Stelrad Group

Website: Stelrad Group
Index: Main Market
EPIC: SRAD
Supersector: Construction and Materials
Sector: Construction and Materials
Subsector: Building Materials and Fixtures
Market Cap: £165.56M
Payout Frequency: Semi-Annual

Stelrad Group Dividend Analysis and Summary

Declared dividend and timetable

Final dividend: 5.05 pence per share (up 5% YoY)
Total dividend for FY2025: 8.09 pence per share (up 3.9% YoY)
Interim dividend already paid: 3.04 pence per share
Ex-dividend date: 23/04/2026 (derived from record date)
Record date: 24/04/2026
Payment date: 26/05/2026
AGM to approve: 20/05/2026
Estimated cash cost of FY2025 dividend: ~£10.3m (final ~£6.43m; interim ~£3.87m)

Dividend sustainability and growth

Coverage by adjusted earnings: FY2025 adjusted EPS 13.08p vs DPS 8.09p ? ~1.6x cover (payout ~62%).
Coverage by statutory earnings: EPS 0.66p (not covering DPS) due to non-cash impairments and restructuring; management and investors will rely on adjusted metrics and cash flow to assess sustainability.
Free cash flow: £20.5m (up 115% YoY), covering total FY2025 dividend (~£10.3m) by ~2.0x.
Balance sheet/leverage: Net debt (pre-leases) ~£51.1m; leverage 1.16x EBITDA, improved from 1.37x; liquidity supported by renewed £100m facility at a lower margin.
Trajectory: Total DPS up 3.9%; final up 5%, consistent with the Group’s progressive dividend policy.

Financial and capital allocation support

Resilient underlying performance: Adjusted operating profit £32.5m (+3.0%) despite revenue decline; ROCE 30.1% (+3.0 ppts).
Strong cash conversion: Adjusted cash flow from operations conversion 111%; disciplined capex and improved working capital.
Financing: £100m facility renewed in Dec-2025 with reduced future borrowing costs, supporting ongoing distributions.
Capital allocation: Focus on organic growth and a progressive dividend while deleveraging; no buybacks indicated.

Structural/one-off items relevant to future dividends

Exit from a loss-making Radiators SpA contract (effective end-2025): expected to be margin-enhancing though it will reduce revenue/volume near term; supports cash generation and dividend safety longer term.
Restructuring in Turkey, Italy (Radiators SpA) and Denmark during 2025 with £14.9m exceptional charges (largely non-cash impairments); actions aim to improve future margins.
Tax headwind: Increase in Turkish dividend withholding tax lifted the adjusted effective tax rate to 34.4%, a modest drag on future cash earnings.
Debt facility refinanced at a lower margin, reducing interest burden and supporting dividend capacity.
Governance: Audit & Risk Committee Chair stepping down at the 2026 AGM; no announced impact on dividend policy.
No M&A, demergers, share consolidations or scrip/DRIP noted.

Risks and flags to monitor

End-market demand remains subdued and is expected to persist through at least H1 2026; revenue sensitivity to macro/RMI and new-build cycles.
European segment margin pressure from fixed costs; execution risk around Radiators SpA repositioning despite expected margin benefits.
Reliance on adjusted metrics: statutory profit is currently minimal due to impairments; further exceptional charges would weigh on reported cover.
FX and tax: TRY/EUR movements and higher Turkish withholding tax can affect cash repatriation and earnings.
Commodity/input costs and pricing discipline remain key to sustaining contribution per radiator and cash flow.

Bottom line

The recommended final dividend of 5.05p (ex-div 23/04/2026) appears well supported by free cash flow, improved leverage, and a renewed, cheaper facility. While statutory profit is thin, adjusted earnings and cash metrics comfortably fund the payout, and operational actions (contract exit, restructuring) should bolster medium-term dividend resilience. Macro softness and tax/FX remain the main watchpoints.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
24/04/2025	27/05/2025	Final	4.81p	GBX
09/10/2025	24/10/2025	Interim	3.04p	GBX

Total (Annual Dividends Per Share): 7.85p

Dividend Yield = Annual Dividends Per Share (7.85p) ÷ Share Price (129.75p) = 6.05%

Ex Dividend Date	Payment Date	Type	Amount	Currency
23/04/2026	26/05/2026	Final	5.0500p	GBX
09/10/2025	24/10/2025	Interim	3.04p	GBX
24/04/2025	27/05/2025	Final	4.81p	GBX
10/10/2024	25/10/2024	Interim	2.98p	GBX
25/04/2024	29/05/2024	Final	4.72p	GBX
12/10/2023	27/10/2023	Interim	2.92p	GBX
27/04/2023	26/05/2023	Final	4.72p	GBX
06/10/2022	28/10/2022	Interim	2.92p	GBX
28/04/2022	27/05/2022	Final	0.96p	GBX

Year	Interim	Final	Currency	Total	Change
2024	2.980	4.720	GBX	7.700	0.780
2023	2.920	4.720	GBX	7.640	96.900
2022	2.920	0.960	GBX	3.880

Number of Shares:

Payment	Paid	Amount
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