Well positioned

for sustainable

growth

Stelrad Group plc

Annual Report 2024

Stelrad Group plc Annual Report 2024

Revenue

£290.6m

(2023: £308.2m)

Adjusted operating profit

(1)

£31.5m

(2023: £29.3m)

EPS

12.97p

(2023: 12.11p)

Free cash flow

(1)

£9.6m

(2023: £17.8m)

Adjusted EPS

(1)

13.05p

(2023: 13.62p)

Operating profit

£31.4m

(2023: £26.7m)

Strong 2024 performance

positions Stelrad well for

sustainable future growth

Stelrad Group plc Annual Report 2024IFC

Financial and operational highlights

• Operating profit for the year up 17.6% to £31.4 million,

an increase of £4.7 million (2023: £26.7 million), due to

continued cost base optimisation initiatives, favourable

materials pricing, strong product mix and the impact

of exceptional items in 2023. Adjusted operating profit

for the year up 7.6% to £31.5 million, an increase of

£2.2 million (2023: £29.3 million).

• Contribution per radiator increased again, by 11.4% to

£20.15, the first time the Group has achieved a figure

in excess of £20, driven by margin control, an increased

volume of higher output radiators in the UK market and

an increase in overall premium panel sales mix to 5.7%.

• Revenue decline of 5.7% to £290.6 million as a result of

ongoing challenges in RMI and new build markets, with

high interest rates and inflation suppressing activity.

– UK & Ireland: revenue down 1.5%, a creditable result

despite wider market headwinds.

– Europe: revenue down 6.8% due to Euro devaluation

and continued sales volume declines.

– Turkey & International: revenue down 27.7%

to £14.2 million, driven by significantly lower

sales volumes.

(1) The Group uses some alternative performance measures to track

and assess the underlying performance of the business. Alternative

performance measures are defined in the glossary of terms on page144

and reconciled to the appropriate financial statements line item in

note 31. Note 31 also outlines the limitations of using alternative

performance measures.

STRATEGIC REPORT

IFC Highlights

02 At a glance

04 Our investment case

06 Chair’s statement

08 Chief Executive Officer’s review

10 Market overview

11 Market trends

12 Strategy in action

14 Our business model

16 Our strategy

18 Strategy in action

20 Key performance indicators

22 Stakeholder engagement

26 Sustainability Report

35 Task Force on Climate-related Financial Disclosures

40 Sustainability metrics

42 Finance and business review

48 Risk management

55 Viability statement and going concern

56 Non-financial and sustainability information statement

GOVERNANCE REPORT

57 Chair’s introduction to governance

58 Board of Directors

60 Section 172 statement

61 Statement of corporate governance

65 Audit & Risk Committee Report

70 Nomination Committee Report

74 Directors’ Remuneration Report

92 Directors’ Report

FINANCIAL STATEMENTS

96 Independent auditors’ report to the members

ofStelrad Group plc

102 Consolidated income statement

103 Consolidated statement of comprehensive income

104 Consolidated balance sheet

105 Consolidated statement of changes in equity

106 Consolidated statement of cash flows

107 Notes to the consolidated financial statements

139 Company balance sheet

140 Company statement of changes in equity

141 Notes to the Company financial statements

ADDITIONAL INFORMATION

144 Glossary of terms

145 Shareholder information

• Return on capital employed grew by 1.6 ppts to 27.1%

boosted by strong operating profit.

• On Time In Full (“OTIF”) delivery of 98% (2023: 97%) in

the UK & Ireland, reflecting the Group’s market-leading

customer service and product availability.

• Investment in working capital to enhance service levels

meant that free cash flow decreased by £8.2 million to

£9.6 million (2023: £17.8 million).

• Leverage at 31 December 2024 was 1.37x (2023: 1.47x),

based on net debt before lease liabilities.

• Recommended final dividend up 2% to 4.81 pence per

share (2024 final dividend: 4.72 pence per share), to be

paid on 27 May 2025, reflecting the Board’s confidence

in the Group’s prospects and balance sheet.

Annual Report 2024 Stelrad Group plc 01

At a glance

Our brands

Innovative design brand

Combining advanced technology with

designer style, the DL Radiators brand offer

includes heat emitters suitable for a wide

variety of heat sources and heating systems.

Europe’s number one brand

Stelrad, the Group’s premier brand, is sold

across all our markets.

The Netherlands’ number one brand

With a strong presence in the Netherlands,

France, the UK and Belgium, Henrad is a

channel differentiated European brand.

Stelrad Group’s value brand

Mainly sold into Turkey and Eastern European

markets, the Termo Teknik brand offers a high

quality-to-cost ratio.

Premium design brand

Representing the best of Danish design,

Hudevad is a favourite brand of architects,

interior designers and commercial specifiers.

Our ESG strategy

Fit for the Future is Stelrad’s sustainability framework, setting

out our approach to delivering both our business strategy

and our sustainability commitments to stakeholders and the

environment. It reflects Stelrad’s vision of the significant role

we can play in the transition to a low – and ultimately zero –

carbon heating industry.

Underpinned by the fundamental issues of safety, governance

and responsible supply chain management, Fit for the Future

has two strategic pillars.

Driving better environmental performance focuses on

reducing Stelrad’s environmental impact whilst engaging,

educating and influencing others to transition effectively to

theheating systems of the future.

Enabling an exceptional workforce ensures our people

contribute positively to the delivery of our strategy and our

sustainability objectives.

» Read more in the Sustainability section on page 26

Data source: BRG Building Solutions.

Our core purpose

Helping to heat

homes sustainably

Underpinning foundations

Conducting business

responsibly

Strategic pillar

Driving better

environmental

performance

Strategic pillar

Enabling an

exceptional

workforce

We are Europe’s leading radiator

manufacturer and our core purpose

is helping to heat homes sustainably

Stelrad Group plc Annual Report 202402

STRATEGIC REPORT

Our products

Electric, hybrid and

dual fuel radiators

Standard steel

panel radiators

Premium steel panel and low surface

temperature steel panel radiators

Column and decorative

steel tubular radiators

Our markets

Market-leading international presence

Supported by an extensive sales and marketing network,

Stelrad’s well-invested, state-of-the-art manufacturing

anddistribution operations provide our customers with

high levels of service and product availability, wherever

they are based.

» Read more in our market overview on page 10

500+

customers

40+

countries

1,400

people

UK & Ireland

£137.4m

Europe

£139.0m

Turkey & International

£14.2m

Key

Head office

Manufacturing,

distribution and sales

Distribution warehouse

Sales presence

Head office

Newcastle upon Tyne, UK

UK Radiators

Mexborough, UK

Continental Radiators

Nuth, Netherlands

Termo Teknik

Çorlu, Istanbul, Turkey

Radiators SpA

Moimacco, Italy

Hudevad

Kolding, Denmark

Caradon Polska

Kraków, Poland

» Read more in our financial statements on page 102

Group revenue

£290.6m

Towel warmers

Annual Report 2024 Stelrad Group plc 03

steel panel radiator market

share position in Europe, leading

in seven countries – the UK,

Ireland, France, the Netherlands,

Belgium, Denmark and Greece

–andwithatop3positionin

eleven more

A long-term player of scale in the

European heat emitter market

• Operating in a market with

high barriers to entry

• Providing cost leadership and

unrivalled operational flexibility

from a multi-site manufacturing

and logistics platform

• Opportunities for organic

growth and complementary

acquisitions from future

market consolidation

14.4%

designer radiator mix, an

increaseof7.0percentagepoints

since2019

Attractive long-term dynamics led

by replacement demand in mature

European markets

• Underlying growth in

higher value design radiators,

coupled with broad geographic

spread and focused, agile

cost management

• Proven financial resilience

through challenging economic

cycles, including 2008’s global

financial crisis, the Covid-19

pandemic and sustained

macroeconomic challenges

from 2022 onwards

Leading

market position

Robust

business model

» Read more about our markets

on page 10

» Read more about our business model

on page 14

Stelrad’s performance in

2024 further demonstrates

the strength and resilience

of our business model,

as we delivered strong

profit growth despite

ongoing macroeconomic

challenges. With an

experienced management

team and a clear strategic

focus, the Group is well

positioned to benefit

from market recovery

alongside the structural

growth drivers of increasing

premiumisation and the

drive for decarbonisation.

Trevor Harvey

Chief Executive Officer

Our investment case

Stelrad Group plc Annual Report 202404

STRATEGIC REPORT

500+

customersin40+countries

A lean, customer-orientated

leadership team with unparalleled

sector experience

• Flat management structure with

clear focus on quality, customer

service and innovation

• Effective channel management

driven by a multibrand strategy

and proactive adaptation to

evolving routes to market

41.6%

energy from renewable sources

With a growing range of innovative

heat emitters and our Fit for

the Future framework ensuring

delivery of both our business

strategy and sustainability

commitments, Stelrad is positioned

effectively for the transition to low

and zero carbon heating over the

coming decades

• Evolving pan-European

legislation driving reduced fossil

fuel use in home heating is

expected to present favourable

growth drivers for higher output

heat emitters

• Stelrad and all its stakeholders

will benefit from long-term

sector transition to a more

sustainable heating model

Strong

financial position

Long-term focus

on decarbonisation

and ESG

Experienced

management and

effective strategy

» Read more about our strategy on page 16

» Read more about our Board of Directors

on pages 58 and 59

» Read more about our KPIs on page 20 » Read more about our ESG priorities

on page 28

80.6%

growth in contribution per

radiatorbetween2019and2024

A track record of consistent growth

• Sector-leading margins

• Strong cash generation and

return on capital employed

Annual Report 2024 Stelrad Group plc 05

In 2024, Stelrad made

meaningful progress on key

strategic and sustainability

objectives, delivering a

robust profit performance

despite ongoing

macroeconomic headwinds.

Bob Ellis

Chair

Dear shareholders

Stelrad delivered another strong performance despite the

continued macroeconomic challenges that we have seen

across our core geographies of the UK, Europe and Turkey &

International, with ongoing high interest rates andinflation

continuing to suppress activity in both RMI and new

build markets.

This performance, and the progress made during the year,

reinforce our confidence in the resilience of the Stelrad business,

with a flexible, low-cost manufacturing footprint, leading

levels of customer service and unrivalled product availability

underpinning our competitive positioning in the market.

Equally, one of our greatest assets remains the experience of

both the Executive and senior management within the Group,

many of whom have been with Stelrad for more than 20 years,

and their combined experience of trading through numerous

other challenging market cycles remains invaluable.

Performance and results

Despite a 5.7% reduction in revenue to £290.6 million,

management actions delivered a robust profit performance

with operating profit of £31.4 million, an increase of

£4.7 million, or 17.6% (2023: £26.7 million) and adjusted

operating profit

(1)

up by £2.2 million to £31.5 million, an

increase of 7.6% (2023: £29.3 million).

The business also recorded its seventh consecutive annual

increase in contribution per radiator, delivering an 11.4%

increase in contribution per radiator during the year through

proactive margin and cost management, in addition to the

price benefit of further increases in average radiator size.

Capital Markets Event

The Group’s Executive and Senior management team hosted

anumber of analysts and investors at our Capital Markets Event

in November 2024. The event outlined the Group’s leading

competitive position and attractive market opportunity.

Key structural growth drivers of premiumisation and

decarbonisation are underpinned by the Group’s sustainable

competitive advantages of flexible, well-invested, lowest-cost

manufacturing, leading levels of product availability and

customer service and a competitive position of scale.

In addition, we outlined Stelrad’s capital allocation priorities

alongside the following medium-term targets:

• Market share improvements of 1-2%

• Contribution per radiator of >£21

• Operating profit margin of 13%

• Operating cash flow conversion of >90%

• Return on capital employed of >30%.

These new targets are underpinned by Stelrad’s four

overarching strategic objectives of growing market share,

improving product mix, optimising routes to market and

positioning effectively for decarbonisation, alongside the

Group’s continued focus on operational excellence.

Strong financial performance

despite challenging

market conditions

(1) The Group uses some alternative performance measures to

track and assess the underlying performance of the business.

Alternative performance measures are defined in the glossary of

terms on page 144 and reconciled to the appropriate financial

statements line item in note 31. Note 31 also outlines the

limitations of using alternative performance measures.

Chair’s statement

Stelrad Group plc Annual Report 202406

STRATEGIC REPORT

Purpose

Stelrad’s purpose is helping to heat homes sustainably.

Given Stelrad’s influential market position with system

specifiers, suppliers and customers, we have a pivotal role

to play in the transition to decarbonised heating systems.

We continue to develop our product range in this area,

ensuring that we can both capture market share arising

from legislative tailwinds, and drive the wider transition

to low-carbon systems.

Environmental, social and governance

(“ESG”) objectives

Achieving our purpose, helping to heat homes sustainably,

demands relentless focus on reducing Stelrad’s own

environmental impact, a consistently high level of employee

engagement and high standards of corporate governance.

These elements are at the heart of Stelrad’s culture and values.

Our sustainability framework, Fit for the Future, is consistent

with that core purpose, setting out our approach to

delivering both our business strategy and our sustainability

commitments to stakeholders and the environment. It

reflects Stelrad’s vision of the significant role the Group can

play in the transition to a low – and ultimately zero – carbon

heating industry.

Alongside this, we continue to make progress in reducing the

Group’s energy usage, with our fuel usage reducing by 13%

in 2024, transitioning away from LPG in the Netherlands and

investing in several electric lift trucks in the UK.

Above everything else, the safety of our people is our number

one priority.

We continue to make meaningful progress, with a 45%

reduction in the number of lost time incidents in 2024.

This significant shift has been driven by improvements at

Radiators SpA and reflects the benefit of instilling our strong

safety culture and applying Group safety processes.

Board

Annette Borén stepped down from the Board on

30 June 2024. I would like to thank Annette for her

positive contribution during her time with Stelrad and

she left with our best wishes for her future endeavours.

Having been appointed Interim Chief Financial Officer on

1 July 2024, we were delighted to appoint Leigh Wilcox as

Chief Financial Officer on 1 October 2024. Leigh previously

served as the Group’s Finance Director, having joined

Stelrad in 2012. He has a deep commercial understanding

of the Group alongside extensive financial experience and

has played a pivotal role in the Group’s development as a

listed Company.

During the year, the Board carried out an internal Board

evaluation, which confirmed that the Board continues to

havethe appropriate mix of skills and experience. It is the

intention of the Board to evaluate the commission of an

external, independent review of the Board’s effectiveness

during the current financial year.

Governance

In line with its status as a company with a premium listing

on the Main Market of the London Stock Exchange, Stelrad

is committed to high levels of corporate governance. Our

compliance with the 2018 edition of the UK Corporate

Governance Code is set out in the Governance Report

on page 61.

Dividend

The Board is recommending a final dividend of 4.81 pence

per share, a rise of 2% on the prior year. The final dividend

will be paid on 27 May 2025 to shareholders on the register

on 25 April 2025, subject to approval by shareholders at the

Annual General Meeting on 21 May 2025. We thank our

shareholders for their continuing support of the Group.

Summary

While overall RMI and new build activity remains subdued,

weare continuing to see signs of our volumes recovering

insome of the Group’s core European territories, including

inBelgium, the Netherlands and Poland, where our

competitive strength has driven volume gains.

While we expect continued softness in market conditions

to persist at least through the first half of 2025, we remain

confident that the Group is well positioned for growth, with

strong embedded replacement demand across Europe, an

increasing drive for premiumisation and long-term regulatory

tailwinds for decarbonised heating systems.

Bob Ellis

Chair

7 March 2025

Annual Report 2024 Stelrad Group plc 07

Overview

2024 largely saw a continuation of the challenging

conditions that have characterised the wider marketplace

in recent years. However, Stelrad’s rigorous focus on

operational excellence, the flexibility of our business model

and the strength of the Group’s market positioning meant

that the business was still able to deliver a strong financial

performance despite declines in revenue and volume.

The Group’s ongoing focus on proactive margin

management initiatives resulted in contribution per radiator

exceeding £20 for the first time and is testament to the

continued transfer of production to lower cost facilities and

the price benefit of larger radiators sold.

Furthermore, alongside the operational gains made during

the period, the Group also made investments in working

capital to ensure that the business is well placed to benefit

from a market recovery.

While we are not expecting the wider market backdrop to

improve during the first half of 2025, we are encouraged by

our continued volume recovery in some of the Group’s core

European territories and remain confident that, regardless

ofwider macro conditions, Stelrad is able to outperform its

peers and deliver continued growth for our stakeholders.

Continued profit growth despite ongoing

volume declines

Revenues during 2024 fell 5.7% to £290.6 million, a decrease

of £17.6 million on the prior year (2023: £308.2 million),

driven primarily by ongoing volume declines which fell 5.8%

alongside the impact of the Euro devaluing against GBP.

Operating profit for the year was up 17.6% to £31.4 million,

an increase of £4.7 million (2023: £26.7 million) while

adjusted operating profit

(1)

for the year was £31.5 million,

an increase of 7.6% or £2.2 million (2023: £29.3 million).

Revenue in UK & Ireland was £137.4 million

(2023: £139.4 million), a fall of 1.5% that was driven

mainly by the reduction in volumes during the period

offset by the benefit of favourable product mix, meaning

that adjusted operating profit increased by 20.7%.

Europe revenues fell 6.8% due to the devaluation of the

Euro against GBP, continued sales volume declines and

adverse mix, resulting in an adjusted operating profit

reduction of 12.4%. This combination of challenging market

conditions particularly impacted the Radiators SpA business

in 2024, but the underlying strategic case for our 2022

acquisition remains compelling. Radiators SpA provides

access to key territories and channels to market, alongside

a product range aligned with the structural drivers of

increased premiumisation and the drive for decarbonisation.

Resilient 2024 performance

positions Stelrad effectively for

sustainable future growth

(1) The Group uses some alternative performance measures to

track and assess the underlying performance of the business.

Alternative performance measures are defined in the glossary of

terms on page 144 and reconciled to the appropriate financial

statements line item in note 31. Note 31 also outlines the

limitations of using alternative performance measures.

As market leader, Stelrad’s

scale and flexible, low-cost

manufacturing operations,

coupled with leading levels

of customer service and

product availability, put the

Group in prime position

to take advantage of the

long-term growth drivers of

increasing premiumisation

and heating system

decarbonisation,

as well positioning

Stelrad effectively for

market recovery.

Trevor Harvey

Chief Executive Officer

Chief Executive Officer’s review

Stelrad Group plc Annual Report 202408

STRATEGIC REPORT

In Turkey & International markets, revenues were down 27.7%

as a result of significantly lower sales volumes with adjusted

operating profit falling by 22.7% as a result. The division

represents 4.9% of Group revenues and 3.3% of adjusted

operating profit respectively.

Market conditions during the year remained similar to the prior

year and were characterised by subdued demand in RMI and

new build markets, principally as a result of high interest rates

and levels of inflation which continue to suppress demand levels.

Nevertheless, Stelrad’s focus on operational excellence

and cost control initiatives meant that the Group was able

to continue to support margin management initiatives,

resulting in our contribution per radiator exceeding £20

forthe first time, at £20.15 (2023: £18.09).

Investing in future growth

During the period, the Group has made investments

across the business to ensure that Stelrad is well placed for

market recovery.

Continued investment was made in our operating plant and

equipment as part of various maintenance and upgrade

projects, designed to ensure that our operating platform remains

best-in-class. We also made additional investment in our IT

infrastructure alongside significant investment in inventory.

The actions taken to optimise our operational facilities

duringthe second half of 2023 have resulted in the

cost-saving benefits in 2024 with the continued transfer of

volumes to our low-cost facility in Çorlu, Turkey progressing

as planned. Our fully invested, flexible and low-cost Turkish

manufacturing capability remains a significant source of

competitive advantage for the Group.

Premiumisation and decarbonisation

As outlined at the Group’s Capital Markets Event in

November 2024, increasing premiumisation and the drive

for decarbonisation are two key structural growth drivers that

will underpin demand for higher margin, higher added-value

product, enabling Stelrad to grow ahead of the market.

Year on year, the proportion of premium panel sales to total

volumes increased by 0.1 ppts to 5.7% while the penetration

of premium panel products into the UK & Ireland increased

in the period from 2.9% to 3.1%, with additional work being

undertaken to drive this growth further. The UK market

remains under-developed compared to other core countries

and Stelrad has developed a clear, three-point strategy

to leverage trade strengths, boost consumer appeal and

optimise routes to market for designer radiators. In addition

to providing extended support for traditional trade partners,

the Group will further develop its stelrad.com online trading

platform in 2025.

The range of electrical radiators launched in the UK

market asthe Electric Series in the second half of 2023

positions Stelrad effectively in a segment with significant

decarbonisation growth potential and has generated

favourable project pipeline potential.

The launch of Stelrad’s new range of electrically fan-assisted

hybrid radiators in July 2024 also received strong customer

support and our partnership with a leading European heat

source manufacturer and system supplier continues to

position the Group well in this area.

The Group also continues to work closely with new build,

social housing and commercial specifiers to find cost-

effective, high-performance solutions for low-temperature

systems and as a result, in 2024 we have seen a 66% volume

increase in high-heat output K3, 900mm high and vertical

radiators in the UK market, relative to the prior year.

Outlook

Although RMI and new build markets continued to

experience subdued levels of demand during 2024, the

robust performance delivered by the Group in the twelve

months to 31 December 2024 has continued into 2025

with trading since the period end remaining in line with

management’s expectations.

While Stelrad continues to expect softness in market

conditions, at least through the first half of 2025, the Group

has seen a recovery in its volumes in some of the Group’s core

European territories such as Belgium, the Netherlands and

Poland where Stelrad volume gains have been driven by our

sustainable competitive advantages.

The Group continues to believe that management’s

considerable experience of successfully steering the business

through other challenging market cycles will enable the

business to navigate the ongoing market challenges and

deliver another year of progress.

Furthermore, the long-term market drivers of

premiumisation and decarbonisation continue to underpin

the Group’s confidence in the future which, alongside our

market leadership, flexible lowest-cost manufacturing and

leading levels of customer service ensure that the Group

enters 2025 in a strong position.

Trevor Harvey

Chief Executive Officer

7 March 2025

Our strategy in action

Increasing premiumisation

To capitalise on the structural growth opportunity

provided by higher margin, higher added-value designer

radiators, Stelrad is pursuing a clear strategy to leverage

its trade strengths, boost its consumer appeal and

optimise its routes to market. In the UK, the Group

continues to respond to evolving buying patterns by

supporting installers and merchant staff in the upsell

process and, in parallel, by optimising the Stelrad.com

customer journey.

» Read more on page 16

Data source: BRG Building Solutions.

Annual Report 2024 Stelrad Group plc 09

In 2023, hydronic systems

accounted for 93% of European

residential heating

321m

homes with central heating

Steel panel radiators represented

56% of European hydronic heat

emitter volume in 2023

41m

heatemitterssoldin2023

Hydronic heating systems

dominate the market

Replacement demand underpins and drives the European

heating market. Hydronic systems, which function through

water circulation, currently represent 93% of home heating

installations. As a result, hydronic heat emitters dominate the

European market and are expected to do so in the future. As

the most popular hydronic heat emitter, steel panel radiators

will be a key enabler of the transition to low-carbon, low-

temperature heating systems.

Stelrad’s strong distributor and

specifier relationships provide

unrivalled market access

Across its core markets, Stelrad has strong, long-term

relationships with all major distributors, retailers and key

specifiers, including housing developers, contractors and

installers, creating high barriers to entry for competitors.

The Group has a strong track record for identifying emerging

distribution trends and capitalising on this potential through

Stelrad’s powerful multibrand strategy.

An attractive market opportunity,

with positive underlying dynamics

and a significant installed base

93%

hydronic

systems

56%

steel panel

radiators

Stelrad’s flexible, low-cost

operational platform, leading

levels of product availability

and #1 market position will

enable above market growth,

underpinned by a significant

long-term replacement

market and two key structural

growth drivers: increasing

premiumisation and the drive

for decarbonisation.

Trevor Harvey

Chief Executive Officer

Market overview

Data source: BRG Building Solutions.

Stelrad Group plc Annual Report 202410

STRATEGIC REPORT

Three key macro trends

Trend

Over the past ten years, replacement

demand has generally represented

around 60% of total steel panel

volume. In 2023, this fell to 55%,

as a result of the challenging

macroeconomic environment

negatively impacting household

spending. Over the next three years,

replacement demand is forecast

to return to a more typical 60%

share, growing at a faster rate than

residential new build, the secondary

market volume driver, which

represented 35% share in 2023.

1.8bn

estimated installed base

ensures long-term demand for

hydronic radiators

55%

of2023steelpanelvolumewas

replacement demand

Opportunity

Adapting to evolving routes to

market, Stelrad continues to develop

multichannel, retail and online channels

to complement the Group’s historically

strong position with traditional trade

distributors. In both cases, Stelrad’s

position of scale, strong brands, high

levels of specification and well-invested

logistics capability position the Group

effectively to capitalise from future

market recovery. Close relationships

with new build residential specifiers also

position Stelrad well for longer-term

growth as economic conditions improve.

1

Replacement

Primary volume driver

Trend

The long-term fundamentals for

premium steel panel and other designer

radiators remain positive. Aseconomic

conditions improve, increased consumer

focus on home design has the potential

to drive profitable growth in higher

added-value products. This is particularly

true in the UK, which has low levels

of premium steel panel penetration

compared to Stelrad’s other core

countries. Across mature European

markets, an increase in home heating

system renovation is forecast, driven by

heat source decarbonisation.

71.5%

growth in Stelrad designer radiator

volumesince2019

14.4%

Stelraddesignermixin2024

Opportunity

2022’s acquisition of Radiators SpA

provided Stelrad with a comprehensive

manufactured range of designer

products to complement the Group’s

premium steel panel offer. Leveraging

Stelrad’s unrivalled channel access in

our core markets will enable us to grow

profitably outside the Group’s traditional

steel panel product portfolio. In the

UK market, Stelrad has a significant

opportunity to leverage its strong

leadership position to develop sales of

premium steel panel and other designer

radiators through both trade and

retail channels.

2

Premium and designer radiators

Profitable growth potential

Trend

Accelerating demand for decarbonised

heating systems will gain increasing

momentum over the longer term.

Whilst the recent economic backdrop

has led some governments to delay

more ambitious shorter-term initiatives,

long-term net zero targets remain

unchanged. These will drive the

installation of higher output, higher

value conventional radiators alongside

hybrid assisted convection heat emitters.

Electric heat emitter volume is also

likely to grow, as renewable energy

sources deliver lower cost electricity and

electricity prices become increasingly

decoupled from those of fossil fuels.

80%

of2050’sbuildingstockalready

exists today

93%

of Europe’s existing homes have

hydronic heating systems

Opportunity

With a clear focus on promoting

high-heat output conventional

radiators, developing hybrid products

for low-temperature systems and

introducing electric ranges into

core markets, Stelrad’s product

development strategy positions the

Group effectively for profitable growth

as the market develops. Coupled

with Stelrad’s position as a trusted

adviser to heating system specifiers,

this approach will enable the Group

to influence the selection of heat

emitters appropriate for low and zero

carbon heating systems, whether

hydronic or electric.

3

Decarbonisation

Long-term demand driver

Market trends

Growing market share

Optimising routes to market

Improving product mix

Optimising routes to market

Positioning effectively for decarbonisation

Annual Report 2024 Stelrad Group plc 11

Growing

market share

Stelrad is outperforming its traditional competitors

The Group’s share increased to 20.2%, a 1.4 percentage point

gain relative to 2022, whilst traditional Western European

competitors experienced further year on year share decline.

In 2023, as well as organic gains in core markets, Stelrad

also benefited from the relative strength of the UK market

compared to mainland Europe.

