Radiator firm Stelrad saw revenues rise in 2022 but complications linked to its Turkish operations meant a drop in statutory profits.
The group – which is based in Newcastle and has a manufacturing site in Yorkshire – has released preliminary results for 2022 which show that revenues rose 16.2% to £316.3m. Over the same period, however, operating profit fell to £22.6m as the company had to adopt the IAS29 rule covering hyperinflationary economies in respect of its Turkish subsidiary after inflation there topped 100% in the last three years.
Stelrad said the impact of the rule took £16.3m off its statutory profits but that it would no longer apply due to changes in the currency it uses.
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The company said that it had seen 6.5% revenue growth in the UK and Ireland during the year and 25.3% in Europe. Total sale volumes fell 9.2% but the ‘contribution per radiator’ increased by 16.5% to more than offset that dip. It highlighted the transfer of two production lines from Western European plants to its lower cost Turkish plant, as well as the acquisition in July of Italian firm DL Radiators for €28.3m.
Chief executive officer Trevor Harvey said: “We delivered a record performance in 2022 thanks to the resilience of our business model combined with the hard work of our employees, the strength of our product offering, the quality of our customer relationships and our relentless approach to operational improvements across the firm.
“While the market backdrop is not easy, as a business with a near 100-year track record, we have successfully navigated previous market downturns and our current management team has the experience and ability to deliver ongoing outperformance despite the challenging macroeconomic environment. Longer-term, the twin drivers of decarbonisation and energy efficient heating remain firmly in place and we remain well-placed to deliver value for stakeholders.”
Stelrad said that its outlook for 2023 remained in line with current market expectations, with “encouraging” trading in the early part of the year. The company is recommending that a final dividend of 4.72 pence per share will be paid in May.
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