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Stelrad Group plc (LSE:SRAD), a leading specialist manufacturer and distributor of radiators across the UK, Europe, and Turkey, has announced its unaudited interim results for the six months ended June 30, 2024. Despite facing a challenging macroeconomic environment, the Group has demonstrated resilience through operational improvements and strategic market share growth.
Financial and Operational Highlights
Stelrad's revenue for the first half of 2024 was £143.1 million, marking an 8.9% decline compared to the same period in 2023. This decrease was in line with the Company's expectations given the ongoing economic pressures. The revenue breakdown by region is as follows:
- UK & Ireland: Revenue decreased by a modest 1.5%, supported by a strong product mix despite reduced volume. This relatively stable performance reflects the Group’s successful adaptation to market conditions in these key regions.
- Europe: The revenue drop was more significant at 12.6%, primarily due to subdued levels of repair, maintenance, and improvement (RMI) activity. The challenging market conditions in Europe have impacted revenue, although the Group remains focused on maintaining its position in this important market.
- Turkey & International: Revenue fell by 30.6% to £7.2 million, driven by low economic activity in Turkey. This decline highlights the broader economic challenges affecting the region and underscores the importance of diversification in Stelrad's strategy.
Despite the revenue decline, Stelrad increased its market share by 1.6% to 20.8%. This growth reflects the Company’s successful efforts to strengthen its competitive position in key markets.
Profitability and Financial Management
Operating profit for the first half of 2024 rose to £15.6 million, an increase of £1.8 million or 13.5% compared to the previous year. This improvement in profitability was achieved through ongoing operational discipline and effective margin management. Adjusted operating profit also increased to £15.7 million, with an adjusted operating profit margin improving to 11.0%, up from 8.9% in 2023.
In recognition of its solid financial performance and strong balance sheet, the Board has declared an interim dividend of 2.98p per share, a 2% increase from the 2.92p interim dividend declared in 2023. This dividend will be paid on October 25, 2024, reflecting the Group's confidence in its future growth prospects and robust cash generation.
Outlook
Stelrad's outlook for the full year 2024 remains unchanged. The Group continues to navigate a challenging macroeconomic environment with a focus on maintaining operational efficiency and leveraging its market position to drive future growth.