Number1insevencountriesandTop3

in eleven more

In 2023, Stelrad secured a top 3 position in 18 countries,

gaining two top 3 positions in comparison to 2022.

The Group maintained market leadership positions in

France, Belgium, the Netherlands, Ireland, Denmark and

Greece, as well as in the UK, Europe’s largest market,

where Stelrad’s share exceeded 50%.

Having moved into the number one position for the

first time in 2022, Stelrad significantly extended its steel

panel radiator market leadership in 2023, according to

the latest available data.

» Read more in the Strategy section on page 16

Stelrad Group plc Annual Report 202412

STRATEGIC REPORT

Strategy in action

12 Stelrad Group plc Annual Report 2024

Leadership of the European hydronic heat emitter market positions Stelrad

effectively to capitalise from both market recovery and future consolidation.

Our clear strategic focus on ten core countries has enabled consistent share

growth at the expense of our traditional competitors.

Trevor Harvey

Chief Executive Officer

France

#1

market position

In 2023, Stelrad extended its lead in

the French market, gaining a further

4.0 percentage points in comparison

to 2022. Driven primarily by organic

growth through traditional distribution

channels, the Group has increased its

market share by 8.2 percentage points

since 2021.

Germany

#3

market position

In 2023, Stelrad’s 17.5% share of

the German market represented a

7.4 percentage point gain relative

to the prior year. 2022’s acquisition

of Radiators SpA was the key driver

for share growth in this important

European market, moving the

Groupfrom a #5 position in 2021

to#3 in 2023.

The Netherlands

#1

market position

In 2023, Stelrad’s share in the Netherlands

was 47.6%, some 24.4 percentage points

ahead of its nearest competitor and

representing a 4.0 percentage point share

gain compared to 2022.

47.6% ↑ 4.0

2023

2022

47.6%

43.6%

17.5% ↑ 7.434.6%↑ 4.0

20232023

20222022

17.5%34.6%

10.1%30.6%

2021

45.8%

20212021

6.0%26.4%

Europe, the UK and Turkey

#1

market position

In 2023, Stelrad’s share of the European

steel panel radiator market increased

by 1.4 percentage points relative to

2022 and has risen by 1.8 percentage

points since 2021. Driven by both

organic growth and 2022’s acquisition

of Radiators SpA, Group share reached

a record level of 20.2%.

Stelrad’s ten core countries

#1

market position

In its ten core geographic markets,

Stelrad increased share in 2023 by

2.1 percentage points compared to

the prior year, growing from 26.5%

to 28.6%. The Group’s focused

share growth strategy has driven

a 3.6 percentage point share gain

since 2021.

#1

market position

Stelrad’s highest market share is in the

UK, Europe’s largest market. In 2023,

the Group gained a 1.1 percentage

point share, to reach a record level of

52.6%. Since 2020, Stelrad’s share has

been in excess of 50%.

52.6% ↑ 1.1

2023

2022

52.6%

51.5%

28.6% ↑ 2.120.2% ↑ 1.4

20232023

20222022

28.6%20.2%

26.5%18.8%

2021

52.1%

20212021

25.0%18.4%

Annual Report 2024 Stelrad Group plc 13

Stelrad’s resilient business model

drives sustainable long-term

stakeholder value

Brand strength

As the leading European steel panel radiator brand,

Stelrad is at the heart of the Group’s powerful multibrand

strategy. Stelrad’s strong brand portfolio enables the

Group to optimise channels to market and to maximise

specifier access in all segments.

Product availability

Aiming to provide best-in-class lead times, Stelrad has

the largest radiator distribution centres in the UK and

mainland Europe, with respective capacities of 350k and

200k units and our customers are further supported

by additional regional distribution hubs. With trade

distributors and retailers reducing stockholding levels, this

provides Stelrad with significant competitive advantage.

Range innovation

Stelrad pioneered premium steel panel radiators, offering

a unique combination of design aesthetic, ease of

installation and value for money. The Group has achieved

high levels of market penetration in Western Europe and

has a clear objective to expand the under-developed UK

market. Acquiring Radiators SpA in 2022 added electric,

hybrid and dual fuel heat emitters suitable for low and

zero carbon heating systems to Stelrad’s portfolio.

Standardised core design

The Group’s core steel panel radiator design is used in all

standard and premium steel panel ranges produced in

the Çorlu, Mexborough and Nuth facilities. This ensures

high quality levels at the lowest possible cost by enabling

production flexibility, cost efficiency and risk mitigation.

People

Stelrad has a lean organisation of 1,400 full-time

employees and the most stable and experienced

management team in the industry, with an average

of 19 years’ experience.

International network

Benefiting from a manufacturing, distribution and sales

and marketing presence across the vast majority of key

global radiator markets, Stelrad endeavours to provide

exceptional technical, logistical and commercial support

for specifiers, distributors, retailers, contractors, installers

and consumers.

Brands

Stelrad has a portfolio of strong brands, each with long-

established and loyal customers. Stelrad is the number

one European steel panel radiator brand. Henrad and

Termo Teknik are leading, industry recognised steel panel

radiator brands, whilst the DL Radiators brand is known

for technical innovation across a range of heat emitter

technologies. Hudevad is a premium Danish design

brand favoured by specifiers in the profitable commercial

and high-end residential sectors.

Operational assets

Stelrad has a flexible, well-invested, efficient and

low-cost Group operational platform, following our

recent five-year investment programme focusing on

manufacturing automation and logistics infrastructure

and the integration of Radiators SpA’s multi-product

manufacturing facility.

Helping to heat homes sustainably

Consistent with our core purpose, helping to heat

homes sustainably, Fit for the Future is Stelrad’s

sustainability framework. It sets out our approach

to delivering both our business strategy and

our sustainability commitments to stakeholders

and the environment. It reflects Stelrad’s

vision of the significant role we can play in the

transition to a low – and ultimately zero – carbon

heating industry.

Driving better environmental

performance

Stelrad recognises the urgent need to reduce

emissions and manage resources efficiently. We

are committed to reducing our environmental

footprint by focusing on energy and material

usage, the lifecycle impact of our products and

the decarbonisation of heating. We will innovate,

introducing products as part of a coherent

offer for low and zero carbon systems. We will

understand and quantify our impacts, reducing the

environmental impact of the raw materials we use

and targeting improvements as part of a long-term

net zero journey.

What makes us differentOur resources

ESG – Fit for the Future

Our business model

Stelrad Group plc Annual Report 202414

STRATEGIC REPORT

Enabling an exceptional workforce

Our people are fundamental to the success of

our business and we are proud of our culture of

collaboration and teamwork at Stelrad. We are

passionate about providing a workplace fostering

an inclusive, encouraging environment, where

everybody can thrive and contribute to the

Group’s future growth. We support all areas of

our workforce, with particular focus on employee

engagement, training and development, wellbeing

and diversity and inclusion. Outside of our business,

we invest in community initiatives tailored to local

needs across our different geographical sites.

Conducting business responsibly

Conducting business responsibly is the key

foundation in everything we do, underpinning

all Stelrad’s activities. As well as the fundamental

principles of international labour standards and

human rights, we are guided by a strong business

culture and a clear set of values overseen by the

Board. Our strengths in corporate governance,

safety, supply chain management and labour

standards enable progress in all aspects of

sustainability and corporate strategy. Our number

one priority is to keep our employees and

contractors safe and healthy and we aim for zero

harm across all our operations.

Driving better environmental performance is a core

element in Stelrad’s strategy. We innovate to provide

an appropriate, coherent heat emitter offer for low and

zero temperature heating systems regardless of heat

source and engage with our value chain to minimise

environmental impact, using our position of influence

toencourage positive behavioural changes from heating

system specifiers.

Shared valueHow we create value

Package

Design and

innovate

Recycle

and reuse

ManufactureDistribute

Source

Engage,

educate and

influence

Formulate

strategy

ESG – Fit for the Future

People

Our people are fundamental to delivering our strategy

and driving the future performance of the Group. We

aim to be a responsible employer providing a safe

and attractive place to work, offering competitive pay,

attractive benefits and continuous investment in training.

Customers

Trusted relationships with our customers and high

standards of business conduct are critical to Stelrad’s

performance. At all times, we strive to build and

strengthen these key relationships and conduct

business professionally and with integrity.

Suppliers

Our suppliers are intrinsic to our business performance.

Maintaining a fully integrated supply chain ensures our

security of supply and speed to market, driving both

quality and competitiveness, enabling Stelrad to gain

the support of our suppliers as we pursue the Group’s

sustainability initiatives.

Investors

Helping investors understand our business model, strategy

and sustainability initiatives through providing balanced and

understandable information is key to their engagement and

motivation to support future investment opportunities and

is fundamental to meeting our regulatory requirements.

Communities and the environment

Striving to make a positive impact in the communities

where it is based, Stelrad has clear ESG initiatives in each of

our main operational territories. We are aware of the Group’s

impact on the environment and this represents a critical

part of our decision making and business planning process.

Annual Report 2024 Stelrad Group plc 15

Stelrad’s strategy is driven

by four key objectives

Improving

product mix

Links to risks

Our strategy

1 2

Growing

market share

Links to risks

Strive for cost leadership

Now In addition to its position of scale as Europe’s #1 radiator

manufacturer, Stelrad has invested for cost leadership, having

upgraded all Group manufacturing facilities in recent years,

including its low-cost Turkish operation.

Future Stelrad will leverage its cost-leading multi-site

manufacturing platform for maximum profitable growth

as smaller, higher cost competitors exit the market.

Provide market-leading product availability

Now A standardised core product design across

three facilities ensures production planning flexibility.

Market-leading UK and European distribution centres,

supported by dedicated inventory in key geographies,

provide best-in-class logistics.

Future The Group will maximise the benefits of its

distribution centres, increasing availability for premium

steel panel and other designer radiators to expand the

market for higher added-value ranges.

Selectively target share growth in key

geographic markets

Now Stelrad is market leader in seven countries and

holds a Top 3 position in eleven more. The 2022

acquisition of Radiators SpA enabled further share

gains,notably in France and Germany.

Future The Group will further develop relationships with

established players in core geographies, adapting to

evolving routes to market and leveraging strong brands

to build its presence in key countries.

Act as a market consolidator

Now Stelrad, a long-term player of scale, is a proven

market consolidator.

Future For smaller manufacturers, continued

challenging market conditions will increase pressure

onprofitability, providing opportunities for Stelrad to

gainshare as competitors exit, either through organic

gains or by acquisition.

Accelerate upselling to premium steel panel

and other designer products

Now In 2024, Stelrad’s mix of higher added-value

designer radiators was 14.4%, representing a

9.2percentage point improvement compared to

2015and up 7.0 percentage points since 2019.

Future Stelrad is well positioned for profitable growth

when European radiator markets recover. The underlying

positive trend for designer radiators is anticipated to

accelerate mix improvement over the longer term.

The Group will continue to leverage its brand strength

and leading market position to expand the market for

designer radiators, notably in the UK, where premium

steel panel penetration is at low levels relative to the

European average.

Pursue complementary

acquisition opportunities

Now Having acquired Radiators SpA in 2022 and Danish

premium design brand Hudevad in 2018, Stelrad

now has a significant presence in higher added-value

radiator categories. The Group is focused on maximising

sales of its extensive designer portfolio across all

core markets, through its well-established sales and

distribution network.

Future At a manufacturer level, the designer radiator

market is fragmented, with many small players. Driven

by ongoing cost-of-living pressures, this category has

experienced greater relative volume decline compared

to higher volume products, such as standard steel panel

radiators. As a result, designer radiator producers without

a position of scale in high volume radiator manufacturing

will face additional profitability pressures, potentially

providing acquisition opportunities.

Stelrad Group plc Annual Report 202416

STRATEGIC REPORT

Optimising

routes to market

Links to risks

Positioning effectively

for decarbonisation

Links to risks

Risk key

Business disruption

IT failure or cyber breach

Climate change

Customers

People and culture

Loss of competitive advantage

Health and safety

Supply chain risk

Political and

economic environment

1 2 3

7 8

3 4

Adapt quickly to channel evolution

Now Stelrad’s multibrand strategy has allowed the Group

to manage the evolving dynamics of market channel

evolution effectively. As a result, Stelrad continues to

maintain unrivalled access to all routes to market,

including retail channels as well as the traditional trade

distribution model.

Future Stelrad will continue to maintain and develop

close customer relationships across its core geographies,

investing in its leading brands to maximise profitable

growth as routes to market evolve and the distribution

channel consolidates. Following the acquisition of

Radiators SpA, the Group will continue to develop sales

through leveraging improved access to DIY and other

retail channels.

Embrace digital transformation

Now Despite continued challenging market conditions,

the Group’s sales through UK online channels have

grown and are strongly orientated towards higher

added-value designer radiators. Stelrad continues to

invest in Building Information Modelling (“BIM”) and

specification databases for building products, ensuring

consulting engineers and architects can easily access

thetechnical data needed to incorporate the Group’s

heat emitters into their designs.

Future Stelrad will continue to develop digital capability

and invest in its online presence to reinforce and develop

awareness of the Group’s leading brands with all potential

specifiers and installers, regardless of their preferred

market channel.

Maximise sales of products compatible

withlow-temperaturesystems

Now With a significant installed base and long

replacement cycles, the heat emitter market will not

feel the full impact of decarbonised heating systems

fordecades. However, particularly in new housing,

legislation to decarbonise heat sources is driving a

requirement for higher output heat emitters compatible

with low-temperature systems.

Future As decarbonisation initiatives gain momentum,

Stelrad’s brand strength, channel access and operational

infrastructure position the Group effectively to

play a pivotal role in the development of European

heating distribution channels. Stelrad will leverage its

technological capabilities in conventional, hybrid and

electric heat emitters to provide appropriate products

forall decarbonised heat sources.

Develop products appropriate for

low-temperature and decarbonised systems

Now In 2024, we continued to develop our higher

output hydronic portfolio, notably in the UK market,

andintroduced a new range of hybrid heat emitters

into the German market whilst expanding our electric

product offer across Europe.

Future Stelrad’s product development strategy positions

the Group effectively for profitable growth as the market

develops over the longer term. Stelrad will innovate to

promote high output conventional radiators, develop

hybrid products for low-temperature systems and

introduce electric ranges into core markets.

» Read more in the Sustainability section on page 26

Annual Report 2024 Stelrad Group plc 17

Positioning effectively

for decarbonisation

Leveraging our scale, technical

know-how, strong brands, access

to market and trusted adviser

status, Stelrad is innovating

to ensure profitable future

growth as the heating market

decarbonises. We have a clear,

three pillar product development

strategy to promote high heat

output conventional radiators,

develop hybrid products for

low-temperature systems and

introduce electric ranges into

core markets.

Trevor Harvey

Chief Executive Officer

Strategy in action

Develop hybrid products for

low-temperature systems

Stelrad has been proactive in developing products

suitable for very low system temperature, heat pump

compatible products, working with specifiers and

key distribution partners to offer a growing range of

electrically fan-assisted hybrid radiators.

In 2024, Stelrad launched a new range of hybrid heat

emitters, targeting the German RMI market. This range

was developed in co-operation with a long-established

customer, a leading heat source and system provider.

Initial market feedback has been extremely positive.

80%

of2050’sbuildingstockexiststoday

Introduce electric ranges

into core markets

In many markets, electricity costs more than gas, making

electric heating systems costly to run. However, increased

generation from renewable sources is expected to reduce

electricity costs. Coupled with benefits such as ease and

flexibility of installation, this product category has clear

long-term growth potential.

Stelrad has a comprehensive portfolio of electric radiators,

which, until 2023, were not commercialised outside

Italy, France and Germany. The Group is now leveraging

its brand strength and channel influence to introduce a

focused electrical offer into its core markets.

ETS2emissions trading system

New EU legislation intended to shift taxation from

electricity to fossil fuels

» Read more in the Sustainability section on page 26

Stelrad Group plc Annual Report 202418

STRATEGIC REPORT

Promote high output

conventional radiators

Higher value, higher heat output conventional

radiators remain the most appropriate solution for the

vast majority of hydronic heating systems. Stelrad is

promoting conventional products suitable for lower

system temperatures by extending its vertical and

multipanel, multiconvector steel panel ranges, whilst

working closely with new build, social housing and

commercial specifiers to find cost-effective, high-

performance solutions.

66%

2024UKvolumegrowthforStelrad’shighoutputK3,

900mmhighandverticalradiators

Annual Report 2024 Stelrad Group plc 19

Management considers

a variety of financial and

non-financial measures

when analysing the

Group’s performance,

and the Directors believe

that each of these

measures provides useful

information with respect

to the Group’s business

and operations. With the

exception of revenue,

these are alternative

performance measures.

(1)

Revenue

£290.6m

Adjusted operating profit

£31.5m

2023 2023

2024 2024

2022 2022

£290.6m £31.5m

£316.3m £34.0m

£308.2m £29.3m

Description

The Group generates revenue from

three operating segments: the UK

& Ireland, Europe, and Turkey &

International. Revenue arises from

thesale of products to consumers

andrepresents the gross invoiced

salesless credit notes and rebates.

Performance

Revenue declined by £17.6 million or

5.7% mainly due to a decrease in sales

volumes of 5.8% and the devaluation

ofthe Euro against GBP, partially offset

by the impact of selling price increases

and product mix improvements.

Description

Adjusted operating profit is the

Group’s key profit measure to show

performance from operations.

Performance

Adjusted operating profit rose by 7.6%.

The increase in adjusted operating

profit was mainly the result of proactive

margin and cost management, in

addition to the price benefit of increases

in average radiator size, offset by a

reduction in sales volumes year on year.

Measuring and analysing

the Group’s performance

Links to strategy

Adjusted EPS

13.05p

2024

2022

2023

2020

13.05p

19.11p

13.62p

Description

Adjusted EPS is the adjusted profit for

the year of the Group per share in issue.

Performance

Adjusted EPS decreased in the year,

despite an increase in adjusted

operating profit of 7.6% due to

increased interest costs and a

significant one-off tax credit in 2023.

Free cash flow

£9.6m

2024

2023

£9.6m

£17.8m

Description

Free cash flow shows the cash available

to make distributions to shareholders.

Performance

Despite an increase in EBITDA, free

cash flow reduced in the year due to

investments in working capital and the

cash unwind of provisions for one-off

restructuring costs incurred to support

the profitability of the Group.

2021

2020

£272.3m

£10.9m

£15.7m

£33.2m

£196.6m £15.6m

2021

16.92p

4.44p

2022

£12.7m

(1) The Group uses some alternative

performance measures to track and assess

the underlying performance of the business.

Alternative performance measures are

defined in the glossary of terms on page144

and reconciled to the appropriate financial

statements line item in note 31. Note 31 also

outlines the limitations of using alternative

performance measures.

Key performance indicators

Stelrad Group plc Annual Report 202420

STRATEGIC REPORT

2023 2023

2024 2024

2022 2022

4,823k 276k

5,404k 304k

5,121k 289k

Links to strategy

Strategy key

Growing market share

Improving product mix

Optimising routes to market

Positioning effectively

fordecarbonisation

2021 2021

2020 2020

5,952k 346k

4,969k 300k

Total radiator

volumes sold

4,823kunits

Total premium panel

radiator volumes sold

276kunits

Description

The sales volumes of premium panel

radiators sold across all geographical

segments. Premium panel radiators

include vertical radiators and are

differentiated from standard steel

panel radiators by their higher margin

and design. Increasing premium

panel penetration will enhance the

profitability of the Group.

Performance

Premium panel volumes fell

by 4.5% due to a decline in

overall volumes. Premium panel

penetration experienced a small

improvement on 2023.

Description

The sales volumes of radiators across

all geographical segments in the

reporting period.

Performance

Volumes decreased by 5.8% in the

year as a result of ongoing challenges

in RMI and new build markets, with

high interest rates and inflation

suppressing activity.

Contribution per radiator

£20.15

2024

2022

2023

£20.15

£16.01

£18.09

Description

The value of contribution generated

perradiator sold.

Performance

Contribution per radiator has increased

by 11.4%, benefiting from the

continued transfer of production to

lower cost facilities, the price benefit of

larger radiators sold and strong margin

management, partially offset by the

impact of inflationary cost increases.

Return on capital employed

27.1%

2024

2022

2023

27.1%

27.3%

25.5%

Description

Return on capital employed is adjusted

operating profit as a percentage of

business capital employed.

Performance

Return on capital employed increased

in the year, primarily due to a 7.6%

growth in adjusted operating profit,

partially offset by a 1.0% increase in

business capital employed due to an

investment in working capital.

2021

2020

£13.74

£13.19

2021

2020

46.5%

21.0%

Annual Report 2024 Stelrad Group plc 21

We are committed to engaging

our stakeholders in all aspects of

our strategic vision

Stakeholder engagement

People

Their material priorities

• A company with a strong sense of purpose that lives by

its values.

• A culture where people are rewarded and can thrive with

opportunities for training, development and progression.

• A diverse and inclusive work environment, where overall

safety, health and wellbeing are valued.

How we engage

• Our recognition and reward programmes offer competitive

pay and attractive benefits.

• Training is provided to enable colleagues to continuously

develop and enhance their skills.

• Annual engagement surveys provide an opportunity for

colleagues to provide feedback.

• Strong collaborative relationships are maintained with

ourtrade unions and employee representatives.

• Regular internal newsletters facilitate information sharing

between colleagues and teams.

• Board members visit operating sites and attend meetings

with colleagues from across Europe to hear their views.

• An anonymous whistleblowing scheme enables concerns

tobe reported.

• The Group’s Code of Conduct and Equality, Diversity and

Inclusion Policy set out the Group’s values and priorities

inthese areas.

Outcomes

• Improved level of engagement, lower absence rates and

higher retention rates.

• Development and improvement of skills throughout

the workforce.

• Improved awareness and support for health and

wellbeing issues.

• High standards of health and safety performance maintained.

• Clear, relevant and timely communications to all employees.

• Knowledge sharing, process improvement, development of

initiatives and management buy-in across the business.

UK Employee Engagement Survey

Participation in the 2024 Employee Engagement Survey

during October/November was strong across all areas of

the business and a total of 87% of employees completed

the survey.

Sarah Riley, Chief People Officer, said: “The survey is

a great opportunity for all UK staff to express their

views and to share thoughts on how we are doing as

a business in areas such as involvement, recognition,

development, diversity and wellbeing.”

» Read more about our workforce in our Sustainability Report on

page 32, in particular our spotlights on alternative employment

routes and inclusion

» Read more in our spotlight on safety engagement on page 34

of our Sustainability Report

» Metrics and targets covering training and development, labour

practices, workforce characteristics and health and safety are

reported on page 41 of our Sustainability Report

Stelrad Group plc Annual Report 202422

STRATEGIC REPORT

Customers

Their material priorities

• Availability of a wide range of products and services on

timeand at competitive prices.

• Online capability and ease of access to products.

• Provision of responsibly sourced, energy efficient options.

• Integrity and professionalism.

How we engage

• We engage closely with our customers to ensure that

wedeliver the highest-quality customer service and

a product range that meets existing and developing

customerexpectations.

• We have invested heavily in our online trading capacity

andin our Customer Service departments.

• We participate in industry forums, exhibitions and

customerevents and product launches.

Outcomes

• Continued customer satisfaction and loyalty.

• Establishment of long-term partnerships.

• Successful and mutually beneficial product development

aswe transition to zero carbon heating systems.

HeatingInstallerAwards2025sponsors

Once again Stelrad has been confirmed as an official

sponsor of the Heating Installer Awards as it returns

this year.

Now entering its tenth anniversary, the Heating Installer

Awards holds an annual search for the best installers in

the nation. The competition builds a positive conversation

in the industry and promotes excellent engineers and

their work which can often go unrecognised.

Sarah Baker, UK Marketing Communications Manager,

commented: “At Stelrad, we have the pleasure of

working with many talented installers on a regular basis

but the Heating Installer Awards allows us to build our

community even further and establish long-lasting

relationships with the best of the best. Each year we have

been amazed at the quality of installers’ work and we

can’t wait to see the projects entered again this year.”

» Read more about how we are positioning effectively for

decarbonisation through our product range on page 18

» Read more in our spotlight on decarbonisation on page 29

of our Sustainability Report

The Board of Directors of Stelrad Group plc, both individually and together, consider that they have acted in good faith and

in a way that would be most likely to promote the long-term success of the Group and Company for the benefit of its members

as a whole (having regard to the stakeholders and matters set out in s172(1)(a–f) of the Act) when making decisions during the

year ended 31 December 2024.

» Read more about how stakeholders were taken into account in decision making on page 60

Annual Report 2024 Stelrad Group plc 23

Suppliers

Their material priorities

• Consistent and reliable demand for their products from

apartner they can trust.

• Long-term collaboration to build strong, lasting relations.

• Clear and timely communication and engagement.

How we engage

• Our commercial teams maintain ongoing dialogue with

oursuppliers to build strong, long-term relationships.

• Engagement with suppliers is primarily through a

combination of day-to-day interactions and formal review

meetings and audits. Key areas of focus include innovations,

product development, health and safety and compliance

with our ethical standards.

• We partner with key suppliers to develop initiatives for

innovative solutions and collaborate as appropriate on

product development.

• Timely payment of suppliers is a key element of the

relationship with our suppliers.

Outcomes

• Stable sourcing, product quality and competitive pricing.

• Long-term partnering, reducing supply chain volatility.

• Fair payment terms.

• Support of our ESG initiatives.

Investors

Their material priorities

• Financial performance and growth that maximises

shareholder returns in a responsible way.

• A clearly communicated strategy and business model.

• Appropriate and considered decision making that is in

thelong-term interest of the Group.

How we engage

• Executive Management engages at results presentations,

the Annual General Meeting, Capital Markets Events and

investor roadshows.

• Executive Management also maintains an open dialogue

with shareholders and potential investors to ensure that

their views are considered and factored into key decisions

taken by the Board.

• Shareholder and investor feedback and details of significant

movements in our shareholder register are monitored and

reported to the Board on a regular basis.

• The corporate website includes a dedicated investor section.

Outcomes

• Maximising demand for the Group’s shares.

• Support for investment opportunities, including potential

acquisitions or capital investment programmes.

Supplier spotlight

Capital Markets Event

Commenting on the relationship, one of our top tier

suppliers said:

“As one of the UK’s leading manufacturers of corrugated

cardboard packaging, we have been a longstanding

supplier to Stelrad since 2012. We have developed a

wide range of fully sustainable, recyclable corrugated

cardboard packaging solutions for Stelrad’s portfolio of

radiators. For a company like Stelrad that places such a

high emphasis on sustainability and ethical resourcing,

we are delighted to continue being the packaging

supplier of choice for them.”

» Read more in our spotlight on supply chains on page 31 of our

Sustainability Report

» Metrics and targets covering business and supply chain ethics are

reported on page 41 of our Sustainability Report

Stelrad Group plc hosted a Capital Markets Event on

14 November 2024. The event was hosted by the Stelrad

executive team and senior leaders from across the business.

Topics included the Group’s market positioning, its

operational capabilities including manufacturing, customer

service and product availability and wider market drivers

around the themes of premiumisation and decarbonisation.

The event was well attended and well received;

commenting on the November 2024 Capital Markets

Event, investors said:

• “Thought the Capital Markets Event content was

excellent. Resilient performance supports the view

that it is a very well-managed business.”

• “Great company. I really rate the management and

enjoyed seeing the full team.”

Stelrad Group plc Annual Report 202424

STRATEGIC REPORT

Stakeholder engagement continued

Communities and the environment

Their material priorities

• Business operations that respect the environment

and biodiversity.

• Benefiting from a positive impact upon the communities

in which we operate.

• Support for local and national causes.

• Benefiting from a successful and sustainable business

that respects people and planet.

How we engage

• We engage with the community through local activity at

branch level, volunteering, giving charitable donations and

providing employment and work experience opportunities.

