Stelrad Group plc (LSE:SRAD), a manufacturer of steel panel radiators, reported year-end results showing improved profitability despite continued pressure on shipment volumes across its core markets.
For the year ended December 31, 2025, the company generated approximately A3280 million in revenue. Overall volumes for the period declined by 4% compared with 2024, although management noted a modest uptick in volumes in the second half versus the first half of the year.
The company highlighted the ongoing impact of volume suppression in its principal geographies, but said margin management and targeted cost reductions implemented across its manufacturing footprint helped mitigate that headwind. Stelrad recorded its eighth consecutive year of improvement in contribution per radiator, a measure the company attributed to product mix improvements and disciplined fixed cost control.
These efforts translated into an expected year-on-year increase in adjusted operating profit of about 3%, to roughly A332.5 million, up from A331.5 million in 2024. The adjusted operating profit margin widened to 11.6% from 10.8% a year earlier.
On balance sheet management, Stelrad said it reduced net debt before lease liabilities to A351.2 million, down from A359.7 million at the end of 2024, improving its leverage ratio to 1.16x from 1.37x. In December, the group renewed a A3100 million loan facility, which the company said will lower its future borrowing costs.
Operational restructuring also featured in the year. Following a prior reorganisation of its Turkish operations, Stelrad completed a restructuring of its Danish business before year-end. The Danish restructuring is expected to lift future operational margins, but generated an exceptional charge of approximately A32.7 million in the second half of 2025.
Management commentary emphasised the combined effect of margin management, cost reduction initiatives and a stronger product mix in delivering profit growth despite the backdrop of weaker volumes. The company did not provide additional numerical guidance beyond the reported figures.
Investors and market participants will likely weigh the improved unit economics and lower leverage against the ongoing volume weakness and near-term restructuring expense as they assess the company's near-term operating outlook.