Stelrad Group plc - interim results for the six months ended 30 June 2023

 

Strategy continuing to deliver with outlook for the full year unchanged

 

Stelrad Group plc ("Stelrad" or "the Group" or "the Company", LSE: SRAD), a leading specialist manufacturer and distributor of steel panel radiators in the UK, Europe and Turkey, today announces its unaudited interim results for the six months ended 30 June 2023.

 

Results summary*

 

	Six months ended 30 June 2023		Six months ended 30 June 2022		Increase/ (decrease) %
Adjusted results
Revenue (pre-IAS 29), £m **	157.0		147.8		6.2
Adjusted operating profit, £m **	14.0		19.0		(26.3)
Adjusted operating profit margin, % **	8.9		12.9		(31.0)
Adjusted profit after tax, £m **	8.1		13.9		(41.9)
Adjusted earnings per share, pence **	6.36		10.95		(41.9)
Statutory results
Statutory revenue, £m	157.0		150.1		4.6
Statutory operating profit, £m	13.8		11.9		16.0
Statutory profit after tax, £m	8.0		0.7		1,105.8
Statutory earnings per share, pence	6.27		0.52		1,105.8
Free cash flow, £m	3.4		(3.6)		194.4
Net debt (excluding lease liabilities), £m	70.4		47.5		48.2
Dividend per share, pence	2.92		2.92		-

 

*As a result of inflation in Turkey exceeding 100% over a three-year period, the Group was required to adopt IAS 29 in respect of its Turkish subsidiary in the financial statements for the six months ended 30 June 2022. On 1 January 2023, the functional currency of the Turkish business was changed from Turkish Lira to Euros and, as a result, IAS 29 is no longer being applied after this date. 

 

**Adjusted figures are stated before exceptional items, the impact of IAS 29 (until 31 December 2022), amortisation of customer relationships, foreign exchange differences (until 31 December 2022) and tax thereon where applicable.  See note 9 for a reconciliation of adjusted profit after tax.  See note 5 for a reconciliation of adjusted operating profit.  See the finance and business review for a reconciliation of free cash flow.

 

Financial and operational highlights

·      Record first half revenue of £157.0 million. The integration of DL Radiators' activities enabled the Group to deliver 6.2% revenue growth, although like-for-like revenues were 12.7% lower than prior year, against very strong first half comparatives in 2022, combined with the impact of high inflation and rising interest rates, supressing both new construction and renovation activities:

-    UK & Ireland:  revenue (pre-IAS 29) -0.7% (-1.0% organic), adjusted operating profit -6.5%.

-    Europe: revenue (pre-IAS 29) +20.3% (-22.1% organic), adjusted operating profit -34.7%.

-    Turkey & International: revenue (pre-IAS 29) -23.5% (-29.8% organic), adjusted operating profit -65.0%.

·      Group contribution per radiator (pre-IAS 29) increased by 10.0%, driven by dynamic pricing and cost management.

·      Volume mix of higher margin, premium steel panel radiators up slightly during the period.

·      Adjusted operating profit performance adversely impacted by the anticipated volume decline versus strong H1 22 comparative and increased depreciation charges, partially offset by pro-active margin management and cost reduction initiatives.

·      Strong cash flow performance driven by proactive working capital management, despite seasonal high point.

·      Leverage at 30 June 2023 was 1.76x (December 2022: 1.62x), based on net debt before lease liabilities. Cash balances of £20.6 million (December 2022: £22.6 million) and undrawn available facilities of £9.3 million (December 2022: £10.1 million) provides the Group with financial flexibility.

·      Longer-term tailwinds of decarbonised, energy efficient heating systems continue to underpin Stelrad's confidence in the future. Launch of new electric range in the UK in second half 2023.

·      Recommended interim dividend of 2.92 pence per share (2022 interim dividend: 2.92p), to be paid on 27 October 2023, reflecting the Board's confidence in the Group's prospects and balance sheet.

·      Outlook for FY23 adjusted operating profit unchanged. [1]

 

Commenting on the Group's performance, Trevor Harvey, Chief Executive Officer, said:

 

"Despite challenging macroeconomic conditions across a number of countries, Stelrad's leading positions mean that the Group remains well placed to outperform the market and deliver on its full year expectations. 

