REG - Stelrad Group PLC - Interim Results
08/08/2025 07:00
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RNS Number : 4944U Stelrad Group PLC 08 August 2025
Stelrad Group plc
("Stelrad" or "the Group" or "the Company)
Interim results for the six months ended 30 June 2025
Continued market leadership, resilient underlying financial performance with
outlook for the full year unchanged
Stelrad Group, a leading specialist manufacturer and distributor of steel
panel and other designer radiators in the UK, Europe and Turkey, today
announces its unaudited interim results for the six months ended 30 June 2025.
Results summary
Six months ended 30 June 2025 Six months ended 30 June 2024 Movement
%
Revenue, £m 136.5 143.1 (4.6)
Adjusted operating profit, £m ((1)) 15.9 15.7 1.1
Adjusted operating profit margin, % ((1)) 11.7 11.0 0.7 ppts
Adjusted profit for the period, £m ((1)) 8.2 8.1 1.0
Adjusted earnings per share - basic, pence ((1)) 6.41 6.34 1.0
Operating profit, £m 3.8 15.6 (75.5)
Operating profit margin, % 2.8 10.9 (8.1) ppts
(Loss)/profit for the period, £m (3.4) 8.0 (142.9)
(Loss)/earnings per share - basic, pence (2.71) 6.30 (142.9)
Free cash flow, £m ((1)) 1.8 1.3 27.7
Return on capital employed, % 26.9 26.4 0.5 ppts
Net debt before lease liabilities, £m 64.8 64.6 0.3
Dividend per share, pence 3.04 2.98 2.0
(1) The Group uses some alternative performance measures to track and assess
the underlying performance of the business. Alternative performance measures
are defined in the glossary of terms and reconciled to the appropriate
financial statements line item at the end of this announcement.
Continued market leadership underpinned by operational excellence
· Industry leading market share at 19.9%* (2023: 20.9%) with the
reduction due to the impact of market mix across the countries we serve.
(*)BRG Building Solutions, May 2025. In the 20 European countries (including
Turkey and Russia) for which 2024 steel panel radiator share data is available
(which represented 94% of the European market in 2023).
o Excluding Russia, where the Group chooses not to participate, market share
was 25.4% (2023: 25.3%).
· On Time In Full (OTIF) delivery was 99% (2024: 98%) in the UK
& Ireland, a key point of differentiation versus our competitors.
· Contribution per radiator remained stable at £20.33 (2024:
£20.48) supported by active margin management providing strong operational
leverage.
Resilient financial performance in a supressed volume environment
· Adjusted operating profit rose to £15.9 million, an increase of
1.1%, benefitting from ongoing margin management and structural currency
gains. Adjusted operating profit margin increased 0.7 ppts to 11.7%.
· Non-cash exceptional items of £12.0 million (2024: £nil)
relating to impairment charge on the assets of Radiators SpA.
· Operating profit on a statutory basis was £3.8 million (2024:
£15.6 million), after the £12.0 million non-cash exceptional items.
· Revenue declined 4.6% to £136.5 million, despite continued
pricing discipline, as a result of ongoing volume challenges from subdued
demand in RMI and new build markets.
o UK & Ireland: revenue declined 5.8% supported in part by favourable
increase in average radiator size, partially offsetting a 9.6% volume
reduction.
o Europe: revenue declined 5.9% as a result of reduced volumes.
o Turkey & International: revenue increased 17.9%, to £8.5 million, due
to increased volumes in the Turkish market.
· Positive free cash flow of £1.8m (2024: £1.3m), despite typical
seasonal high point and selective investments in working capital to enhance
service levels in the UK market.
· Return on capital employed increased by 0.5 ppts to 26.9% (2024:
26.4%).
· Leverage(1) at 30 June 2025 was 1.48x (December 2024: 1.37x),
based on net debt before lease liabilities.
· Interim dividend increased by 2% to 3.04 pence per share (2024
interim dividend: 2.98 pence), to be paid on 24 October 2025, reflecting the
strength of the Group's balance sheet and the Board's confidence in the
Group's future growth prospects and increasing cash generation.
Outlook
· Whilst the current market environment remains subdued, the Board
expects a modest level of market volume improvement in the second half of the
year augmented by the strength of Stelrad's market position, sustainable
competitive advantages and operational excellence.
· Proactive margin management and cost discipline leave the Group
well placed to achieve unchanged Board expectations of further adjusted profit
growth in FY25.
Commenting on the Group's performance, Trevor Harvey, Chief Executive Officer,
said:
"During the period, we delivered a resilient financial performance against a
backdrop of ongoing economic uncertainty suppressing volumes in the Group's
key markets. Crucially, despite this environment, we have maintained our
market leadership position and continued to enhance the flexibility of our
operational capabilities.
"The Board remains confident in its long-term growth plans and in driving
continued shareholder value. The key priority for the Group is to be prepared
for an increase in volumes as and when market conditions improve. We know from
our years of experience and long-standing position in the market that when
volumes begin to recover, this happens at pace."
Analyst Conference Call
Trevor Harvey (CEO) and Leigh Wilcox (CFO) will host an analyst presentation
at 9.00 a.m. today, 8 August 2025.
The presentation will be broadcast live at https://brrmedia.news/SRAD_HY_2025
(https://brrmedia.news/SRAD_HY_2025)
To dial in via a phone line, please use the below dial in details:
Dial in number(s): UK-Wide: +44 (0) 33 0551 0200
UK Toll Free: 0808 109 0700
Password (if prompted): Please quote 'Stelrad HY25' when prompted by the operator
For further information:
Stelrad Group plc +44 (0) 191 261 3301
Trevor Harvey, Chief Executive Officer
Leigh Wilcox, Chief Financial Officer
Investec (Joint Corporate Broker) +44 (0) 207 597 4000
Ben Griffiths / David Anderson / Tom Brookhouse
Singer Capital Markets (Joint Corporate Broker) +44 (0) 20 7496 3000
Graham Hertrich / Sara Hale / James Todd
Sodali & Co stelrad@sodali.com (mailto:stelrad@sodali.com)
James White / Pete Lambie +44 (0)7855 432699
Notes to Editors
Stelrad Group plc is Europe's leading specialist radiator manufacturer,
selling an extensive range of hydronic, hybrid, dual fuel and electrical heat
emitters to more than 500 customers in over 40 countries. These include
standard, premium and low surface temperature (LST) steel panel radiators,
towel warmers, decorative steel tubular, steel multicolumn and aluminium
radiators.
The Group has five core brands: Stelrad, Henrad, Termo Teknik, DL Radiators
and Hudevad. The Group is market leader by volume in the combined UK,
European and Turkish steel panel radiator market. In the 20 countries for
which 2024 steel panel radiator share data is now available (which represented
94% of the European market in 2023), Stelrad's market shares was 19.9%. The
Group is market leader in seven countries - the UK, Ireland, France, the
Netherlands, Belgium, Denmark and Greece, with a top 3 position in a
further 11 territories in 2023.
Stelrad is headquartered in Newcastle upon Tyne in the UK and in 2024
employed 1,400 people, with manufacturing and distribution facilities in
Çorlu (Turkey), Mexborough (UK), Moimacco (Italy) and Nuth (Netherlands),
with further commercial and distribution operations in Kolding (Denmark)
and Krakow (Poland).
The Group's origins date back to the 1930s and Stelrad enjoys long
established commercial relationships with many of its customers, having served
each of its top five current customers for over twenty years.
Further information can be found at: https://stelradplc.com/
(https://stelradplc.com/) .
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements which are made in good
faith and are based on current expectations or beliefs, as well as assumptions
about future events. You can sometimes, but not always, identify these
statements by the use of a date in the future or such words as "will",
"anticipate", "estimate", "expect", "project", "intend", "plan", "should",
"may", "assume" and other similar words. By their nature, forward-looking
statements are inherently predictive and speculative and involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. You should not place undue reliance on these
forward-looking statements, which are not a guarantee of future performance
and are subject to factors that could cause our actual results to differ
materially from those expressed or implied by these statements. The Company
undertakes no obligation to update any forward-looking statements contained in
this document, whether as a result of new information, future events or
otherwise.
CHIEF EXECUTIVE OFFICER'S REVIEW
During the period, we delivered a resilient financial performance against a
backdrop of ongoing economic uncertainty suppressing volumes in the Group's
key markets. Crucially, despite this environment, we have maintained our
market leadership position and continued to enhance the flexibility of our
operational capabilities.
