26 January 2024
Stelrad
Group PLC
("Stelrad" or "the Group")
Trading
Update
Resilient
performance in line with consensus
Stelrad Group plc ("Stelrad" or "the
Group" or "the Company", LSE: SRAD), a leading specialist
manufacturer and distributor of steel panel radiators in the UK,
Europe and Turkey, today announces a trading update for the twelve
months ended 31 December 2023.
Trading Update
The Group's H2 performance was, as
expected, impacted by high inflation and rising interest
rates, which have supressed both new construction and renovation
activities.
Despite these well documented
headwinds impacting volumes in new build and RMI, the Group
delivered a robust performance. Revenue for the year was c.£308m,
representing a c.3% reduction on prior year including the full year
benefit of the acquisition of Radiators SpA (formerly DL Radiators
SpA) and a c.13% reduction on a like-for-like basis.
Proactive price and cost management
have led to a 13% increase in contribution per radiator in the
year. This is the sixth consecutive annual increase in contribution
per radiator and has countered the impact of a decrease in volumes.
As a result, the Board expects to deliver a statutory operating
profit of c.£27m, after the impact of exceptional restructuring
charges in Q4 incurred to drive cost savings for future periods.
The Board expects to deliver an adjusted operating
profit1 of c.£29m, in line with market
expectations2.
Leverage, based on net debt before
lease liabilities, was c.1.5x EBITDA at 31 December 2023 with good
headroom against both bank facilities and covenants.
Outlook
The Board remain mindful of
continuing headwinds across the Group's markets. However, we are
confident that the Group is well positioned and prepared to
navigate these challenges and the Group's resilience has been
further strengthened by cost saving initiatives implemented in the
second half of 2023, with benefits to be realised from 2024
onwards.
Strong replacement demand across
Europe and longer-term regulatory tailwinds for decarbonised energy
efficient heating systems continue to underpin the Group's
confidence in the future. These trends, together with the
flexibility of Stelrad's business model, market-leading positions,
and the strength and breadth of the Group's customer and supplier
relationships, mean that the Group enters 2024 in a strong
position.
The Group intends to issue its full
year Preliminary Announcement on Friday 8 March
2024.
Trevor Harvey, Chief Executive of
Stelrad, commented:
"Stelrad's financial performance in 2023 is testament to the
resilience and flexibility of our business and the Group's
experience in navigating previous market downturns, which has
enabled us to deliver an adjusted operating profit in line with
expectations. We have been able to offset a decline in volumes with
proactive margin management initiatives which will position the
Group well to capitalise once markets improve.
"We continually focus on our strategic objectives of growing
market share, improving product mix, optimising routes to market,
and positioning the business for decarbonisation, and, while 2024
is expected to provide continuing market challenges, the
initiatives we have undertaken during 2023 will mean that our
business can meet these challenges and continue to deliver
long-term value for our stakeholders."
1. Operating profit before exceptional items and the
amortisation of customer relationships.
2. Average analysis adjusted operating profit consensus is
currently £28.5m.
For further information:
Stelrad Group plc
Trevor Harvey, Chief Executive
Officer
Annette Borén, Chief Financial
Officer
|
+44 (0)191 261 3301
|
Investec - Sole Broker
Bruce Garrow / Ben
Griffiths
Powerscourt - PR Advisor
James White / Pete Lambie
|
stelrad@powerscourt-group.com
+44 (0)7855 432 699
|
Notes to Editors
Stelrad Group plc is Europe's
leading specialist radiator manufacturer, selling an extensive
range of hydronic, hybrid, dual fuel and electrical heat emitters
to more than 500 customers in over 40 countries. These include
standard, premium and low surface temperature (LST) steel panel
radiators, towel warmers, decorative steel tubular, steel
multicolumn and aluminium radiators.
The Group has five core brands:
Stelrad, Henrad, Termo Teknik, DL Radiators and Hudevad. In
the data reported by BRG Building Solutions for 2022, Stelrad moved
into a market leadership position, with 18.8% share by volume of
the combined UK, European and Turkish steel panel radiator
market. The Group is now market leader in seven countries -
the UK, Ireland, France, the Netherlands, Belgium, Denmark and
Greece, with a top 3 position in a further nine
territories.
Stelrad is headquartered in
Newcastle upon Tyne in the UK and in 2023 employed 1,400+ people,
with manufacturing and distribution facilities in Çorlu (Turkey),
Mexborough (UK), Moimacco (Italy) and Nuth (Netherlands), with
further commercial and distribution operations in Kolding (Denmark)
and Krakow (Poland).
The Group's origins date back to the
1930s and Stelrad enjoys long established commercial relationships
with many of its customers, having served each of its top five
current customers for over twenty years.
Further information can be found
at: https://stelradplc.com/.