Stelrad confirms intention to float on London Stock Exchange

Radiator manufacturer Stelrad has confirmed its intention to float on the London Stock Exchange with an initial public offering (IPO) on the main market.

In the 12 months ended June 2021, the group’s revenue grew to £243 million (unaudited) compared with £197m the year before, and profits (EBITDA) of £35.7m.

Market analysts have suggested that the business could be worth around £350m upon flotation.

The IPO would comprise both new ordinary shares to raise gross proceeds of £25m to repay certain existing indebtedness, as well as existing ordinary shares to be sold by current Stelrad shareholders.

Stelrad expects to have a free float in excess of 25% of its issued share capital immediately following admission and to be eligible for inclusion in the FTSE UK indices. It is also expected that ordinary shares representing up to a further 15% of ordinary shares comprising the offer will be made available to existing shareholders.

Commenting on the move, Stelrad chief executive Trevor Harvey said: “The interest we’ve received from potential investors in our business has been significant and I’m delighted to confirm our intention to float on the London Stock Exchange. 

“We are well placed to pursue both organic and inorganic growth opportunities. Our extensive product offering, strong relationships with all major distributors and specifiers and the supportive market backdrop will enable us to continue to play a central role in keeping Europe warm. 

“In addition, given the increasing focus on energy efficiency and desire for more environmentally friendly homes, I am tremendously excited about how our products will form a central component of the wider decarbonisation journey.” 

Stelrad, which sells to more than 500 trade customers annually, is headquartered in the UK and operates across six core geographic regions: the UK, Benelux, France, Germany, Turkey and Poland and has manufacturing and distribution facilities in the UK, Netherlands and Turkey.

In a statement, Stelrad said: “Stelrad’s strategy builds upon the group’s leading market position to achieve further organic growth within existing product categories through increased penetration of existing geographies, further leveraging the group’s low-cost base alongside ongoing product mix improvement, notably in premium steel panel radiators. This will be aided by effective channel positioning and brand marketing, focusing on the higher margin premium radiator segment and continuing to optimise the group’s operational infrastructure.”

In its document  supporting the intention to float, Stelrad chairman Bob Ellis said: “Stelrad is a leading specialist manufacturer and distributor of steel panel radiators with a track record dating back to the 1930s. Today, the group benefits from an unrivalled combination of brand strength, highly efficient operating infrastructure and market access, trading across six core geographies of the UK, Benelux, Germany, France, Turkey and Poland.

“The European countries where the group operates have been progressive in advancing the decarbonisation agenda through strong regulation and policies and Stelrad’s products will play a key role in the longer-term transition away from traditional gas boilers with larger surface area radiators in particular being well suited to low temperature systems such as heat pumps.

“The group’s highly experienced management team have a wealth of industry experience and a long-standing commitment to the business having put in place a strategy that has seen the business deliver a resilient financial performance in recent years and, as a result, the group is well placed to build on the strong momentum through both organic and inorganic growth opportunities.”

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