Sustainable competitive advantages in an attractive market
The key priority for the Group is to be prepared for an increase in volumes as
and when market conditions improve. While the current market environment
remains subdued, we know, from our years of experience and long-standing
position in the market, that when volumes begin to recover, this happens at
pace.
It is therefore critical for us, as a management team, to ensure that our
business is well placed to take advantage of this recovery.
Stelrad's commercial position remains underpinned by our sustainable
competitive advantages of:
1. Our flexible, lowest-cost manufacturing base, with a robust supply chain
and industry leading production capacity.
2. Leading levels of customer service and product availability, with the best
on-time in full delivery in the industry of 99% in the UK & Ireland.
These have helped to both grow and consolidate our market share position over
the last five years, positioning the Group as the supplier of choice for
customers regardless of market conditions.
These sustainable competitive advantages position us well in a market that
remains fundamentally attractive and supported by favourable, long-term
trends.
There are over 321 million homes in Europe with central heating, of which 93%
have hydronic heating systems. This equates to >1.8 billion hydronic heat
emitters, 56% of which are steel panel radiators. There is a significant
long-term replacement market opportunity that we are well-positioned to
address, with market leadership in seven of our European markets and an
addressable market share of 25.4%.
As the market leader, Stelrad is also well positioned to both drive and
benefit from long-term structural growth drivers that will underpin demand for
higher-margin, higher added-value products, enabling above-market growth.
Firstly, increased customer demand for premium panel, designer radiators. The
UK market remains under-developed compared to other core countries and Stelrad
has developed a clear, three-point strategy to leverage trade strengths, boost
consumer appeal and optimise routes to market for designer radiators.
Secondly, the decarbonisation of home heating systems provides both a
structural legislative tailwind as well as a growing market for larger, higher
heat output conventional radiators, hybrid radiator products and electric
radiator ranges. The first half saw this trend reflected in another period of
growth in average radiator size.
Continued operational excellence and commercial discipline
During the period, the Group experienced a continued decline in volumes of
4.8%, driven primarily by the UK & Ireland (9.6% decline) and European
markets (3.8% decline), albeit with an improving volume environment in our
smaller segment of Turkey & International (29.5% increase). Revenue
declined 4.6% to £136.5 million (2024: £143.1 million), albeit to a lesser
degree than the volume decline, reflecting the continued strength of our
market position and the ongoing favourable impact of larger heat output
radiators in the UK.
Over the last three years, the Group has maintained a strong focus on cost
reduction initiatives. These initiatives are now embedded in our operations,
ensuring our key metric of contribution per radiator remains above £20,
despite a marginal decrease in premium panel penetration in the UK
year-on-year due to low consumer confidence.
Our focus remains on maintaining our operational excellence, coupled with
commercial discipline, ensuring that we continue to consolidate our market
share and leadership while maintaining pricing discipline and margin
contribution.
During the period, we took significant steps to embed commercial discipline
within our European operations, particularly in Radiators SpA. We have
recognised a non-cash £12.0 million impairment charge on the assets of
Radiators SpA, primarily reflecting the exposure to declining volumes in the
French and German markets since the business was acquired. The Group has taken
decisive action to terminate all supply under a loss-making contract for steel
panel radiators, effective at the end of 2025 following unsuccessful price
negotiations between Radiators SpA and the customer during the period. The
exit from this contract will be immediately margin-enhancing at a Group level
and provides the opportunity to focus the Radiators SpA business on electrical
and designer products - the key ranges that underpinned the strategic
rationale for our acquisition in 2022. The strategic acquisition case for
Radiators SpA remains integral to the Group, with the business providing
increased access to new channels to markets and a product range orientated
towards higher added value designs, including those suitable for decarbonised
heating systems.
As a result of our ongoing operational excellence and commercial discipline
across the Group, we have continued to grow our adjusted operating profit,
which increased 1.1% during the year to £15.9 million (2024: £15.7 million).
Progress with strategic priorities
Our four key strategic priorities are to (1) grow market share, (2) improve
product mix, (3) optimise our routes to market and (4) position effectively
for decarbonisation.
We continue to be the market leader across the UK and Europe, with a market
share of 19.9%. While this share has declined marginally over the past year,
this is primarily a result of market mix across the countries we serve, with
market growth in Russia, where the Group chooses not to participate, alongside
weaker market volumes in the UK. Excluding the Russian market, the Group's
market share position is 25.4% (2023: 25.3%).
In terms of product mix, while we have seen a short-term impact from ongoing
economic uncertainty in the UK on the penetration of premium panel radiators,
we have made tangible progress on our strategy to drive adoption of designer
radiators as the market leader. The refreshed Stelrad.com website has now been
launched, optimising the consumer journey and broadening our routes to market
for designer radiators where there is a greater level of direct consumer
input. We have also launched our 48 hour designer radiator service to enhance
customer service levels for these products and remove long lead time
perceptions. Management remains confident in the opportunity, underpinned by
the initiatives undertaken, to improve the penetration of premium products in
the UK as market conditions and consumer confidence improve.
We continue to see long-term structural tailwinds from the decarbonisation of
commercial and residential property stock, with the average radiator size
increasing by 2.5% during the period. We continue to further expand our high
heat output and hybrid heat emitter radiator portfolios, alongside leveraging
our brand strength and channel access to drive electric radiator sales in core
markets.
Interim dividend
The Board has declared an interim dividend of 3.04 pence per share, an
increase of 2%. The interim dividend will be paid on 24 October 2025 to
shareholders on the register on 10 October 2025. This increase reflects the
strength of the Group's balance sheet and the Board's confidence in the
Group's future growth prospects and increasing cash generation.
Outlook
Whilst the current market environment remains subdued, the Board expects a
modest level of market volume improvement in the second half of the year
augmented by the strength of Stelrad's market position, sustainable
competitive advantages and operational excellence.
Proactive margin management and cost discipline leave the Group well placed to
achieve unchanged Board expectations of further adjusted profit growth in
FY25.
The Board remains confident in its long-term growth plans and in driving
continued shareholder value. The key priority for the Group is to be prepared
for an increase in volumes as and when market conditions improve. We know from
our years of experience and long-standing position in the market that when
volumes begin to recover, this happens at pace.
Trevor Harvey
Chief Executive Officer
8 August 2025
FINANCE AND BUSINESS REVIEW
Group overview
The following table summarises the Group's results from operations for the six
months ended 30 June 2025 and 30 June 2024.
Six months ended 30 June 2025 Six months ended 30 June 2024 Movement Movement
£m £m £m %
Revenue 136.5 143.1 (6.6) (4.6)
EBITDA((1)) 21.8 21.7 0.1 0.5
Adjusted operating profit((1)) 15.9 15.7 0.2 1.1
Exceptional items (12.0) - (12.0) n/a
Amortisation of customer relationships (0.1) (0.1) - 1.5
Operating profit 3.8 15.6 (11.8) (75.5)
Net finance costs (3.7) (3.9) 0.2 5.0
Profit before tax 0.1 11.7 (11.6) (99.2)
Income tax expense (3.5) (3.7) 0.2 4.2
(Loss)/profit for the period (3.4) 8.0 (11.4) (142.9)
(Loss)/earnings per share - basic (p) (2.71) 6.30 (9.01) (142.9)
Adjusted profit for the period((1)) 8.2 8.1 0.1 1.0
Adjusted earnings per share - basic (p)((1)) 6.41 6.34 0.07 1.0
Dividend per share (p) 3.04 2.98 0.06 2.0
Return on capital employed (%)((1)) 26.9 26.4 n/a 0.5 ppts
Net debt before lease liabilities((1)) 64.8 64.6 0.2 0.3
( )
(1) The Group uses some alternative performance measures to track and assess
the underlying performance of the business. Alternative performance measures
are defined in the glossary of terms and reconciled to the appropriate
financial statements line item at the end of this announcement.
Financial overview
A resilient adjusted operating performance driven by ongoing margin management
and structural currency gains allowed the Group to offset the impact of a
continued reduction in demand during the first half of 2025. Whilst there were
positive year-on-year trends across some of our core European geographies, UK
& Ireland continued to see subdued renovation activity driven by a
challenging macroeconomic environment related to continued high interest rates
and inflation.