• Our sustainability steering group and sustainability working

group identify and monitor initiatives to help reduce the

environmental impact of our business.

• We are dedicated to supporting customers with the design

of low-temperature heating systems.

Outcomes

• Support and development of local educational institutions.

• Longstanding sponsorship of local sport clubs, regular

charitable events and fundraising.

• Cleaner and friendlier areas for the local communities.

• A long-term strategy for improving our impact on

the environment.

• Successful product development as we transition to zero

carbon heating systems.

National Manufacturing Day

Stelrad Mexborough opened its doors as part of Make

UK’s National Manufacturing Day celebrations on

26September 2024.

Stelrad showcased potential careers and jobs on offer and

ran scheduled “through the keyhole” tours of its business,

welcoming pupils from Ridgewood School to have a

first-hand experience of local manufacturing. The aim is

to encourage all age groups from school leavers to more

experienced workers looking at reskilling, to consider

the possibilities of a career in manufacturing as well

as helping local communities understand more about

businesses on their doorstep.

David Taylor, Operations Director, said: “The day gives us

the opportunity to interact with students, teachers and

career advisers and show the exciting opportunities on

offer and get behind the scenes of success.”

» Read more about our environmental performance in our

Sustainability Report on page 29, in particular our spotlights on

decarbonisation, energy usage and supply chains

» Metrics and targets covering energy and carbon, water and waste

and materials are reported on page 41 of our Sustainability Report

Annual Report 2024 Stelrad Group plc 25

Paving the path for

sustainable progress

Sustainability Report

2024 marked a year of further

strengthening our commitment to

sustainability, with clearer alignment to

stakeholder needs. We have operated

our Fit for the Future sustainability

programme for over two years now,

enabling us to fully embed many of its

related policies and processes. With

increased focus, we are addressing our

key sustainability issues more effectively.

Conducting climate scenario modelling

to evaluate the resilience of our

strategy in alternative scenarios (see

page36) is a prime example of how

we are developing our approach to

sustainability, as we strive to identify

the potential impact on the Stelrad

Group of longer-term climate-related

opportunities and risks.

We are also proud to support the

United Nations Global Compact

initiative, whose principles align strongly

with our values and overall approach.

We are committed to aligning our

business with ten universally accepted

principles in the areas of human rights,

labour, environment and anti-corruption

and to acting in support of the

Sustainable Development Goals.

Highlightsof2024

• Joined the UN Global Compact

initiative, committing to align our

operations and strategies with ten

universally accepted principles.

• Launch of the Green Compact

range of low-carbon radiators

inthe UK (see page 29).

• Certified for sending zero

avoidable waste to landfill

in the UK.

• Published additional

Environmental Product

Declarations, covering sales

inScandinavia.

• Achieved a record low lost

time frequency rate of 4.75,

areduction of 45% from 2023

(see page 34).

Nextstepsfor2025

• Development of our net zero

climate transition plan in line

with best practice.

• Expand and strengthen internal

reporting processes, including

preparing for reporting in line

with upcoming regulation.

• Continue progress towards a

zero-harm workforce, building

upon the recommendations of

recent health and safety audits

(see page 34).

• Implementation of our

action plan for packaging

improvements, targeting

progress in our key packaging-

related metrics.

Our core purpose

Helping to heat

homes sustainably

Underpinning foundations

Conducting business

responsibly

Strategic pillar

Driving better

environmental

performance

Strategic pillar

Enabling an

exceptional

workforce

In-depth analysis of our approach to

packaging has identified significant

opportunities for progress and we

will continue to drive these initiatives

forwards over the coming years. Our

Green Compact radiator is a clear

statement of intent, being Stelrad’s first

range to contain zero plastic packaging.

Above everything else, the safety of our

people is our number one priority. We

continue to make meaningful progress,

with a 45% reduction in the lost time

incident rate in 2024. This significant

shift has been driven by improvements

at Radiators SpA and reflects the benefit

of instilling our strong safety culture and

applying Group safety processes.

As our approach to sustainability develops,

I’m confident that we will continue

to build on our well-established

foundations to make further progress

in fulfilling our core purpose: helping

to heat homes sustainably.

Trevor Harvey

Chief Executive Officer

7 March 2025

Stelrad Group plc Annual Report 202426

STRATEGIC REPORT

Sustainability metrics

The table below shows our key sustainability metrics and any

targets associated with these. Further metrics are shown on

page 40. During 2024, we have incrementally evolved these

metrics and additional targets are detailed below. In addition,

we are now focusing on and reporting the gender split in

managerial positions, instead of the overall gender split,

because we consider that we have a greater ability to impact

the outcome of this metric. The overall gender breakdown is

reported on page 33.

We have also recalculated some historical data as data

coverage and quality improved. The baseline carbon emissions

intensity has been adjusted from 0.18 to 0.17 due to a greater

scope of products being included in the weight of production.

This increase in scope also impacted our packaging

metrics and Scope 3 emissions. Finally, the methodology

for calculating our two safety metrics has beenaltered in

two subsidiaries to ensure greater consistency across the

Group. The changes relate to the recording of lost time and

hours worked.

In 2024, our absolute, operational carbon emissions increased,

driven by an increase in energy usage in Turkey, and by

changes in the residual emissions factor in Italy. The increase

was mitigated by an increase in the proportion of energy

coming from renewable sources, which reached 41.6% in

2024. Our absolute Scope 1 and 2 emissions are now 62%

below the baseline in 2021. Our Scope 3 emissions reduced,

driven by reductions in purchased goods and services.

Our packaging metrics remained in line with 2023 with

moresignificant changes planned for 2025.

The amount of training provided remains above our ongoing

target, despite a reduction from 2023. The full year voluntary

labour turnover result was also better than target, despite

a period of significant additional recruitment in Turkey. The

steady rise in turnover rate since 2022 is an area of focus for

the next few years. The percentage of managerial positions

increased from last year, and has improved significantly

since 2022. Details of how we are encouraging women in our

workforce can be found on page 33.

We achieved a significant reduction in the number of lost

time incidents, driven primarily by a 64% reduction in Italy,

and two sites achieving a full year without a lost time incident

(“LTI”). LTSR finished above 2023 due to some significant lost

time in Turkey. Finally, we saw improvement in the number

ofsuppliers with up-to-date audits.

Additional sustainability targets

This year our sustainability targets reflect the goal to reduce net

carbon emissions from our operations and our supply chain to

zero by 2050, in line with national goals. We have also added

targets to maintain performance above important thresholds

on the amount of training, voluntary employee turnover and

recycled content of packaging. Two of these are also reflected

in our executive remuneration (see page 87). Targets for the

remaining key metrics will be developed over 2025, when we

will also assess the possibility of strengthening existing targets.

Metric 2024 2023 2022 Target Progress towards target

Driving better environmental performance

Total market-based Scope 1 and 2 emissions

(tCO

e) 12,382 12,122 14,827

Net zero emissions

by 2050

62.2% reduction

from 2021

Market-based Scope 1 and 2 emissions

intensity (tCO

e/t) 0.10 0.10 0.11

45% reduction from

2021 by 2030

40.6% reduction

from 2021

Total Scope 3 emissions (tCO

e) 368,654 445,516 531,456

Net zero emissions

by 2050

30.5% reduction

from 2022

Energy from renewable sources (%) 41.6% 41.5% 39.5% 45% by 2030 41.6%

Plastic packaging intensity (kg/t) 12.0 12.0 11.0 — —

Recycled content of packaging material used (%) 66.5% 67.0 % 60.1% Above 65% in 2024 Above target

Enabling an exceptional workforce

Training days per employee 2.5 2.9 2.6 2 days

Above the target of

2 days

Voluntary labour turnover rate 7.8% 6.6% 6.3%

Lower than the

average for UK

manufacturers

Below the target

of 9.9%

(2)

% of managerial positions held by women 23.8% 22.2% 18.9% — —

Conducting business responsibly

Lost time frequency rate

(1)

4.75 8.61 8.99 Zero harm 45% reduction

Lost time severity rate

(1)

54.8 42.6 62.1 Zero harm 29% increase

% of key suppliers with up-to-date audits 70.1% 64.3% 19.7% 75% by 2030 70.1%

(1) Any incident resulting in an employee not being able to attend work the following day is regarded as a lost time incident.

(2) Source: XpertHR.

Definitions of these key metrics are available on page 144.

Annual Report 2024 Stelrad Group plc 27

Our Fit for the Future framework covers a variety of strategic issues as shown in the table below. These were determined

through an in-depth consultation process with a wide range of the Group’s key stakeholders. These were then aligned

withthe structure, capabilities and processes of the Group.

Description Objective Progress

Driving better environmental performance

Decarbonisation of heating

Reducing the amount of carbon produced by

domestic and commercial heating systems

Ensure we maintain a coherent offering suitable

for lower-carbon heating systems, regardless of

theheat source

On track

Energy and carbon

Managing business activities that consume energy

and emit greenhouse gases into the atmosphere,

contributing to climate change

Target improvements as part of a long-term journey

to net zero carbon emissions, within our operations

and our wider value chain

On track

Upstream lifecycle impacts

Managing the environmental impact of a product

in the extraction, processing and distribution of

raw materials

Understand and quantify our indirect impacts, and

engage elements of our value chain to minimise

these impacts

On track

Packaging

Managing the lifecycle environmental impacts

of the packaging used to protect products

during transportation

Develop an approach to packaging products that is

fit for the future, environmentally and commercially

Work to do

Enabling an exceptional workforce

Training and development

Developing the skills needed to maintain

andenhance our market position

Review and strengthen existing training

anddevelopment programmes

On track

Diversity and inclusion

Enhancing the presence of differences such as

gender or ethnicity within the workplace, and

ensuring that all people share a sense of belonging

Be representative of the communities in which we

operate and broaden the diversity of our population

Work to do

Employee engagement

Understanding the motivations of employees

andworking to foster an engaged workforce

Develop employee engagement programmes

withongoing two-way communication

On track

Employee wellbeing

Supporting employees’ mental, emotional

andphysical health

Provide and foster a safe and supportive working

environment that promotes personal wellbeing

On track

Conducting business responsibly

Health and safety

Protecting the health and safety of the workforce

during all business-related activities

Aim for continuous improvement in accident

frequency rates by nurturing a positive safety

culturethroughout the business

On track

Supply chain management

Identifying and managing issues within the supply

chain, and promoting the improvement of standards

Engage with suppliers to optimise sustainability

inour supply chain

Work to do

Corporate governance and ethics

Ensuring the system of rules and processes fosters

ethical business practices and supports the needs

ofall stakeholders

Maintain high ethical and corporate governance

standards and a culture of accountability

On track

Stelrad Group plc Annual Report 202428

STRATEGIC REPORT

Sustainability Report continued

Driving better

environmental performance

Our approach to driving better environmental performance

focuses on four areas, as shown on the previous page. Two

of these relate to climate change – our mitigation of it by

reducing our carbon emissions and our adaptation to the

decarbonisation of our markets. The others relate to the

impact of our sourcing, particularly of steel, and the impact

ofour packaging.

Spotlight on energy usage

An important approach to decarbonising operations is

to reduce the use of fossil fuels. The primary fossil fuel

used within our operations is natural gas and we are

regularly assessing our ability to convert these processes

to alternative fuels where current technology allows us to

achieve this.

Our vehicle use offers an opportunity to transition

immediately from fossil fuels. Our fuel usage reduced by

13% in 2024, with significant reductions in diesel and

LPG. We recently transitioned away from LPG entirely in

the Netherlands and have invested in seven electric lift

trucks in the UK to reduce our LPG usage there also. In

addition, we continue to progress towards our target for

all passenger vehicles to emit less than 50g CO

e per

km. At the end of 2024, 55% of cars in the Group meet

this standard.

Spotlight on decarbonisation

We supplied radiators for a residential refurbishment

project in the South Downs, UK. The owners wanted to

reduce their energy usage by installing an air source

heat pump and reducing the system temperature. This

project was unusual because the house was 300 years

old and owned by a retired couple who needed to be

able to heat their homes efficiently for the whole day.

Further challenges were encountered due to the wattle

and daub (wood- and clay-based) walls and the timber

structure of the house, but the system was designed and

commissioned successfully utilising a mix of double panel

and triple panel Stelrad radiators.

Climate change

Positioning effectively for decarbonisation is one of our four

key objectives, as shown on page 18. Changes in the heating

market are driven by legislation focused on decarbonising

heat sources which requires heat emitters compatible with

low-temperature systems. We have continued to expand and

develop our product range in recent years, including adding

to our offering of electric, dual fuel and hybrid ranges. In

addition, we introduced our first lower-carbon radiator range

in 2024, with the launch of the Green Compact in the UK.

The spotlight on decarbonisation demonstrates how

radiators can be used in low-carbon systems in even the most

challenging circumstances.

On top of our direct activities, we believe that co-operation

and communication within the construction industry will be

key enablers of decarbonisation. In support of this, Stelrad has

joined the Future Homes Hub – a not-for-profit organisation

set up to help transition the residential building industry in

the UK to net zero. Membership of this hub will enable us to

work in partnership on the identified core priorities.

Besides ensuring the suitability of our product range, we

have continued to enable our customers to make informed

decisions on the products that they use. Raising awareness

of the flexibility and suitability of radiators in a decarbonised

heating system is a key activity, and we have supported this

with the publication of Environmental Product Declarations

(“EPDs”) in certain priority markets. EPDs provide factual,

neutral and verified information on the environmental effect

of products and ensure that our customers have access to all

the relevant information.

41.6%

of energy from renewable energy sources

Annual Report 2024 Stelrad Group plc 29

Driving better environmental performance continued

Sustainability Report continued

Streamlined Energy and Carbon Reporting

In tandem with our focus on industry decarbonisation, we have a strong emphasis on our own carbon emissions. The table

below summarises the Group’s position during 2024. Our chosen intensity metric is tCO

e per tonne of product and our

baseline year is 2021.

Scope 1 and 2 intensity 2024 2023 Baseline

Baseline

variance

Market-based 0.10 0.10 0.17 (40.6)%

Location-based 0.18 0.18 0.17 6.1%

2024 2023

UK Non-UK Total UK Non-UK Total

YoY

variance

Consumption

(MWh)

Scope 1 5,468 38,585 44,053 6,539 36,506 43,045 2.3%

Scope 2 4,969 40,767 45,735 6,349 39,399 45,749 0.0%

Total 10,436 79,352 89,788 12,889 75,905 88,794 1.1%

Tonnes of carbon dioxide equivalent (tCO₂e)

2024 2023

UK Non-UK Total UK Non-UK Total

YoY

variance

Scope 1 1,025 7,188 8,213 1,235 6,838 8,073 1.7%

Scope 2 Market-based 3 4,166 4,169 3 4,046 4,049 3.0%

Location-based 1,029 12,608 13,637 1,315 12,613 13,928 (2.1)%

Total Scope 1

and 2

Market-based 1,028 11,353 12,382 1,238 10,885 12,122 2.1%

Location-based 2,054 19,795 21,850 2,549 19,452 22,001 (0.7)%

Scope 3 category 1 39,620 307,677 347,297 88,114 336,999 425,113 (18.3)%

Scope 3 category 4 1,722 6,301 8,023 1,103 7,625 8,728 (8.1)%

Other Scope 3

emissions

(1)

2,431 10,903 13,334 1,978 9,697 11,675 14.2%

Total gross Scope 3

emissions 43,773 324,881 368,654 91,195 354,321 445,516 (17. 3) %

Total Scope 1, 2

and 3 emissions

(1)

Market-based 44,802 336,234 381,036 92,433 365,205 457,638 (16.7)%

Location-based 45,827 344,676 390,504 93,744 373,772 467,517 (16.5)%

(1) Category 11 emissions are not included, as products use energy indirectly.

Our emissions have been calculated following the GHG Protocol’s

standard, with all seven Kyoto gases reported in tonnes of carbon

dioxide equivalent (“tCO

e”). Where available, country-specific

emissions factors have been utilised and residual emissions

factors have been used for non-renewable energy reported

under market-based calculations.

Our Environmental Policy identifies three goals related to

energy and carbon:

• Reduce energy usage. In 2024, we saw an increase in the

amount of energy used, with increases in our electricity

and natural gas consumption for production. However,

ouruse of other fuels reduced, due to initiatives such as

those highlighted in the spotlight on energy usage.

• Reduce our use of non-renewable energy sources. In 2024,

our renewable energy use continued its steady increase

– from 41.5% to 41.6% – remaining on track to reach our

target of 45% by 2030.

• Reduce carbon emissions throughout the supply chain.

2024 saw a 17% decrease in Scope 3 carbon emissions,

primarily due to a reduction in emissions associated

with purchased goods and services (category 1). Our

operational emissions remained very similar to 2023, as

increases in residual emissions factors offset efficiencies

achieved. Overall, our Scope 1 and 2 emissions increased

by 2.1%. More details can be found in our Carbon Balance

Sheet Report, published on our website at stelradplc.com/

sustainability/driving-better-environmental-performance/.

Stelrad Group plc Annual Report 202430

STRATEGIC REPORT

Packaging

Packaging is an essential part of our offering, as our products

are heavy and bulky and can be damaged if packaged

incorrectly. We continue to develop our understanding of

thepackaging that we use and have expanded the coverage

of our data in 2024.

This data helps us to identify the potential for improvements

to the packaging we use. Our primary aims are:

• to reduce our use of packaging;

• where packaging is essential, transition away from

single-use plastics to alternative materials; and

• to support the circular economy by increasing the

recycledcontent and improving recyclability.

These aims are supported by our key metrics of plastic

packaging intensity and the recycled content of packaging.

In 2024, our absolute use of packaging decreased, and we

made some progress in pursuit of our goals. The weight of

plastic reduced by 38 tonnes and our plastic packaging

intensity reduced by 0.1%. We expect this to reduce further

in2025 as we remove bubble wrap and polystyrene from

some products. We have also identified several opportunities

to increase the recycled content of our packaging.

Although there exist opportunities for improvement,

therearemany positive aspects of our packaging use.

Thecharts below show an improving trend in the proportion

of packaging provided by plastic, the recycled content

and the recyclability of our packaging. In 2024, we used

3,014tonnes of packaging material, down 1.0% from 2023.

Spotlight on supply chains

During 2024, Tata Steel, a key, long-term supplier of ours,

announced that it was planning to invest in state-of-the-art

electric arc furnace steel making in South Wales. This is a

key step in decarbonising the UK steel industry and could

result in a c.90% reduction in CO

emissions compared to

the current process. However, one associated change is the

closure of the continuous annealing processing line that is

key to supplying the type of steel that we use. We therefore

needed to find alternative supply.

Over recent years, we have maintained relationships with

alternative suppliers, meaning we were able to switch

relatively easily, including finding alternative supply for the

low-carbon steel used in our Green Compact range. Our

strong relationship with Tata Steel also ensured that we

were able to maintain supply during a transitional period

in 2024. We recently signed a contract to ensure that

we have security of supply into the future, and we look

forward to strengthening our relationships with our chosen

suppliers even further.

Upstream lifecycle impacts

Our emissions analysis on page 30 demonstrates the huge

impact that our sourcing has on our carbon emissions, with

purchased goods and services accounting for 91% of our

emissions. Addressing this will rely on our relationships with

suppliers and our approach to procurement.

Our Sustainable Procurement Policy assists us in achieving

the best combination of whole-life costs and benefits by

considering appropriate environmental, social and economic

factors in all purchasing decisions. The policy outlines our

objectives in the areas of human rights, labour standards, the

environment, materials, and resources, including proactively

tackling labour exploitation, protecting nature, reducing the

energy use in our supply chain, seeking reductions in materials

consumption, and reducing the use of single-use plastic.

The most important element of our sourcing activities

relates to steel, as steel makes up c.96% of the weight of our

products. We faced some challenges on this during 2024 as

we were forced to move away from a major supplier of steel.

This is explored in the spotlight on supply chains.

2022 2023 2024

100

Carton/paper Plastic Overall

Recycled content

32.0%

66.5%

97.8%

Carton/paper Plastic

Packaging weight

47.6%

48.4%

46.2%

2023

2022

2024

52.4%

51.6%

53.8%

3,014t

3,045t

3,315t

Recyclable Not recyclable

Recyclability

2023

2022

2024

93.6%

93.9%

93.2%

6.4%

6.1%

6.8%

Annual Report 2024 Stelrad Group plc 31

Enabling an exceptional workforce

Our people are fundamental to the success of our business,

and we are passionate about providing a workplace

environment where everybody can thrive and contribute

to our future growth. We support all areas of our workforce,

with particular focus in the areas of employee engagement,

training and development, wellbeing, and equality, diversity

and inclusion.

Our people

Our geographical footprint is shown on page 3. Across the

Group, we have a total of 1,436 employees, with 1,240 of

those outside the UK. The table below shows the make-up

ofour workforce by contract type, showing that the majority

of our workers are permanent, full-time staff.

Headcount at 31 December 2024 2023

Number of employees 1,436 1,414

Number of permanent employees 1,426 1,413

Number of temporary/

zero hours employees 10 1

Number of non-employee workers 55 50

Number of full-time employees 1,405 1,379

Number of part-time employees 31 35

Our geographic span gives us a diversity of cultural norms

as well as a breadth of differing statutory requirements.

Our culture, with its emphasis on respect, integrity, service,

stewardship and excellence, bridges these different cultures.

Our strategy of local-led implementation ensures we are

delivering for our employees in each country and our flat

management structure assists us in maintaining close

working relationships across the Group.

Training and development

We have a highly skilled and experienced workforce with a

deep understanding of our industry. We offer a wide range

of training and development opportunities and target the

provision of at least two days of training per employee each

year. The number of training days provided in 2024 was

lowerthan in 2023, but remained 26% above this target.

As a manufacturing-led business, the majority of our

workforce are operatives, and we provide opportunities

for people to develop their skills with extensive on the job

training. Each site maintains a competency matrix which

identifies the range of skills required for each task within

the manufacturing process and individuals are developed

across this matrix through a detailed programme of training

and assessment. This is complemented by external market

insight, technical skills and knowledge development received

through partnerships with various suppliers and subject

matter experts. This is all supported by extensive sharing

of best practice across the Group. Underpinning this is our

commitment to supporting all employees with a continuous

health and safety training programme, with 12% of training

provided being related to health and safety.

Sustainability Report continued

Spotlight on alternative employment routes

Across the Group, we are constantly looking to evolve our

approach to attracting new talent. In the UK, we work

with The Work-wise Foundation on its sector routeways

programme for engineering and manufacturing. This

supports job seekers from a mixture of age groups who

want to change the direction of their career – wanting

either an apprenticeship or a job within manufacturing

and warehousing. The programme provides information

on local opportunities, and interested attendees can then

access a short-term work placement.

Similarly, Radiators SpA has engaged and enthused the

local community by partnering with other local businesses

and employment agencies to present the business and the

opportunities that exist, and to screen a selection of people

interested in technical roles.

Leadership is developed at several levels in the organisation.

For example, Continental Radiators followed up on the

leadership class of 2023 with a second course, further

developing seven team leaders with an advanced class,

and expanding the training to 28 new participants.

We also foster multiple relationships with local education

facilities to encourage enthusiasm and engagement in

technical and manufacturing skills among current students.

There are many examples of these partnerships, including:

• hosting work experience and shadowing events at

our sites;

• informing local teachers in the Netherlands about

operations and mechanical professions, enabling better

information for students considering further education;

• providing scholarships to local students; and

• participating in schemes such as Procestechniek &

Maintenance Limburg (“PML”) that promote enrolment

intechnical training courses.

Stelrad Group plc Annual Report 202432

STRATEGIC REPORT

Equality, diversity and inclusion

As an international group, we recognise and enjoy thebenefits

ofworking with a diverse group of colleagues. We are committed

to providing an environment where everyone feels valued

and respected, and this commitment is encapsulated by our

Group Equality, Diversity and Inclusion Policy. This policy sets

out our aim to:

• prevent discrimination;

• eliminate prejudice;

• promote inclusion;

• celebrate diversity; and

• ensure that equality, diversity and inclusion are embedded

in everything that we do.

We report on the composition of the Board and Executive

Management in relation to gender and ethnicity on page 72.

In addition, we voluntarily report on gender pay statistics in

the UK, with a report available on our website.

We are consistent with the wider manufacturing sector in

that the majority of our workforce is male. We recognise that

further increasing the number of women in our business and

in leadership roles is important to our future success, and we

continue to do all we can to promote female representation

in all roles. We have chosen to focus on the proportion of

women in management roles as one of our key sustainability

metrics as a key driver for wider representation.

All employees

SG&A

Management

Men Women Not specified/Prefer not to say

Board

9.5%

25.0%

23.8%

33.2%

90.5%

66.8%

76.2%

Employee engagement

Our approach to employee engagement is decentralised and

tailored to local workforces. We listen to and communicate

with our employees through multiple approaches,

including feedback schemes, team meetings, magazines

and employee dinners. The focus across our locations is on

establishing ongoing two-way dialogue with all employees.

This is reinforced through formal employee representation

partnerships, and we have well-established, positive

relationships with trade union partners across our sites.

Amore detailed review of employee engagement at Board

level is shown on page 94.

We conducted a follow-up engagement survey in the UK.

AllUK employees were invited to participate on a voluntary

basis, and we were delighted to achieve a response rate of

87%, with a 76% positive rating for the questions overall.

Wellbeing

We continued to develop our health and wellbeing support

with a focus on physical and mental wellbeing. Our approach

is underpinned by detailed policies and resources that

support employees’ wellbeing, including:

• workplace physicians and nurses;

• external specialist services;

• preventative medical examinations; and

• an Employee Assistance Programme.

A significant change this year to promote increased

employeewellbeing is the extension of flexible working

toallemployees in Italy. This has been implemented to

promote better work-life balance and involved putting in

place a variety of different working patterns.

76%

positive rating in UK Employee Engagement Survey

62.5%

Spotlight on inclusion

We actively contribute to initiatives that promote a safe,

inclusive, and forward-thinking work environment.

Through our affiliation with the Metalektro collective labour

agreement (“CAO”) in the Netherlands, we participated

in a pilot project focused on enhancing social safety and

exploring the role of women in technical roles. This study

delivered valuable conclusions and recommendations and,

by engaging in this pilot, we have reinforced our dedication

to creating a workplace that values diversity, fosters safety

and supports continuous development for all employees.

12.5%

Annual Report 2024 Stelrad Group plc 33

Conducting business responsibly

Conducting business responsibly is a key foundation in

everything we do and underpins our business activities.

Our approach is guided by a strong culture and a clear set

of values overseen by the Board. Our strengths in corporate

governance, safety, supply chain management and ethics

enable our progress in other elements of sustainability and

corporate strategy.

Health and safety

Our number one priority is to keep our employees and

contractors safe and healthy, and we aim for zero harm across

all our operations. During 2024, we had clear opportunities

for improvement in Radiators SpA, where the number of

safety incidents in 2023 was notably greater than at other

sites. We can report significant progress on this aspect, with

lost time incidents (“LTIs”) falling from 14 in 2023 to five

in 2024. This, along with sites in the UK, the Netherlands

and Belgium all recording zero LTIs in 2024, contributed

to a 44.9% reduction in the Group lost time frequency rate

(“LTFR”). The number of recordable incidents also fell (by

10.5%), but our lost time severity rate increased by 28.6%

dueto some long-term absentees in Turkey.

Whilst these results show positive progress on safety, we

are constantly looking to improve towards our aim of zero

harm. In 2024, we engaged an industry expert to conduct an

independent safety audit at each of our manufacturing sites.

The objective was to identify opportunities to raise standards

further, and the scope included the organisation of safety,

risk assessment and analysis, fire detection and protection,

and site security among other aspects. A detailed report

has been provided to each site, along with a comprehensive

set of recommendations. The implementation of these

recommendations will be a chief focus for 2025 and will be

supported by additional training provision where required.

