Stelrad Group (LSE:SRAD) delivered another year of adjusted operating profit growth in 2025 despite continued weakness across its core UK and European radiator markets. Group revenue was around £280m, with overall sales volumes down roughly 4%, but this was more than offset by a richer product mix and disciplined cost control. Contribution per radiator increased for the eighth consecutive year, driving a rise in adjusted operating profit of around 3% to £32.5m and lifting the operating margin to 11.6%.
Cash generation remained strong, enabling the group to reduce net debt to £51.2m and lower leverage to 1.16x. This balance sheet improvement was supported by the renewal of a £100m loan facility on improved terms. During the year, Stelrad also continued to reshape its operational footprint, including a restructuring of its Danish business following earlier changes in Turkey. These actions resulted in an exceptional charge of approximately £2.7m but are intended to support improved efficiency and margin performance over the medium term.
Management said visibility on a broader recovery in construction and refurbishment markets remains limited, but highlighted that the margin improvements and strategic actions delivered in 2025 provide a solid foundation heading into 2026. The company believes it is well positioned to benefit when demand conditions improve, given its stronger cost base, improved leverage profile and focus on higher-value products. While fundamentals are supported by robust cash flow and operational execution, the overall outlook is tempered by weaker share price momentum and a relatively high valuation multiple.
More about Stelrad Group plc
Stelrad Group plc is a leading specialist manufacturer and distributor of steel panel and designer radiators, with operations primarily across the UK, Europe and Turkey. The group focuses on higher-margin, value-added heating products and leverages a flexible, low-cost manufacturing footprint, broad product range and strong customer service to compete effectively in residential repair, maintenance, improvement and new-build markets.
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