Stelrad Group (SRAD) H2 2025 earnings summary

Executive summary

• Maintained market leadership in Europe with a 15.7% overall share and 24.2% in steel panels, operating in 40+ countries with 500+ customers, and continued progress despite challenging macroeconomic conditions.

• Achieved eighth consecutive year of growth in contribution per radiator, reaching £20.50, driven by operational efficiencies and higher-margin sales mix.

• Strategic focus on premiumization, decarbonization, operational efficiency, and cost management drove profitability improvements, with premium steel panel mix at a record 6.4% and strong growth in electric radiator volumes.

• Embedded operational and commercial excellence, with 98% OTIF delivery and leading customer service.

• Exited a significant loss-making contract in DL Radiators S.p.A., positioning for improved margins and future growth.

Financial highlights

• Group revenue declined 3.8% year-over-year to £279.6m due to lower sales volumes, partially offset by favourable product mix and price increases.

• Adjusted operating profit rose by 3% to £32.5 million, with margin up to 11.6%.

• Adjusted EPS was 13.08p, up slightly from 13.05p, while total dividend per share increased 3.9% to 8.09p.

• Adjusted operating cash flow conversion reached 111.4%, up from 80.3% in 2024, and leverage reduced to 1.16x EBITDA.

• Return on capital employed improved by 3 percentage points to 30.1%.

Outlook and guidance

• Trading in early 2026 is steady and in line with expectations, but subdued demand is expected to persist through H1 2026; end markets remain stable but subdued.

• No significant market recovery expected in H1 2026; positioned to capture share and profit from any upturn.

• Steel prices are expected to rise in 2026, while other input costs remain stable; capital expenditure will increase slightly for IT and Turkish factory investments.

• New build market expected to grow 4-5% and RMI by 1.5% in 2026, both second-half weighted.

• Adjusted tax rate guidance for FY 2026 is 34%.