Stelrad Group (SRAD) H2 2024 earnings summary

Executive summary

• Adjusted operating profit rose 7.6% year-over-year to £31.5 million, with a record contribution per radiator exceeding £20 for the seventh consecutive year.

• Revenue declined 5.7% to £290.6m due to challenging macroeconomic conditions and lower sales volumes, but margin management and product mix improvements offset the impact.

• Maintained market leadership in Europe, with a 98% OTIF delivery rate in the UK & Ireland and strong customer service.

• Premium steel panel radiator mix reached a record 6.3% of steel panel volume, and high-output radiator sales in the UK grew 66% year-over-year.

• Entered 2025 in a strong financial and strategic position, focusing on sustainable growth and decarbonisation opportunities.

Financial highlights

• Adjusted operating profit margin increased by 1.3 percentage points to 10.8%.

• Return on capital employed improved by 1.6 percentage points to 27.1%.

• EBITDA increased 5.6% to £43.5m, with a year-over-year improvement of £2.3 million.

• Adjusted earnings per share declined to 13.05p due to a prior year one-off deferred tax credit; excluding this, earnings grew.

• Total dividend per share for 2024 increased by 2% to 7.79p, reflecting confidence in future growth.

Outlook and guidance

• Market conditions expected to remain subdued through at least H1 2025.

• Key input prices, including steel, anticipated to be stable in 2025.

• One-off IT infrastructure investment planned for 2025, modestly increasing capex.

• Group tax rate expected to exceed 30% in 2025 due to higher Turkish withholding tax.

• Long-term growth underpinned by positive replacement demand, premiumisation, and regulatory support for decarbonisation.