Revenue for the six months ended 30 June 2025 was £136.5 million, a decrease
of £6.6 million, or 4.6%, on the six months ended 30 June 2024 (2024: £143.1
million). The decline in revenue was mainly due to a 4.8% decline in sales
volumes during the period. Selling prices have benefitted from a third
successive annual increase in average radiator size in the UK and stronger
European sales at higher prices.
Adjusted operating profit for the period was £15.9 million, an increase of
£0.2 million, or 1.1%, compared to the same period last year (2024: £15.7
million). The increase in adjusted operating profit arose despite the 4.8%
decrease in sales volumes. Adjusted operating profit grew due to the benefits
of favourable material price and structural currency benefits, partially
offset by lower sales volumes. The structural currency benefits arise from the
way the Group has structured its Turkish operations, with the gain being a
result of the year to date devaluation of the Turkish Lira against the Euro
which will further benefit the cost base of our Turkish operations in the
future.
Operating profit for the period was £3.8 million, a decrease of £11.8
million, or 75.5%, compared to the prior year (2024: £15.6 million).
Operating profit is stated after the deduction of non-cash exceptional items
of £12.0 million (2024: £nil) and the amortisation of customer relationships
of £0.1 million (2024: £0.1 million).
Supported by continued operational control and margin management, despite a
challenging market environment, contribution per radiator has remained in
excess of £20 at £20.33, providing the Group with very strong operating
leverage that will drive considerable profitability improvements when volumes
recover. The Group continues to push the sale of premium products throughout
its markets, recognising the additional margin that these products generate.
The proportion of premium panel sales to total volumes was 5.7% with further
progress expected as the economic environment improves.
The statutory loss for the period was £3.4 million (2024: profit of £8.0
million) due to the non-cash exceptional items of £12.0 million (2024:
£nil). Adjusted profit for the period grew by £0.1 million to £8.2 million
(2024: £8.1 million). Interest charges reduced by £0.2 million year-on-year
as interest rates continue to fall. Tax charges decreased marginally
year-on-year due to a credit linked to the exceptional items.
Loss per share was 2.71 pence (2024: earnings per share of 6.30 pence).
Adjusted earnings per share was 6.41 pence (2024: 6.34 pence).
At 30 June 2025 the Group had cash of £17.6 million (December 2024: £18.6
million) and undrawn available facilities of £17.9 million (December 2024:
£21.1 million), with net debt before lease liabilities of £64.8 million
(December 2024: £59.7 million).
Working capital at 30 June 2025 reflects a seasonal high point prior to the
heating season, with the lowest level of working capital historically
experienced in December. Selective investments in working capital have been
made in the period to enhance customer relationships in the UK market. The
Group expects a reduction in net debt by the end of the financial year,
reflecting the seasonality of working capital investment.
The Group has made pleasing progress towards its medium-term targets in the
period, despite challenging market conditions, with growth in both adjusted
operating profit margins and return on capital employed. The Board remain
confident in the ability for the Group to achieve all medium-term targets.
Revenue by geographical market
The table below sets out the Group's revenue by geographical market.
Revenue by geographical market Six months ended 30 June 2025 Six months ended 30 June 2024 Movement Movement
£m £m £m %
UK & Ireland 65.1 69.1 (4.0) (5.8)
Europe 62.9 66.8 (3.9) (5.9)
Turkey & International 8.5 7.2 1.3 17.9
Total 136.5 143.1 (6.6) (4.6)
UK & Ireland
The Group's revenue in the UK & Ireland for the period was £65.1 million
(2024: £69.1 million), a decrease of £4.0 million, or 5.8%. This was
principally a result of a decrease in sales volumes of 9.6%, partially offset
by a continued increase in the average size of radiators sold, with a 2.5%
year-on-year higher output, though the penetration of premium panel products
sold was impacted by low UK consumer confidence.
Europe
The Group's revenue in Europe for the period was £62.9 million (2024: £66.8
million), a decrease of £3.9 million, or 5.9%, as a result of a 3.8% decrease
in sales volumes and the impact of higher average Euro exchange rates in the
period. Encouragingly, we note certain key geographies in Europe have shown a
year-on-year increase in volumes, including Belgium, Poland, France and
Germany.
Turkey & International
The Group's revenue in Turkey & International for the period was £8.5
million (2024: £7.2 million), an increase of £1.3 million, or 17.9%. This
was principally a result of higher volumes sold in Turkey due to an
improvement in market conditions.
Adjusted operating profit by geographical market
The table below sets out the Group's adjusted operating profit by geographical
market.
Adjusted operating profit by geographical market Six months ended 30 June 2025 Six months ended 30 June 2024 Movement Movement
£m £m £m %
UK & Ireland 15.0 15.1 (0.1) (0.3)
Europe 3.6 3.7 (0.1) (5.4)
Turkey & International 0.7 0.9 (0.2) (17.6)
Central costs (3.4) (4.0) 0.6 14.7
Total 15.9 15.7 0.2 1.1
UK & Ireland
The Group's adjusted operating profit in the UK & Ireland for the period
was £15.0 million (2024: £15.1 million), a decrease of £0.1 million, or
0.3%. The result includes the benefit of favourable material prices and the
increase in the average size of radiators sold offset by lower sales volumes.
Europe
The Group's adjusted operating profit in Europe for the period was £3.6
million (2024: £3.7 million), a decrease of £0.1 million, or 5.4%. A high
fixed cost base in Europe, combined with the sales volume decrease, has led to
a reduction in operating margin percentage in recent years. We expect margins
for the Europe segment, to recover in line with market recovery as variable
profit margins remain strong.
The Group will continue to focus on improving the margins of Radiators SpA's
sales, with the exit from a significant loss-making contract at the end of
2025 providing renewed opportunity to focus business efforts on the product
ranges which are unique to Radiators SpA.
Turkey & International
The Group's adjusted operating profit in Turkey & International for the
period was £0.7 million (2024: £0.9 million), a decrease of £0.2 million,
or 17.6%. The decrease is due to country mix with a growth in Turkish sales
which are traditionally at lower margins.
Central costs
Central costs, including Group LTIP charges, for the period were £3.4 million
(2024: £4.0 million), a decrease of £0.6 million, or 14.7%. The reduction is
due to the removal of one-off costs from the prior year.
Exceptional items
Operating profit is stated after exceptional items of £12.0 million. The
non-cash exceptional items relate to impairment of goodwill of £2.6 million,
impairment of customer relationships of £1.4 million, impairment of property,
plant and equipment of £5.7 million and a provision against inventories of
£2.3 million, all within the Radiators SpA business.
The Radiators SpA business has been exposed to declining market volumes in
France and Germany (c.30% reduction) since its acquisition in July 2022,
resulting in deteriorating operating margins despite active fixed cost
management. Since the acquisition, the business has been impacted by a
significant low margin, and latterly a loss-making contract, for the supply of
steel panel radiators which has contributed to suppressed European operating
margins.
Negotiations during the period to reset the price on this contract have been
unsuccessful and, in line with the Group's focus on commercial discipline,
decisive action has been taken to terminate all supply under this contract,
effective at the end of 2025. Whilst the exit from this loss-making contract
will negatively impact future revenue and volumes, it will result in improved
contribution and the opportunity to reduce fixed costs in the short-term. The
exit from the contract presents an increased opportunity to focus attention on
the electrical and designer product ranges which are unique to this division
and were the key strategic rationale for acquiring the business. The
refocussed business will be underpinned by a rationalised product profile that
will provide greater operational efficiency.
Finance costs
The Group's finance costs for the period were £3.7 million (2024: £3.9
million). The decrease of £0.2 million is due to comparatively lower interest
rates (blended 5.6%) in the first half of 2025 with a small reduction in
interest rates expected in the second half of 2025.
Income tax expense
The Group's income tax expense for the period was £3.5 million (2024: £3.7
million), a decrease of £0.2 million with the expense reduced due to a credit
linked to the exceptional items in the period.
(Loss)/earnings per share and adjusted earnings per share
Results for the period reduced to a loss of £3.4 million (2024: profit of
£8.0m) and basic loss per share was 2.71 pence (2024: earnings per share 6.30
pence) due to the impact of the exceptional items, net of tax, of £11.6
million in the period (2024: £nil). The weighted average number of shares was
127.4 million (2024: 127.4 million).
