Stelrad Group (SRAD) H2 2025 earnings summary

Executive summary

• Adjusted operating profit rose 3.0% to £32.5m, with margin up to 11.6%, despite a 3.8% revenue decline to £279.6m year-over-year.

• Statutory operating profit fell to £17.5m due to £14.9m in exceptional items, mainly non-cash impairments and restructuring.

• Free cash flow more than doubled to £20.5m, driven by improved working capital and lower interest costs.

• Final dividend increased 5% to 5.05p per share, reflecting confidence in future prospects.

• Market leadership maintained in six of ten core territories, with a top-three position in three others.

Financial highlights

• Revenue declined 3.8% to £279.6m, with UK & Ireland down 4.4%, Europe down 3.9%, and Turkey & International up 3.9%.

• Adjusted profit for the year was £16.7m, up 0.2% year-over-year.

• Basic EPS dropped to 0.66p (from 12.97p), while adjusted EPS was stable at 13.08p.

• Return on capital employed improved to 30.1% from 27.1%.

• Net debt before lease liabilities reduced to £51.2m, leverage ratio improved to 1.16x.

Outlook and guidance

• Board expects further progress in 2026, supported by competitive advantages and strategic initiatives.

• Early 2026 trading in line with expectations, but subdued demand expected to persist through H1 2026.

• Confident in medium-term growth, especially from premiumisation and decarbonisation trends.