Stelrad celebrates "strong" first half despite revenue decrease
Stelrad Group PLC on Friday reported lower revenue but increased its dividend for the first half of this year.
The Rotherham, England-based radiator manufacturer said its pretax profit surged to £13.1 million for the six months ended June 30, from just £98,000 the previous year.
However, revenue fell 9.1% to £124.0 million from £136.5 million. Stelrad said this was due to sales volumes falling 15%, with UK & Ireland revenue decreasing 4.0% and Europe revenue down 7.4%. Turkey & International revenue dropped 61% due to the company reducing sales to the Turkish market.
Stelrad said volumes declined 6.6% for the UK & Ireland region, "reflecting the continued weakness in new build housing and RMI," while attributing Europe's revenue fall to "reduced market volumes and the exit from a loss-making contract".
Operating profit more than quadrupled to £15.7 million from £3.8 million, while adjusted operating profit rose 4.9% to £16.7 million from £15.9 million.
Losses from exceptional items fell to £1.0 million from £12.0 million.
"During the period, we delivered a strong financial performance against a backdrop of ongoing economic uncertainty suppressing volumes in the group's key markets," commented Chief Executive Officer Trevor Harvey. "Crucially, despite this environment, we have maintained our market leadership position and continued to optimise our cost base."
Stelrad declared an interim dividend of 3.19 pence per share, up 4.9% from 3.04p the year before.
Looking ahead, Stelrad maintained its full-year outlook and said trading for the second half has met its expectations so far.
"The board remains confident in its strategic pillars and in driving continued shareholder value," Harvey commented. "Our operational excellence initiatives, underpinned by our competitive advantages and market positioning, mean that Stelrad remains well-placed to target market share gains across the geographies in which we operate."
Shares in Stelrad traded 2.0% higher at 156.00 pence on Friday afternoon in London.
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