Adjusted profit for the period increased to £8.2 million (2024: £8.1
million) and consequently basic adjusted earnings per share was 6.41 pence
(2024: 6.34 pence).
Dividend
The Group is committed to delivering returns for its shareholders via a
progressive dividend policy. The Board has confidence in the Group's financial
position and believes that its leading market positions, regulatory tailwinds,
product premiumisation upside and favourable contribution per radiator will
lead to strong future financial performance, as demonstrated by the Group's
medium-term targets published at our Capital Markets Event in November 2024.
On this basis, despite suppressed earnings caused by trading headwinds, the
Group intends to pay an interim dividend of 3.04 pence per share, an increase
of 2% on the 2024 interim dividend, on 24 October 2025 to shareholders on the
register on 10 October 2025.
The Group paid its final dividend for 2024 of 4.81 pence per share in May
2025, resulting in a total dividend for 2024 of 7.79 pence per share.
Cash flows
The following table summarises the Group's cash flow for the six months ended
30 June 2025 and 30 June 2024.
Six months ended 30 June 2025 Six months ended 30 June 2024 Movement
£m £m £m
EBITDA 21.8 21.7 0.1
Gain on disposal of property, plant and equipment (0.1) (0.1) -
Share-based payment charge 0.6 0.3 0.3
Working capital (9.0) (9.8) 0.8
Net capital expenditure (3.7) (3.1) (0.6)
Cash flow from operations((1)) 9.6 9.0 0.6
Income tax paid (4.8) (4.0) (0.8)
Net interest paid (3.0) (3.7) 0.7
Free cash flow((1)) 1.8 1.3 0.5
Cash flow from operations 9.6 9.0 0.6
Adjusted for
Exceptional items, impact on working capital - 2.2 (2.2)
Adjusted cash flow from operations 9.6 11.2 (1.6)
Six months ended 30 June 2025 Six months ended 30 June 2024 Movement
Cash flow from operations((1)) (£m) 9.6 9.0 0.6
Adjusted cash flow from operations((1)) (£m) 9.6 11.2 (1.6)
Adjusted operating profit((1)) (£m) 15.9 15.7 0.2
Cash flow from operations conversion((1)) (%) 60.5 57.7 2.8ppts
Adjusted cash flow from operations conversion((1)) (%) 60.5 71.5 (11.0)ppts
(1) The Group uses some alternative performance measures to track and assess
the underlying performance of the business. Alternative performance measures
are defined in the glossary of terms and reconciled to the appropriate
financial statements line item at the end of this announcement.
The Group's free cash inflow for the period was £1.8 million (2024: £1.3
million), an increase of £0.5 million. This reflects investments in capital
expenditure and higher tax paid, partially offset by lower interest payments.
During quarter four of 2024, the Group undertook a proactive price realignment
exercise on its core range of contract products in the UK with equal
reductions in both list prices and rebates. The price realignment is a
commercial initiative designed to make the price points of our contract
products more competitive and enhance customer relationships. During 2025,
because of the reduction in the level of rebates, there has been an increase
in working capital. The Group's UK business became cash tax paying in the
period, after fully utilising its historic tax losses, which contributed to
the increase in income tax paid.
The Group's cash inflow from operations for the period was £9.6 million
(2024: £9.0 million), an increase of £0.6 million. Adjusted operating profit
for the period was £15.9 million (2024: £15.7 million), an increase of £0.2
million. Cash flow from operations conversion for the period was 60.5% (2024:
57.7%). Adjusted cash flow from operations conversion for the period was 60.5%
(2024: 71.5%).
Capital expenditures
The Group's capital expenditures mainly relate to investment in operating
plant and equipment. Key capital expenditure in the period ended 30 June 2025
related to various maintenance and upgrade projects. Capital expenditure for
the remainder of 2025 will be in line with expectations.
Return on capital employed and capital allocation priorities
Return on capital employed for the period was 26.9% (2024: 26.4%), an increase
of 0.5 ppts. This improvement is partially due to the impairment of assets and
an increase in adjusted operating profit, partially offset by the investment
made in working capital.
Capital allocation considerations remain high on the Group's agenda, and both
the 2024 and 2025 investments in working capital are considered a key part of
the Group's prioritisation of investment for organic growth under its capital
allocation framework set out at the Capital Markets Event in November 2024.
Additionally, alongside the investment in organic growth during 2024 and 2025,
dividends have progressively increased by 2%, whilst the Group's debt leverage
ratio before lease liabilities has remained stable at 1.48x (30 June 2024:
1.49x), demonstrating a controlled and balanced approach to capital allocation
and balance sheet prudence given the challenging macroeconomic environment.
Net debt and leverage
At 30 June 2025, net debt (including lease liabilities) of £73.1 million
(December 2024: £67.6 million) comprises £82.4 million (December 2024:
£78.3 million) drawn down against the multicurrency facility and £8.3
million (December 2024: £7.9 million) lease liabilities net of £17.6 million
(December 2024: £18.6 million) cash.
30 June 31 December 2024
2025
£m £m
Revolving credit facility - GBP 44.4 41.8
Revolving credit facility - EUR 13.7 13.1
Term loan 24.3 23.4
Cash (17.6) (18.6)
Net debt before lease liabilities 64.8 59.7
Lease liabilities 8.3 7.9
Net debt 73.1 67.6
EBITDA (rolling 12 months) 43.8 43.5
Debt leverage ratio before lease liabilities 1.48x 1.37x
The debt leverage ratio before lease liabilities at 30 June 2025 was 1.48x (31
December 2024: 1.37x; 30 June 2024: 1.49x).
Going concern
After reviewing the Group's current liquidity, net debt, financial forecasts
and stress testing of potential risks, the Board confirms there are no
material uncertainties which impact the Group's ability to continue as a going
concern for at least twelve months from the date of approval of the financial
statements and therefore these condensed consolidated interim financial
statements have been prepared on a going concern basis.
The financial position of the Group remains robust. The Group has in place a
£100 million multicurrency facility, made up of a £76.0 million revolving
credit facility and a €28.3 million term loan facility. At 31 December
2024, the entire term loan was drawn along with £58.1 million of the
revolving credit facility. The facility matures in November 2026.
As the £100 million bank loan facility is maturing in November 2026,
refinancing discussions with lenders commenced during the first half of 2025.
The expectation is that the loan will be refinanced.
Leigh Wilcox
Chief Financial Officer
8 August 2025
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that these condensed consolidated interim financial
statements have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and that the interim management report includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· material related party transactions in the first six months and
any material changes in the related party transactions described in the last
annual report.
The directors of Stelrad Group plc are listed in the Annual Report and
Accounts for the year ended 31 December 2024.
