Stelrad profit up 87% despite revenue slip to £308m

Shares of Stelrad Group plc, the Newcastle-based radiator firm, rose about 3% after it published 2023 results showing profit before tax rose 87.2% to £19.2 million despite revenue slipping 2.6% to £308.2 million.

Total dividend is maintained at 7.64p per share.

Stelrad, a leading radiator manufacturer and distributor for the UK, Europe and Turkey, said revenue was down 12.9% on a like-for-like basis “driven by subdued new build and renovation activity due to high inflation and interest rate environment.”

The Newcastle firm said its Turkey & International revenue was down 25.8% (30.5% like-for-like) “driven primarily by volume decline in China” but reported a 13.0% rise in contribution per radiator, the sixth consecutive year on year increase, driven by proactive price and cost management.

On current trading and outlook, the Newcastle firm said: “Despite the headwinds impacting volumes in new build and RMI during 2023, the robust performance delivered by the group has continued into 2024 with trading during the initial weeks of the current financial year remaining in line with management’s expectations.

“Although we expect these headwinds to continue throughout 2024, Stelrad believes that management’s considerable experience of successfully navigating other challenging market cycles will enable the business to navigate this turbulence and deliver another encouraging year of progress …

“As a result, our outlook for the current financial year remains unchanged thanks to the resilience and flexibility of our business model, the strength of our market positioning and the robustness of our strategy. 

“Longer term, Stelrad will benefit from strong underlying replacement demand combined with regulatory tailwinds for decarbonised, energy efficient heating systems.”

Stelrad Group has more than 500 customers in over 40 countries and has five core brands: Stelrad, Henrad, Termo Teknik, DL Radiators and Hudevad. 

Stelrad is headquartered in Newcastle and employs 1,400 people, with manufacturing and distribution facilities in Mexborough, South Yorkshire, and in Çorlu (Turkey), Moimacco (Italy) and Nuth (Netherlands), with further commercial and distribution operations in Kolding (Denmark) and Krakow (Poland).

Stelrad Group CEO Trevor Harvey said: “Our performance in 2023 is testament to the resilience and flexibility of our business model, the strength of our market positioning and the robustness of our strategy that continues to see us focus on our four key strategic objectives of growing market share, improving product mix, optimising routes to market and positioning effectively for decarbonisation.

“After many years as challenger, Stelrad has now gained market leadership of both the steel panel radiator category and the hydronic heat emitter market in total, across the combined market of Europe, the UK and Turkey, taking market share from our competitors during a prolonged period of wider market uncertainty. 

“Although we expect these macroeconomic headwinds to continue during 2024, management’s considerable experience of managing through numerous other challenging market cycles will enable us to navigate current market conditions to deliver another robust financial performance.

“In combination with our focused strategy,  this positions Stelrad well for a sustained period of profitable growth when markets recover, with the Group well placed to benefit from strong underlying replacement demand across Europe and the long-term regulatory tailwinds for decarbonised energy efficient heating systems.”