 

"Our focus remains on our key objectives of growing market share, improving product mix, optimising routes to market and positioning effectively for decarbonisation.  Following a pivotal first year as a PLC in 2022, I am pleased that, despite the notable headwinds facing the wider industry, we have been able to deliver on our plans for the first half of 2023 and remain on course to achieve our expectations for the full year. 

 

"The resilience of our business model, alongside our experience of navigating previous market downturns, means that the Group is well positioned to capitalise once markets improve.  Regardless of the near term headwinds facing the wider sector, the increasing need for decarbonised, energy efficient heating systems remains unchanged and underpins our confidence in our ability to drive long-term shareholder value."

 

Analyst Conference Call

 

Trevor Harvey (CEO) and George Letham (CFO) will host an analyst presentation at 9am GMT today, 14 August 2023, to talk through the Group's operational and financial performance.

 

Please advise whether you and / or a colleague would like to attend to Powerscourt, either by phone on +44 (0) 20 7250 1446 or by email to stelrad@powerscourt-group.com for dial in details.

 

For further information:

 

Stelrad Group plc Trevor Harvey, Chief Executive Officer George Letham, Chief Financial Officer	+44 (0)191 261 3301
Investec Bank plc (Sole Corporate Broker) Bruce Garrow Ben Griffiths	+44 (0)20 7597 5970
Powerscourt (PR Advisor) James White Genevieve Ryan	stelrad@powerscourt-group.com +44 (0)7855 432 699

 

Notes to Editors

Stelrad Group plc is a leading specialist radiator manufacturer, selling an extensive range of hydronic, hybrid, dual fuel and electrical heat emitters to more than 500 customers in over 40 countries. These include standard, premium and low surface temperature (LST) steel panel radiators, towel warmers, decorative steel tubular, steel multicolumn and aluminium radiators.

 

Following the acquisition of DL Radiators in July 2022, the Group has five core brands: Stelrad, Henrad, Termo Teknik, DL Radiators and Hudevad.  In the countries reported by BRG Building Solutions in 2023 to date, Stelrad moved into a market leadership position, with 18.5% share by volume of the combined UK, European and Turkish steel panel radiator market.  The Group is now market leader in six countries - the UK, Ireland, France, the Netherlands, Belgium and Denmark, with a top 3 position in a further five territories. 

 

Stelrad is headquartered in Newcastle upon Tyne in the UK and in 2022 employed 1,500+ people, with manufacturing and distribution facilities in Çorlu (Turkey), Mexborough (UK), Moimacco (Italy) and Nuth (Netherlands), with further commercial and distribution operations in Kolding (Denmark) and Krakow (Poland).

 

The Group's origins date back to the 1930s and Stelrad enjoys long established commercial relationships with many of its customers, having served each of its top five current customers for over twenty years.

 

Further information can be found at: https://stelradplc.com/.

 

CHIEF EXECUTIVE OFFICER'S REVIEW

 

Overview

 

Despite challenging macroeconomic conditions across a number of markets, Stelrad remains well-positioned to deliver on expectations for the full year.

 

The integration of DL Radiators' activities enabled the Group to deliver 6.2% revenue growth in the first half of the year, rising from £147.8 million in 2022 to £157.0 million in 2023. 

 

Like-for-like revenues were 12.7% lower than prior year, against strong first half comparatives in 2022 combined with the impact of high inflation and rising interest rates, supressing both new construction and renovation activities.

 

Group contribution per radiator, a key performance indicator for the business, increased by 10.0%, offsetting a 3.2% year-on-year sales volume decline (15.7% like-for-like decline) versus very strong first half comparatives in 2022.

 

Overall, volumes have declined in all territories, resulting in a 2023 first half adjusted operating profit of £14.0 million, a £5.0 million reduction relative to the same period in 2022.

 

Nevertheless, Stelrad's market positioning, focused strategy and management experience mean that the Group remains confident in its ability to take further market share in the near term, despite market headwinds, while the integration of DL Radiators remains on track. Stelrad is now European market leader in steel panel radiators, with number one positions in six markets.

