“However, as a result of our rigorous focus on operational excellence, the flexibility of our business model and the strength of our market position, we have still delivered a strong financial performance across the business, despite ongoing declines in revenues and volume.”
The group continues to expect softness in market conditions for the first half of 2025 at least, but is seeing a recovery in its volumes in some of Stelrad’s core European territories such as Belgium, the Netherlands, and Poland.
Mr Harvey added: “While we are not expecting the wider market backdrop to improve significantly during the first half of 2025, we are encouraged by our continued volume recovery in some of the group’s core European territories and remain confident that, regardless of wider macro conditions, Stelrad is able to outperform its peers and deliver continued growth for our stakeholders.”
The group also announced an increase in the recommended final dividend by 2 per cent to 4.81 pence per share, to be paid on May 27, 2025, reflecting the board’s confidence in the group’s prospects and balance sheet.
The group’s return on capital employed grew by 1.6 percentage points to 27.1 per cent, boosted by strong operating profit.
The group’s on time in full (OTIF) delivery was 98 per cent in the UK and Ireland, reflecting the group’s market-leading customer service and product availability.
However, investment in working capital to enhance service levels meant that free cash flow decreased by £8.2 million to £9.6 million.
The group’s leverage at December 31, 2024, was 1.37x, based on net debt before lease liabilities.
Despite the challenging market conditions, the group is confident in its future, underpinned by a significant installed radiator base and long-term structural growth drivers of premiumisation and decarbonisation.
With these attractive market opportunities and the group’s market leadership, flexible lowest-cost manufacturing, and leading levels of customer service, Stelrad enters 2025 in a strong position.