Stelrad half-year revenue falls on contract exit, volume reductions
Stelrad half-year revenue falls on contract exit, volume reductions
Overview
UK radiator maker's half-year revenue fell 9.1% yr/yr due to lower volumes and contract exits
Adjusted operating profit rose 4.9% and margin expanded, supported by operational initiatives
Adjusted EPS increased 16%, driven by operating profit growth and reduced interest costs
Outlook
Stelrad says full-year outlook remains unchanged
Company expects ongoing cost inflation and weak end markets to persist
Stelrad sees uncertainty around timing of broader market recovery
Result Drivers
CONTRACT EXIT AND VOLUME REDUCTIONS - Co said revenue declined due to a 14.6% drop in sales volumes, including the exit from a loss-making contract and reduced sales in lower-margin markets
MARGIN MANAGEMENT AND COST INITIATIVES - Adjusted operating profit and margin rose, supported by operational control, exit from a loss-making contract, and cost optimisation programmes
FAVOURABLE PRODUCT AND MARKET MIX - Improved product mix and a higher proportion of premium products contributed to margin gains
Company press release: ID:nRSG6555Pa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 Revenue |
| GBP 124 mln |
|
H1 Adjusted Net Income |
| GBP 9.50 mln |
|
H1 Adjusted EBIT |
| GBP 16.70 mln |
|
H1 Adjusted EBIT Margin |
| 13.50% |
|
H1 EBIT |
| GBP 15.70 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the electrical components & equipment peer group is "buy"
Wall Street's median 12-month price target for Stelrad Group plc is GBp190.00, about 24.2% above its August 6 closing price of GBp153.00
The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 9 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)