For and on behalf of the Board
Leigh Wilcox
Chief Financial Officer
8 August 2025
Stelrad Group plc. Registered number 13670010
Independent review report to Stelrad Group plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Stelrad Group Plc's condensed consolidated interim financial
statements (the "interim financial statements") in the Interim results of
Stelrad Group Plc for the 6 month period ended 30 June 2025 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed consolidated interim balance sheet as at
30 June 2025;
· the Condensed consolidated interim income statement and condensed
consolidated interim statement of comprehensive income for the period then
ended;
· the Condensed consolidated interim statement of cash flows for
the period then ended;
· the Condensed consolidated interim statement of changes in equity
for the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim results of Stelrad
Group Plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Interim results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Interim results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the Interim results, including the
interim financial statements, the directors are responsible for assessing the
group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Newcastle upon Tyne
8 August 2025
Stelrad Group plc
Condensed consolidated interim income statement
for the six months ended 30 June 2025
Six months ended 30 June 2025 Six months ended 30 June 2024 (not audited) Year ended 31 December 2024 (audited)
(not audited)
Notes £'000 £'000 £'000
Continuing operations
Revenue 5 136,475 143,116 290,577
Cost of sales (93,991) (98,987) (201,617)
Gross profit 42,484 44,129 88,960
Selling and distribution expenses (19,699) (19,922) (41,729)
Administrative expenses (8,788) (9,164) (17,165)
Other operating income/(expenses) 6 1,848 624 1,319
Exceptional items 7 (12,001) - -
Operating profit 5 3,844 15,667 31,385
Finance income 86 113 186
Finance costs (3,832) (4,057) (8,189)
Profit before tax 98 11,723 23,382
Income tax expense 8 (3,543) (3,699) (6,864)
(Loss)/profit for the period (3,445) 8,024 16,518
Notes
(Loss)/earnings per share
Basic 9 (2.71)p 6.30p 12.97p
Diluted 9 (2.66)p 6.26p 12.87p
Adjusted earnings per share
Basic 9 6.41p 6.34p 13.05p
Diluted 9 6.30p 6.30p 12.94p
Stelrad Group plc
Condensed consolidated interim statement of comprehensive income for the six
months ended 30 June 2025
Six months ended 30 June 2025 Six months ended 30 June 2024 (not audited) Year ended
(not audited) 31 December 2024 (audited)
Notes £'000 £'000 £'000
(Loss)/profit for the period (3,445) 8,024 16,518
Other comprehensive income/(expense)
Other comprehensive income/(expense) that may be reclassified to profit or
loss in subsequent periods:
Net (loss)/gain on monetary items forming part of net investment in foreign (723) 421 867
operations and qualifying hedges of net investments in foreign operations
Income tax effect 8 181 (105) (217)
Exchange differences on translation of foreign operations 3,300 (2,226) (4,711)
Net other comprehensive income/(expense) that may be reclassified to profit or 2,758 (1,910) (4,061)
loss in subsequent periods
Other comprehensive expense not to be reclassified to profit or loss in
subsequent periods:
Remeasurement losses on defined benefit plans (63) (907) (925)
Income tax effect 8 16 200 232
Net other comprehensive expense not to be reclassified to profit or loss in (47) (707) (693)
subsequent periods
Other comprehensive income/(expense) for the period, net of tax 2,711 (2,617) (4,754)
Total comprehensive income/(expense) for the period, net of tax attributable (734) 5,407 11,764
to owners of the parent
Stelrad Group plc (Registered Number 13670010)
Condensed consolidated interim balance sheet
as at 30 June 2025
30 June 2025 30 June 2024 31 December 2024 (audited)
(not audited) (not audited)
Notes £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 73,781 82,111 79,173
Intangible assets 15 547 4,990 4,652
Trade and other receivables 295 298 284
Deferred tax assets 6,241 6,640 4,821
80,864 94,039 88,930
Current assets
Inventories 69,786 70,512 67,311
Trade and other receivables 48,871 57,690 45,478
Income tax receivable 254 230 235
Financial assets 11 - 83 293
Cash and cash equivalents 17,572 19,359 18,633
136,483 147,874 131,950
Total assets 217,347 241,913 220,880
Equity and liabilities
Equity
Share capital 127 127 127
Merger reserve (114,469) (114,469) (114,469)
Retained earnings 230,758 234,971 239,788
Foreign currency reserve (65,095) (65,702) (67,853)
Total equity 51,321 54,927 57,593
Non-current liabilities
Interest-bearing loans and borrowings 11 87,767 89,610 83,329
Deferred tax liabilities 217 214 209
Provisions 1,800 1,925 1,910
Net employee defined benefit liabilities 13 4,537 4,865 5,118
94,321 96,614 90,566
Current liabilities
Trade and other payables 67,635 85,963 69,210
Financial liabilities 11 505 - -
Interest-bearing loans and borrowings 11 2,456 2,295 2,212
Income tax payable 418 1,317 550
Provisions 691 797 749
71,705 90,372 72,721
Total liabilities 166,026 186,986 163,287
Total equity and liabilities 217,347 241,913 220,880
The financial statements on pages 19 to 35 were approved by the Board of
Directors on 8 August 2025 and signed on its behalf by:
Leigh Wilcox
Chief Financial Officer
Stelrad Group plc
Condensed consolidated interim statement of changes in equity
for the six months ended 30 June 2025
Attributable to the owners of the parent
Issued share capital Merger reserve Retained earnings Foreign currency Total
£'000 £'000 £'000 £'000 £'000
At 31 December 2023 (audited) 127 (114,469) 233,329 (63,792) 55,195
Profit for the year - - 16,518 - 16,518
Other comprehensive expense for the year - - (693) (4,061) (4,754)
Total comprehensive income/(expense) - - 15,825 (4,061) 11,764
Share-based payment charge - - 440 - 440
Dividends paid (note 10) - - (9,806) - (9,806)
At 31 December 2024 (audited) 127 (114,469) 239,788 (67,853) 57,593
Loss for the period - - (3,445) - (3,445)
Other comprehensive (expense)/income for the period - -
(47) 2,758 2,711
Total comprehensive income/(expense) - - (3,492) 2,758 (734)
Share-based payment charge - - 588 - 588
Dividends paid (note 10) - - (6,126) - (6,126)
At 30 June 2025 (not audited) 127 (114,469) 230,758 (65,095) 51,321
Attributable to the owners of the parent
Issued share capital Merger reserve Retained earnings Foreign currency Total
£'000 £'000 £'000 £'000 £'000
At 31 December 2023 (audited) 127 (114,469) 233,329 (63,792) 55,195
Profit for the period - - 8,024 - 8,024
Other comprehensive expense for the period - - (707) (1,910) (2,617)
Total comprehensive income/(expense) - - 7,317 (1,910) 5,407
Share-based payment charge - - 336 - 336
Dividends paid (note 10) - - (6,011) - (6,011)
At 30 June 2024 (not audited) 127 (114,469) 234,971 (65,702) 54,927
Stelrad Group plc
Condensed consolidated interim statement of cash flows
for the six months ended 30 June 2025
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended 31 December 2024
(audited)
£'000 £'000 £'000
Operating activities
Profit before tax 98 11,723 23,382
Adjustments to reconcile profit before tax to net cash flows:
Depreciation of property, plant and equipment 5,776 5,777 11,692
Amortisation of intangible assets 190 252 468
Gain on disposal of property, plant and equipment (71) (83) (118)
Share-based payment charge 588 336 440
Exceptional items 12,001 - -
Finance income (86) (113) (186)
Finance costs 3,832 4,057 8,189
Working capital adjustments:
(Increase) / decrease in trade and other receivables (2,360) (7,622) 3,885
Increase in inventories (2,992) (8,170) (6,143)
(Decrease) / increase in trade and other payables (2,819) 8,954 (6,743)
Decrease in provisions (261) (2,195) (2,176)
Movement in other financial assets / liabilities 809 (394) (610)
Decrease in other pension provisions - - (7)
Difference between pension charge and cash contributions (1,375) (366) (581)
13,330 12,156 31,492
Income tax paid (4,769) (3,987) (6,265)
Interest received 86 113 186
Net cash flows from operating activities 8,647 8,282 25,413
Investing activities
Proceeds from sale of property, plant, equipment and intangible assets 68 184 341
Purchase of property, plant and equipment (2,626) (1,858) (5,861)
Purchase of intangible assets (18) - (100)
Net cash flows used in investing activities (2,576) (1,674) (5,620)
Financing activities
Proceeds from external borrowings 2,736 5,087 3,388
Repayment of external borrowings - (2,200) (5,150)
Payment of lease liabilities (1,134) (1,408) (2,865)
Interest paid (3,121) (3,778) (7,372)
Dividends paid (6,126) (6,011) (9,806)
Net cash flows used in financing activities (7,645) (8,310) (21,805)
Net decrease in cash and cash equivalents (1,574) (1,702) (2,012)
Net foreign exchange difference 513 (381) (797)
Cash and cash equivalents at start of period 18,633 21,442 21,442
Cash and cash equivalents at end of period 17,572 19,359 18,633
Stelrad Group plc
Notes to the condensed consolidated interim financial statements
for the six months ended 30 June 2025
1 Corporate information
Stelrad Group plc is a public limited company that is incorporated, domiciled
and has its registered office in England and Wales.
2 Basis of preparation
The condensed consolidated interim financial statements for the half-year
reporting period ended 30 June 2025 have been prepared in accordance with the
UK-adopted International Accounting Standard 34, 'Interim Financial Reporting'
and the disclosure guidance and transparency rules sourcebook of the United
Kingdom's Financial Conduct Authority.
The interim financial statements do not include all of the notes of the type
normally included in annual financial statements. Accordingly, this report
is to be read in conjunction with the Annual Report and Accounts for the year
ended 31 December 2024, which has been prepared in accordance with UK adopted
international accounting standards in conformity with the requirements of the
Companies Act 2006, and any public announcements made by Stelrad Group plc
during the interim reporting period. The condensed consolidated interim
financial statements have been prepared using the same material accounting
policies and methods of computation used to prepare the Group's 2024 Annual
Report and Accounts as described on pages 107 to 116 of that report, which can
be found on the Group's website at www.stelradplc.com
(http://www.stelradplc.com) , and the adoption of new standards and
interpretations, noted below.