Corporate governance and ethics

We maintain high standards, ensuring we respect

fundamental principles of human rights, and comply with

all applicable laws and regulations. This approach is enacted

locally but supported by a range of Group policies.

During 2024, we implemented greater structure into the

training of these Group policies, ensuring that all senior

managers are aware of their contents. We require an annual

review of all eight Group policies by our management

population. This mandatory requirement is managed

through an online training platform, ensuring visibility of

compliance. We plan to adopt a similar approach to the

provision of anti-corruption training in support of our policy,

with senior and at-risk employees identified and addressed.

We also continue our use of the EcoVadis platform, with

Hudevad joining our manufacturing sites in being assessed

in 2024. All our sites were awarded at least a bronze

medal, and Continental Radiators received a gold medal

– putting it among the top 5% of companies assessed by

EcoVadis in 2024.

Supply chain management

Our approach to supply chain management through regular

audits of key suppliers is now well established across the

Group. Audits cover a range of areas including health and

safety, human rights, the environment and product quality.

At the end of the year, we had completed audits on 70%

of our key suppliers and we have a target of reaching and

maintaining this above 75% of our key supplier base by 2030.

Lost time severity rate

2024

2023

2022

Lost time frequency rate

2024

2023

2022

Fatality rate

2024

2023

2022

Total recordable incident rate

2024

2023

2022

Definitions of these metrics are available on page 144.

4.75

54.77

5.0

8.99

62.07

5.7

8.61

42.60

5.7

Sustainability Report continued

Spotlight on safety engagement

A key requirement in support of continuous improvement in

safety is to ensure that all relevant employees are engaged.

This was addressed by Continental Radiators through the

hosting of a safety day in March 2024, which addressed all

Netherlands-based employees in production, warehouse

and office-based roles. The day involved training on last

minute risk analysis, and also provided an opportunity for

employees to broadly discuss safety, raise any thoughts, and

identify any opportunities for improvement.

The result of the day was an increase in interest, knowledge

and enthusiasm for safety, boosting the safety culture of the

Group. The day was a success and will be repeated annually.

This is also supported by the installation of on-site banners

stating that “safety is enhanced when you work together”.

Stelrad Group plc Annual Report 202434

STRATEGIC REPORT

Task Force on Climate-related Financial Disclosures

TCFD Report

In this report we make disclosures against the

recommendations of the Task Force on Climate-related

Financial Disclosures (“TCFD”), including the 2021 TCFD

Annex guidance. These disclosures show progress towards

the TCFD recommendations and the requirements of the

IFRS Sustainability Disclosure Standards. The main progress

has been achieved with the completion of climate scenario

analysis to assess strategy resilience. We have also expanded

our climate-related targets, and aim for net zero Scope 1,

2 and 3 carbon emissions by 2050. This progress means

wearenow fully compliant with the UK government’s

Climate-related Financial Disclosures (“CFD”) regulations,

asstated on page 56, and are consistent with each of the

eleven TCFD recommended disclosures.

Our future focus is on mitigation of our climate-related

risks and maximising our opportunities. We will continue

to strengthen our alignment with the IFRS standards in

preparation for full compliance with future UK Sustainability

Reporting Standards.

Governance

The management of climate-related risks and opportunities

follows the same structures as the governance of broader

sustainability issues. The diagram shows the main parties

involved in the governance of sustainability and their main

roles and responsibilities.

Central to this governance structure is the sustainability steering

group. This group comprises cross-functional leadership and

operates according to defined terms of reference, which identify

its responsibilities. These responsibilities include conducting a

periodic review of strategy and prioritisation and communicating,

co-ordinating and managing resources across the Group.

These activities are led by our Group Sustainability Manager.

The terms of reference for the steering group specify its

role in managing climate-related risks and opportunities.

A climate-related risk and opportunity register is maintained

by the Group Sustainability Manager, and emerging climate-

related risks are monitored by both the working group

and the steering group. These risks and opportunities are

then assigned to a member of the steering group who is

responsible for managing the response and updating the

business on any changes relevant to the topic. The register

is subject to wide review every six months, firstly by both the

working group and the steering group, and then by the Audit

& Risk Committee, alongside business unit registers. The Audit

& Risk Committee is responsible for ensuring that the key risks

and opportunities identified in the climate-related register

are properly reflected in the Group risk register and that they

provide appropriate context for Board decision making.

The steering group’s terms of reference also outline the

group’s role in setting climate-related targets and ensuring

sufficient reporting to monitor progress against these

targets. All targets are discussed and agreed by the steering

group before being communicated to the Group Board.

Communication on progress is then completed monthly and

shared with those involved in our sustainability efforts.

Other key activities for the steering group in 2024 include the

quantification of financial impacts, climate scenario modelling

and preparation for reporting in line with upcoming regulation.

Strategy

We have a clear business strategy (outlined on page 16)

which is supported by our core purpose: helping to heat

homes sustainably. Ensuring that we position ourselves

effectively for the potential impacts of decarbonisation of

the heating industry forms a key part of our strategy and is

strongly linked to climate-related risks and opportunities,

including the risk related to alternative technologies and

the opportunity for differentiation of our offering which are

outlined on the following pages.

We believe that our strategy appropriately addresses the risks

and opportunities arising from climate change, including our

Fit for the Future sustainability framework, which is outlined on

page 28. This year, we have strengthened our understanding

of the impact of climate-related risks and opportunities on our

strategy through the completion of scenario modelling. We

have also assessed our climate-related risks and opportunities

and have quantified the estimated financial impact, outlining

potential changes in operating profit. This impact is shown

on pages 38 and 39. Finally, development work continues

on a comprehensive climate transition plan in line with the

recommendations of the Transition Plan Taskforce. This plan

will set out the detailed actions needed to mitigate our climate

impact and to adapt to a low-carbon economy.

Sustainability steering group

Monitors progress on the execution of our sustainability

strategy. Periodically updates the Board and the Chief

Executive Officer on progress. Responsible for the initial

assessment of emerging climate-related risks and for

theco-ordination of identified mitigation actions.

Sustainability

working group

Comprises

representatives from

each of the business

units. Responsible for the

day-to-day delivery of our

sustainability strategy and

co-ordination of actions

within each business unit.

Operational

teams

Responsible for site-level

delivery of agreed initiatives

and involvement in discrete

projects as appropriate.

Interaction is co-ordinated

byeither the working group

or the steering group.

Chief Executive Officer

Has overall accountability for our corporate strategy,

including ensuring that this appropriately takes

accountofsustainability matters and climate-related

risksand opportunities.

Audit & Risk Committee

Guides the Board in matters related to risk, including

climate-related risk.

Responsible for overseeing the implementation of the

overall risk management framework and for reviewing

theGroup’s risk assessment capabilities and processes.

Board

Responsible for ensuring that appropriate systems and

processes are in place to monitor and manage progress

against our strategy and the identified climate-related

risksand opportunities.

Ensures that sustainability is an essential consideration of all

key decisions, alongside the section 172 requirements.

Annual Report 2024 Stelrad Group plc 35

TCFD Report continued

Climate resilience

We have identified five principal climate-related risks and one

climate-related opportunity that are material to our business

because of their potential financial and strategic impact. These

risks and opportunities are shown below and on pages 38

and 39. In 2024 we conducted a scenario analysis to better

understand the resilience of our strategy and business model

to these risks and opportunities. In doing so, we focused on

specific elements of the overriding principal risks, such as

considering the impact of specific regulations on the new build

housing market in the UK.

In conducting this modelling, we applied widely used

reference scenarios, specifically a transition scenario based

on RCP1.9 and a BAU scenario using RCP8.5. The transition

pathway limits global warming to a 1.5°C increase, which

is the aspirational goal of the Paris Agreement. The BAU

pathway assumes that emissions continue to rise throughout

the 21

century and represents a worst-case scenario where

physical climate change-related events will be more severe

and frequent, which results in an increased likelihood of

impact on our business. Physical impacts also exist under the

transition pathway, but these will be lower. Instead, the main

aspect of this pathway is the increase in transition risks and

opportunities, driven by earlier and more aggressive policy

action, regulation and market scrutiny.

In applying these scenarios, we used two timescales –

evaluating transition risks and opportunities in 2035, and

physical risks in 2050. These time horizons were chosen to give

the best balance between allowing for sufficient differentiation

between the scenarios and not allowing uncertainties to

overwhelm useful analysis. The conclusion from this scenario

analysis is that the current strategy and business model is

resilient across a range of climate scenarios.

Transitionscenario(1.5°C) BAU(4°C)

Increasing expectations of stakeholders (T)

There is an increased focus on sustainability, including

purchase decisions directly related to sustainability

performance. Acting unsustainably comes with

increased costs.

Stakeholder expectations do not increase significantly,

and customers deprioritise sustainability considerations.

Increased climate-related legislation increases costs (T)

Frequent legislation introductions affect our

markets, supply chains and production. Costs for key

materials and energy increase and increased product

development is necessary to maintain revenue.

Announced legislation (such as CBAM) is introduced

as planned but further legislation is not implemented.

The impact of carbon pricing reduces.

Increasingly stringent regulatory requirements (T)

Reporting requirements and product standards

consistently evolve and get more onerous.

Reporting requirements increase as already announced

but no further expansion is seen.

An increase in the use of alternative technology (T)

Radiators will maintain a strong position but may face

increasing competition from technologies specifically

targeted at low-carbon heating systems.

Radiators will maintain the strong position they hold

in our key markets, with no significant changes in

market considerations.

Opportunity for differentiation of our product and service offering (O)

Increased uptake of lower-carbon heating systems

alters the demand for heating products, favouring

more differentiated products such as those with

increased heat output.

Market demand stays similar to the present, with no

largegrowth in alternative products.

Increased severity and frequency of extreme weather events (P)

The frequency and severity of impacts increase, but

only to a mild degree, and stay within our capability

toadjust using the Group’s flexibility.

Direct impacts on our production are limited but

increased disruptions to supply chains lead to

increased impacts.

Key

The circles show the extent of the financial impact under each scenario.

Highest risk/

lowest opportunity

Lowest risk/

greatest opportunity

T Transition risk

O Opportunity

P Physical risk

Stelrad Group plc Annual Report 202436

STRATEGIC REPORT

Task Force on Climate-related Financial Disclosures continued

Risk management

Our wider risk management processes are explained in detail

on pages 48 to 54. Climate change is included as a principal

risk for the Group. Climate-related risks and our planned

responses are reviewed and updated twice a year, along

with all principal risks, using the climate-related risk and

opportunity register. This ensures that significant emerging

orevolving climate risks are reviewed and assessed by the

Audit & Risk Committee on an ongoing basis.

The climate register captures the transitional risks associated

with adapting to a lower-carbon economy, the physical

risks associated with climatic temperature increases and

any opportunities that may arise and from which we may

gain commercial advantage. Climate-related risks and

opportunities are managed and mitigated by our operational

management team, with a member of senior management

being assigned as the risk owner and being responsible for

implementing the chosen response.

Our climate-related risks and opportunities are assessed in

terms of the likelihood of the risk arising over three different

time periods. Short term covers the next financial year (2025),

medium term covers up to five years (to 2030) and long

term considers the impacts beyond this. These time periods

are consistent with the recommendations outlined in the

European Sustainability Reporting Standards (“ESRS”). The

likelihood of occurrence is expressed in levels from one to

three, with level one meaning that the risk or opportunity is

unlikely to occur in the period and level three suggesting that

the risk is more likely than not to happen.

The likelihood is assessed in conjunction with the potential

impact if a risk does occur. This impact is defined based on

the likely financial or reputational damage or gain that could

result, with the highest impact relating to events that could

halt our ability to service our customers for a period.

Metrics and targets

The key metrics we use to monitor our strategically material

sustainability issues are shown on page 27, and further

metrics are included on page 40. These metrics address our

material issues and relate to identified risks enabling us to

identify potential areas of targeted action.

Our key metrics include Scope 1, 2 and 3 emissions for the

full Group, measured in accordance with the Greenhouse Gas

Protocol. This is shown on page 30 and is also available on our

website. Category 11 emissions are excluded from the Scope 3

data due to energy use being indirect, and our inability to

materially impact these emissions through our actions. We have

specific targets related to these carbon emissions, also shown

on page 27. We aim to reduce our Scope 1 and 2 emissions

intensity by 45% from 2021 levels by 2030 across our whole

Group and to reduce our absolute carbon emissions to net

zero by 2050, including limited use of carbon offsetting.

These targets are in line with the reductions needed to fulfil

the Paris Agreement and we will assess the potential value

in having these targets verified over the coming years. These

metrics and targets address the first three transition risks shown

on page 38 as they track our progress on reducing carbon

emissions, in line with stakeholder expectations and legislation.

In addition to our carbon targets, we have a target to source

45% of our energy from renewable sources by 2030 and to

promote the circular economy and reduce waste by targeting

at least 65% of our packaging material to be from recycled

sources. The target related to recycled content of packaging

is also included in the executive remuneration scheme as

shown on page 87, with 5% of potential annual bonus linked

to climate considerations.

Our priority over the coming years is to extend our reporting of

climate-related metrics to cover all material cross-industry and

industry-specific metrics recommended in the TCFD Annex.

Climate-related risk integration into ERM framework

Group

risk

Responsibility: Board, Audit & Risk Committee

• Climate change identified as a principal risk

• Climate change evaluated in context with other risks

andthe Group risk appetite

• Control processes related to climate risk reviewed in

linewith the wider risk management process

Business risk

Responsibility: steering group

• Climate-related risk and opportunity register developed

and managed by the Group Sustainability Manager

• The status of key climate-related risks is regularly

communicated to the Board and the Audit &

Risk Committee

Operational risk

Responsibility: steering group, working group

• Climate-related risks are identified at the operational level

and assessed for their potential impact and likelihood

• Response actions are identified and implemented at local

level, co-ordinated by the sustainability steering group

Annual Report 2024 Stelrad Group plc 37

TCFD Report continued

Climate-related risks and opportunities

Increasing expectations of stakeholders related to sustainability

Category

Transition risk

Timeframe

Medium Long

Financial impact

Medium

Description Impact Our response

There is a growing awareness and focus

from stakeholders, including customers,

investors and regulators, of a company’s

sustainability performance, especially

around climate and achieving carbon

reductions. There is a risk that these

increasing expectations are not met.

• A poor sustainability reputation may

lead to customers switching their

business to competitors.

• Stelrad’s access to capital may worsen,

making it more difficult or costly

to invest.

• Regulators may increase regulation or

take action against the Company.

An appropriate governance structure

exists to ensure that sustainability

matters are prioritised according

to materiality and that we meet

stakeholders’ climate expectations.

This includes engaging with major

stakeholders, ensuring that perceptions

are accurate.

Increased levels of climate-related legislation leading to increased costs

Category

Transition risk

Timeframe

Short Medium Long

Financial impact

High

Description

Impact Our response

Many nations and regions are introducing

legislation to encourage companies to

reduce their climate impacts, including

introducing carbon pricing through

emissions trading schemes or border

adjustment mechanisms.

This legislation may increase the costs

ofmaterials by adding costs to suppliers

or through funding the investment in

lower-carbon alternatives.

• Procurement costs for raw materials

may increase.

• The relative competitiveness

ofproducts may change due

toprice restructuring.

• Increased prices may reduce demand.

We actively monitor and assess all

legislation, developing appropriate

responses. Our existing governance

structure allows us to identify any

issues that may arise and ensure that

the appropriate skills and resources

are deployed.

Increasingly stringent and new regulatory requirements

Category

Transition risk

Timeframe

Short Medium Long

Financial impact

Medium

Description Impact Our response

Regulators are increasing the level

of sustainability-related regulation,

including regulation on reporting

sustainability performance as well as

product standards.

Entry into new markets or products may

also expose Stelrad to new requirements.

• The cost of compliance may increase,

for example due to investing in

processes or people.

• Non-compliance may also

bring financial penalties or a

loss of reputation.

Governance processes exist to identify

and assess regulatory requirements,

which are analysed and understood.

Remaining compliant is an ongoing

priority and this is done efficiently

and effectively.

Stelrad Group plc Annual Report 202438

STRATEGIC REPORT

Task Force on Climate-related Financial Disclosures continued

An increase in the use of alternative technology

Category

Transition risk

Timeframe

Medium Long

Financial impact

High

Description Impact Our response

The drive to reduce carbon in heating

may lead to new heat emitting

technology entering the market, or

anincrease in market share of existing

competing technology.

This could be driven by consumer

behaviour and could be intensified

bypolicy or legislation.

This also gives rise to an opportunity

fordifferentiation (see below).

• Any increase in the presence of

competing technologies may reduce

the relative share of radiators and

mayimpact on Stelrad’s market

shareand profitability.

We continue to monitor legislative

changes and assess these for their likely

impact on product choices.

We maintain strong relationships with

customers and specifiers to ensure

the positive attributes of radiators are

understood and incorporated.

Where appropriate, alternative

technologies will continue to be brought

to market as part of our offering.

Differentiation of Stelrad’s product and service offering

Category

Opportunity

Timeframe

Medium Long

Financial impact

Medium

Description Impact Our response

The drive to reduce carbon in heating

may also lead to changes that could

benefit us, including an increasing

demand for higher output products.

There is also the opportunity to bring

new technology to market as part of

our offering.

The buying decision on heating

products is likely to encompass broader

considerations, leading to greater

opportunity for differentiation.

• Opportunities for development of

ourproduct and service offering.

• Diversified or increased revenue

streams through growing market

share and from new products.

Realising this opportunity requires that

we have an offering that meets the

changing demands of customers. To

this end, we will continue to focus on

increasing our technical capability, as

wellas adapting and optimising our

product offering, such as the launch

ofthe low-carbon Green Compact.

Increased severity and frequency of extreme weather events

Category

Physical risk

Timeframe

Medium Long

Financial impact

Medium

Description Impact Our response

The severity and frequency of extreme

events with the capability to cause

damage are increasing. These events

include intense rainfall, flooding,

heatwaves and droughts.

• Damage or disruption to our

production facilities may reduce our

ability to fulfil customer demand.

• Disruption to global supply chains

may reduce our ability to move

product and materials.

• Extreme heat may necessitate

changes to working practices to

maintain worker welfare, which may

impact on productivity or cost.

• Prolonged periods of heat may create

drought conditions, reducing access

to water in our operations.

All facilities have reactionary processes

inplace to adapt to acute events.

Proactive defences (such as fire

prevention or flood defences) are

regularly assessed for adequacy.

Production volume can be flexed across

the Group if specific facilities have issues.

Many inputs are sourced from multiple

suppliers across different regions,

reducing the risk if specific supply routes

are disrupted.

Annual Report 2024 Stelrad Group plc 39

Sustainability metrics table

The below table shows our wider set of sustainability metrics, referring to Sustainability Accounting Standards Board (“SASB”)

metrics where relevant. Some historical data has been recalculated due to changes in scope or methodology. These changes

are described on page 27.

Unit of measure SASB reference 2024 2023 2022

Driving better

environmental

performance

Energy and carbon

Total energy consumed GJ CG-BF-130a.1 323,238 319,657 376,349

Grid energy % CG-BF-130a.1 58.4% 58.5% 60.5%

Renewable energy % CG -BF-130a.1 41.6% 41.5% 39.5%

Energy consumed from

renewable sources MWh n/a 37,388 36,889 41,273

Fuel consumed from

renewable sources MWh n/a — — —

Purchased electricity

from renewable sources MWh n/a 35,630 34,942 39,084

Self-generated

renewable energy MWh n/a 1,758 1,947 2,189

Global Scope 1 emissions kgCO

e EM- IS-110a .1 8,212,882 8,072,896 9,660,097

Global market-based

Scope 2 emissions kgCO

e n/a 4,168,925 4,049,320 5,166,732

Global location-based

Scope 2 emissions kgCO

e n/a 13,636,631 13,928,224 17,041, 370

Global Scope 3 emissions kgCO

e n/a 368,654 445,516 531,456

Market-based Scope 1 and 2

emissions intensity per tonne kgCO

e/tonne n/a 103 99 106

Market-based Scope 1 and 2

emissions intensity per

net revenue

kgCO

e/£m n/a 42,611 39,333

42,041

Energy consumption and operational carbon emissions increased, driven by increased production in Turkey.

The proportion of energy from renewable sources also increased, despite reductions in the amount of

energy generated.

Water and waste

Total water withdrawn m

EM-IS-140a.1 83,484 101,298 109,044

Water usage in areas of

water stress % EM-IS-140a.1 37.9% 37. 2% 36.8%

Water intensity per tonne l/tonne n/a 696 823 781

Water intensity per net revenue l/£m n/a 287 329 309

Total waste generated tonnes EM-IS-150a.1 7,515 7,547 8,687

Waste intensity kg/tonne n/a 62.6 61.3 62.2

Waste sent to landfill % n/a 2.1% 2.3% 1.2%

Water usage and intensity reduced significantly, reflecting changes in production mix.

The amount of waste produced also reduced, reflecting reduced production. The proportion of waste

sent to landfill remains very small.

Materials

Low-gauge steel purchased % n/a 9.9% 17.8 % 16.3%

Packaging material used tonnes n/a 3,014 3,045 3,315

Plastic packaging material % n/a 47.6% 48.4% 46.2%

Plastic packaging intensity kg/tonne n/a 12.0 12.0 11.0

Recycled content of packaging

material used % n/a 66.5% 67.0 % 60.1%

Our purchases of low-gauge steel reduced, reflecting changes in our supplier mix. Our use of packaging

also decreased, with our use of plastic reducing more than other materials.

Stelrad Group plc Annual Report 202440

STRATEGIC REPORT

Sustainability metrics

Unit of measure SASB reference 2024 2023 2022

Enabling an

exceptional

workforce

Training and development

Training days per person days n/a 2.5 2.9 2.6

Training provision reduced from 2023 but remains 26% higher than our target of two days per employee.

Labour practices

Voluntary employee turnover headcount n/a 108 92 98

Employee turnover rate % n/a 7.8% 6.6% 6.3%

Absence rates % n/a 5.3% 5.3% 7.4%

Voluntary turnover increased from 2023 but remained below our target of 9.9%. Turnover in Turkey was

above target, reflecting extensive recruitment in that unit. Turnover from all other sites was significantly

better than target.

Workforce characteristics

Total employees at period end headcount n/a 1,436 1,414 1,454

Permanent employees at

period end headcount n/a 1,426 1,413 1,440

Temporary employees at

period end headcount n/a 10 1 14

Full time employees at

period end headcount n/a 1,405 1,379 1,416

Part time employees at

period end headcount n/a 31 35 38

All employees – female % n/a 9.5% 10.5% 11.1%

All employees – male % n/a 90.5% 89.5% 88.9%

Management – female % n/a 23.8% 22.2% 18.9%

Management – male % n/a 76.2% 77.8 % 81.1%

Conducting

business

responsibly

Health and safety

Workers covered by ISO 45001

certified management systems % n/a 77.2% 73.5% 74.6%

Lost time frequency rate rate n/a 4.75 8.61 8.99

Lost time severity rate rate n/a 54.8 42.6 62.1

Total days lost days n/a 750 569 898

Total recordable incidents number n/a 68 76 82

Total recordable incident rate rate EM-IS-320a.1 5.0 5.7 5.7

Total fatalities number n/a — — —

Fatality rate rate EM-IS-320a.1 — — —

Significant reductions in lost time and recordable incidents were achieved in 2024.

Business and supply chain ethics

Total amount of monetary

losses as a result of legal

proceedings associated

with bribery or corruption £m RT-EE-510a.2 — — —

Total amount of monetary losses

as a result of legal proceedings

associated with anti-competitive

behaviour regulations £m RT-EE-510a.3 — — —

% of key suppliers with

up-to-date audits % n/a 70.1% 64.3% 19.7%

Annual Report 2024 Stelrad Group plc 41

Group overview

The following table summarises the Group’s results for the years ended 31 December 2024 and 31 December 2023.

2024

£m

2023

£m

Movement

£m

Movement

Revenue 290.6 308.2 (17.6) (5.7)

EBITDA

(1)

43.5 41.2 2.3 5.6

Adjusted operating profit

(1)

31.5 29.3 2.2 7.6

Exceptional items — (2.5) 2.5 100.0

Amortisation of customer relationships (0.1) (0.1) — 2.8

Operating profit 31.4 26.7 4.7 17.6

Net finance costs (8.0) (7.5) (0.5) (6.7)

Profit before tax 23.4 19.2 4.2 21.9

Income tax expense (6.9) (3.8) (3.1) (82.7)

Profit for the year 16.5 15.4 1.1 7.1

Earnings per share – basic (p) 12.97 12.11 0.86 7.1

Adjusted profit for the year

(1)

16.6 17.3 (0.7) (4.2)

Adjusted earnings per share – basic (p)

(1)

13.05 13.62 (0.57) (4.2)

Total dividend per share (p) 7.79 7.6 4 0.15 2.0

Returnoncapitalemployed(%)

(1)

27.1 25.5 n/a 1.6 ppts

Net debt before lease liabilities

(1)

59.7 60.4 (0.7) (1.2)

(1) The Group uses some alternative performance measures to track and assess the underlying performance of the business. Alternative performance

measures are defined in the glossary of terms on page 144 and reconciled to the appropriate financial statements line item in note 31. Note 31 also

outlines the limitations of using alternative performance measures.

Operational excellence

and strong fixed cost control

Finance and business review

The Group has used its

significant experience

to deliver operational

excellence and strong

fixed cost control.

Leigh Wilcox

Chief Financial Officer

Stelrad Group plc Annual Report 202442

STRATEGIC REPORT

Financial overview

A strong operating performance driven by ongoing

operational excellence and proactive margin management

allowed the Group to more than offset the impact of a

continued reduction in market demand during 2024. In

a trend consistent with 2023, renovation activity across

the majority of European countries remained weak

throughout the year, driven by a challenging macroeconomic

environment related to high interest rates and inflation.

Revenue for the year was £290.6 million, a decrease of

£17.6 million, or 5.7%, on last year (2023: £308.2 million).

The decline in revenue was due to a 5.8% decrease in

sales volumes during the year and the impact of the Euro

devaluing against GBP, partially offset by selling price

benefits. Selling prices have benefited from further increases

in average radiator size and the impact of 2024 price

increases, which were applied to recover ongoing inflationary

cost increases, partially offset by adverse mix and modest

price concessions in some European markets.

Operating profit for the year was £31.4 million, an

increase of £4.7 million, or 17.6%, compared to last year

(2023:£26.7million). The increase in operating profit arose

despite the 5.8% decrease in sales volumes. Operating profit

grew due to the benefits of cost base management initiatives,

favourable material price, strong product mix in UK & Ireland

and the impact of exceptional items in 2023, partially offset

by lower sales volumes and continued wage inflation. Cost

management initiatives include the transfer of further

volume to Turkey and the optimisation of our facilities in

the UK and the Netherlands.

Adjusted operating profit for the year was £31.5 million,

an increase of £2.2 million, or 7.6%, compared to last

year (2023:£29.3 million). Adjusted operating profit is

stated before the deduction of exceptional items of £nil

(2023:£2.5million) and the amortisation of customer

relationships of £0.1 million (2023: £0.1 million). The

exceptional costs in 2023 relate largely to a restructuring

exercise undertaken in quarter four of the year in order to

drive cost savings for future periods.

