Radiator manufacturer Stelrad has restructured one of its overseas divisions after seeing ‘subdued’ market conditions in recent months.
The company, which is based in Newcastle and has its main manufacturing base in South Yorkshire, has issued a trading update for the 10 months ending October 31. It said that activity in property refurbishment and new-build housing had been falling in recent months, leading to revenues that were lower than the previous year.
It said it “continues to implement proactive margin management initiatives and cost reduction activities”, with cost control measures including a restructuring of its Turkish business. The restructuring led to an exceptional expense of around £1.6m being incurred this year.
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But it added that a focus on higher added value products had led to an increase in contribution per radiator compared to last year, and it was expecting its 2025 operating profits to be between £32m and £33m, slightly ahead of the £31.5m recorded in 2024.
Stelrad said that its debt leverage ratio is expected to improve further during the year and that the refinancing of the group’s loan facility, which is expected to complete before the end of the year, would reduce future borrowing costs. It said that ‘actions taken by the business during the second half have positioned the group well for the eventual recovery in its markets’, pointing in particular to strong performance from its relaunched website.
Stelrad chief executive Trevor Harvey said: “Stelrad continues to deliver a strong operational performance and remains on track to achieve growth in adjusted operating profit and margin expansion year-on-year, despite the subdued volume environment. Whilst the continued delay in end-market recovery remains frustrating, Stelrad’s flexible, low-cost manufacturing footprint, outstanding customer service and unmatched product availability means that the group remains well-positioned for the eventual recovery in our end markets, and I remain confident in our ability to deliver long-term value for our stakeholders.”
Stelrad, which dates back to the 1930s, has its headquarters in Newcastle with manufacturing and other facilities in Mexborough, South Yorkshire, and in Turkey, Italy, the Netherlands, Denmark and Poland. It employs around 1,400 people and listed on the London Stock Exchange in 2021.