Stelrad turns up the heat to post strong UK trading

The UK's leading manufacturer and distributor of household and commercial radiators has reported strong trading in the final quarter of 2021.

Stelrad employs 300 people at its UK manufacturing site in South Yorkshire
Stelrad employs 300 people at its UK manufacturing site in South Yorkshire

Stelrad, which employs 300 people at its UK manufacturing site in South Yorkshire, is a leading specialist manufacturer and distributor of steel panel radiators.

From its manufacturing site in Mexborough, the firm makes a large range of standard and premium steel panel radiators, low surface temperature radiators, towel warmers, and decorative steel tubular radiators.

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Stelrad said that trading across the group’s European markets has strengthened, driven by the success of its products across the replacement, residential new build and commercial sectors.

The firm said that the wider focus on the decarbonisation agenda and measures to reduce the carbon footprint of the built environment continues to fuel interest in alternative heat sources, resulting in increased awareness of lower temperature heating systems, driving interest in the group’s larger radiators.

Even though steel prices have appreciated throughout the period, the group said it has effectively managed this price volatility and, as a result, the board now expects full year earnings for 2021 to be slightly ahead of its previous view.

Longer term, Stelrad is adopting a conservative approach to steel price movements and is continually looking to achieve cost and price optimisation.

Trevor Harvey, chief executive of Stelrad, said: “2021 was a pivotal year for our business and, following our successful IPO in November and a robust end to the year from a trading perspective, we enter 2022 with strong momentum.

"Macro trends such as the ongoing focus on decarbonisation and the trend towards premium steel panel radiators continue to provide a positive backdrop for our business and support ongoing demand for our products and the group remains confident in its ability to deliver on its long term growth plans.”

Analyst Scott Cagehin at Investec said: "Stelrad has delivered a positive maiden update post its IPO in November 2021.

"Robust trading continued to the year end, penetration in European markets has strengthened and it has successfully managed steel price fluctuations. 2021 profits are slightly ahead of management expectations and we increase our 2021 expected earnings per share by 3 per cent. We prudently leave 2022/2023 estimates unchanged, but see upside to our forecasts given the strong momentum into 2022 and accelerating decarbonisation-driven demand. Valuation is undemanding."

Following the trading update, Mr Cagehin gave Stelrad a "buy" recommendation.