Supported by ongoing operational excellence and margin

management, in addition to favourable UK product mix,

the contribution per radiator has increased by 11.4% in the

period to over £20 for the first time. The Group continues to

push the sale of premium products throughout its markets,

recognising the additional margin that these products

generate. Year on year the proportion of premium panel sales

to total volumes increased by 0.1ppts to 5.7%. Positively,

the penetration of premium panel products into the UK

& Ireland increased in the period from 2.9% to 3.1% as a

result of targeted management action in the Group’s largest

segment, with additional work being undertaken to drive

thisgrowth further. This positive trend was partially offset

byadecline in sales to Germany where the penetration of

these products is high.

Profit for the year increased by £1.1 million, or 7.1%, to

£16.5million (2023: £15.4 million). Adjusted profit for the

year decreased by £0.7 million, or 4.2%, to £16.6 million

(2023: £17.3 million) due to an increase in adjusted

operatingprofit offset by increased interest charges

and a return to a more normal effective tax rate after a

large deferred tax credit in 2023. Earnings per share was

12.97pence (2023: 12.11 pence). Adjusted earnings per

share was13.05 pence (2023: 13.62 pence).

At 31 December 2024 the Group had cash of £18.6 million

(2023: £21.4 million) and undrawn available facilities of

£21.1million (2023: £18.7 million), with net debt before

lease liabilities of £59.7 million (2023: £60.4 million).

Annual Report 2024 Stelrad Group plc 43

Revenue by geographical market

The table below sets out the Group’s revenue by geographical market.

Revenue by geographical market

2024

£m

2023

£m

Movement

£m

Movement

UK & Ireland 137.4 139.4 (2.0) (1.5)

Europe 139.0 149.1 (10.1) (6.8)

Turkey & International 14.2 19.7 (5.5) (27.7 )

Total 290.6 308.2 (17.6) (5.7)

UK & Ireland

The Group’s revenue in UK & Ireland for the year was £137.4 million (2023: £139.4 million), a decrease of £2.0 million, or 1.5%.

This was principally a result of a decrease in sales volumes of 7.2%, partially offset by a continued increase in the average selling

price of radiators sold due to a 6% year on year higher heat output of radiators sold, an increase in the penetration of premium

panel products and the application of a price increase.

Europe

The Group’s revenue in Europe for the year was £139.0 million (2023: £149.1 million), a decrease of £10.1 million, or 6.8%.

European revenue has been negatively impacted on consolidation by the GBP strengthening against the Euro, which reduced

revenue by 2.6%. Additionally, revenue has been negatively impacted by a 0.6% decline in sales volumes, adverse country and

customer mix and the impact of modest price concessions. Encouragingly, we note certain key geographies in Europe have

shown a year on year increase in volumes led by business gains, including Belgium, the Netherlands and Poland.

Turkey & International

The Group’s revenue in Turkey & International for the year was £14.2 million (2023: £19.7 million), a decrease of £5.5 million, or

27.7%. This was principally a result of significantly lower sales volumes to Turkey due to the economic slowdown and also lower

sales to China.

Adjusted operating profit by geographical market

The table below sets out the Group’s adjusted operating profit by geographical market

Adjusted operating profit by geographical market

2024

£m

2023

£m

Movement

£m

Movement

UK & Ireland 29.6 24.5 5.1 20.7

Europe 7.9 9.1 (1.2) (12.4)

Turkey & International 1.0 1.3 (0.3) (22.7)

Central costs (7.0) (5.6) (1.4) (25.0)

Total 31.5 29.3 2.2 7.6

UK & Ireland

The Group’s adjusted operating profit in UK & Ireland for the year was £29.6 million (2023: £24.5 million), an increase of

£5.1million, or 20.7%. This result includes the benefits of the 2023 restructure, favourable selling and material prices, the

increase in theaverage size of radiators and stronger premium panel penetration. These factors have combined to more than

offset the lower sales volumes and the impact of ongoing inflation.

Europe

The Group’s adjusted operating profit in Europe for the year was £7.9 million (2023: £9.1 million), a decrease of £1.2 million,

or 12.4%. Whilst European sales volumes improved in the second half of the year, they still fell 0.6% year on year due to a weak

macroeconomic environment. Additionally, adverse country and customer mix has led to a small reduction in the average

contribution per radiator. Ongoing inflation, combined with the sales volume decrease and adverse mix, has led to a reduction

in operating margin percentage. The Group continues to focus on improving the margins of Radiators SpA’s sales, and whilst

initiatives to drive efficiencies have to date been offset by lower volumes, we expect margins for Radiators SpA, and the wider

Europe segment, to recover in line with market recovery.

Turkey & International

The Group’s adjusted operating profit in Turkey & International for the year was £1.0 million (2023: £1.3 million), a reduction

of£0.3 million, or 22.7%. This decrease is due to a decline in sales volumes partially offset by favourable material prices.

Central costs

Central costs for the year were £7.0 million (2023: £5.6 million), an increase of £1.4 million, or 25.0%. The increase is primarily

due to inflationary cost increases, alongside one-off consultancy costs related to our investment in appraisal of premium panel

penetration strategies.

Finance and business review continued

Stelrad Group plc Annual Report 202444

STRATEGIC REPORT

Exceptional items

During the year the charge for exceptional items was £nil (2023: £2.5 million).

The exceptional items in 2023 mainly relate to a £2.9 million restructuring exercise undertaken in quarter four of the year in

order to drive cost savings for future periods, partially offset by exceptional income related to the acquisition of Radiators SpA

of£0.4 million.

These costs are one-off in nature and disclosing these costs as exceptional allows the true underlying performance of the

Groupto be better understood.

Finance costs

The Group’s net finance costs for the year were £8.0 million (2023: £7.5 million). The increase of £0.5 million is due to an

increase in the interest rate of the Group’s debt from a blended rate of 6.3% (including a margin of 2.25%) during 2023 to

ablended rate of 6.6% (including a margin of 2.25%) during 2024.

Income tax expense

The Group’s income tax expense for the year was £6.9 million (2023: £3.8 million), an increase of £3.1 million, or 82.7%.

The 2023 tax charge benefited from a deferred tax credit associated with higher tax asset values allowed by the Turkish

government due to hyperinflation. The Group’s 2023 effective tax rate of 19.6% was low because of the deferred tax

credit. In2024, the effective tax rate was 29.4% which was in line with expectations. In 2025, the Group’s effective tax rate

is expectedto rise to around 30% due to the announcement of a 5% increase in the withholding tax charges applied to

dividendsreceived from Turkey.

Earnings per share and adjusted earnings per share

Profit for the year increased by £1.1 million, or 7.1%, to £16.5 million (2023: £15.4 million) and basic earnings per share

was12.97 pence (2023: 12.11 pence). The weighted average number of shares was 127.4 million (2023: 127.4 million).

Adjusted profit for the year decreased by £0.7 million, or 4.2%, to £16.6 million (2023: £17.3 million) and, consequently,

basicadjusted earnings per share was 13.05 pence (2023: 13.62 pence).

Dividends and reserves

The Group is committed to delivering returns for its shareholders via a progressive dividend policy. The Board has confidence

in the Group’s financial position and believes that its leading market positions, regulatory tailwinds, product premiumisation

upside and favourable contribution per radiator will lead to strong future financial performance, as demonstrated by the

Group’s medium-term targets published at our Capital Markets Event in November 2024. On this basis, despite suppressed

earnings caused by short-term trading headwinds, the Board recommends payment of a final dividend of 4.81 pence per

share (2023: 4.72 pence per share) on 27 May 2025 to shareholders on the register at 25 April 2025, an increase of 2% on

the2023 final dividend. The cost to the Group of the 2024 final dividend is £6.1 million.

The Group paid an interim dividend in respect of the year ended 31 December 2024 of 2.98 pence per share

(2023: 2.92pence), also an increase of 2% on the 2023 interim dividend. Therefore, the total dividend in respect of

theyearended 31 December 2024 will be 7.79 pence per share (2023: 7.64 pence), an increase of 2% on 2023.

Annual Report 2024 Stelrad Group plc 45

Cash flow

The following table summarises the Group’s cash flow for the years ended 31 December 2024 and 31 December 2023.

2024

£m

2023

£m

Movement

£m

EBITDA

(1)

43.5 41.2 2.3

Exceptional items — (2.5) 2.5

Gain on disposal of property, plant and equipment (0.1) — (0.1)

Share-based payment charge 0.4 0.5 (0.1)

Working capital (10.1) (0.6) (9.5)

Working capital – exceptional items (2.3) 2.2 (4.5)

Net capital expenditure (8.4) (9.3) 0.9

Cash flow from operations

(1)

23.0 31.5 (8.5)

Income tax paid (6.2) ( 7. 5) 1.3

Net interest paid (7.2) (6.2) (1.0)

Free cash flow

(1)

9.6 17.8 (8.2)

Cash flow from operations 23.0 31.5 (8.5)

Adjusted for

Exceptional items — 2.5 (2.5)

Exceptional items, impact on working capital 2.3 (2.2) 4.5

Adjusted cash flow from operations

(1)

25.3 31.8 (6.5)

2024 2023 Movement

Cash flow from operations

(1)

(£m) 23.0 31.5 (8.5)

Adjusted cash flow from operations

(1)

(£m) 25.3 31.8 (6.5)

Adjusted operating profit

(1)

(£m) 31.5 29.3 2.2

Cash flow from operations conversion

(1)

(%) 73.0 107.6 (34.6)

Adjusted cash flow from operations conversion

(1)

(%) 80.3 108.6 (28.3)

(1) The Group uses some alternative performance measures to track and assess the underlying performance of the business. Alternative performance

measures are defined in the glossary of terms on page 144 and reconciled to the appropriate financial statements line item in note 31. Note 31 also

outlinesthe limitations of using alternative performance measures.

The Group’s free cash flow for the year was £9.6 million (2023: £17.8 million), a decrease of £8.2 million. This reflects

investments in working capital, the cash unwind of provisions for one-off restructuring costs and higher interest paid, partially

offset by an increase in EBITDA, lower tax paid and reduced capital expenditure as the Group returned to a lower level of

spend.The significant working capital investment in the year was in inventories as the Group continues to invest to ensure

thatit is able to continue to be well placed to respond to market demand and maintain best-in-class delivery performance.

During quarter four of 2024, the Group undertook a proactive price realignment exercise on its core range of contract

productsin theUK with equal reductions in both list prices and rebates. The price realignment is a commercial initiative

designed to makethe price points of our contract products more competitive and enhance customer relationships. During

2025, becauseof the reduction in the level of rebates, there will be an increase in working capital.

The Group’s cash flow from operations for the year was £23.0 million (2023: £31.5 million), a decrease of £8.5 million.

Adjusted operating profit for the period was £31.5 million (2023: £29.3 million), an increase of £2.2 million. Cash flow from

operations conversion for the year was 73.0% (2023: 107.6%), a decrease of 34.6 ppts. Adjusted cash flow from operations

conversion for the year was 80.3% (2023: 108.6%), a decrease of 28.3 ppts.

Finance and business review continued

Stelrad Group plc Annual Report 202446

STRATEGIC REPORT

Capital expenditure

The Group’s capital expenditure mainly relates to investment in operating plant and equipment. Key capital expenditure

inthe year ended 31 December 2024 related to various maintenance and upgrade projects. Capital expenditure for

2025will continue to focus on ensuring our operating platform is well maintained whilst making a periodic investment

inourIT infrastructure.

Return on capital employed and capital allocation priorities

Return on capital employed for the year was 27.1% (2023: 25.5%), an increase of 1.6 ppts. This improvement is largely

due to the increase in adjusted operating profit and a lower level of capital expenditure, partially offset by an investment

inworking capital.

Capital allocation considerations remain high on the Group’s agenda, and both the 2024 and 2025 investments in

workingcapital are considered a key part of the Group’s prioritisation of investment for organic growth. Additionally,

alongsidethe investment in organic growth during 2024, dividends have progressively increased by 2%, whilst the

Group’sdebt leverage ratio before lease liabilities has reduced to 1.37x (2023: 1.47x), demonstrating a controlled and

balancedapproach to capital allocation.

Net debt and leverage

At 31 December 2024, net debt (including lease liabilities) of £67.6 million (2023: £70.3 million) comprises £78.3 million

(2023: £81.8 million) drawn down against the multicurrency facility and £7.9 million (2023: £9.9 million) lease liabilities

netof £18.6 million (2023: £21.4 million) cash.

2024

£m

2023

£m

Revolving credit facility – GBP 41.8 46.9

Revolving credit facility – Euro 13.1 10.4

Term loan 23.4 24.5

Cash (18.6) (21.4)

Net debt before lease liabilities 59.7 60.4

Lease liabilities 7.9 9.9

Net debt 67.6 70.3

EBITDA 43.5 41.2

Debt leverage ratio before lease liabilities 1.37x 1.47x

The debt leverage ratio before lease liabilities at 31 December 2024 was 1.37x (2023: 1.47x).

Leigh Wilcox

Chief Financial Officer

7 March 2025

Annual Report 2024 Stelrad Group plc 47

The Board has ultimate responsibility for the Group’s system of internal control and risk

management, supported by the Audit & Risk Committee. The Board understands that

successful delivery of its strategic objectives depends on effective risk management

processes that enable the monitoring and mitigation of existing risks and the early

identification of emerging risks.

Risk management approach

The Group’s approach to risk management combines a top

down strategic assessment of risk and risk appetite with a

bottom up operational identification and reporting process.

Top down activities are carried out by the Group Board

and Audit & Risk Committee and consider the strategy and

operating environment of the Group. Bottom up activities

take place across the Group and capture risks that are

significant at a business unit, project or functional level.

The risk evaluation process begins in the business units with

regular exercises undertaken by management to identify

and document the significant risks facing the businesses.

This process ensures risks are identified and monitored and

mitigating management controls are embedded in the

businesses’ operations. Risk management teams are also

set up for specific projects or operations to consider the risks

associated with that project or specific operational area of

the business; for example, there is a separate climate risk

management team and a separate information security risk

management team. The risk assessments from each of the

operating businesses, and from the project and operational

risk teams, are reported to Group management twice a year

and are considered in determining the principal risks of the

Group with reference to the Group’s strategy and operating

environment. The principal risks of the Group are presented

to the Audit & Risk Committee and the Board for review and

consideration. The principal risks of the Group are mapped

tokey performance indicators, where applicable, and these

are reported to the Board at each Board meeting.

New and emerging risks are considered through the regular

risk activities outlined here, the regular review of risk research

and other publications, and the results of assurance activities.

Emerging risks are also collated from assessments made by

the business units and through considered risk oversight

across the Group and industry.

Monitoring and mitigation of

existing risks and the early

identification of emerging risks

New and emerging risks

Product risk Product risk, related to the extended

range of products in Radiators SpA,

including electrical products with fire risks

and shorter lifecycle products, givesrise

to risk of increased product claims and

stock obsolescence.

The Group considers that the process for the management

ofrisk consists of three lines of defence.

Third line of defence

Independent review

Internal audit and other external assurance providers.

First line of defence

Business unit and management activity

Aligns to the bottom up activities detailed here.

Second line of defence

Group Board and Audit & Risk Committee

assurance model

Corresponds to the top down activities outlined here.

Risk management

Stelrad Group plc Annual Report 202448

STRATEGIC REPORT

Board Ultimate responsibility for risk management

• Sets Group strategy

• Approves the Group risk management framework

• Sets the Group’s risk appetite

• Top down risk identification

• Reviews the Group’s principal risks

• Sets delegated levels of authority

Audit & Risk Committee Monitors risk management and assurance arrangements

• Supports the Board in risk management responsibilities and activities

• Reviews the effectiveness of key risk management and control processes

Executive Directors Monitor performance and changes in key risks

• Provide regular risk management update reports to the Board and the Audit

&Risk Committee

• Report to the Board and the Audit & Risk Committee on the status of key risks

• Provide guidance and advice to operating companies to assist with identifying

risks, assessing the extent of the impact of identified risks and implementing

mitigating actions

• Oversee health and safety activities

Business units /

operational and

project level risk

management teams

Identify, manage and report local risks

• Maintain local risk registers and risk management plans

• Identify risks

• Identify and implement mitigating actions

• Assess the likelihood and impact of each risk before and after mitigating

andcontingent actions are taken

Risk management framework

Top down, bottom up approach

Identification of emerging risks

Risk appetite

The Group Board is responsible for setting and monitoring

the Group’s risk appetite. The Group Board accepts that,

inorder to achieve its strategic objectives, and generate

suitable returns for shareholders, it must accept, and

manage,a certain level of risk.

The Group’s approach is to minimise exposure to reputational,

financial and operational risk, while accepting and recognising

a risk and reward trade-off in the pursuit of its strategic and

commercial objectives. The Group Board assesses its risk

appetite across a number of risk categories according to a

five-point scale, where one is zero tolerance of risk and five

is a high tolerance of risk. For example, the Group has zero

tolerance for risks relating to health and safety.

The Group establishes its risk appetite through use of

delegated authorities so that matters considered higher

risk require the approval of senior management or the

Group Board. The Group’s risk appetite remains unchanged

in the year.

Principal risks

The Board confirms that it has carried out a thorough

assessment of the principal and emerging risks facing the

Group. Set out below is the Board’s view of the principal risks

currently facing the Group, along with details of the impact

and strategic relevance of the risks and an explanation of

how the risks are managed or mitigated. Each risk has been

assigned to a risk owner, who is a member of the Group

Board or senior management. The risk rating and risk

appetite have been reported, alongside the trend for each

risk, based upon the changes from prior year. The Board

acknowledges that the Group is exposed to a wide range

of risks; however, only the risks that are believed to have

the greatest impact on the Group delivering its strategic

objectives have been listed.

The climate-related disclosures on pages 35 to 39 document

our approach to climate risk management and our

compliance with the TCFD requirements.

Annual Report 2024 Stelrad Group plc 49

Risk owner Chief Executive Officer and

Group Operations Director

Trend No change

Risk appetite Medium

Risk rating Low

Key stakeholders Customers, suppliers and people

Link to strategy

1 2 3 4

Risk owner Chief Executive Officer and Group

Strategic Marketing Director

Trend No change

Risk appetite Medium

Risk rating Low

Key stakeholders Customers

Link to strategy

1 2 3

1.Businessdisruption 2.Customers

Risk description

The Group could be subject to disruption due to incidents

including, but not limited to, pandemics, major accidents

ornatural disasters.

Impact

• The Group’s production and distribution facilities and

processes could be disrupted, due to events including

major accidents and natural disasters, leading to an

inability to meet customer demands.

• A global pandemic could reduce market demand for

theGroup’s products.

• There is a risk of widespread absence caused by infection

without any control measures in place and a consequential

loss of production capacity due to staff shortages.

Mitigations

• Appropriate fire safety measures are in place at key sites.

• Building modifications have been made to address

flooding risk.

• The majority of stock is stored in racking high off

the ground.

• Accident prevention measures are put in place.

• Infection and pandemic risk assessments and response

procedures are in place and reviewed regularly. Measures

that could be implemented at short notice include:

– social distancing;

– regular testing on site;

– working from home and segregation of staff; and

– following all applicable government guidance in each

location as prescribed.

• There is an option and ability to flex production volume

across facilities around the Group.

• Appropriate business interruption insurance is in place.

Risk description

The Group, in some geographies, is overly dependent on

a small number of customers, or on a particular market

or business segment.

Impact

• In certain markets, particularly the UK, the Group derives

asignificant proportion of its revenue from a small number

of customers. Failure to manage these relationships or a

change in the organisational structure of these entities

could lead to a loss of demand.

• Customers in declining markets could consolidate suppliers.

• Evolving routes to markets could see a shift in demand.

Mitigations

• The Group continues to maintain and develop strong

relationships in all market channels.

• The Group continues to maintain strong specifier

relationships to generate demand for the Group’s

brands through the distribution channel.

• The Group actively manages and maintains its ongoing

customer relationships.

• The Group will take appropriate measures to seek to

regainlost customers.

• The Group attends customer events and product

launches,and participates in industry forums,

exhibitionsand events.

• The Group actively manages and maintains brand websites

and its social media presence to establish and maintain a

relationship with the final consumer.

• Commercial strategies will be reviewed and modified

as appropriate.

• Regular strategic planning sessions and analysis of

routesto market.

• Customer surveys and interviews are carried out,

particularly focused on sustainability.

Principal risks continued

Strategy key

Growing market share

Improving product mix

Optimising routes to market

Positioning effectively

fordecarbonisation

Risk management continued

Stelrad Group plc Annual Report 202450

STRATEGIC REPORT

Risk owner Chief Executive Officer and Group

Strategic Marketing Director

Trend No change

Risk appetite Medium

Risk rating Low

Key stakeholders Customers

Link to strategy

1 2 3 4

Risk owner Chief Executive Officer and

Group Operations Director

Trend Increasing

Reflecting the risk of changes

to steel tariffs

Risk appetite Low

Risk rating Medium

Key stakeholders Suppliers

Link to strategy

1 2 3 4

3.Lossofcompetitiveadvantage

4.Supplychainrisk

Risk description

New products, innovations or routes to market could cause

aloss of competitive advantage.

Impact

• Competitors could gain a cost, reputation or product

advantage that results in a loss of market share for the

Group or leads to price erosion.

• New product types or heating system designs could

enter the market or increase market share as part of the

drive to “zero carbon”, for example underfloor heating,

electrification or fan-assisted heat exchanger products.

There could be a resultant loss of Group sales volumes.

Mitigations

• The Group continues to monitor legislative changes.

• The Group will continue to evaluate the potential impact

of zero carbon initiatives.

• The Group continues to maintain strong customer

and specifier relationships to determine the most

appropriate solutions.

• Appropriate product types are brought to market under

the Group’s brands, including the introduction of electrical

products across the Group.

• The Group continues to maintain and develop strong

relationships in all market channels.

• The Group continues to maintain strong specifier

relationships to generate demand for the Group’s

brandsthrough the distribution channel.

• The Group attends customer events and product launches,

and participates in industry forums, exhibitions and events.

• The Group actively manages and maintains brand

websites and its social media presence to establish and

maintain a relationship with the final consumer.

• Customer surveys and interviews are carried out,

particularly focused on sustainability.

• The Group invests in the development of new products to

maintain a competitive advantage in changing markets.

• The Group invests in appropriate energy saving initiatives

across its sites in line with its sustainability strategy.

• The Group will continue to tightly monitor and

control costs.

• The Group builds relationships with developers which

aremost likely to adopt alternative solutions.

• The Group closely monitors and reacts to heating system

studies that are published.

Risk management in action

» Read more about how we are positioning effectively for decarbonisation

on page 18

» Read more in our spotlight on decarbonisation on page 29

Risk description

Failure of the supply chain either due to lack of availability

or unforeseen price increases.

Impact

• A reduction of raw material availability, in particular

steel availability, could restrict the ability of the Group to

manufacture products or negatively impact profit margins.

• Reduced security and availability of energy supply could

restrict the ability of the Group to manufacture products.

• Unforeseen increases in raw material prices, in particular

steel price and energy prices, could harm profit margins.

• The introduction of local tariffs and cross border

adjustment mechanisms on raw materials, particularly

steel and energy, will impact profit margins.

• Inflationary price increases could harm profit margins.

• The Group has a complex, wide-ranging distribution

chain which is critical to the success of the Group and any

disruption in the supply chain could impact on the ability

of the Group to meet customer demands and/or cause a

reduction in profitability.

» Continued on next page

Annual Report 2024 Stelrad Group plc 51

5.ITfailureorcyberbreach

Risk description

Prolonged or major failure of the Group’s IT systems or

asignificant security breach.

Impact

• A cyber attack at one of the Group’s facilities could

disruptits production and/or distribution capabilities

leading to an inability to meet customer demands.

• Failure of our IT and communication systems could

affect any or all of our business processes and have

significant impact on our ability to trade, collect cash

andmake payments.

• IT lifecycle risk results in behind-the-curve reaction to

IT developments, meaning that new and emerging

opportunities are missed.

Mitigations

• IT and cyber training and education, particularly around

the identification of fraud, are delivered to all staff.

• Appropriate access rights are applied on all IT systems

across the business.

• Appropriate security software is installed, including

firewalls and anti-malware, to protect our IT systems.

• Email scanning processes are implemented.

• Robust systems and processes are in place including

databack-ups.

• Third party penetration testing is carried out by all sites.

• The business uses internal and third party expertise

tokeep up to date with the latest developments.

• Disaster recovery plans are in place.

• There is continued investment in and maintenance of

ITsystems across the Group.

• The Group appointed cyber security consultants to

providea security operations centre and other related

services to the Group.

• An information security working group has been set up

toshare best practice across the Group.

• Working groups are set up for major technology

change projects, including accounting and operating

system upgrades.

Risk owner Chief Executive Officer, Chief

Financial Officer and Group

Finance Director

Trend No change

Risk appetite Low

Risk rating High

Key stakeholders Customers, suppliers,

people and investors

Link to strategy

1 2 3

Principal risks continued

Risk management continued

4.Supplychainrisk continued

Mitigations

• Raw material is dual sourced with all key components

and materials having a secondary provider; this extends

tolocation dual sourcing.

• Raw material prices are constantly monitored by the

business. For the purchase of raw materials, stocks are

maintained to protect against sharp price rises and

buy prices are agreed in advance which gives a clear

understanding of future prices.

• Where prices are rising the business has sufficient foresight

to implement selling price increases.

• Sufficient stock levels are maintained across the Group

toprevent against short-term supply issues.

• The Group undertakes ongoing supplier performance

andrelationship building meetings, alongside supplier

reviews and audits.

• Long-term relationships are maintained on good terms

with trusted shipping partners.

• Options are available to use alternative forms of transport,

for example trucks instead of shipping.

• Energy prices are fixed with suppliers for the forthcoming

year where this option is available.

• There is an option and ability to flex production volume

across facilities around the Group.

• The Group pays suppliers on a timely basis.

• The Group will review and control any discretionary spend.

• The Group will continue to tightly monitor and

control costs.

• Solar panels are in place at the warehouse in Heerlen,

theNetherlands, and at the Radiators SpA factory in Italy.

• The Group monitors legislation associated with local

tariffs and cross border adjustment mechanisms on raw

materials and has undertaken financial modelling to assess

the impact.

Risk management in action

» Read more in our spotlight on supply chains on page 31

» Go to page 27 to view the KPI for suppliers with up-to-date audits

Stelrad Group plc Annual Report 202452

STRATEGIC REPORT

6.Peopleandculture

Risk description

Being unable to retain key personnel and attract skilled

individuals or deterioration of our relationships with unions

and workers’ representatives.

Impact

• The loss of key personnel or the inability to put the correct

succession planning in place could lead to a shortage

ofexperience that could damage business performance.

• Labour shortages/workforce strikes or the increase in

costsof skilled labour could increase the costs of the

Groupor lead to delays in production.

• Inflationary increases in staff costs could harm

profit margins.

• Lower than inflationary pay increases could result in

workforce losses.

Mitigations

• Deputies are in place for immediate interim assumption

ofkey roles.

• Longer-term succession planning focuses on identification

and development of potential successors for key roles.

• Documented processes are in place for key functions

toensurecontinuity of process.

• Policies and procedures are embedded to ensure appropriate

management practices and to minimise the risk of fraud

or error.

• Knowledge sharing and support are available from other

functions and sites.

• Any necessary recruitment process will be identified,

commenced and progressed in a timely manner,

wherenecessary.

• Relationships with unions and works councils are

managed closely.

• Pay rates are maintained at a competitive level to attract

andretain staff.

• Training and development programmes are in operation,

including apprenticeship and other formal trainee

programmes, alongside individual performance reviews.

• Employee relationships are well maintained locally

through employee engagement activities and regular

communications, including newsletters.

• The Group regularly reviews, updates and broadens its

Group policies.