 

The Group remains confident that it is well positioned to capitalise once markets improve while, longer term, the increasing need for decarbonised, energy efficient heating systems remains a key driver in Stelrad's long-term growth plans.

 

Results and performance for the period

 

In the first half of 2023, relative to its competitors, Stelrad's strong UK share position has been advantageous, with volume, revenue and adjusted operating profit impacted less in this territory than in mainland European and other international markets.   

 

Revenue in the UK & Ireland decreased by 0.7% to £70.1 million, whilst adjusted operating profit reduced by 6.5% to £11.5 million.  In Europe, revenue increased by 20.3% to £76.5 million, benefitting from the acquisition of DL Radiators.  Adjusted operating profit decreased by 34.7% to £4.9 million, driven by a reduction in like-for-like sales volumes across Stelrad's principal European markets.  In Stelrad's Turkey & International markets, revenue reduced by 23.5% to £10.4 million, mainly due to significantly lower sales volumes to China, also resulting in a 65.0% fall in adjusted operating profit, to £0.7 million.

 

Strategic priorities

 

To fulfil our purpose of helping to heat homes sustainably, we continue to pursue the commercial and operational strategies developed to achieve our four key strategic objectives: growing market share, improving product mix, optimising routes to market and positioning effectively for decarbonisation.

 

The acquisition and integration of DL Radiators is well aligned with all four of these objectives, in particular extending our electric technologies.  Following the acquisition, Stelrad has moved into the number three position in the German steel panel radiator market and has increased share in higher added-value multicolumn steel, aluminium and towel warmer radiator markets, driving product mix improvement. 

 

With access to the well-established and complementary De'Longhi brand, a wider range of both retail and trade channels to market are now available to Stelrad.  Through providing our customers with a wider range of heat emitter solutions in both hydronic and electric technologies, the acquisition has also positioned the Group more effectively for decarbonisation, with the launch of a range of electric products into the UK market anticipated during the second half of 2023.

 

Sustainability

 

Stelrad Group remains fully committed to high standards of corporate responsibility, sustainability and employee engagement. We believe that our long-term success depends on proactively addressing the sustainability challenges that we face.  In 2022, we developed our Fit for the Future sustainability framework,  focused on the material issues for Stelrad Group and its stakeholders.

 

Centred around our core purpose, helping to heat homes sustainably, it reflects the significant role we can play in the transition to a zero carbon heating industry, through driving better environmental performance, enabling our exceptional workforce and by conducting business responsibly, underpinned by strong governance, exceptional safety standards and effective oversight of supply chain management.

 

Interim dividend

 

Based on the Group's financial results in the first half of 2023, the Board recommends an interim dividend of 2.92 pence per share.  The interim dividend will be paid on 27 October 2023 to shareholders on the register on 13 October 2023.

 

Outlook

 

The Group's outlook for the full year remains unchanged with the Group remaining confident in its long-term growth plans.

 

For the second year in succession, economic conditions in our end markets remain extremely challenging, with the combined impact of high levels of inflation and rising interest rates constraining consumer confidence and disposable income.

 

However, Stelrad's strong, long-lasting customer relationships, combined with the Group's flexible, low-cost manufacturing capabilities, market-leading product availability and customer service, mean that the Group is better placed than its competitors to trade through periods of wider market uncertainty.

 

The Group has also adapted effectively to the current financial climate through proactive margin management and cost reduction activities, and has also benefitted from a favourable geographic mix, with a particularly strong UK position.  Encouragingly, volume mix of premium steel panel radiators, a Group key performance indicator, has shown growth in the first half of 2023. 

 

Integration of DL Radiators is proceeding to plan and is fully aligned with our key strategic objectives, with the introduction of Stelrad's first UK range of electrical heat emitters later in the year.

 

The continued resilience of our business model, alongside our experience of navigating previous market downturns, means that the Group will be well positioned to capitalise once markets improve.  Regardless of the near term headwinds facing the wider sector, the increasing need for decarbonised, energy efficient heating systems remains unchanged and underpins our confidence in our ability to drive long-term shareholder value.

