Tyneside radiator company Stelrad said it remains confident in its long-term growth plans after a strong half year in challenging conditions.
Newcastle-based Stelrad – which has more than 1,500 employees across its main manufacturing base in Mexborough, South Yorkshire, and sites in the Netherland, Italy, Turkey, Denmark and Poland – says the integration of DL Radiators’ in July 2022 help the group to deliver a 6.2% rise in revenues from £147.8m to £157m.
The company – which sells a range of hydronic, hybrid, dual fuel and electrical products in more than 40 countries – saw like-for-like revenues drop 12.7% against strong first half comparatives in 2022 combined with the impact of high inflation and rising interest rates, supressing both new construction and renovation activities.
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Revenue in the 海角视频 & Ireland decreased by 0.7% to £70.1m, whilst adjusted operating profit reduced by 6.5% to £11.5m. In Europe, revenue rose 20.3% to £76.5m, but adjusted operating profit decreased by 34.7% to £4.9m, driven by the reduction in like-for-like sales volumes across Stelrad’s principal European markets. Pre-tax profit more than doubled from £4.7m to £10.3m.
Following the successful integration of Italian business DL Radiators, CEO Trevor Harvey says the company was eyeing further acquisitions, but that they would possibly take place in the 2024 financial year and not in the current year.
Meanwhile, the DL Radiators’ deal has given the wider company access to an enlarged portfolio of products, and a new range of electric heaters is being launched in the 海角视频 this autumn, including 64 electric heat emitters including towel warmers, aluminium and other design products. A pre-launch in the second quarter of the year was very well received, Mr Harvey said.
Mr Harvey said: “We’ve pre-launched this range in quarter two, to the 海角视频 market place and it’s been very well received, and we already have some specifications for a national housebuilder and we’ve already got commitment from a leading national electrical distributor to stock our range, so this is a good opportunity for Stelrad.”
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“Clearly with decarbonisation on the horizon, as people strive for low carbon or zero carbon heating systems then electric emitters have an important role to play in that outcome.”
“In quarter two we presented to the market. We were slightly taken aback when one of the housebuilders immediately spcifided our product which, to be frank, was quite unexpected. It’s a great start and reflects the strength of the brand and our very strong relationships with the new build sector and specifiers in particular.
With autumn officially starting in 18 days, Mr Harvey said consumers will be switching heating systems back on, launching the start of Stelrad’s ‘heating season’ when it sees a spike in customer demand. Overall, Mr Harvey said the group remains confident for the future, having successfully traded through a number of economic downturns in its company history.
He added: “Despite challenging macroeconomic conditions across a number of countries, Stelrad’s leading positions mean that the group remains well placed to outperform the market and deliver on its full year expectations.
“Our focus remains on our key objectives of growing market share, improving product mix, optimising routes to market and positioning effectively for decarbonisation. Following a pivotal first year as a PLC in 2022, I am pleased that, despite the notable headwinds facing the wider industry, we have been able to deliver on our plans for the first half of 2023 and remain on course to achieve our expectations for the full year.
“The resilience of our business model, alongside our experience of navigating previous market downturns, means that the group is well positioned to capitalise once markets improve. Regardless of the near term headwinds facing the wider sector, the increasing need for decarbonised, energy efficient heating systems remains unchanged and underpins our confidence in our ability to drive long-term shareholder value.”