Risk management in action

» Read more in our spotlight on alternative employment routes on page32

and our spotlight on inclusion on page 33

» Go to page 41 to view our KPIs on enabling an exceptional workforce

Risk owner Chief Executive Officer and

Chief People Officer

Trend No change

Risk appetite Low

Risk rating Medium

Key stakeholders People

Link to strategy

1 2 3

7.Healthandsafety

Risk description

Failure to comply with health and safety legislation and

regulatory requirements including obligations to take the

correct measures to prevent fatalities or serious injury.

Impact

• The Group’s production, manufacturing and distribution

operations are carried out under potentially hazardous

conditions. Accidents, events or conditions that are

detrimental to the health and safety of the Group’s

employees, including, for example, as a result of operating

heavy machinery, could have a material adverse effect on

the Group’s business, reputation and financial results.

Mitigations

• Health and safety are proactively managed with robust

processes in place to identify and manage risks.

• Health and safety training is provided regularly across

the Group.

• The Group has invested heavily in reducing risk, for

example by introducing appropriate machinery guarding

and also introducing robotics.

• Where health and safety incidents arise, there are

rigorousprocesses in place to learn from these incidents

and put in place procedures and training to prevent

themfrom reoccurring.

Risk management in action

» Read more in our spotlight on safety engagement on page 34

» Go to page 34 to view our health and safety KPIs

Risk owner Chief Executive Officer, Chief

People Officer and Group

Operations Director

Trend No change

Risk appetite Low

Risk rating Low

Key stakeholders People

Link to strategy

Annual Report 2024 Stelrad Group plc 53

Climate change

Failure to manage and mitigate climate change is

identified as a risk on the Group register. Given the scale

and the potentially significant impact of climate risk

on the Group, it is essential to understand how climate

change might impact the business and which strategies

may be employed to mitigate any exposure to the

business. Expertise and resources have been allocated

to manage climate risk across the organisation and to

determine the impact that this risk may have on the

business model and the broader Group strategy over the

short, medium and long term. Climate risk is considered

at a Board level when discussing Group strategy and

making Board decisions.

Work undertaken by the Group to date to understand

the impact of climate change, as well as potential risks

and opportunities considered by the business, are further

outlined in the TCFD section found on pages 35 to 39.

9.Climatechange

Risk description

Failure to evolve business practices and operations

inresponse to climate change.

Impact

• See climate-related risks on pages 38 and 39.

Mitigations

• See climate-related risks on pages 38 and 39.

Risk management in action

» Read more in our spotlight on energy usage on page 29

» Go to page 40 to view our KPIs for driving better

environmentalperformance

Risk owner Chief Executive Officer

and Group Strategic

Marketing Director

Trend Increasing

Due to heightened awareness

of the impacts of changes in

global climate

Risk appetite Low

Risk rating Medium

Key stakeholders Communities and

the environment

Link to strategy

1 4

Principal risks continued

Risk management continued

8.Politicalandeconomicenvironment

Risk description

Failure to evolve business practices and operations in response

to the changing political and economic environment.

Impact

• The change in political conditions in Turkey could give rise

to an adverse change in the Group’s Turkish operations,

either due to the costs to produce, the availability of

labour or the ability for Turkey to interact globally with

other economies.

• A change in political conditions in any of the countries

inwhich the Group operates could give rise to an adverse

change in the Group’s operations.

• The Group is exposed to potential changes in economic

circumstances as a consequence of political events,

examples of which include exchange rate fluctuations

andreductions in private disposable income.

• Inflationary price increases could harm profit margins;

this is a particular risk in Turkey where the Turkish Lira

hasbeen hyperinflationary in recent years.

• High inflation across Europe could lead to a reduction

inconsumer spending.

• A significant increase in interest rates would increase

interest costs for the Group.

• Market lending capacity could reduce.

Mitigations

• The Group continuously monitors legislative changes

andevaluates any potential impact.

• Exchange rate fluctuations are mitigated using the

naturalhedge of key currency spend where possible.

• For currencies where there is no natural hedge and

where deemed necessary, appropriate exchange forward

contracts are entered into to fix the parity over the short

tomedium term in line with the Group’s hedging policy.

• A Group currency hedging strategy, approved by the

Audit& Risk Committee, is in place.

• The Group monitors and actions loan renewals on a

timely basis. The existing loan facility is in place until

November 2026.

• There is an option and ability to flex production volumes

ateach of the Group’s facilities.

Risk owner Chief Executive Officer, Chief

Financial Officer, Group

Operations Director and Group

Strategic Marketing Director

Trend No change

Risk appetite Medium

Risk rating Medium

Key stakeholders Customers, suppliers, people

and investors

Link to strategy

1 4

Stelrad Group plc Annual Report 202454

STRATEGIC REPORT

Viability statement

The Board has considered the viability of the Group over a three-

year period to 31 December 2027, taking into account the Group’s

current financial position and forecasts, as well as the potential

impact of the principal and emerging risks and uncertainties facing

the Group. The three-year period chosen is one for which the Board

believes that it can forecast with a degree of accuracy and certainty.

While the Board has no reason to believe that the Group will not

be viable over a longer period, it recognises that there is inherent

uncertainty involved in looking further forward than three years.

The Board believes that this timeframe also increases reliability

in the modelling and stress testing of the Group’s viability and

provides the users of the Annual Report with a reasonable degree

ofconfidence over the Group’s viability. Additionally, three years

aligns with the Group’s business planning cycle and a three-year

horizon is typically the period over which the Group reviews its

external banking facilities.

The Group’s annual business plan process looks at financial

projections for the next three years, including profitability, balance

sheet liquidity and cash flow. The business plan is a detailed bottom

up process and is used to perform central debt, headroom and

covenant compliance analysis. A sensitivity review is performed

on the most significant risks, as well as a combination of those

risks. The output of the annual business plan process is reported

to the Board for consideration. The Group monitors performance

through the financial year against this budget and prior year actual

performance with a formal reforecast process conducted on at least

a quarterly basis.

The financial position of the Group remains robust. The Group

has in place a £100 million multicurrency facility, made up of a

£76.027 million revolving credit facility and a €28.346 million

termloan facility. At 31 December 2024, the whole term loan

wasdrawn along with £54.9 million of the revolving credit facility.

The facility matures in November 2026.

As the £100 million bank loan facility is maturing in November

2026, refinancing discussions with lenders will commence during

the first half of 2025. The expectation is that the loan will be refinanced.

The Board believes that the business model remains highly

relevant to the long-term viability of the Group. The regulatory drive

towards making new and existing homes more energy efficient will

continue, meaning that there will be increased opportunities to play

a part in providing greener solutions for heating homes.

The Board has carried out a robust assessment of the principal

and emerging risks facing the Group, including those that would

threaten its business model, future performance, liquidity or

solvency. Principal and emerging risks to the business are identified

through the risk management process and are set out on pages

48to 54. They are recorded in a Group risk register, which is

reviewed and discussed at Audit & Risk Committee meetings,

whichare held at least three times per annum.

The review has considered all the principal and emerging risks

identified by the Group, but a selection of risks was considered to

pose a severe but plausible downside scenario if they occurred. These

risks have been stress tested to assess the viability of the Group. The

sensitivities modelled used the same assumptions as for the going

concern statement up to the end of the going concern period, as

set out in the going concern statement later on this page, with

further assumptions applied for the period outside of the going

concern period up to 31 December 2027.

The Board has carefully considered the principal and emerging

risksof the Group and the impact of those risks on the viability

of the Group and the Board confirms that it has a reasonable

expectation that the Group will be able to continue in operation

andmeet its liabilities as they fall due over the period of assessment.

Going concern statement

The financial position of the Group, its cash flows and its liquidity

position are set out in the financial statements. Furthermore, note 29

to the consolidated financial statements includes the Group’s

objectives and policies for capital management, and note 30

to theconsolidated financial statements outlines the Group’s

financialrisk management objectives and policies, details of its

financial instruments and its exposure to credit and liquidity risk.

As part of its year-end review, the Directors have performed a

detailed going concern review looking at the Group’s current

financial position and forecasts, cash flows, liquidity and loan

covenant compliance over the forecast period, and taking into

account the potential impact of the principal and emerging

risksfacing the Group. The Directors have also applied severe

butplausible downside scenario testing to the Group forecasts.

Under a severe but plausible downside scenario, the Group remains

within its debt facilities and its financial covenants until the end of

the going concern period.

Based on the output of this going concern review, the Directors

have concluded that, at the time of approving the financial

statements, the Group will be able to continue to operate within

its existing facilities and is well placed to manage its business risks

successfully. The Directors also used the financial forecasts as the

basis for their assessment of the Group’s ability to continue as a

going concern for at least twelve months from the date of approval

of the financial statements. Therefore, the financial statements have

been prepared on a going concern basis.

The Group meets its day-to-day working capital requirements through

a £100 million bank loan facility, made up of a £76.027million

revolving credit facility and a €28.346 million termloan facility,

which is in place up to November 2026. At the year-end date

the Group had drawn down the whole term loan along with

£54.9 million of the revolving credit facility. Theremainder of the

facility and cash balances of £18.6 million were available to enable

day-to-day working capital requirements to be met.

The financial covenants on the £100 million bank loan facility are

for leverage (net debt (excluding IFRS 16 finance leases)/adjusted

EBITDA (before exceptional items and foreign exchange

differences)) of not more than three times and for interest cover

of not less than four times. The Group has complied with the

covenants during the year ended 31 December 2024 and, as

discussed above, is forecast to comply with covenants in the going

concern period. The calculations of net debt (excluding IFRS 16

finance leases) and adjusted EBITDA (before exceptional items and

foreign exchange differences) are provided in note 31.

The forecast base case scenario has been prepared using robust

forecasts from each of our operating companies, with each

considering the risks and opportunities the businesses face. Two

keysensitivities have been applied to prepare what is considered

tobe a severe but plausible downside scenario, these being:

• the reduction in volumes; and

• a reduction of the contribution per radiator from forecast levels

to reflect a reduction in profitability due to external factors.

Volumes

Volumes could reduce in the future due to competitive pressures

ormarket weakness and this has been modelled as a downside risk.

Contributions per radiator

The Group’s contribution per radiator sold has increased in recent

years. There is a downside risk that competitive pressures could

reduce the Group’s contributions in the future.

In the downside scenario, volumes have been reduced and the

contribution per radiator has been reduced for the whole period.

Under these circumstances, the Group would remain compliant

with both of its covenants without the adoption of mitigating

actions. Mitigating actions could include restructuring the cost

base, and implementation of further cash saving measures, such

as reducing advertising costs and other discretionary expenditure,

deferral of capital expenditure, delayed/reduced dividend payments

and active management of net working capital.

Viability statement and going concern

Annual Report 2024 Stelrad Group plc 55

Non-financial and sustainability information statement

The table below sets out where information relating to non-financial and sustainability matters can be found in our Strategic Report.

Compliance statement

Stelrad Group plc has complied with the requirements of sections 414CA and 414CB of the Companies Act 2006 (as amended

by The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022) with the table disclosed below

and other disclosures throughout the Strategic Report. The climate-related financial disclosures of the Company are contained

within the Task Force on Climate-related Financial Disclosures (“TCFD”) section on pages 35 to 39 of this Annual Report.

Reporting

requirement Relevant policies and standards which govern our approach Read more in this report

Page

reference

Environmental

matters

• Risk management

framework(including

climaterisk management)

• Code of Conduct

• Local corporate social

responsibility policies

• UN SDGs

• ISO 14001 (environmental

management) and ISO 50001

(energy management)

• Sustainability strategy

and sustainability

framework

• Environmental Policy

• Sustainable

Procurement Policy

• The Ten Principles of

the UN Global Compact

• Risk management

• Sustainability Report

• Task Force on Climate-related

Financial Disclosures

• Stakeholder engagement

Climate

change and

sustainability

• Risk management

framework(including

climaterisk management)

• UN SDGs

• ISO 14001 (environmental

management) and ISO 50001

(energy management)

• Sustainability strategy

and sustainability

framework

• Environmental Policy

• Sustainable

Procurement Policy

• Risk management

• Sustainability Report

• Task Force on Climate-related

Financial Disclosures

Employees • Whistleblowing Policy

• Equality, Diversity and

Inclusion Policy

• Code of Conduct

• Health and safety policies

andprocedures

• Sustainability strategy and

sustainability framework

• Conflicts of Interest Policy

• Social dialogue

statement

• Information

Security Policy

• UN SDGs

• The Ten Principles of

the UN Global Compact

• Stakeholder engagement

• Sustainability Report

• Directors’ Remuneration Report

• Nomination Committee Report

• Statement of

corporategovernance

• Audit & Risk Committee Report

Social matters • Group purpose and values

• Code of Conduct

• Local corporate social

responsibility policies

• Equality, Diversity and

Inclusion Policy

• Social

dialogue statement

• Stakeholder engagement

• Sustainability Report

Human rights • Modern slavery statement

• Equality, Diversity and

Inclusion Policy

• Code of Conduct

• UN SDGs

• The Ten Principles of

the UN Global Compact

• Stakeholder engagement

• Sustainability Report

• Statement of

corporategovernance

Anti-bribery

and

corruption

• Code of Conduct

• Anti-Corruption and

Bribery Policy

• Dealing Policy

• Insider Dealing and Market

Abuse Policy

• Conflicts of

Interest Policy

• UN SDGs

• The Ten Principles of

the UN Global Compact

• Statement of

corporategovernance

• Audit & Risk Committee Report

Business

model

n/a • Our business model

• Our strategy

Principal risks • Risk management framework • Risk management 48

Non-financial

KPIs

n/a • Key performance indicators

• Sustainability Report

Non-financial and sustainability information statement

Stelrad Group plc Annual Report 202456

STRATEGIC REPORT

Dear shareholders

On behalf of the Board, I am pleased to present the Corporate

Governance Report of Stelrad Group plc. The report summarises

the governance structure and the governance procedures of

the Group and, specifically, sets out the following:

• details of the Board of Directors, their biographies and

theBoard skills matrix (pages 58 and 59);

• the role of the Board and how it delegates authority

(page 61);

• the key roles of the Board and the division of

responsibilities (page 62);

• the Audit & Risk Committee Report (pages 65 to 69);

• the Nomination Committee Report (pages 70 to 73);

• the Remuneration Committee Report (pages 74

to 91); and

• the Directors’ Report (pages 92 to 95).

Purpose, culture and values

The Board believes that good governance enhances long-

term shareholder value and promotes a sustainable business.

The Board also believes that all decisions should be made for

the benefit of all stakeholders and to ensure the long-term

success of the Group. It is a priority of the Board to set the

culture and values of the Group and to lead by example.

Each member of the Board brings their own set of skills,

knowledge and experience. We believe that their broad

ranging knowledge and experience enable them to provide

independent challenge in Board discussions and enhanced

insight to the Group’s business model and strategy. Details

ofthe Board of Directors and their biographies can be found

on pages 58 and 59.

The core purpose of Stelrad Group plc of helping to heat

homes sustainably is proudly delivered by the Group

with oversight from the Board. Our core purpose is a key

component of our sustainability framework, which is outlined

in the Sustainability Report on pages 26 to 34.

The Group has established five values that provide its moral

compass, governing the fundamentals of who we are and

what we believe is right. These values define the culture

weseek to maintain:

• respect – we harness the power of diversity and inclusion

in our business, trust those we work with, and value

everyone’s contribution;

• integrity – we operate with honesty, transparency and

fairness in all we do;

• service – we act with empathy and humility, putting people

and businesses we serve at the centre of what we do;

• excellence – we champion innovation, and use our energy,

expertise and resources to make a positive difference to

the environment; and

• stewardship – we prize sustainability, and are passionate

about leaving things better than we found them.

Compliance with the 2018 UK Corporate

Governance Code

The Board is committed to the highest standards of corporate

governance. Since admission, we have strived to comply

with the 2018 UK Corporate Governance Code (the “Code”);

further details are included in the statement of corporate

governance on page 61.

In January 2024, the Financial Reporting Council updated

the UK Corporate Governance Code. This new Code will apply

to financial years beginning on or after 1 January 2025, with

the exception of provision 29 which will apply to financial

years beginning on or after 1 January 2026. The Company

will consider the implications of this new Code when it

becomes effective and implement accordingly.

Board composition and diversity

The Board recognises the advantages of having a diverse

and inclusive Board in bringing different perspectives to

thedebate and decision making processes of the Board,

tothe benefit of all stakeholders.

On 1 October 2024, Leigh Wilcox was appointed to the

Board as Chief Financial Officer, replacing Annette Borén

whoresigned on 30 June 2024.

On 1 February 2024, Katherine Innes Ker was appointed

tothe Board as Senior Independent Director, replacing

TerryMiller who resigned on 31 December 2023.

The Company has met one of the three targets for diversity

in the Listing Rules. Further details on the Group’s progress

against the new targets for diversity prescribed by the Listing

Rules can be found in the Nomination Committee Report on

pages 70 to 73.

The Board continues to encourage diversity and inclusion

across the Group, and the Board and the Nomination

Committee remain focused on this area when considering

Board succession.

Board engagement

2024 saw the Board visiting the Group’s largest radiator

manufacturing site in Çorlu, Turkey. The visit was successful

and included a tour of the manufacturing and warehousing

facilities and the opportunity to meet key employees from

across the business.

The Board also oversaw preparations for the Group’s inaugural

Capital Markets Event held in November 2024. The event was

well received and outlined medium-term targets based upon

the Group’s strategic objectives.

Board evaluation

The Board evaluation process continues to gather momentum.

It is pleasing to see the actions of the 2022 and 2023

evaluations being addressed and also to see additional

progressive recommendations being made during the 2024

evaluation. Addressing these recommendations will be a key

focus for 2025.

Stakeholders

The Board understands the importance of listening to all

stakeholders and making sure that their views are heard and

acted upon. Our Section 172 statement on page 60 details

how the Board has engaged with stakeholders during the year.

The strategy and business model of the Group aim to deliver

sustainable growth for the business and long-term benefits

for all stakeholders.

The Board looks forward to the Annual General Meeting of

the Group as an opportunity to continue to engage with

our stakeholders.

Bob Ellis

Chair

7 March 2025

Chair’s introduction to governance

Annual Report 2024 Stelrad Group plc 57

GOVERNANCE REPORT

Bob Ellis

Chair

Bob Ellis is a Director and the

Chair of the Board and joined

the Group in August 2009.

Skills and experience

Mr Ellis has a strong financial

background with significant

experience in operational

restructuring and has

also worked with various

companies with private

equity ownership, across a

number of sectors, including

the retail, manufacturing

andconstruction sectors.

External appointments

Mr Ellis currently holds

directorships on the board

of Whittan Group as chair of

the remuneration and audit

committees, the board of

Reconomy as chair of the

board and remuneration and

audit committees and the

board of Outright Games as

chair of the remuneration

andaudit committees.

Leigh Wilcox

Chief Financial Officer

Leigh Wilcox is the Chief

Financial Officer of the Group

and joined the Group in

January 2012.

Skills and experience

Since 2012, Mr Wilcox has

been an integral member

of the Group’s Finance

department and has gained

significant experience during

that time, including cross-

business engagement,

corporate transactions,

financing activities, the

Group’s IPO and development

of the Group’s post-IPO

governance landscape.

Mr Wilcox was previously

a manager at PwC where

he qualified as a Chartered

Accountant (ICAEW). He

studied at the University of

York and graduated with a

BSc (Hons) in Economics.

External appointments

None.

Trevor Harvey

Chief Executive Officer

Trevor Harvey is the Chief

Executive Officer of the

Groupand joined the

Groupin January 2000.

Skills and experience

Prior to joining the Group,

MrHarvey held management

positions as managing

director of Myson Radiators

and managing director of

Myson Heat Emitters, both

of which operate within the

radiator and heat emitter

sector. He studied at the

University of Newcastle

uponTyne and graduated

with a BSc (Hons) in

Mechanical Engineering.

External appointments

None.

Edmund Lazarus

Non-Executive Director

Edmund Lazarus is a Non-

Executive Director and joined

the Group in November 2014.

Skills and experience

Mr Lazarus is also managing

partner and founder of EMK

Capital. Prior to EMK Capital,

Mr Lazarus was managing

partner of Bregal Capital

which he co-founded in

2002. He has been in senior

private equity positions for

over 20 years. Mr Lazarus’

prior career was as a strategic

consultant with Bain & Co

and as an M&A and corporate

finance adviser with SG

Warburg and Merrill Lynch

before entering the private

equity industry with Morgan

Stanley Capital Partners.

External appointments

In addition to being a

partner of EMK Capital

LLP, Mr Lazarus holds a

number ofother external

appointments in private

equity portfolio companies.

Director

Radiator

manufacturing

Financial/audit

and risk

Leadership

and people Strategy

PLC and

governance ESG

Capital

markets

Tech and

digital

Legal/

regulation

Bob Ellis

Trevor Harvey

Leigh Wilcox

Katherine Innes Ker

Nicola Bruce

Martin Payne

Edmund Lazarus

Nicholas Armstrong

Skills matrix

Under the 2018 Corporate Governance Code, the Board and its Committees should have a combination of skills, experience

and knowledge. Below is a skills matrix which includes capabilities that should be covered by the Board as a whole. These

capabilities are standard capabilities which are reviewed by the proxy agencies including ISS and Glass Lewis. The skills matrix

below provides a visual representation of the Directors’ skills.

Board of Directors

Stelrad Group plc Annual Report 202458

GOVERNANCE REPORT

Nicholas Armstrong

Non-Executive Director

Nicholas Armstrong is a

Non-Executive Director

and joined the Group in

November 2015.

Skills and experience

Mr Armstrong is a partner

and member of the founding

team at EMK Capital. Prior

to EMK, Mr Armstrong was

part of the Bregal Capital

team from mid-2014 and

worked extensively across

a number of portfolio

companies including Stelrad

Group. Prior to joining Bregal,

Mr Armstrong worked in

Nomura’s UK M&A team

in London and Nomura’s

Australian M&A team in

Sydney. He graduated from

the University of Sydney

with a Bachelor and Master

of Commerce.

External appointments

In addition to being a

partner of EMK Capital

LLP, Mr Armstrong holds a

number ofother external

appointments in private

equity portfolio companies.

Nicola Bruce

Non-Executive Director

Nicola Bruce is an

independent Non-Executive

Director and joined the

Groupin October 2021.

Skills and experience

In addition to her significant

non-executive board

experience, Ms Bruce was

a partner at the Monitor

Group (now Deloitte) and

group director of strategy

at De La Rue plc. Ms Bruce

holds a number of non-

executive roles in the housing

and building materials

sectors. She is a fellow of

the Chartered Institute of

Management Accountants

and holds an MBA from

INSEAD and an MA (Hons) in

PPE from Oxford University.

External appointments

Ms Bruce is currently a

non-executive director of

Ofwat, the economic water

regulator for England and

Wales, a non-executive

director and chair of the

remuneration committee for

Ibstock plc and MJ Gleeson

plc, and senior independent

director and chair of the

remuneration committee for

the Anchor Hanover Group.

Katherine Innes Ker

Non-Executive Director

Katherine Innes Ker is the

Senior Independent Director

and joined the Group in

February 2024.

Skills and experience

Dr Innes Ker has gained

extensive executive and non-

executive experience across

a range of sectors in a career

spanning over 30 years. She

was a non-executive director

of Vistry plc until 2023, and

senior independent director

of Go-Ahead Group until

2020. Dr Innes Ker has also

held positions as a non-

executive director at Taylor

Wimpey plc, St Modwen

Properties plc, Bryant Group

plc, Gigaclear Ltd, Colt Group

SA, Gyrus Group plc, and the

Ordnance Survey. She was

chair of Sovereign Housing

Association and Victoria

Carpets, and deputy chair of

Marine Farms ASA. Dr Innes

Ker holds an MA (Hons) in

Chemistry and a DPhil in

Molecular Biophysics from

Oxford University.

External appointments

Dr Innes Ker is currently

senior independent director

and chair of the remuneration

committee of Forterra plc,

non-executive director of

Ground Rents Income Fund

plc, and chair of toob ltd. She

is chair of the remuneration

committee of Balliol

College, Oxford.

Martin Payne

Non-Executive Director

Martin Payne is an

independent Non-Executive

Director and joined the

Group in October 2021.

Skills and experience

Mr Payne is an experienced

chief executive officer and

was formerly the chief

executive officer of Genuit

Group plc (formerly Polypipe

Group plc), a UK FTSE

250 building materials

company which serves the

construction industry by

providing sustainable water

and climate management

solutions. Prior to that Mr

Payne was chief financial

officer of Polypipe Group plc,

and has also held the roles

of group finance director

at Norcros plc and group

financial controller at JCB,

the construction equipment

manufacturer. Mr Payne was

also a director and chairman

of the Construction Products

Association, the trade

association that represents

the UK building materials

industry. Mr Payne is a

qualified accountant and

a fellow of the Chartered

Institute of Management

Accountants and holds a

BA(Hons) in Economics

fromDurham University.

External appointments

Mr Payne is currently senior

independent director and

chair of the audit committee

of Churchill China PLC and

chair of the audit committee

of Topps Tiles plc.

Committee key

Audit & Risk

Nomination

Remuneration Chair of Committee

Former Directors

Annette Borén resigned from the Board as Chief Financial Officer on 30 June 2024.

Annual Report 2024 Stelrad Group plc 59

Acting responsibly towards

our stakeholders at all times

Section 172 statement

The Board of Directors of Stelrad Group plc, both

individually and together, consider that they have acted

in good faith and in a way that would be most likely

to promote the long-term success of the Group and

Company for the benefit of its members as a whole

(having regard to the stakeholders and matters set out

in s172(1)(a–f) of the Act) when making decisions during

the year ended 31 December 2024.

The Board considers its key stakeholders to be its people,

customers, suppliers and investors, and also recognises

the importance of the communities and environment in

which the Group operates. The Board takes the views of

its stakeholders seriously in setting and implementing

the Group strategy and believes that good stakeholder

engagement is key to the long-term success of Stelrad

Group plc. Stakeholder considerations also form part of

any Board discussions which lead to decision making.

Each year the Group undertakes a detailed business

planning process, during which the Group sets out its

short and long-term plans and, as part of this process,

carefully assesses any consequences of these plans.

The main objective of the business planning process is

to define a direction that will most likely promote the

success of the Group for all stakeholders. The Board

will also, on an ad-hoc basis, consider other decisions,

both strategic and operational, and in doing so will ask

the Group to explore various alternatives and the likely

consequences of each.

The Stakeholder Engagement section of the Annual

Report, on pages 22 to 25, sets out how Stelrad Group

plc and the Board have engaged with key stakeholders.

In addition to the information provided here, the Group’s

business model on pages 14 and 15 and the Group’s

strategy on pages 16 and 17 outline how the Group

engages with its stakeholders and how the business

creates value for each of them. Furthermore, our ESG

strategy and activity, which directly or indirectly impact

all of our stakeholders, are outlined in the Sustainability

Report on page 26.

As the Board of Directors, our intention is to behave

responsibly towards our stakeholders at all times

and treat them fairly, so that they all benefit from the

successful delivery of our plan.