 

Trevor Harvey

Chief Executive Officer

14 August 2023

 

FINANCE AND BUSINESS REVIEW

 

Group overview

 

The following table summarises the Group's results from operations for the six months ended 30 June 2023 and 30 June 2022.

 

	Six months ended 30 June 2023	Six months ended 30 June 2022	Increase/ (decrease)	Increase/ (decrease)
	£m	£m	£m	%
Revenue	157.0	150.1	6.9	4.6
Revenue (pre-IAS 29)	157.0	147.8	9.2	6.2
Adjusted operating profit(1)	14.0	19.0	(5.0)	(26.3)
Exceptional items	(0.1)	-	(0.1)	n/a
Amortisation of customer relationships	(0.1)	-	(0.1)	n/a
Foreign exchange differences	-	(3.0)	3.0	n/a
Impact of IAS 29	-	(4.1)	4.1	n/a
Operating profit	13.8	11.9	1.9	16.0
Net finance costs	(3.5)	(1.8)	(1.7)	(94.4)
Monetary losses - net (IAS 29)	-	(5.4)	5.4	n/a
Profit before tax	10.3	4.7	5.6	119.1
Income tax expense	(2.3)	(4.0)	1.7	42.5
Profit for the period	8.0	0.7	7.3	1,105.8
Earnings per share (p)	6.27	0.52	5.75	1,105.8
Adjusted profit for the period(1)	8.1	13.9	(5.8)	(41.9)
Adjusted earnings per share (p)(1)	6.36	10.95	(4.59)	(41.9)
Dividend per share (p)	2.92	2.92

 

⁽¹⁾ Adjusted figures are stated before exceptional items, the impact of IAS 29 (until 31 December 2022), amortisation of customer relationships, foreign exchange differences (until 31 December 2022) and tax thereon where applicable. 

 

Financial overview

 

Business performance was negatively impacted by a reduction in demand during the first half of 2023 compared to the same period in 2022. Renovation activity across the majority of European countries remained weak throughout the period, driven by a challenging macroeconomic environment related to high inflation and interest rates. The impact of volume decline varied by operating segment with the UK & Ireland being more robust than Europe and Turkey & International. Steel and energy costs remain high relative to historical benchmarks but have been decreasing in recent months.

 

Revenue for the six months ended 30 June 2023 was £157.0 million, an increase of £9.2 million, or 6.2%, on the six months ended 30 June 2022 (2022: £147.8 million (pre-IAS29)), with the inclusion of DL Radiators since August 2022. Higher selling prices partially offset a decline in like-for-like sales volumes. Higher selling prices primarily represent the full year impact of 2022 price increases which were applied to recover steel and other inflationary cost increases. Revenue (pre-IAS 29) fell by 12.7% on a like-for-like basis.

 

Adjusted operating profit for the period was £14.0 million, a decrease of £5.0 million, or 26.3%, compared to the same period last year (2022: £19.0 million). The reduction in operating profit was mainly the result of a reduction in sales volumes year on year leading to a reduction in EBITDA of £2.8 million. Additionally, depreciation increased by £2.2 million in the period - mainly a legacy of the IAS 29 revaluation of Turkish fixed assets which crystalised in the opening balance sheet and a depreciation charge for DL Radiators (2022: £nil). The impact of lower volumes has been partially offset by operational improvements mainly relating to increased efficiencies at plants, fully utilising the flexibility of our manufacturing footprint.

 

Statutory operating profit for the period was £13.8 million (2022: £11.9 million), after deducting exceptional items of £0.1m (2022: £nil) and the amortisation of customer relationships £0.1m (2022: £nil). Statutory operating profit in the first half of 2022 also included the non-cash impact of IAS 29 of £4.1 million and the impact of foreign exchange losses of £3.0 million.   

 

Adjusted profit after tax for the period decreased by £5.8 million to £8.1 million (2022: £13.9 million). Statutory profit for the period increased by £7.3 million to £8.0 million (2022: £0.7 million) due to the impact of IAS 29 in the prior year.  Adjusted earnings per share was 6.36 pence (2022: 10.95 pence).  The statutory earnings per share was 6.27 pence (2022: 0.52 pence), with the 2022 statutory earnings per share being impacted by IAS 29.

