Stelrad: 'Record Results Underpinned By Resilient Business Model'

Stelrad Group plc (“Stelrad” or “the Group” or “the Company”, LSE: SRAD), a leading specialist manufacturer and distributor of steel panel and other designer radiators in the UK, Europe and Turkey, today announces its audited financial results for the year ended 31 December 2022.

*As a result of inflation in Turkey exceeding 100% over a three-year period, the Group was required to adopt IAS 29 in respect of its Turkish subsidiary for the first time in the financial statements for the year ended 31 December 2022. The impact of the adoption of IAS 29 is a non-cash item but has a £16.3m negative impact on statutory profit for the year. See Finance and business review for further details. Due to a change in functional currency, IAS 29 will no longer apply after 1 January 2023.

**Adjusted figures are stated before the impact of IAS 29, exceptional items, foreign exchange differences, amortisation of customer relationships and tax thereon where applicable. See note 8 for a reconciliation of adjusted profit after tax. See note 3 for a reconciliation of adjusted operating profit. See the finance and business review for a reconciliation of adjusted free cash flow.

Financial and operational highlights

• Record Group financial performance as a result of Stelrad’s resilient business model:

          – UK & Ireland: 6.5% revenue growth (pre-IAS 29), 5.2% growth in adjusted operating profit.

          – Europe: 25.3% (-0.8% organic) revenue growth (pre-IAS 29), 7.3% growth in adjusted operating profit.

          – Turkey & International: 6.4% (+3.1% organic) revenue growth (pre-IAS 29), 29.1% reduction in adjusted operating profit.

• Contribution per radiator (pre-IAS 29) increased by 16.5% (18.6% like-for-like increase), more than offsetting a 9.2% year on year sales volume decline (15.3% like-for-like decline) versus exceptionally strong comparatives in 2021.

• Improved performance underpinned by proactive margin management and operational improvements across the business.
  
  
• Completion of two further production line transfers from Western European plants to lower cost Turkish facility in the period.
  
  
• Acquisition of Italian manufacturer of heat emitters, DL Radiators for €28.3 million in July 2022.
  
  
• Continued to strengthen our market position, thanks to strong, long-lasting customer relationships, market-leading product availability and customer service and product innovation.
  
  
• Recommended final dividend of 4.72 pence per share, to be paid on 26 May 2023.

Commenting on the Group’s performance, Trevor Harvey, Chief Executive Officer, said: 
“We delivered a record performance in 2022 thanks to the resilience of our business model combined with the hard work of our employees, the strength of our product offering, the quality of our customer relationships and our relentless approach to operational improvements across the firm. While the market backdrop is not easy, as a business with a near 100-year track record, we have successfully navigated previous market downturns and our current management team has the experience and ability to deliver ongoing outperformance despite the challenging macroeconomic environment. Longer-term, the twin drivers of decarbonisation and energy efficient heating remain firmly in place and we remain well-placed to deliver value for stakeholders.”

Current trading and outlook
The Group’s outlook for FY23 remains in line with current market expectations. Whilst it is early in the year and we are mindful of the exceptionally strong comparatives in H1 2022, trading since the period end has been encouraging. We remain confident in our strategic objectives of growing market share, improving product mix, optimising routes to market, and positioning the business for decarbonisation.

Source : Stelrad Group PLC

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