» Read more in our Governance Report on page 61

Decision making by the Board Section 172 statement

Board information

• Board training and induction,

including s172 training

• Board papers including financial

andnon-financial information

• Advice and presentations by internal

and external experts

• Board engagement with key

stakeholders

Board discussion

• s172 considerations are taken into

account in the Board’s discussions,

including the long-term impacts on

the Group, its stakeholders and the

wider environment

• s172 is taken into account in the

Board’s decision making

• The Board satisfies itself that

information provided is sufficient,

accurate and comprehensive to

enable decision making, and further

information is requested if required

• The Executive Management team

provides information on a timely basis

and further assurance where required

Board decision

• Actions are taken to implement

theBoard’s decisions

Board review

• The Board is provided with

information on the outcomes

andactions of its decisions

Stelrad Group plc Annual Report 202460

GOVERNANCE REPORT

Compliance with the Code

The Board is committed to the highest standards of corporate

governance. Since admission, we have complied with the

2018 UK Corporate Governance Code (the “Code”) except

inthe following areas:

Board composition

At least half the board, excluding the chair, should be

non-executive directors whom the board considers

tobeindependent

The Company does not comply with the Code

recommendation that at least half the board, excluding

the chair, should be non-executive directors whom the

board considers to be independent for the full year. For the

period from 1 January 2025 to 31 January 2025, the Board,

excluding the Chair, was made up of four non-independent

and two independent directors and was therefore not

compliant. For the period from 1February 2025 to 30 June

2025, the Board, excluding the Chair, was made up of four

non-independent and three independent directors and was

therefore not compliant. For the period from 1 July 2025

to 30September 2025, the Board, excluding the Chair, was

made up of three non-independent and three independent

directors and was therefore compliant. For the period from

1October 2025 to 31 December 2025, the Board, excluding

the Chair, was made up of four non-independent and three

independent directors and was therefore not compliant.

Twoof the current Non-Executive Directors are representatives

of the Major Shareholder as a condition of the Relationship

Agreement. Although the number of Non-Executive Directors

on the Board who are not considered to be independent

is expected to reduce over time, with reductions in the

shareholding of the Major Shareholder leading to adjustment

of the conditions set by the Relationship Agreement, the Board

also continues to consider potential recruitment of additional

independent Directors as part of Board succession planning.

Independent chair

The chair should be independent on appointment

The Code recommends that the chair of a company should

be independent on appointment when assessed against the

circumstances set out in the Code. The Chair, Bob Ellis, has in

the past held, and continues to hold, various positions with

portfolio companies owned by affiliates of The Bregal Fund III LP,

the Company’s Major Shareholder, and was initially appointed

as a Non-Executive Director of the Group in 2009. By virtue

of holding these positions with portfolio companies owned

by affiliates of the Major Shareholder and taking into account

MrEllis’ tenure as a Non-Executive Director, the Board does not

consider that the Chair should be viewed as being independent

on appointment by reference to the independence criteria set

out in the Code. However, in view of the Chair’s involvement

with the Group over the last 15 years, and as Chair since 2013,

the Board continues to consider that he has made, and will

continue to make, a major contribution to the Group’s growth

and success, and in looking at the year ahead is unanimously of

the opinion that his continued involvement as Chair will help to

ensure the ongoing success of the Company.

The chair should not remain in post beyond nine years

from the date of their first appointment to the Board

The Chair, Bob Ellis, was appointed as a Non-Executive

Director of the Group in 2009 and as Chair in 2013. This

constitutes non-compliance with Provision 19 of the Code.

The Board continues to consider that Bob Ellis has made,

andwill continue to make, a major contribution to the Group’s

growth and success, and in looking at the year aheadis

unanimously of the opinion that his continued involvement as

Chair will help to ensure the ongoing successof the Company.

Senior independent director

A senior independent director should be appointed

to the Board

From 1 January 2024 until 31 January 2024, there was

noSenior Independent Director on the Board. The previous

Senior Independent Director, Terry Miller, resigned on

31 December 2023 and the new Senior Independent

Director, Katherine Innes Ker, was appointed on

1February 2024.

A copy of the Code can be found at www.frc.org.uk.

Role of the Board and its Committees

Board

The role of the Board is to set and monitor the Group’s purpose

and strategy in order to promote sustainable growth and the

long-term success of the business and, in doing so, generate

value for the shareholders. It is the responsibility of the Board

to ensure that the strategy of the business is in alignment with

the culture and values of the organisation. The Board is also

responsible for taking into account the views and interests

of all stakeholders, including the wider community, through

engagement with a wide range of stakeholders.

The Board, supported by the Audit & Risk Committee, is

responsible for the Group’s systems of internal control and

risk management and for ensuring that these systems of

governance are strong and effective. The Board also sets

therisk appetite of the Group.

The Board’s main responsibilities are included in a schedule

ofmatters reserved for the Board, as set out below:

• strategic matters – responsibility for the overall leadership

of the Group and setting and monitoring the Group’s

strategy, values and standards;

• structure and capital – approving or recommending any

changes relating to the Group’s capital structure;

• financial reporting and controls – approving the Group’s

annual financial statements and reports, and approving

the Group’s business plan, budget and forecasts;

• agreements – approving major capital projects,

investments, contracts and lending or borrowing by the

Group (outside of the treasury policy);

• communications with shareholders – ensuring an effective

engagement strategy with shareholders;

• Board appointments and remuneration – approving

changes to the structure, size and composition of the Board;

• risk assessment and internal controls – ensuring the

maintenance of sound systems of internal control and risk

management, and monitoring these systems; and

• corporate governance – reviewing the Company’s overall

corporate governance arrangements and assessing and

monitoring the Group’s culture.

The membership of the Board is detailed below:

• a Non-Executive Chair;

• two Executive Directors;

• three independent Non-Executive Directors, including

aSenior Independent Director; and

• two Major Shareholder Representative Directors.

The Directors of the Company who were in office during the

year and up to the date of signing the financial statements

are detailed on pages 58 and 59.

Statement of corporate governance

Annual Report 2024 Stelrad Group plc 61

Key roles of the Board

The roles and division of responsibilities between the Chair,

Chief Executive Officer and Senior Independent Director have

been clearly defined and agreed by the Board. A summary of

the key roles and responsibilities is given below:

Chair

• Responsible for the leadership of the Board, promoting

a culture of openness and debate.

• Promotes the highest standards of integrity, probity

and corporate governance, in line with best practice.

• Sets the Board agenda, ensuring it has a focus

on strategy, performance, value creation, culture,

stakeholders and accountability.

• Oversees the development, induction and performance

evaluation of each Director.

• Ensures that Directors receive accurate, timely, high-quality

and clear information on the basis of which they can make

sound decisions.

• Ensures that the Board listens to the views of shareholders,

the workforce, customers and other key stakeholders

by ensuring effective communication with them in

order to understand their issues and concerns, and by

communicating issues to the Board.

Nomination Committee

Responsibility for the composition

of the Board and Committees of

the Board including succession

planning and ongoing review of

diversity policies.

Members:

• Three independent

Non-Executive Directors –

Katherine Innes Ker (Chair)

(appointed 1 February 2024),

Martin Payne and Nicola Bruce

• One Major Shareholder

Representative Director –

Edmund Lazarus

» The Nomination Committee Report can

be found on page 70

Audit & Risk Committee

Responsibility for oversight of

the Group’s financial reporting,

internal controls, risk management

and relationship with the

external auditors.

Members:

• Three independent

Non-Executive Directors

– MartinPayne (Chair),

KatherineInnes Ker

(appointed1 February 2024)

and Nicola Bruce

» The Audit & Risk Committee Report can

be found on page 65

Remuneration Committee

Responsibility for the Remuneration

Policy, setting individual

remuneration levels for Executive

Directors and the Chair, and

aligning workforce remuneration

and related policies with the

Group’s strategy and culture and

the requirements of the Code.

Members:

• Three independent

Non-Executive Directors

– NicolaBruce (Chair),

KatherineInnes Ker

(appointed1 February 2024)

and Martin Payne

» The Remuneration Committee Report

can be found on page 74

Statement of corporate governance continued

Chief Executive Officer

• Responsible for the leadership of the business.

• Works closely with the Chair and the Board to propose,

develop and implement the Company’s strategy.

• Represents the Company and oversees and manages all

business activities, operations and performance of the

Group within the authority delegated by the Board.

• Leads the senior management team of the Group in the

day-to-day running of the business.

• Regularly reviews the Group’s operational performance

and strategic direction and reports accurately in agreed

formats to the Board and the Committees.

• Monitors and maintains high standards of

corporate governance.

• Manages the Group’s risk profile in line with the extent

andcategories of risk identified as acceptable by the

Boardand the Audit & Risk Committee.

Senior Independent Director

• Provides a sounding board to the Chair and supports

theChair in the delivery of their objectives.

• Appraises the Chair’s performance.

• Acts as an intermediary between the Chair and the other

Directors, when necessary.

• Available to shareholders if they have concerns which

havenot been resolved through the normal channels.

Role of the Board and its Committees continued

Board continued

On 30 June 2024, Annette Borén resigned from the Board and Leigh Wilcox was appointed to the Board on 1 October 2024.

On 1 February 2024, Katherine Innes Ker was appointed to the Board, replacing Terry Miller, who resigned from the Board on

31 December 2023.

As envisaged by the Code, the Board has established an Audit & Risk Committee, a Nomination Committee and a Remuneration

Committee, each with formally delegated duties and responsibilities with written terms of reference. The Committees play

an essential role in supporting the Board and provide focused oversight of key aspects of the business. A summary of the

membership and responsibilities of each Committee is detailed in this report. The full terms of reference for each Committee

are available on the Company’s website, www.stelradplc.com.

Stelrad Group plc Annual Report 202462

GOVERNANCE REPORT

Board activities and priorities during 2024

During the year ended 31 December 2024, the Board has met eight times, seven of which were scheduled. The following

areas have been discussed during the year:

Governance Report

Board meetings and attendance

The Board held seven scheduled meetings during the year

ended 31 December 2024. The table below sets out the

attendance of each Director versus the maximum number

of scheduled meetings they could have attended during the

year ended 31 December 2024.

Board

Audit & Risk

Committee

Nomination

Committee

Remuneration

Committee

Trevor Harvey 7/7 — — —

Leigh Wilcox 2/2 — — —

Annette Borén 4/4 — — —

Bob Ellis 7/7 — — —

Katherine

Innes Ker 6/6 3/3 2/2 3/3

Martin Payne 7/7 3/3 2/2 4/4

Nicola Bruce 7/7 3/3 2/2 4/4

Edmund

Lazarus 6/7

(1)

— 2/2 —

Nicholas

Armstrong 7/7 — — —

(1) Edmund Lazarus was unable to attend one meeting due to

pre-existing commitments.

Additional ad-hoc meetings were also held during the year

in respect of changes to the composition of the Board.

Appointment and election

On 1 February 2024, Katherine Innes Ker was appointed to

the Board. On 30 June 2024, Annette Borén resigned from

the Board. On 1 October 2024, Leigh Wilcox was appointed to

the Board. There has been no other change to the composition

of the Board during the year ended 31 December 2024 or up

to the date of signing the financial statements.

The Board is satisfied that all Directors are effective and

committed to their roles and have sufficient time available

toperform their duties. In line with the Code and the

Company’s Articles, all of the Directors will be subject to

annual re-election. Therefore, all members of the Board

willbe standing for election at the 2025 Annual General

Meeting tobe held on 21 May 2025.

Board induction

Details of the Board induction can be found in the

Nomination Committee Report on page 71.

Board evaluation

The Board completed its annual Board and Committee

evaluation in the second half of 2024. The results of the

evaluation, along with an action plan for addressing

any identified issues, were reported to the Board in

December 2024.

» Read more about the format and outcome of our Board evaluation

process on page 72

Board effectiveness review

In line with the Code, the Board reviewed its own

effectiveness and that of its Committees during 2024.

The 2024 Board evaluation was internally facilitated by

the Chair of the Nomination Committee in conjunction

with the Company Secretary, and it was conducted during

the second half of 2024 using an online questionnaire

which each Director was asked to complete, with specific

reference to individual Board and Committee responsibilities.

The completed questionnaires were then collated, and

the responses reviewed by the Chair of the Nomination

Committee and Company Secretary.

The findings of the 2024 evaluation exercise confirmed

that overall the Board and its Committees continued to operate

effectively during the year. The Nomination Committee will

consider the findings and develop proposals for action by the

Board to address recommendations arising from the evaluation.

With respect to individual performance assessment, the

Senior Independent Director provided a performance

assessment to the Chair following a session with all

Board members (excluding the Chair) and the Company

Secretary. An annual performance assessment of each

Non-Executive Director is carried out to ensure that

performance, contribution, commitment and any training

and development needs are addressed.

It is the intention of the Board to evaluate the commission of

an external, independent review of the Board’s effectiveness

during the current financial year.

Non-Executive Director independence

The Non-Executive Directors bring a broad range of skills and

experience to Stelrad Group plc, and they are qualified to

provide constructive challenge in Board discussions, where

needed, and considered insights to refine the strategy of

the Group over the coming years. The independence of the

Non-Executive Directors is reviewed as part of an annual

Board evaluation process. As previously stated within the

statement of corporate governance, the Board does not

currently comply with the requirements of the Code in

relation to majority of independence of the board and the

independence of the chair on appointment.

• health and safety;

• ESG strategy, sustainability

andTCFD requirements;

• Radiators SpA update;

• approval of 2023 Annual Report,

2024 interim statement and

trading updates;

• dividend approval;

• 2024 budget approval;

• 2023 annual bonus approval

andthe total remuneration

outcome for Executive Directors

and senior management;

• Board evaluation;

• Board and senior management

succession planning;

• Chief Financial Officer appointment;

• risk management and risk register;

• review of premium panel

radiator market;

• review of cyber security;

• review of strategic initiatives;

• review of market developments;

• Capital Markets Day review;

• investor relations update; and

• Group policy review.

Annual Report 2024 Stelrad Group plc 63

Governance Report continued

Non-Executive Director independence continued

Three of the Non-Executive Directors – the two Major

Shareholder Representative Directors and the Chair – are not

independent. Under the meaning of independence within

the Code, the Company regards the three independent

Non-Executive Directors as independent and free from any

business or other relationship that could materially interfere

with the exercise of their independent judgement.

Time commitment

All Non-Executive Directors are required to devote appropriate

time to meet their Board responsibilities and demonstrate

commitment to their role. The time commitment of each

Non-Executive Director was considered prior to their

appointment to determine that it was appropriate. The

Non-Executive Directors’ letters of appointment contain

information in relation to the time commitment expected

of each Director in their role. Directors’ external time

commitment is regularly reviewed to ensure Directors can

allocate the necessary time and effort to the Company.

This process is continually managed by the Company

Secretary and the Chair and takes into consideration outside

appointments and commitments.

The Board has concluded that, notwithstanding Directors’

other appointments, they are each able to dedicate sufficient

time to fulfil their duties and obligation to the Company.

Directors’ conflicts of interest

The Group has a formal ongoing procedure for the disclosure,

review and authorisation of Directors’ conflicts of interest.

All Directors are required to make the Board aware of any

other commitments. Potential and actual conflicts of interest

are carefully considered and, if deemed appropriate, the

continuing existence of the potential or actual conflict of

interest may be approved by the Board. All conflicts of interest

are recorded in the conflicts register. The conflicts of interest

are reviewed annually to determine whether they should

remain authorised.

Internal control and risk management

The Board, supported by the Audit & Risk Committee, is

responsible for the Group’s systems of internal control and

risk management and for ensuring that these systems of

governance are strong and effective.

Details of how the Audit & Risk Committee reviews and

assesses the effectiveness of the system of internal control

can be found in the Audit & Risk Committee Report on

pages65 to 69. The Board understands that systems of

internal control can only manage, and not eliminate, risk,

and that they are designed to provide reasonable, and not

absolute, assurance against material misstatement or loss.

The Board is responsible for the oversight of the risk

management process, which involves reviewing the

processes in place to calculate and manage risk effectively.

The Board is also responsible for setting the risk appetite

of the Group and acknowledges its responsibility for

determining the extent of the risks it is willing to take in

achieving its strategic objectives. The Board regularly reviews

the principal risks facing the Group and the mitigation

measures for each risk which are set out on pages 48 to 54.

Whistleblowing

The Group has a Whistleblowing Policy in place and a

whistleblowing contact email address is available to enable

employees to raise any legitimate concerns which they

feel need to be brought to the attention of management

concerning any wrongdoings within their workplace.

TheGroup believes that it is important to have a culture of

openness to prevent such situations occurring or to bring

them to the attention of management when they do occur.

Information and support

The information presented to the Board is clear, accurate

and timely, and intended to enhance Board effectiveness.

Acomprehensive Board procedures manual is maintained

in the online Board portal, to which all Directors have access.

The standing information held there includes Board and

Committee terms of reference, the duties and responsibilities

of Directors, including standards of conduct and compliance,

and training documents. The Board and Committee papers

are also posted in the online Board portal.

All Directors have access to the advice and services of the

Group Company Secretary, who can specifically advise

them on governance matters. The Directors may also take

independent professional advice at the Group’s expense

when it is judged necessary to perform their duties effectively.

Business ethics

The Group’s core values and principles, and the standards

of behaviour which every employee across the Group is

expected to uphold, are set out in the Stelrad Group plc

Code of Conduct. These values and principles are applied

todealings with our employees, customers and suppliers

andallother stakeholders of the business.

The Group has anti-corruption and bribery policies which

are communicated to all employees through business units’

intranets and readily available from the respective Human

Resources departments. The policy is prepared in light of

the UK Bribery Act 2010 and describes the legal framework

applicable to the business as well as standards and policies to

be adhered to by employees. In addition, training courses are

provided locally.

The Group is opposed to modern slavery and human

trafficking and will only work with organisations which

formally commit to the Group’s Ethical Trading Policy. The

Board has approved the modern slavery statement which

canbe found on the Group’s website at www.stelradplc.com.

Equality, diversity and inclusion

The Group has both an Equality, Diversity and Inclusion Policy

and a Diversity and Inclusion Policy for the Board. The Diversity

and Inclusion Policy for the Board aims to ensure that diversity

and inclusion will be considered in all future Board appointments

so that the Board membership reflects a broad combination

of factors such as diversity of gender, age, educational and

professional background, social, ethnic and geographical

background, and cognitive and personal strengths. The Diversity

and Inclusion Policy for the Board is detailed on page 71.

More details can be found in the Nomination Committee

Report on pages 71 and 72 where the Board diversity

disclosures required by the FCA Listing Rules are disclosed.

Succession planning

Succession planning, both for the Board and for senior

management, has been a major focus over the past year.

Details of the Nomination Committee’s consideration

of succession planning can be found in the Nomination

Committee Report on pages 70 to 73.

Statement of corporate governance continued

Stelrad Group plc Annual Report 202464

GOVERNANCE REPORT

Overseeing financial reporting

and risk management

Highlights of 2024

• Completion of the 2023 Annual Report.

• Continued development of the Group’s risk

management framework, including the incorporation

of an information security risk register and a treasury

risk register.

• Continued focus on cyber security risk, including an

internal audit revisiting the recommendations of

the2022 cyber security audit.

• Continued development of the Group’s internal audit

approach and plan, including the commencement

ofa risk-based approach to internal audit.

• Preparation for new environmental reporting and

auditing requirements.

• Review of the updated provisions and principles

ofthe2024 Code.

• Supported the Nomination Committee in the

appointment of a new Chief Financial Officer.

Focus areas for 2025

• Review of the 2024 Annual Report.

• Continued focus on environmental reporting and

auditing requirements, including preparation for

2025CSRD reporting in our Italian and Dutch

businesses and obtaining the correct levels of advice

and assurance in this area.

• Implementation of the updated provisions and

principles of the 2024 Code and an assessment

ofprovision 29 of the 2024 Code.

Committee members

Martin Payne (Chair)

Nicola Bruce

Katherine Innes

Ker (appointed

1 February 2024)

During the year the Committee

has been active in preparing for

legislative changes.

Martin Payne

Chair of the Audit & Risk Committee

Dear shareholders

As Chair of the Audit & Risk Committee, I am pleased to

introduce the Committee’s report, which provides a summary

of the Committee’s role and activities for the financial year

ended 31 December 2024.

The Committee plays a vital role in delivering the Company’s

corporate governance obligations, by overseeing the

accounting, financial reporting and internal control and

riskmanagement processes, and providing valuable

independent challenge where required.

As well as detailing the composition and remit of the

Committee, this report will also outline how the Committee

operates; give an appraisal of the external auditors and auditors’

effectiveness; and provide an overview of the Group’s internal

control environment and risk management framework,

including the Committee’s assessment of its effectiveness.

During the year, Annette Borén resigned from her position

asChief Financial Officer and stepped down from the

Board. I would like to record the Committee’s thanks to

Annette, andwe wish her well for the future. Leigh Wilcox

was appointed as Chief Financial Officer and also joined

theBoardon 1 October 2024. Leigh Wilcox has been

withthe business since 2012 and brings a wealth of Group

experience to the role.

Committee composition

The Committee has comprised three independent

Non-Executive Directors during the year ended

31December2024: Nicola Bruce, Katherine Innes

Ker (appointed 1 February 2024) and Martin Payne as

Committee Chair. TheMajor Shareholder is entitled to

nominate an observer tothe Audit & Risk Committee

andhasexercised its right todo this during the year.

The membership of the Committee was selected with the

aim of providing the range of financial, commercial and

sector expertise necessary to meet the responsibilities of

theCommittee and the requirements of the Code.

Going forward, the Committee will keep its composition

under review to ensure it remains appropriate. The Board

believes that the Committee has the competence and

experience that are relevant to the sector in which the

Company operates. The Board is also satisfied that Martin

Payne, a Chartered Management Accountant and a former

public company finance director, has recent and relevant

financial experience and he has been designated as the

financial expert on the Committee for the purposes of

the Code.

Details of the Directors’ experience and skill sets can

befoundin the Director biographies on pages 58 and 59.

Audit & Risk Committee Report

Annual Report 2024 Stelrad Group plc 65

Committee remit

The key responsibilities of the Committee are:

• reviewing and monitoring the integrity of the Group’s

annual and interim financial statements, and reviewing

the significant financial reporting judgements made in

connection with their preparation;

• reviewing the content of the Annual Report and advising

the Board on whether, taken as a whole, it is fair, balanced

and understandable;

• monitoring and reviewing the adequacy and effectiveness

of the Company’s internal financial controls and internal

control and risk management systems;

• overseeing and maintaining an appropriate relationship

with the Company’s external auditors and reviewing

the independence, objectivity and effectiveness of the

audit process;

• ensuring that internal audit arrangements are appropriate

and effective; and

• ensuring that fraud prevention and whistleblowing

arrangements are established which minimise the

potential for fraud and financial impropriety.

Further details on the remit and responsibilities of the

Committee can be found in its terms of reference. The terms

of reference, which are reviewed annually and approved by

the Board, can be found on our website, www.stelradplc.com.

How the Committee operates

The Committee schedules its meetings to align with the key

dates in the Company’s financial calendar. The dates of the

meetings have been set using a structured forward planner,

developed in conjunction with the Company Secretary, to

ensure it is able to devote sufficient time to discussing and

debating the key matters within its remit and discharge

its responsibilities in full. Additional meetings are held

as required where there are specific areas of judgement

to discuss.

The Committee will meet at least three times per annum.

Theexternal auditors, PricewaterhouseCoopers LLP, are

invited to attend each meeting together with the Chair of

theBoard, the Chief Financial Officer, the Group Finance

Director and the Company Secretary. The Committee Chair

will also update the Board following each meeting.

The Committee also sets time aside at each meeting to

seek the views of the external auditors, in the absence of

management. In between meetings the Committee Chair

keeps in touch with the Chief Financial Officer and other

members of the management team.

During 2024 the Board undertook a review of its own

effectiveness which included the effectiveness of the

Committee. This review concluded that the Committee was

operating effectively. For more details please see page 63.

2024 Committee activities

The Committee held three scheduled meetings during

the year ended 31 December 2024, and key areas

coveredat the meetings of the Committee were:

• review of external auditors’ and internal

auditors’ effectiveness;

• consideration of the relevant elements of the Group’s

2023Annual Report, including the key accounting

judgements and the going concern and viability

statement, and of the 2024 interim statement;

• review of proposed dividend and assessment of

distributable reserves;

• consideration of the risk management framework

and of the Group risk register, including the approval

of an information security risk register and a treasury

risk register;

• consideration of the Group’s cyber security risks and

the progress against the cyber security internal audit

recommendations;

• Radiators SpA pre-acquisition due diligence review

follow-up;

• consideration of new environmental reporting and

auditing requirements;

• review of existing hedging strategy;

• review of the 2024 internal audit reports, undertaken

by Grant Thornton UK LLP, covering treasury and

risk management, revisiting the Radiators SpA and

cyber security audits and review of the 2025 internal

audit plan; and

• review of the updated provisions and principles of the

2024 Code.

Financial reporting review

A key requirement of the financial statements is that

they arefair, balanced and understandable. In reaching

ajudgement as to whether this is the case, the Annual

Reportis reviewed and assessed by the Committee.

TheCommittee considers that the 2024 Annual Report

isfair, balanced and understandable in terms of the form

andcontent of the strategic, governance and financial

information presented therein.

Audit & Risk Committee Report continued

Stelrad Group plc Annual Report 202466

GOVERNANCE REPORT

Significant issues and other

accountingjudgements

The Committee reviewed the integrity of the Group’s financial

statements and all formal announcements relating to the

Group’s financial performance. This included an assessment

of each critical accounting policy, as set out in note 5 to the

financial statements, as well as review of the following key

areas of judgement and areas of audit risk:

Impairment of non-financial assets

The Committee reviewed the impairment assessment

ofintangible assets, including goodwill, in Radiators SpA.

TheCommittee also reviewed the key judgements used.

Revenue recognition and indirect rebates

In conjunction with the annual audit, the Committee

continued to review key judgements in respect of revenue

recognition and indirect rebate provisions.

Going concern and long-term viability

The Committee has reviewed the Group’s going concern and

long-term viability disclosures in this Annual Report, along

with supporting documents, and advised the Board on their

appropriateness. More detail on these disclosures can be

found on page 55 of the Strategic Report. As part of its review,

the Committee considered the appropriateness of the “severe

but plausible” downside scenario modelled by the business,

especially considering the potential ongoing impact of the

current economic situation.

External auditors and audit effectiveness

PricewaterhouseCoopers LLP (“PwC”) were appointed as

theauditors of Noosa Holdings Jersey Limited, which was

the parent company of the Group prior to the Group’s listing,

in 2017, and were subsequently appointed as auditors of

the Company.

For the financial year ending 31 December 2025, the

Committee has recommended to the Board that PwC be

reappointed as external auditors and the Company will be

seeking shareholder approval for the reappointment of

PwCat its AGM to be held in May 2025.

The current lead audit partner, Paul Cheshire, was appointed

in 2022. Current professional standards require a lead partner

to be rotated every five years.

The Committee has no current plans to re-tender the audit

in the foreseeable future.

In assessing the independence of the auditors from the

Group, the Committee has been provided with information

and assurances that all of the auditors’ partners and staff

involved with the audit are independent of any links to the

Group. The Committee has reviewed, and is satisfied with,

the independence of PwC as the external auditors.

Subsequent to the year end, the Committee assessed the

effectiveness of PwC and the external audit process for 2024

through discussions with senior members of management

across the Group who had been involved in the audit process.

A summary of the findings was prepared for consideration

bythe Committee and PwC.

There were no substantive matters identified during this

assessment and the Committee concluded that the external

audit process for 2024 had been effective.

The Committee reviewed PwC’s findings in respect of

theaudit of the financial statements for the year ended

31 December 2024. The Committee met separately with

the auditors without management present and with

management without the auditors present, to ensure

that there were no issues in the relationship between

management and the external auditors which it should

address. No matters were raised.

Non-audit services

A policy governing the provision of non-audit services is in

place in order to ensure the independence of the external

auditors. Non-audit services should not be carried out by

theexternal auditors where doing so would compromise

their independence. The provision of non-audit services by

the external auditors must always be approved by the Board,

either by specific pre-approval or on a case by case approval

basis. In deciding whether the external auditors should be

appointed to carry out any non-audit services, the following

areas should be taken into consideration:

• the skills and experience of the external auditors to

perform the required services;

• the effect of the non-audit services on the audited

financial statements;

• the potential impact of each project on the external

auditors’ independence and objectivity; and

• the resulting ratio of non-audit to audit fees.