 

At 30 June 2023 the Group had cash of £20.6 million (December 2022: £22.6 million) and undrawn available facilities of £9.3 million (December 2022: £10.1 million), with net debt before lease liabilities of £70.4 million (December 2022: £68.4 million). Working capital at 30 June reflects a seasonal high point prior to the heating season with the lowest level of working capital historically experienced in December. The Group therefore expects a reduction in net debt by the end of the financial year.

 

IAS 29

 

As a result of inflation in Turkey exceeding 100% over a three-year period, the Group was required to adopt IAS 29 in respect of its Turkish subsidiary for the first time in the financial statements for the six months ended 30 June 2022. The impact of the adoption of IAS 29 in the six months ended 30 June 2022 is explained in more detail in note 16 of the consolidated interim financial statements.

 

On 1 January 2023, the functional currency of the Turkish business was changed from Turkish Lira to Euros and, as a result, IAS 29 is no longer being applied after this date. 

 

Revenue by geographical market

 

The table below sets out the Group's revenue by geographical market.

 

Revenue* by geographical market	Six months ended 30 June 2023	Six months ended 30 June 2022	Increase / (decrease)	Increase / (decrease)
	£m	£m	£m	%
UK & Ireland	70.1	70.6	(0.5)	(0.7)
Europe	76.5	63.6	12.9	20.3
Turkey & International	10.4	13.6	(3.2)	(23.5)
Total	157.0	147.8	9.2	6.2

* 2022 figures are stated pre-IAS 29

 

UK & Ireland

The Group's revenue in the UK & Ireland for the period was £70.1 million (2022: £70.6 million (pre-IAS 29)), a decrease of £0.5 million, or 0.7%. This was principally a result of a decrease in sales volumes partially offset by the impact of selling price increases implemented to mitigate the impact of inflationary costs.

 

Europe

The Group's revenue in Europe for the period was £76.5 million (2022: £63.6 million (pre-IAS 29)), an increase of £12.9 million, or 20.3%, supported by the acquisition of DL Radiators and the impact of selling price increases implemented to mitigate the impact of inflationary costs, offset by a decrease in like-for-like sales volumes. Excluding the acquisition of DL Radiators, the Group's revenue in Europe for the period was £49.6 million. Our European markets have been most affected by the weak demand experienced in the period, giving rise to a significant reduction in link-for-like sales.

 

Turkey & International

The Group's revenue in Turkey & International for the period was £10.4 million (2022: £13.6 million (pre-IAS 29)), a decrease of £3.2 million, or 23.5%. This was principally a result of significantly lower sales volumes to China.

 

Adjusted operating profit by geographical market

 

The table below sets out the Group's adjusted operating profit by geographical market.

 

Adjusted operating profit by geographical market	Six months ended 30 June 2023	Six months ended 30 June 2022	Increase/ (decrease)	Increase/ (decrease)
	£m	£m	£m	%
UK & Ireland	11.5	12.3	(0.8)	(6.5)
Europe	4.9	7.5	(2.6)	(34.7)
Turkey & International	0.7	2.0	(1.3)	(65.0)
Central costs	(3.1)	(2.8)	(0.3)	(10.7)
Total	14.0	19.0	(5.0)	(26.3)

 

UK & Ireland

The Group's adjusted operating profit in the UK & Ireland for the period was £11.5 million (2022: £12.3 million), a decrease of £0.8 million, or 6.5%. This was principally as a result of lower sales volumes, partially offset by proactive margin management leading to increased contribution per radiator.

 

Europe

The Group's adjusted operating profit in Europe for the period was £4.9 million (2022: £7.5 million), a decrease of £2.6 million, or 34.7%. Sales volumes have increased in Europe due to the acquisition of DL Radiators, though the incremental volumes are at lower margin. Like-for-like sales volumes have fallen significantly due to a weak macroeconomic environment which has reduced operating profit, partially compensated for by proactive margin management leading to increased like-for-like contribution per radiator.

