Stelrad’s AGM update highlights that, despite a subdued demand backdrop, trading in FY26 to date remains in line with expectations and the full year outlook is unchanged. The near-term investment case continues to be driven by Stelrad’s ability to outperform peers in difficult markets, underpinned by management action to control costs and drive higher contribution margins. This has led to several years of profit growth despite the weak volume backdrop. We expect further progress in FY26, forecasting adj. PBT growth of 8%. We consider this forecast to be de-risked, with growth largely driven by restructuring actions already embedded during FY25. Outer year forecasts also show growth of 7%-10% p.a. With market leadership in six of its ten core territories, a lean operating model and further cost and margin levers under consideration, Stelrad is well-placed to outperform peers in the near-term, as well as to benefit disproportionately from any market recovery. We stay at Buy with a 215p TP (15x FY26 PER).
