Stelrad’s trading update points to subdued end-markets resulting in a nudging of FY25 adj. EBIT expectations (SCM 3.6% downgrade). There’s not much management can do about the demand environment but what it can control is the cost base and the story here is one of continued progress with its programme of operational excellence offsetting volume declines which, combined with a focus on higher added value products, is expected to result in an increase in contribution per radiator. As such, despite lower revenues, revised guidance still implies YoY growth in adj. EBIT (SCM +1.9%) which in current markets we see as a solid outturn. Our unchanged BUY case highlights the group’s resilience and the strong operating leverage it offers into a market recovery.
