H1 results highlight a resilient earnings performance (adj. PBT +3.2%) despite subdued volumes (-4.8%). Full year guidance is reiterated, reflecting continued action to manage costs and margins in order to maintain earnings resilience. Steps to right-size the European operations were implemented during H1. Whilst this gives rise to a £12m non-cash impairment charge, these actions should materially enhance European margins. Investors have started to recognise the value of Stelrad’s proposition, with the shares up 26% YTD. As the European market leader, it remains highly geared towards the market recovery when it materialises. The shares continue to trade at a discount to peers (Dec. ’25 PER of 11.8x vs. peers on 15x) despite Stelrad’s continued resilience. We target a Dec. ‘25 PER of 15x to drive our 215p TP and remain at Buy.