 

Turkey & International

The Group's adjusted operating profit in Turkey & International for the period was £0.7 million (2022: £2.0 million), a decrease of £1.3 million, or 65.0%. This was principally as a result of lower sales volumes and higher post-IAS 29 depreciation.

 

Central costs

Central costs for the period were £3.1 million (2022: £2.8 million), an increase of £0.3 million, or 10.7% partially as a result of inflationary pressures.

 

Exceptional items

 

During the period exceptional costs of £0.1 million were incurred (2022: £nil).  The exceptional items in the six months ended 30 June 2023 are the final costs associated with the 2022 acquisition of DL Radiators.

 

Finance costs

 

The Group's finance costs for the period were £3.5 million (2022: £1.8 million). The increase of £1.7 million is due to an increase in interest rates (blended 6%) during the first half of 2023 in addition to a higher quantum of debt drawn following the acquisition of DL Radiators.

 

Income tax expense

 

The Group's income tax expense for the period was £2.3 million (2022: £4.0 million), a decrease of £1.7 million. The 2022 charge was increased by £1.3m due to the impact of IAS 29. The 2023 tax charge has benefitted from a deferred tax credit associated with higher tax asset values allowed by the Turkish government due to hyperinflation, partially offset by withholding tax charges associated with the repatriation of cash from Turkey.

 

Earnings per share and adjusted earnings per share

 

Profit attributable to shareholders increased by £7.3 million to £8.0 million (2022: £0.7m) and earnings per share was 6.27 pence (2022: 0.52 pence). The weighted average number of shares was 127.4 million (2022: 127.4 million). Profit attributable to shareholders before exceptional items, amortisation of customer relationships, foreign exchange differences (until 31 December 2022), the impact of IAS 29 (until 31 December 2022) and tax thereon decreased by £5.8 million to £8.1 million (2022: £13.9 million) and consequently adjusted earnings per share was 6.36 pence (2022: 10.95 pence).

 

Dividends

 

The Group is committed to delivering returns for its shareholders. It adopted a progressive dividend policy at IPO targeting an initial pay-out of approximately 40% of adjusted earnings, with capital allocation focused on reinvestment for growth. The Group intends to split dividend payments approximately 33% and 67% between the Group's interim and final dividend payments respectively, across the fiscal year.

 

The Group paid its final dividend of 4.72 pence per share in May 2023, resulting in a total dividend for 2022 of 7.64 pence per share.

 

The Group intends to pay an interim dividend of 2.92 pence per share on 27 October 2023, maintaining the 2022 dividend payment despite lower earnings due to short term trading headwinds. This reflects the board's prudent view on the current commercial and strategic position of the business, confidence in the Group's financial position and cash generation, and the intention to support shareholder returns through the cycle.

 

Cash flows

 

The following table summarises the Group's cash flow for the six months ended 30 June 2023 and 30 June 2022.

 

	Six months ended 30 June 2023	Six months ended 30 June 2022	Increase/ (decrease)
	£m	£m	£m
EBITDA(1)	19.7	22.5	(2.8)
Exceptional items	(0.1)	-	(0.1)
Gain on disposal of property, plant and equipment	-	(0.2)	0.2
Share-based payment charge	0.3	0.1	0.2
Working capital (adjusted for foreign exchange 2022)	(4.9)	(18.1)	13.2
Net capital expenditure	(4.5)	(4.3)	(0.2)
Cash flow from operations	10.5	-	10.5
Income tax paid	(4.1)	(2.2)	(1.9)
Net interest paid	(3.0)	(1.4)	(1.6)
Free cash flow	3.4	(3.6)	7.0

 

⁽¹⁾ EBITDA is profit before interest, taxation, depreciation, amortisation and exceptional items. In 2022, EBITDA was also stated before foreign exchange differences and the impact of IAS 29.

 

	Six months ended 30 June 2023	Six months ended 30 June 2022	Increase/ (decrease)
Cash flow from operations (£m)	10.5	-	10.5
Adjusted operating profit (£m)	14.0	19.0	(5.0)
Cash flow from operations conversion (%) *	75.2	(0.1)

*Cash flow from operations conversion is the ratio of cash flow from operations to adjusted operating profit

 

The Group's free cash inflow for the period was £3.4 million (2022: outflow £3.6 million), an increase of £7.0 million. This reflects an improvement in cash flow from operations offset by higher income tax and interest payments.

