Directors at radiator manufacturer Stelrad say the firm has posted a “resilient” half year performance within a subdued market.
The Newcastle-based company has more than 1,500 employees across its main manufacturing base in Mexborough, South Yorkshire, and sites in the Netherlands, Italy, Turkey, Denmark and Poland. During the six months to June 30 it saw a decline in revenues across some of the markets it serves.
The firm said it saw revenue decline 4.6% to £136m despite continued pricing discipline, as a result of ongoing volume challenges from subdued demand. Adjusted operating profit rose to £15.9m, an increase of 1.1%, as a result of ongoing margin management and structural currency gains.
However, it noted an exceptional item of £12m in relation to an impairment charge on the assets of Radiators SpA, an Italian design brand it acquired in 2022, which led to statutory operating profit falling by more than 75% to £3.8m. Discounting the impairment, adjusted operating profit increased 1.1% to £15.9m.
In the Ƶ and Ireland revenue declined 5.8%, supported in part by a favourable increase in average radiator size, partially offsetting a 9.6% volume reduction. In Europe revenue declined 5.9% as a result of reduced volumes, and in its Turkey and international markets revenue increased 17.9%, to £8.5m, due to increased volumes in the Turkish market.
The firm said it maintains an industry leading market share at 19.9%, but this was down from the 2023 figure of 20.9% due to the impact of the market mix across the countries it serves. Excluding Russia, where the group chooses not to participate, market share was 25.4%.
In a note to shareholders on the outlook, the firm said: “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.”
Trevor Harvey, chief executive officer, said the manufacturer had posted a resilient financial performance "in a suppressed volume environment".
He 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.”
The dividend per share was increased 2% to 3.04p.