The condensed consolidated interim financial statements have not been prepared
using any new accounting policies in the six months ended 30 June 2025.
The 2024 annual consolidated financial statements of the Group were prepared
in accordance with UK adopted international accounting standards in conformity
with the requirements of the Companies Act 2006 and the disclosure guidance
and transparency rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The financial statements for the six months ended 30 June 2025 and the
comparative financial statements for the six months ended 30 June 2024 have
not been audited. However, the financial statements for the six months ended
30 June 2025 and the six months ended 30 June 2024 have been reviewed by the
auditor, PricewaterhouseCoopers LLP. The comparative financial statements
for the year ended 31 December 2024 have been extracted from the 2024 Annual
Report and Accounts. The financial statements contained in this interim
report do not constitute statutory accounts as defined in section 434 of the
Companies Act 2006 and do not reflect all of the information contained in the
Group's 2023 Annual Report and Accounts. The statutory accounts for the year
ended 31 December 2024, which were approved by the Board of Directors on 7
March 2025 and have been filed with the Registrar of Companies, received an
unqualified audit report which did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
Going concern
In preparing these financial statements on the going concern basis, the
directors have considered the Group's current and future prospects and its
availability of cash resources and financing and the Group's financial
position.
The Group meets its day-to-day working capital requirements through a bank
loan facility which is in place up to November 2026. At the period-end date
the Group had drawn down £82.4 million of a £100 million loan facility. The
remainder of the facility and significant cash balances of £17.6 million are
available to enable day-to-day working capital requirements to be met.
As part of their period-end review, management has performed a detailed going
concern review, based on severe but plausible conditions, looking at the
group's liquidity and banking covenant compliance, examining expected future
performance. The Board have also reviewed the risks and uncertainties facing
the business. Based on the output of these going concern reviews, management
have concluded that the Group will be able to continue to operate within its
existing facilities for at least twelve months from the date of approval of
the financial statements and as such the financial statements have been
prepared on a going concern basis.
New standards and interpretations applied in the period
The following amendments and interpretations apply for the first time in 2025,
but do not have a material impact on the consolidated financial statements of
the Group. These include:
· Lack of exchangeability - Amendments to IAS 21
New standards and interpretations not applied
The International Accounting Standards Board has issued the following
standards and interpretations with an effective date after the date of these
financial statements:
International Accounting Standards (IAS/IFRSs) Effective date
(period beginning on or after)
Classification and Measurement of Financial Instruments - Amendments to IFRS 9 1 January 2026
and IFRS 7
Annual Improvements to IFRS Accounting Standards - Volume 11 1 January 2026
Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and 1 January 2026
IFRS 7
IFRS 18 - Presentation and Disclosure in Financial Statements 1 January 2027
IFRS 19 - Subsidiaries without Public Accountability: Disclosures 1 January 2027
It is anticipated that adoption of these standards and interpretations will
not have a material impact on the Group's financial statements.
The Group has not early adopted any standards, interpretations or amendments
that have been issued but are not yet effective.
3 Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
Judgements
In the process of applying the Group's accounting policies, management has
made judgements which would have a significant effect on the amounts
recognised in the consolidated financial statements.
The judgements used in the condensed consolidated interim financial statements
are detailed in the Group's 2024 Annual Report and Accounts on pages 116 of
that report, which can be found on the Group's website at www.stelradplc.com
(http://www.stelradplc.com) .
No new judgements have been applied to the condensed consolidated interim
financial statements in the six months ended 30 June 2025. However, the
judgement related to impairment of non-financial assets has been updated in
the six months ended 30 June 2025 following exit from a significant supply
contract with an existing customer.
Impairment of non-financial assets
Intangible assets, including goodwill, that have an indefinite useful life are
not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events
or circumstances indicate that the carrying amount may not be recoverable.
Details of the impairment assessment of goodwill and other assets, which
includes key estimates, are disclosed in note 15.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, which have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described in the Group's 2024 Annual Report and
Accounts on page 116 of that report. The Group based its assumptions and
estimates on parameters available when the consolidated financial statements
were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances
arising beyond the control of the Group. Such changes are reflected in the
assumptions when they occur.
The estimates and assumptions used in the condensed consolidated interim
financial statements are detailed in the Group's 2024 Annual Report and
Accounts on page 116 of that report, which can be found on the Group's website
at www.stelradplc.com (http://www.stelradplc.com) .
No new estimates and assumptions have been applied to the condensed
consolidated interim financial statements in the six months ended 30 June
2025.
4 Principal risks
The Board has undertaken a review of the principal risks affecting the Group
for the six months ended 30 June 2025. The Board considers that the principal
risks, as discussed in the 'Risk management' section on pages 48 to 54 of the
Group Annual Report and Accounts for the year ended 31 December 2024
(available on the Group's website www.stelradplc.com
(http://www.stelradplc.com) ), remain relevant.
5 Segmental information
IFRS 8 Operating Segments requires operating segments to be determined by the
Group's internal reporting to the Chief Operating Decision Maker ("CODM"). The
CODM has been determined to be the Chief Executive Officer and Chief Financial
Officer. The operating segments are determined to be the key geographical
regions in which the Group operates. The CODM receive management information
as part of the internal reporting framework based upon the key geographical
regions. The CODM assesses the performance of geographical segments based on a
measure of revenue and adjusted operating profit.
Adjusted operating profit is earnings before interest, tax, amortisation of
customer relationships and exceptional items.
Revenue by geographical market Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended 31 December 2024 (audited)
£'000 £'000 £'000
UK & Ireland 65,073 69,052 137,351
Europe 62,861 66,821 138,971
Turkey & International 8,541 7,243 14,255
Total revenue 136,475 143,116 290,577
The revenue arising in the UK, being the Company's country of domicile, was
£63,595,000 (six months ended 30 June 2024: £66,893,000; year ended 31
December 2024: £134,442,000).
Adjusted operating profit by geographical market Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended 31 December 2024
(audited)
£'000 £'000 £'000
UK & Ireland 15,029 15,080 29,548
Europe 3,567 3,769 7,937
Turkey & International 741 899 1,042
Central costs (3,424) (4,012) (7,005)
Adjusted operating profit 15,913 15,736 31,522
Exceptional items (note 7) (12,001) - -
Amortisation of customer relationships (68) (69) (137)
Operating profit 3,844 15,667 31,385
Non-current operating assets Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended
31 December 2024
(audited)
£'000 £'000 £'000
UK 15,776 16,597 16,324
The Netherlands 17,349 18,863 17,453
Turkey 26,219 25,460 25,549
Italy 14,028 25,379 23,894
Other 956 802 605
Total 74,328 87,101 83,825
The revenue information above is based on the locations of the customers. All
revenue arises from the sale of goods.
One customer has revenues in excess of 10% of revenue (six months ended 30
June 2024: none; year ended 31 December 2024: one).
6 Other operating income/(expenses)
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended
31 December 2024 (audited)
£'000 £'000 £'000
Net gain on disposal of property, plant and equipment 71 83 118
Foreign currency gains 2,725 571 723
Net losses on forward derivative contracts (1,115) (220) (35)
Sundry other income 167 190 513
1,848 624 1,319
7 Exceptional items
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended
31 December 2024 (audited)
£'000 £'000 £'000
Impairment of goodwill 2,648 - -
Impairment of customer relationships 1,369 - -
Impairment of property, plant & equipment 5,716 - -
Inventory provision 2,268 - -
12,001 - -
The exceptional items relate to impairment of assets of the Radiators SpA cash
generating unit and an inventory provision, which has arisen due to the
circumstances surrounding the impairment.
Further detail can be found in the Finance and Business Review within the
exceptional items section.
All exceptional items have been presented as such because they are one-off in
nature and separate disclosure allows the underlying trading performance of
the Group to be better understood.