 

The Group's cash inflow from operations for the period was £10.5 million (2022: £nil), an increase of £10.5 million. This was principally as a result of working capital management to mitigate the historical seasonal pattern. Adjusted operating profit for the period was £14.0 million (2022: £19.0 million), a decrease of £5.0 million. Cash flow from operations conversion for the period was 75.2% (2022: -0.1%), mainly due to the proactive working capital management in the period.

 

Capital expenditures

 

The Group's capital expenditures mainly relate to investment in operating plant and equipment. Key capital expenditure in the period ended 30 June 2023 related to the final installation of a new steel panel radiator line at the Group's facilities in Italy. Capital expenditure for the remainder of 2023 will be in line with expectations.

 

Net debt

 

At 30 June 2023, statutory net debt (including lease liabilities) of £80.9 million (December 2022: £78.4 million) comprises £91.0 million (December 2022: £91.0 million) drawn down against the multicurrency facility and £10.5 million (December 2022: £10.0 million) lease liabilities net of £20.6 million (December 2022: £22.6 million) cash.

 

	30 June 2023	31 December 2022
	£m	£m
Revolving credit facility - GBP	56.4	55.3
Revolving credit facility - EUR	10.3	10.6
Term loan	24.3	25.1
Cash	(20.6)	(22.6)
Net debt before lease liabilities	70.4	68.4
Lease liabilities	10.5	10.0
Net debt	80.9	78.4

 

Going concern

 

After reviewing the Group's current liquidity, net debt, financial forecasts and stress testing of potential risks, the Board confirms there are no material uncertainties which impact the Group's ability to continue as a going concern for the period to 31 December 2024 and therefore these condensed consolidated interim financial statements have been prepared on a going concern basis.

 

 

George Letham

Chief Financial Officer

14 August 2023

                                                                                                                                   

FORWARD-LOOKING STATEMENTS

 

This document may contain forward-looking statements which are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events. You can sometimes, but not always, identify these statements by the use of a date in the future or such words as "will", "anticipate", "estimate", "expect", "project", "intend", "plan", "should", "may", "assume" and other similar words. By their nature, forward-looking statements are inherently predictive and speculative and involve risk and

uncertainty because they relate to events and depend on circumstances that will occur in the future. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to factors that could cause our actual results to differ materially from those expressed or implied by these statements. The Company undertakes no obligation to update any forward-looking statements contained in this document, whether as a result of new information, future events or otherwise.

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES

 

The directors confirm that these condensed consolidated interim financial statements have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

 

·      an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.

 

The directors of Stelrad Group plc are listed in the Annual Report and Accounts for the year ended 31 December 2022.

 

For and on behalf of the Board

 

Trevor Harvey                           George Letham                                   

Chief Executive Officer                         Chief Financial Officer             

14 August 2023                         14 August 2023

 

Stelrad Group plc. Registered number 13670010

 

Independent review report to Stelrad Group plc

 

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Stelrad Group plc's condensed consolidated interim financial statements (the "interim financial statements") in the interim results of Stelrad Group plc for the 6 month period ended 30 June 2023 (the "period").

 

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

The interim financial statements comprise:

·    the Condensed consolidated interim balance sheet as at 30 June 2023;

·    the condensed consolidated interim income statement and condensed consolidated interim statement of comprehensive income for the period then ended;

·    the Condensed consolidated interim statement of cash flows for the period then ended;

·    the Condensed consolidated interim statement of changes in equity for the period then ended; and

·    the explanatory notes to the interim financial statements.

 

The interim financial statements included in the interim results of Stelrad Group plc have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

 

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

 

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern.

 

Responsibilities for the interim financial statements and the review

 

Our responsibilities and those of the directors

The interim results, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the interim results, including the interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

 

Our responsibility is to express a conclusion on the interim financial statements in the interim results based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

 

PricewaterhouseCoopers LLP

Chartered Accountants

Newcastle upon Tyne

14 August 2023