Radiator manufacturer Stelrad has announced it expects to report growth in adjusted operating profit for 2025, despite facing a subdued market environment and a decline in overall sales volumes. The Newcastle-based firm, which operates its main production facility in Mexborough, South Yorkshire, provided a trading update ahead of its full-year results scheduled for March.
Financial Performance and Market Context
The company revealed that revenue for the year will reach approximately £280 million, following a modest uplift in volumes during the second half of the year. However, overall volumes experienced a 4% year-on-year decrease. Stelrad acknowledged ongoing uncertainty in the wider market, with repair, maintenance, and new build activity remaining subdued across the sector.
Strategic Cost Management Initiatives
In response to these challenging conditions, Stelrad has implemented a rigorous cost-cutting and margin improvement programme throughout recent months. The London Stock Exchange-listed business has focused on what it terms "margin management initiatives" and comprehensive cost-tackling measures. These efforts included the restructuring of its Turkish operations, which has contributed to enhanced operational efficiency.
The company reported that these strategic moves have resulted in an improvement in "contribution per radiator" – a crucial performance indicator – for the eighth consecutive year. This sustained improvement is projected to deliver approximately 3% growth in the group's adjusted operating profit to £32.5 million, up from £31.5 million in the previous year.
Strengthened Financial Position
Stelrad also highlighted improvements in its financial standing through effective cash management. Net debt before lease liabilities reduced to £51.2 million, with an improved leverage ratio of 1.16x. Furthermore, in December 2025, the group successfully renewed a £100 million loan facility, which management states will reduce future borrowing costs and provide greater financial flexibility.
Operational Restructuring and Future Outlook
The company continues to assess opportunities to enhance its competitive position and operational efficiency. Prior to the year-end, following the earlier restructuring of Turkish operations, Stelrad restructured its Danish business. This move is expected to further improve future operational margins, though it incurred an exceptional expense of approximately £2.7 million in the second half of 2025.
Leadership Perspective on Performance
Trevor Harvey, Chief Executive of Stelrad, commented on the company's performance: "During 2025, Stelrad continued to demonstrate and enhance its operational excellence, underpinned by our core competitive advantages of a flexible, low-cost manufacturing footprint, outstanding customer service and unmatched product availability. These allowed us to continue to deliver growth in operating profits and margins, despite the subdued market environment."
Harvey added: "While persisting market headwinds remain frustrating, our performance in the last year further evidences Stelrad's ability to continue to deliver against our strategy irrespective of market conditions. The ongoing execution of our strategy underpins my confidence that Stelrad is well-placed to deliver sustained growth and, longer term, is incredibly well positioned to benefit from the eventual market recovery."
Company Heritage and Sustainable Innovation
This year marks Stelrad's 90th anniversary, having been established in 1936. In recent years, the business has launched a range of environmentally conscious compact radiators designed to reduce emissions. These innovations incorporate green steel and reduced plastic packaging, aligning with broader sustainability trends within the manufacturing sector.
The company's ability to navigate challenging market conditions while maintaining profit growth demonstrates the effectiveness of its strategic focus on margin improvement and cost management. As Stelrad prepares to release its full-year results in March, industry observers will be watching closely to see how these initiatives translate into long-term sustainable performance.
