Stelrad Group's Profit Declines Despite Improved Profit Margins, Stock Price Falls

Investing.com - Stelrad Group plc (LSE:SRAD) announced its full-year results on Friday, showing declines in both revenue and statutory profit. The radiator manufacturer warned that weak demand will persist at least until the first half of 2026, causing the stock to fall by 1.9%.

The company’s revenue for the fiscal year ending December 31, 2025, was £279.6 million, down 3.8% from £290.6 million the previous year.

This decline reflects ongoing economic uncertainty in key markets such as the UK, Ireland, and Europe, although the decrease is an improvement from last year’s 5.7% drop.

Statutory operating profit fell 44.3% to £17.5 million from £31.4 million, impacted by a total of £14.9 million in special items related to restructuring activities and non-cash impairments of Radiators SpA assets.

However, adjusted operating profit increased 3.0% to £32.5 million from £31.5 million, with the adjusted operating margin expanding from 10.8% to 11.6%. This improvement was driven by margin management initiatives and strategic efforts to promote a favorable product mix.

The company achieved eighth consecutive year of growth in contribution per radiator, reaching £20.50, up from £20.15 in 2024.

CEO Trevor Harvey stated, “2025 once again demonstrated our ability to grow adjusted operating profit through market cycles while continuously improving our operations.”

Free cash flow surged 114.6% to £20.5 million from £9.6 million, thanks to better working capital management and strict capital expenditure controls. Net debt before lease liabilities improved from £59.7 million to £51.2 million.

The board recommended a final dividend of 5.05 pence per share, a 5% increase from 4.81 pence, bringing the total dividend for the year to 8.09 pence per share.

Stelrad stated that trading conditions early in 2026 are in line with management’s expectations, although market demand remains weak and is expected to persist at least through the first half of this year.

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