Stelrad Group (SRAD) H1 2025 earnings summary

Executive summary

• Maintained market leadership with a 25.4% addressable market share (excluding Russia) and 19.9% overall share, despite a 4.6% revenue decline due to challenging macroeconomic conditions.

• Adjusted operating profit rose 1.1% to £15.9m, supported by margin management and operational excellence.

• Interim dividend increased by 2% to 3.04p per share, reflecting confidence in future growth and strong cash generation.

• Board expects further profit growth for FY25, with full-year guidance unchanged and modest volume improvement anticipated in H2.

• Statutory loss of £3.4m driven by £12.0m non-cash exceptional impairment at Radiators SpA.

Financial highlights

• Revenue declined 4.6% year-on-year to £136.5m, mainly due to a 4.8% reduction in sales volumes and adverse currency movements.

• Adjusted operating profit increased to £15.9m (up 1.1%), with margin up 0.7 percentage points to 11.7%.

• Adjusted EPS rose to 6.41p; statutory EPS was a loss of 2.71p (vs. 6.30p prior year).

• Free cash flow increased to £1.8m, with cash flow from operations conversion at 60.5%.

• Return on capital employed improved by 0.5 percentage points to 26.9%.

Outlook and guidance

• Well placed to achieve full-year expectations of further adjusted operating profit growth, with guidance unchanged.

• Modest market volume improvement expected in H2, supported by strong market position and operational excellence.

• Group tax rate expected to be around 31% for the year, with possible non-cash deferred tax movements in Turkey and gradual reduction anticipated.

• Leverage expected to fall in H2 after a seasonal increase in H1, as working capital reduces.