8 Income tax expense
The major components of income tax expense are as follows:
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended 31 December 2024 (audited)
£'000 £'000 £'000
Consolidated income statement
Current income tax:
Current income tax charge 4,547 3,552 5,083
Adjustments in respect of current income tax charge of previous period - - (127)
Deferred tax:
Relating to origination and reversal of temporary differences (1,004) 147 1,908
Income tax expense reported in the income statement 3,543 3,699 6,864
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended 31 December 2024 (audited)
£'000 £'000 £'000
Consolidated statement of comprehensive income
Tax related to items recognised in other comprehensive income/(expense) during
the period:
Deferred tax on actuarial loss (16) (200) (232)
Current tax on monetary items forming part of net investment and on hedges of (181) 105 217
net investment
Income tax expensed to other comprehensive income/(expense) (197) (95) (15)
The taxation charge has been calculated by applying the Directors' best
estimate of the annual effective tax rate to the profit for the period.
9 Earnings per share
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended 31 December 2024 (audited)
£'000 £'000 £'000
Net (loss)/profit for the period attributable to owners of the parent (3,445) 8,024 16,518
Exceptional items (note 7) 12,001 - -
Amortisation of customer relationships 68 69 137
Tax on exceptional items (448) - -
Tax on amortisation of customer relationships (19) (19) (38)
Adjusted net profit for the period attributable to owners of the parent 8,157 8,074 16,617
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended
31 December 2024 (audited)
Basic weighted average number of shares in issue 127,352,555 127,352,555 127,352,555
Diluted weighted average number of shares in issue 129,438,265 128,105,925 128,389,983
(Loss)/earnings per share
Basic (loss)/earnings per share (pence per share) (2.71) 6.30 12.97
Diluted (loss)/earnings per share (pence per share) (2.66) 6.26 12.87
Adjusted earnings per share
Basic earnings per share (pence per share) 6.41 6.34 13.05
Diluted earnings per share (pence per share) 6.30 6.30 12.94
10 Dividends paid and proposed
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended
31 December 2024
(audited)
£'000 £'000 £'000
Declared and paid during the period
Equity dividend on ordinary shares:
Final dividend for 2024: 4.81p per share (2023: 4.72p per share) 6,126 6,011 6,011
Interim dividend for 2024: 2.98p per share - - 3,795
6,126 6,011 9,806
Six months ended 30 June 2025 (not audited) Six months ended 30 June 2024 (not audited) Year ended
31 December 2024
(audited)
£'000 £'000 £'000
Dividend proposed (not recognised as a liability)
Equity dividend on ordinary shares:
Final dividend for 2024: 4.81p per share - - 6,126
Interim dividend for 2025: 3.04p per share (2024: 2.98p per share) 3,872 3,795 -
11 Financial instruments
a) Financial instruments - other - not interest bearing
30 June 2025 (unaudited) 31 December 2024 (audited)
£'000 £'000
Financial assets
Financial instruments at fair value through profit or loss
Derivatives not designated as hedges - foreign exchange forward contracts - 293
Total instruments at fair value through profit or loss - 293
Current - 293
Non-current - -
30 June 2025 (unaudited) 31 December 2024 (audited)
£'000 £'000
Financial liabilities
Financial instruments at fair value through profit or loss
Derivatives not designated as hedges - foreign exchange forward contracts 505 -
Total instruments at fair value through profit or loss 505 -
Current 505 -
Non-current - -
Financial instruments through profit or loss reflect the change in fair value
of those foreign exchange forward contracts that are not designated in hedge
relationships, but are, nevertheless, intended to reduce the level of foreign
currency risk for expected sales and purchases.
b) Financial instruments - interest-bearing loans and borrowings
Effective interest rate Maturity 30 June 2025 (not audited) 31 December 2024 (audited)
% £'000 £'000
Current interest-bearing loans and borrowings
Lease liabilities 2,456 2,212
2,456 2,212
Non-current interest-bearing loans and borrowings
Lease liabilities 5,873 5,671
Revolving credit facility - GBP SONIA + 2.0% 9 Nov 2026 44,400 41,750
Revolving credit facility - Euro Euribor + 2.0% 9 Nov 2026 13,706 13,146
Term loan Euribor + 2.0% 9 Nov 2026 24,281 23,436
Unamortised loan costs (493) (674)
87,767 83,329
Total interest-bearing loans and borrowings 90,223 85,541
The Group has a £100 million loan facility jointly financed by National
Westminster Bank plc and Barclays Bank plc. The facility consists of a
£76.027 million revolving credit facility and a €28.346 million term loan
facility.
During the year ended 31 December 2023, the £76.027 million revolving credit
facility and the €28.346 million term loan facility were extended by two
years to 9 November 2026 by exercising the two-year extension option included
in the facility agreement.
As the £100 million bank loan facility is maturing in November 2026,
refinancing discussions with lenders commenced during the first half of 2025.
The expectation is that the loan will be refinanced.
The RCF and term loan facilities are secured on the assets of certain
subsidiaries within the Group.
c) Changes in liabilities arising from financing activities
1 January 2025 (audited) Cash flows Non-cash changes 30 June 2025 (unaudited)
£'000 £'000 £'000
Liabilities from financing activities
Revolving credit facility - GBP 41,750 2,650 - 44,400
Revolving credit facility - Euro 13,146 86 474 13,706
Term loan 23,436 - 845 24,281
Lease liabilities 7,883 184 262 8,329
86,215 2,920 1,581 90,716
Other assets
Cash and cash equivalents (18,633) 1,574 (513) (17,572)
(18,633) 1,574 (513) (17,572)
Net liabilities arising from financing activities 67,582 4,494 1,068 73,144
The non-cash changes all relate to foreign exchange differences.
12 Contingent liabilities
Termo Teknik Ticaret ve Sanayi A.S. has issued letters of guarantee and
letters of credit to its steel suppliers amounting to $5,672,000 (31 December
2024: $17,917,000) and $30,626,000 (31 December 2024: $18,071,000)
respectively. Termo Teknik Ticaret ve Sanayi A.S. has also issued letters of
guarantee denominated in Turkish Lira totalling TL26,445,000 (31 December
2024: TL26,514,000).
The Group enters into various forward currency contracts to manage the risk of
foreign currency exposures on certain purchases and sales. The total amount of
unsettled forward contracts as at 30 June 2025 is £13,067,000 (31 December
2024: £12,123,000) on purchases and £16,250,000 (31 December 2024:
£17,500,000) on sales.
The fair value of the unsettled forward contracts held at the balance sheet
date, determined by reference to their market values, is a liability of
£505,000 (31 December 2024: asset of £293,000).
As part of the £100 million loan facility, entered into in November 2021, and
amended on 8 July 2022, the Group is party to a cross-collateral agreement
secured on specific assets of certain Group companies. No liability is
expected to arise from the agreement.
Under an unlimited multilateral guarantee, the Company, in common with certain
fellow subsidiary undertakings in the UK, has jointly and severally guaranteed
the obligations falling due under the Company's net overdraft facilities. No
liability is expected to arise from this arrangement.
13 Pensions and other post-employment plans
30 June 2025 (not audited) 31 December 2024
(audited)
£'000 £'000
Net employee defined benefit liability
Turkish scheme 3,883 4,476
Italian scheme 611 600
Other retirement obligations 43 42
4,537 5,118
Turkish scheme
In Turkey there is an obligation to provide lump sum termination payments to
certain employees; this represents 30 days' pay (subject to a cap imposed by
the Turkish Government) for each year of service. The IAS 19 valuation gives
a liability of £3,883,000 (31 December 2024: £4,476,000). There are no
assets held in this plan (31 December 2024: nil).
Italian scheme
The Italian pension scheme, the Trattamento di Fine Rapporto, is a deferred
compensation scheme established by Italian law. Employers are required to
provide a benefit to employees when, for any reason, their employment is
terminated. The IAS 19 valuation gives a net liability of £611,000 (31
December 2024: £600,000).
UK scheme
The UK has one defined contribution pension scheme.
There were £31,000 outstanding contributions (31 December 2024: £66,000) due
to the scheme at the balance sheet date.
Other overseas retirement obligations
The Group operates a number of defined contribution pension schemes in its
overseas entities and also has certain other retirement obligations.
IAS 19 accounting - Turkish and Italian schemes
Principal actuarial assumptions
Italian scheme Turkish scheme Italian scheme Turkish scheme
30 June 2025 (not audited) 30 June 2025 (not audited) 31 December 2024 (audited) 31 December 2024 (audited)
Discount rate (per annum) 3.2% 29.3% 3.2% 29.3%
Future salary increases (per annum) n/a 25.6% n/a 25.6%
Quantitative sensitivity analysis
30 June 2025 (not audited) 30 June 2025 (not audited)
Discount rate Future salary increases
(per annum) (per annum)
+1% -1% +1% -1%
£'000 £'000 £'000 £'000
(Decrease)/increase in defined benefit obligation - Turkish scheme (99) 112 90 (80)
The sensitivity analysis above has been determined based on a method that
extrapolates the impact on the net defined benefit obligation as a result of
reasonable changes in key assumptions at the end of the reporting period.
14 Related party disclosures
There are no related party transactions or changes to related party
transactions since the last year end that could have a material effect on the
Group's financial position or performance for the period.
15 Intangible assets
Goodwill Customer relationships Technology and software costs Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2025 2,607 1,737 1,357 5,701
Additions - - 18 18
Exchange adjustment 41 28 49 118
At 30 June 2025 2,648 1,765 1,424 5,837
Accumulated amortisation and impairment
At 1 January 2025 - 323 726 1,049
Amortisation - 68 122 190
Impairment 2,648 1,369 - 4,017
Exchange adjustment - 5 29 34
At 30 June 2025 2,648 1,765 877 5,290
Net book value
At 30 June 2025 - - 547 547
At 31 December 2024 2,607 1,414 631 4,652
Impairment
Goodwill is subject to annual impairment testing. All of the goodwill
recognised was allocated to a single cash‑generating unit ("CGU"), being the
Radiators SpA division which, post the impairment recognised, has a total
carrying value of £14.0 million. A CGU represents the lowest level in the
Group at which goodwill is monitored for internal management purposes.
Management is required to assess CGUs for impairment where they believe there
are triggers for impairment. During the period, management identified that
there are triggers for impairment with respect to the Radiators SpA CGU and
performed an impairment review as set out below.
Impairment tests are performed by analysing the carrying amount allocated to
the CGU against the higher of fair value less costs to sell or its value in
use. Both methods are calculated as the net present value of the CGU's
discounted future cash flows covering a three‑year period. These cash flows
are based on discounted cash flows covering a period up to December 2027.
Terminal growth rates of 1.8% have been applied beyond this, based on
historical macroeconomic performance and projections of the sector served by
the CGUs.
When assessing for impairment, management has considered the impact of climate
change, particularly in the context of the risks and opportunities identified
within the Task Force on Climate‑related Financial Disclosures Report on
pages 35 to 39 of the Strategic Report in the 2024 Annual Report &
Accounts, and has not identified any material short‑term impacts from
climate change that would impact the recoverable amount of the CGU.
For the value in use model, a pre‑tax discount rate of 14.8% has been
applied in determining the recoverable amounts of the CGU. The pre‑tax
discount rate is estimated based on the Group's risk adjusted cost of capital.
Other key assumptions throughout the budget period are EBITDA, which is
included in the terminal value at a margin of 7%, volumes, contribution per
radiator sold and capital expenditure. The key assumptions have been
determined using past experience or external sources of information.
Based on the impairment tests performed, the recoverable amount calculated in
the impairment review of the Radiators SpA CGU was lower than the carrying
amount. As a result, an impairment has been recognised, reducing goodwill by
£2,648,000, customer relationships by £1,369,000 and property, plant &
equipment by £5,716,000. Inventories are not included in the carrying value
of the CGU, however the circumstances surrounding the impairment have resulted
in an additional inventory provision of £2,268,000. The tax impact of the
total impairment is a credit of £448,000.
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES AND GLOSSARY OF TERMS
The Group uses some alternative performance measures to monitor and assess the
underlying performance of the business. These measures include adjusted
operating profit and adjusted profit for the year. These measures are deemed
useful as they aid comparability year-on-year. The use of alternative
performance measures compared to statutory IFRS measures does give rise to
limitations, including a lack of comparability across companies and the
potential for them to present a more favourable view. Further, these measures
are not a substitute for IFRS measures of profit. Alternative performance
measures are defined in the glossary of terms below. Alternative performance
measures are reconciled to the appropriate financial statements line item
being disclosed.
Reconciliation of adjusted profit for the period and adjusted earnings per
share
Six months ended 30 June 2025 Six months ended 30 June 2024
£'000 £'000
(Loss)/profit for the period (3,445) 8,024
Adjusted for:
Exceptional items 12,001 -
Amortisation of customer relationships 68 69
Tax on exceptional items (448) -
Tax on amortisation of customer relationships (19) (19)
Adjusted profit for the period 8,157 8,074
Basic weighted average number of shares in issue 127,352,555 127,352,555
Diluted weighted average number of shares in issue 129,438,265 128,105,925
(Loss)/earnings per share
Basic (loss)/earnings per share (pence per share) (2.71) 6.30
Diluted (loss)/earnings per share (pence per share) (2.66) 6.26
Adjusted earnings per share
Basic earnings per share (pence per share) 6.41 6.34
Diluted earnings per share (pence per share) 6.30 6.30
Reconciliation of adjusted operating profit and EBITDA
Six months ended 30 June 2025 Six months ended 30 June 2024
£'000 £'000
Operating profit 3,844 15,667
Adjusted for:
Exceptional items 12,001 -
Amortisation of customer relationships 68 69
Adjusted operating profit 15,913 15,736
Adjusted for:
Depreciation 5,776 5,777
Amortisation (excluding customer relationships) 122 183
EBITDA 21,811 21,696
Reconciliation of cash flow from operations, adjusted cash flow from
operations and free cash flow
Six months ended 30 June 2025 Six months ended 30 June 2024
£'000 £'000
EBITDA (see reconciliation above) 21,811 21,696
Adjusted for:
Gain on disposal of property, plant and equipment (71) (83)
Share-based payments 588 336
Working capital adjustments (8,998) (9,793)
Net capital expenditure (3,710) (3,082)
Cash flow from operations 9,620 9,074
Income tax paid (4,769) (3,987)
Interest paid - net (3,035) (3,665)
Free cash flow 1,816 1,422
Cash flow from operations (see reconciliation above) 9,620 9,074
Adjusted for
Exceptional items' impact on working capital - 2,168
Adjusted cash flow from operations 9,620 11,242
Reconciliation of net debt and leverage before leases liabilities
Six months ended 30 June 2025 Six months ended 30 June 2024
£'000 £'000
Total interest-bearing loans and borrowings 90,223 91,905
Cash and cash equivalents (17,572) (19,359)
Adjusted for:
Unamortised loan costs 493 856
Lease liabilities (8,329) (8,768)
Net debt before leases liabilities 64,815 64,634
EBITDA - six months ended 30 June (see reconciliation above) 21,811 21,696
EBITDA - half two prior year 21,994 21,567
EBITDA - last twelve months 43,805 43,263
Debt leverage ratio before leases liabilities 1.48 1.49
Adjusted cash flow from operations: cash flow from operations before
exceptional items and the impact of exceptional items on working capital.
Adjusted EPS: adjusted earnings per share is calculated on adjusted profit for
the period divided by the weighted average number of shares in issue.
Adjusted operating profit: operating profit before exceptional items and
amortisation of customer relationships.
Adjusted profit for the period: earnings before exceptional items,
amortisation of customer relationships and tax thereon.
Business capital employed: the sum of property, plant and equipment,
technology and software costs, trade and other receivables, inventories, other
current financial assets, provisions, net employee defined benefit
liabilities, trade and other payables and other current financial liabilities.
Cash flow from operations: EBITDA, less exceptional items, plus or minus
movements in operating working capital, less share-based payment expense, less
net investments in property, plant and equipment, less technology and software
costs, less finance lease payments.
Cash flow from operations conversion: calculated by dividing cash flow from
operations by adjusted operating profit.
Contribution: revenue from sale of the Group's products less any cost of
direct materials, variable distribution costs, variable selling costs, direct
labour costs and other variable costs.
EBITDA: profit before interest, taxation, depreciation, amortisation and
exceptional items.
Free cash flow: cash flow from operations less tax paid less net interest
paid.
Debt leverage ratio: calculated by dividing net debt by EBITDA.
Debt leverage ratio before lease liabilities: calculated by dividing net debt
before lease liabilities by EBITDA.
Net debt: the sum of revolving credit facilities, term loan, lease liabilities
net of cash.
Return on capital employed: adjusted operating profit as a percentage of
business capital employed.
RMI: repair, maintenance and improvement activities.
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