In 2024, PwC received total fees of £531,000

(2023: £474,000) comprising £485,000 of audit fees

(2023: £430,000) and £46,000 of non-audit service fees

(2023: £44,000). The fees for non-audit services during

the year ended 31 December 2024 and the year ended

31 December 2023 include:

• in 2024, £38,000 related to interim review fees and

£8,000 related to bank covenant reporting; and

• in 2023, £36,000 related to interim review fees and

£8,000 related to bank covenant reporting.

Further details of fees paid to PwC are set out in note 8 to the

financial statements.

Annual Report 2024 Stelrad Group plc 67

Internal control framework

The day-to-day management of our principal risks is

supported by an internal control environment which

isembedded in our management and operational

processes.The most significant elements of the Group’s

internal control environment include the following:

Communication of policies and procedures

The Group has documented policies and procedures

underpinning its key business and finance processes.

Policies and procedures documents are held at both Group

and business unit level, with more detailed documents held

at a business unit level to support the local conditions.

The Group will continue to monitor and review its Group

policies and build upon them in future years as required.

Promoting a culture of honesty and ethical behaviour

The Group educates new staff on the values and culture of

the business through employee handbooks and induction

training sessions. The content and structure of the employee

handbooks vary across the business units to support local

conditions. Areas covered include terms of employment

andhealth and safety.

In addition to the local employee handbooks, the Group

maintains complementary key policies and procedures for HR,

anti-corruption and bribery, modern slavery and whistleblowing.

Monitoring and oversight by those charged

withgovernance

There are a number of operational controls in place which

facilitate the Executive Directors’ monitoring of the Group’s

financial performance and position. In addition, business

process controls are in place for the key operational cycles.

The Group has a documented organisational structure that

clearly specifies roles and reporting lines for all business units

and departments within the Group. The reporting line to

the Board is through the Chair, Chief Executive Officer and

Chief Financial Officer. There is frequent interaction between

the Chief Executive Officer and Chief Financial Officer and

business unit management teams.

Segregation of duties

Appropriate segregation of duties has been put in place

across the Group.

Risk management

Overall responsibility for risk management lies with the

Board, supported in its role by the Audit & Risk Committee,

which has been delegated the responsibilities of reviewing

the risk management methodology and the effectiveness

of internal control.

The Group has in place a risk management framework,

underpinned by the use of business unit and Group level risk

registers, which clearly documents procedures to ensure risks

to the organisation are identified, reported and reassessed on

an ongoing basis.

In addition to the assurance provided by the formal risk

management framework, the Executive Directors are very

involved in the day-to-day running of the business and have

overview of potential risks in the business units.

The Group continually assesses and monitors the impact

of the most significant risks. Where necessary, mitigating

actions are put in place to reduce the likelihood or impact

of such risks to an acceptable level.

The Group’s risk appetite is largely risk averse. However, the

Group Board accepts that, in order to achieve its strategic

objectives and generate suitable returns for shareholders,

it must accept, and manage, a certain level of risk.

Internal audit

During the year ended 31 December 2024, the internal

auditors, Grant Thornton UK LLP, commenced delivery of

a risk-based internal audit plan with reviews undertaken

covering risk management and treasury. The internal

auditors have also revisited previous recommendations

and their implementation, focusing particularly upon the

recommendations of the cyber risk review and the financial

controls review at Radiators SpA.

Audit & Risk Committee Report continued

Stelrad Group plc Annual Report 202468

GOVERNANCE REPORT

Assessment of the Group’s system of internal

control and risk management framework

The risk assessment process within the Group and the

management of significant business risks is a key area of

focus for the Committee. The Committee’s undertakings

with regard to risk assessment have focused on the key risks

identified by the Group and the actions it had put in place to

address these – as described in the Risk Management section

of the Strategic Report on pages 48 to 54.

The Group’s internal control environment is designed to

protect the business from the material risks which have

been identified. Management is responsible for establishing

and maintaining adequate internal controls over financial

reporting and the Committee has responsibility for ensuring

the effectiveness of these controls.

The internal auditors, Grant Thornton UK LLP, will contribute

to the review of the internal control environment.

In accordance with the requirements of the Code, the

Committee confirms it has reviewed the Group’s risk

management framework and internal control environment.

No significant failings or weaknesses were identified as

a result of the review that may significantly impact the

financial statements.

Internal audit effectiveness

The Committee reviewed the effectiveness of the internal

audit process by using a formal questionnaire-based

approach. No matters were raised.

Management ensures that the provider of internal audit

services is appropriately qualified to audit the risk area

being considered.

Fraud, whistleblowing and the UK Bribery Act

The Committee recognises the importance of effective

whistleblowing policies as being an additional tool to

strengthen governance, by ensuring a reliable system is in

place to identify and correct any unlawful or unethical conduct.

The Committee monitors any reported incidents under the

Group’s Whistleblowing Policy, which is explained in more

detail on page 64 of the statement of corporate governance.

There were no incidents during the year which were required

to be brought to the attention of the Committee.

The Committee also reviews the Group’s procedure for

detecting fraud and the systems and controls in place to

prevent a breach of anti-bribery legislation. The policy is

explained in more detail on page 64 of the statement of

corporate governance. There were no breaches during the

year which were required to be brought to the attention of

the Committee.

Martin Payne

Chair of the Audit & Risk Committee

7 March 2025

Annual Report 2024 Stelrad Group plc 69

Dear shareholders

I am pleased to present the Nomination Committee Report

of Stelrad Group plc for the year ended 31 December 2024

following my appointment as Chair of the Committee on

1February 2024. This report summarises the activities of

theCommittee during the year and examines the future

focus areas of the Committee.

Nomination Committee composition

The Committee’s membership is detailed on page 62, and

information on the Directors’ experience and skill sets can

be found in their biographies and the Board skills matrix on

pages 58 and 59. At the financial year end, the Committee

comprised a majority of independent Non-Executive

Directors, complying with provision 17 of the 2018 Code.

Nomination Committee remit

The key responsibilities of the Nomination Committee are:

• to assist the Board in discharging its responsibilities

relating to the composition and make-up of the Board

and any Committees of the Board;

• to periodically review the Board’s structure and identify

potential candidates to be appointed as Directors or

Committee members as the need may arise;

• to evaluate the balance of skills, knowledge and experience

and the size, structure and composition of the Board

and Committees of the Board, and retirements and

appointments of additional and replacement Directors

and Committee members, and to make appropriate

recommendations to the Board on such matters;

• to assist the Chair in the annual evaluation of the Board’s

performance and to review the results relating to Board

composition and performance;

• to put in place plans for the orderly succession of

appointments to the Board and to senior management

and to oversee the development of a diverse pipeline

for succession, taking into account the importance of

maintaining the Group’s culture, the challenges and

opportunities facing the Group, and the skills, experience

and knowledge needed within the Group and on the

Board; and

• to maintain an ongoing review of the Group’s Equality,

Diversity and Inclusion Policy and the progress in meeting

its objectives for the Board, its Committees and the Group,

recommending changes to the Board as appropriate.

Further details on the remit and responsibilities of the

Committee can be found in its terms of reference. The terms

of reference are reviewed at least annually and approved

by the Board. The terms of reference can be found on our

website, www.stelradplc.com.

Focused on Board effectiveness

and succession planning

Highlights of 2024

• Undertook the Board and Committee evaluation

process, including a review of the current year outcomes

and an update of the recommendations from the

prior year process, with continuing focus on actions to

address recommendations and enhance effectiveness.

• Review of Board and senior management

succession planning.

• Oversight of the Chief Financial Officer

appointment process.

• Review of the Board skills matrix and the roles and

responsibilities of Directors to ensure that the Board

has the right mix of skills, experience and knowledge.

• Continued development of the ESG strategy.

• Enhanced shareholder engagement across a wider

investor community.

Focus areas for 2025

The Committee will focus on overseeing actions to

address the outcomes of the Board evaluation, including:

• A review of long-term succession planning for the

Board and senior management, and oversight of

efforts to enhance diversity and inclusion.

• Board assessment of culture.

Committee members

Katherine Innes Ker

(Chair) (appointed

1 February 2024)

Martin Payne

Nicola Bruce

Edmund Lazarus

In 2024, the Nomination Committee

focused on the priorities raised in

the prior year Board and Committee

evaluation process, including

succession planning, ESG strategy

and shareholder engagement.

Katherine Innes Ker

Chair of the Nomination Committee

Nomination Committee Report

Stelrad Group plc Annual Report 202470

GOVERNANCE REPORT

Board Diversity and Inclusion Policy

To deliver on our purpose, it is essential that we foster

diversity of thought and an environment where everyone

is encouraged to bring their best and true selves to work.

The Board believes that better decision making and

outcomes are achieved when people with differences of

opinion and with different backgrounds come together

with a common objective and shared ambition. As a

Board, we monitor the implementation of the Group’s

diversity and inclusion policies, including relevant metrics,

satisfying ourselves that the Group’s culture is and

remains aligned to its purpose, strategy and values.

“Diversity” describes all the characteristics, experiences

and cultural influences that make each of us unique

individuals. Our policy is to respect the diversity of all

customers, colleagues, prospective colleagues, contractors

and suppliers, and treat all fairly and equally regardless

of characteristics. “Inclusion” means that all are welcome,

and will be treated with respect and dignity in line with

our values irrespective of their individual circumstances.

This policy on diversity and inclusion applies to the

Board only but complements the Group’s wider diversity

policies, values, Code of Conduct and sustainability

framework. The Board, supported by the Board

Nomination Committee, will:

• encourage a diverse and inclusive working

environment in the boardroom, where everyone

isaccepted and valued and receives fair treatment

according to their different needs and situations

without discrimination or prejudice;

• continue our journey towards greater diversity on

theBoard across all dimensions, including aspiring

toreach greater representation of women and those

ofan ethnic minority background over time;

• consider all aspects of diversity when reviewing the

Board’s composition, skills, experience and overall

balance, including when conducting the annual

Boardeffectiveness review;

• oversee the development of a diverse pipeline for

succession to the Board and ensure that all Board

appointments are subject to a formal, rigorous and

transparent procedure based on merit and objective

criteria taking into account (among other things)

factors such as diversity of gender, age, educational

and professional background, social, ethnic and

geographical background, and cognitive and personal

strengths; and

• engage search firms which understand and agree

to comply with the Group’s values and approach

todiversity in identifying suitable Board candidates

from diverse candidate pools.

Succession planning

This year has seen changes to the composition of the Board

and its Committees, with the resignation of Annette Borén

as Chief Financial Officer in June, the appointment of Leigh

Wilcox to replace her as Chief Financial Officer in October,

and my appointment as Non-Executive Director and Senior

Independent Director in February.

One of the Nomination Committee’s main activities

during 2024 was overseeing the appointment of the

ChiefFinancial Officer.

In line with the Company’s Equality, Diversity and Inclusion

Policy, both 2024 appointments were made on merit and

against objective criteria, taking into consideration diversity

of gender, social and ethnic backgrounds and cognitive

and personal strengths. My appointment as Non-Executive

Director and Senior Independent Director was undertaken

using an external search consultant.

In the coming year, the Committee will continue to review

the long-term succession planning for the Board to ensure

that the composition of the Board and its Committees

continues to be effective, with an appropriate balance of

skills,experience, knowledge and diversity.

The Committee works closely with the Chief People Officer

to identify and maintain pipelines of immediate, short-term

and longer-term leadership potential within the senior

management team, and is supported by the Chief People

Officer in ongoing review of objectives and timeframes for

Board succession planning.

Board member induction

A comprehensive and tailored induction plan was established

for both Leigh Wilcox and me taking into account our

respective considerable experience.

Diversity and inclusion

Diversity and inclusion continues to be a focus of the

Committee, with a commitment to promoting diversity and

inclusion on the Board. As set forth in the Board’s Diversity

and Inclusion Policy (see inset), which is reviewed annually,

the Committee recognises the importance of diversity in its

Board composition to ensure that it can draw upon a diverse

range of experience, skills and knowledge in all aspects of the

Board’s discussions and decision making.

The Board’s Diversity and Inclusion Policy also applies to the

Nomination Committee, the Audit & Risk Committee and

theRemuneration Committee.

The Committee has a robust process for identifying and

evaluating potential Board candidates and continues to

usesearch firms that are committed to identifying suitable

Board candidates from diverse candidate pools.

Board diversity disclosures

Listing Rule 6.6.6(9)

As at the Company’s chosen reference date, 31 December 2024,

and in line with FCA Listing Rule 6.6.6(9), the Company has

not met the target for at least 40% female membership on

the Board or for one member of the Board to be from an

ethnic minority background. However, it has met the target

for one of the positions of Chair, Senior Independent Director,

Chief Executive Officer or Chief Financial Officer to be held

by a woman, with my appointment as Senior Independent

Director. The overall diversity targets were not met in the

year as the succession plans of the Group, including the

recognition of diversity, will require time to materialise.

Futureevolution of the Board will continue to focus on

broadening the diversity of its members.

Annual Report 2024 Stelrad Group plc 71

Board diversity disclosures continued

Data under Listing Rule 6.6.6(10)

In line with Listing Rule 6.6.6(10), as at the reference date of 31 December 2024, the composition of the Board and Executive

Management was as follows, with members of the Board and the Executive Management team asked to complete a diversity

disclosure form at year end.

31 December 2024

Gender identity

Number

of Board

members

Percentage

of the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

Executive

Management

(1)

Percentage of

Executive

Management

(1)

Men 5 62.5% 3 3 60%

Women 2 25% 1 2 40%

Not specified/prefer not to say 1 12.5% — — 0%

31 December 2024

Ethnic background

Number

of Board

members

Percentage

of the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

Executive

Management

(1)

Percentage of

Executive

Management

(1)

White British or other white

(including minority white groups) 7 87.5% 4 5 100%

Not specified/prefer not to say 1 12.5% — — 0%

At 31 December 2023, the composition of the Board and Executive Management was as follows.

31 December 2023

Gender identity

Number

of Board

members

Percentage

of the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

Executive

Management

(1)

Percentage of

Executive

Management

(1)

Men 5 62.5% 2 3 60%

Women 3 37.5% 2 2 40%

Not specified/prefer not to say — 0% — — 0%

31 December 2023

Ethnic background

Number

of Board

members

Percentage

of the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

Executive

Management

(1)

Percentage of

Executive

Management

(1)

White British or other white

(including minority white groups) 8 100% 4 5 100%

Not specified/prefer not to say — 0% — — 0%

(1) Stelrad has a flat structure, operating a decentralised model with local management teams in each of the key territories, supported by a small Group head

office. The Company is treating its Group roles as Executive Management for the purpose of this reporting requirement and consists of the Chief Financial

Officer, Chief People Officer, Group Operations Director, Group Finance Director and Group Strategic Marketing Director.

Board evaluation

The Committee has assisted the Chair in working with the Company Secretary to facilitate the content and process of a

comprehensive internally managed Board and Committee evaluation in the second half of 2024. The results of the evaluation,

along with an action plan for addressing any identified issues, were reported to the Board in December 2024, and the aspects

relating to Board and Committee composition and performance were reviewed by the Committee.

This was the Board’s third evaluation following the listing on the London Stock Exchange in October 2021. Overall, the results

confirmed that the Board and its Committees were operating effectively. Following review by the Nomination Committee,

the findings have been presented to the Board to agree actions for addressing the recommendations of the evaluation.

Insummary, key areas of focus identified by the evaluation include:

• succession planning for the CEO and Chair;

• Board assessment of culture and behaviours; and

• training and development of individual Directors.

Nomination Committee Report continued

Stelrad Group plc Annual Report 202472

GOVERNANCE REPORT

Progress following the 2023 Board evaluation

Additionally in the year, the Board reflected on its progress made against the outcomes from the 2023 Board evaluation.

The overall outcome of the 2023 evaluation was very positive and indicated that the Board was running effectively. While the

outcome of the evaluation showed that the Board, its Committees and the Board members operated professionally and in

an open and transparent manner, the Board developed an action plan based on the outcomes, designed to enhance further

the effectiveness of the Board. Following the discussions of the Nomination Committee, several key themes were highlighted

for focus during 2024, including in the areas of succession planning for senior management and the Board, ESG strategy

development and stakeholder engagement. The following table summarises progress in these areas of focus.

Area of focus Progress

Succession

planning

The Board continues to focus on succession planning, both at an executive and senior management

level. During 2024, consideration was given to the Chair and Chief Executive positions, due to their

important role in providing external oversight and strategic operational leadership, respectively.

The Board successfully appointed a new Senior Independent Director in January 2024, and a new

Chief Financial Officer in October 2024. Both appointments have further strengthened the Board

by providing both diverse senior leadership and industry experience.

Meetings of the Nomination Committee continue to focus on all aspects of succession planning to

ensure the Board has a sufficient mix of independence and diversity moving forward.

ESG strategy

development

The Board received an overview on the developments of ESG strategy over the course of 2024.

Certain Group subsidiaries will commence reporting against the EU Corporate Sustainability

Reporting Directive in respect of the financial year commencing 1 January 2025. Group functions

will provide significant input to align the EU reporting with Group strategy in this area.

Climate-related risks continue to be monitored as part of the Group’s risk register.

Stakeholder

engagement

The Board has reviewed its workforce engagement arrangements and agreed that “alternate

arrangements” under the Code remained appropriate for the Group. In July 2024 the Board visited

the Company’s site in Turkey where key individuals of the business were met.

The Board is comprehensively briefed on external stakeholder engagement via reports and

standard agenda items to the Board. Enhanced engagement with the wider investor community

remains a priority for the Board and was supported by the Group’s first Capital Markets Day in

November 2024, attended by the Executive Management team and senior leaders within the business.

Committee meetings and agenda

The Committee meets as often as needed and, in any case, no less than twice per year, depending on circumstances,

toensureit is discharging its duties as a Committee in full and in accordance with its terms of reference. The Committee

heldtwoscheduled meetings and two additional unscheduled meetings during the year ended 31 December 2024.

Agenda items for the Committee’s meetings during the year ended 31 December 2024 included:

• review of the Board’s composition and the diversity of Directors’ skills;

• review of Directors’ time commitments and time available to dedicate to the role;

• review of the Board Diversity and Inclusion Policy and the Group Equality, Diversity and Inclusion Policy;

• succession planning for Executive Directors and Non-Executive Directors of the Board;

• oversight of the appointment of the Senior Independent Director and the Chief Financial Officer; and

• the 2024 Board and Committee evaluation process, including a review of the current year outcomes and an update

ofthe prior year recommendations, initiated by the Company Secretary.

The Committee’s future focus will continue to include consideration of these topics as well as the areas of focus identified

in the Board evaluations.

Annual re-election of Directors

As required by the 2018 UK Corporate Governance Code, all Directors will be subject to re-election at the next AGM.

The Committee has considered each of the current Board members in the context of re-election and is satisfied that

each Director has dedicated sufficient time to their duties and that they have shown commitment to their role. Acting

on the Committee’s advice, the Board recommends that each Director be re-elected.

Katherine Innes Ker

Chair of the Nomination Committee

7 March 2025

Annual Report 2024 Stelrad Group plc 73

Directors’ Remuneration Report

Highlights of 2024

• Review of Directors’ Remuneration Policy in advance

of the triennial review at the 2025 AGM.

• Setting incentive targets and determining incentive

outcomes for Executive Directors and senior management,

including the addition of ESG measures to our

remuneration arrangements for 2024.

• Review of total remuneration outcomes for Executive

Directors and senior management, and their

alignment with strategy.

• Determination of remuneration arrangements in

relation to CFO change.

Focus areas for 2025

• Setting incentive targets and determining

incentive outcomes for Executive Directors and

senior management.

• Monitoring the ongoing effectiveness of strategic

measures in remuneration.

• Oversight of wider workforce remuneration and policies.

Committee members

Nicola Bruce (Chair)

Martin Payne

Katherine Innes

Ker (appointed

1 February 2024)

2024 has seen the review of the

Directors’ Remuneration Policy

inadvance of the triennial renewal

at the 2025 AGM.

Nicola Bruce

Chair of the Remuneration Committee

Annual Statement by the

Remuneration Committee Chair

Dear shareholders

On behalf of the Board, I am pleased to present the Directors’

Remuneration Report for the year ended 31 December 2024.

This report consists of three sections:

• the Annual Statement and associated high-level

summary (Remuneration at a glance), including our

proposed implementation of the Policy for Executive

Directors in 2025;

• the Directors’ Remuneration Policy that is being put

forward for shareholder approval at the 2025 AGM; and

• the Annual Report on Remuneration, which outlines

the decisions made by the Remuneration Committee

(the “Committee”) and payments made to Directors in

respect of 2024, describing the link between Company

performance and remuneration for 2024.

Our new Directors’ Remuneration Policy

Our current Remuneration Policy was approved at the 2022

AGM, with over 99% of the votes cast being in favour of the

resolution. In line with the usual three-year cycle, a new

Policy is now being put forward for shareholder approval at

the 2025 AGM. During 2024, we have reviewed the Policy

to ensure that it continues to support the delivery of our

strategy and future plans, considering developments in best

practice, with the objective of rewarding management fairly

and in line with investor expectations. We also considered

therequirements of the updated Corporate Governance

Code, which applies from 1 January 2025, to ensure our

ongoing compliance with the Code.

The conclusion of our review was that the Policy approved

in 2022 remains largely fit for purpose. We are therefore

proposing only a small number of changes in the new Policy,

with no changes to the overall structure of remuneration.

Anextensive shareholder consultation has been carried out

with the majority of Stelrad’s shareholder register to gather

views and feedback, which were carefully considered in

developing and finalising the new Policy.

The key change that we are proposing is the creation of

additional headroom for exceptional circumstances for both

the annual bonus and LTIP awards. For both the annual bonus

and LTIP, the ordinary maximum of 125% and 150% of salary

respectively will remain. Shareholders will note that in 2025,

the annual bonus will remain at a maximum of 125% of

salary, and an LTIP of 50% of salary will be awarded (below

the current and proposed ordinary maximum of 150% of

salary). However, in line with market practice, the Committee

believes it is sensible to create headroom for exceptional

circumstances for an award of up to 150% of salary for the

annual bonus and up to 200% of salary for the LTIP. In line

with the current Policy, a minimum of 70% of weighting for

the Annual Bonus Plan will be based on financial measures

and a minimum of 70% of weighting for the LTIP will be

based on financial and market-based measures.

Overseeing how we

reward our people

Stelrad Group plc Annual Report 202474

GOVERNANCE REPORT

The “Remuneration at a glance” table later in this report

summarises the key differences between the Policy approved

in 2022 and the Policy for which approval will be sought at

the 2025 AGM which has been received positively by the

majority of shareholders. We are proposing some additional,

more minor changes to the Policy to aid its practical

implementation and to take account of latest market

developments since the last approval of the Policy in 2022.

Board changes in 2024

As has been reported elsewhere, Leigh Wilcox was appointed

to the Board as Chief Financial Officer on 1 October 2024,

having served as Interim CFO since 1 July 2024. Following an

external benchmarking exercise, his salary on appointment was

set at £260,000, the same level as the outgoing CFO, Annette

Borén. This was set having regard to his relative experience and

is towards the lower end of the market competitive range for

the role. For January 2025, Leigh will receive an annual salary

increase in line with that awarded to the majority of the UK

workforce for the year. Leigh receives a salary supplement of 9%

of salary in lieu of pension contributions. This has been reduced

from 11% which applied prior to his appointment to the Board, in

order to align his pension contribution level with the majority of

the UK workforce. Details of the bonus earned are included later

in this report.

Annette Borén stepped down from the Board on 30 June 2024.

Annette’s remuneration earned up to that date is included in

the single total figure of remuneration, with information on

certain other payments included later in the report. Annette

was not entitled to earn a bonus in respect of the six months

of the year for which she was in service and the LTIP award

granted to her in 2024 lapsed when she left the business. In

line with the Policy, Annette retains the deferred bonus that

she was awarded in March 2024 in respect of performance in

2023 and which was not subject to any further performance

conditions; the award will remain subject to its original deferral

period and will vest in March 2026.

On 1 February 2024, Katherine Innes Ker joined the Board

and the Committee.

Remuneration outcomes in 2024

The key highlights of the performance of the business

during the year can be found in the Strategic Report on

pages 1 to 56.

Fixed remuneration

Trevor Harvey’s salary was increased to £535,600 with effect

from 1 January 2024. This incorporated the agreed increase

of 4% with effect from 1 January 2023, which Trevor had

opted to defer, and an increase of 4% for 2024 in line with

the increase awarded to the majority of the UK workforce.

Annual bonus

The Annual Bonus Plan (“ABP”) structure for 2024 reflected

the Policy approved at the 2022 AGM. The outturn is summarised

in the “Remuneration at a glance” table, with full details of the

targets and performance against them set out on page 87.

Based on the performance delivered, bonuses were earned

at the level of 53.3% of the maximum.

In line with the reporting requirements, the bonus awarded

to Leigh Wilcox in respect of the period from his appointment

to the Board on 1 October 2024 is included in the single total

figure of remuneration. Annette Borén was not eligible to

earn a bonus for 2024.

As per the rules of our Deferred Share Bonus Plan, 75% of

Executive Director annual bonuses will be paid in cash, with

the remaining 25% deferred and held in Stelrad shares for

two years.

LTIP vesting in respect of performance in 2024

A Long Term Incentive Plan (“LTIP”) is in place for Executive

Directors and other members of senior management. The first

awards under the LTIP were granted in May 2022 with vesting

based on EPS and relative TSR performance conditions

assessed over the three financial years 2022, 2023 and 2024.

The May 2022 awards were issued before the significant

impact of the current macroeconomic crisis materialised.

Due to the high inflationary environment that has followed,

a significant drop in demand and a rise in interest rates,

the targets were not met. Full details of the targets and the

performance against them are set out later in this report.

The threshold levels of performance were not achieved and

these awards have lapsed in full.

LTIP granted in 2024

Our LTIP Policy permits the grant of LTIP awards at the level

ofup to 150% of salary. In 2024, an award of 50% of salary

was granted. The performance conditions are summarised

inthe “Remuneration at a glance” table, with details set out

later in this report.

Wider workforce remuneration in 2024

The Group supports the collective bargaining process

in theUK, Turkey, the Netherlands and Italy with local

employeerepresentation where appropriate. We adhere

tothe outcome of national collective agreements regarding

pay,and implement these according to the earliest

appropriate timescales. We also keep under regular review

the non-pay-related benefits offered to our employees

to ensure these remain competitive and of value to our

workforce. At Stelrad, we consider that our workforce is

our most important asset and in 2024, as part of the

ESGcomponent of our Annual Bonus Plan for Executive

Directors, we introduced a metric relating to labour turnover.

Implementation of the Policy in 2025

Our approach to Executive Directors’ remuneration for 2025

is summarised in the “Remuneration at a glance” table, with

further information contained later in this report. Both our

CEO and CFO will receive an annual salary increase for 2025

of 3%, in line with the increase awarded to the UK workforce,

and both will participate in our Annual Bonus Plan, with a

maximum potential bonus of up to 125% of salary for the

delivery of stretching and ambitious targets. In addition,

an LTIP grant of 50% of salary will be awarded in the first

half of 2025.

Share plans

We are proposing to make a small number of changes to

the rules of our LTIP and Deferred Share Bonus Plan rules,

toreflect changes in practice since they were first adopted

and to aid their practical operation. Shareholder approval

forsome of these changes is required and resolutions will

beproposed at the 2025 AGM.

Annual Report 2024 Stelrad Group plc 75

Directors’ Remuneration Report continued

Annual Statement by the

Remuneration Committee

Chair continued

Conclusion

I trust the information presented in this report enables our

shareholders to understand both how we have operated

our Directors’ Remuneration Policy over the year and

our rationale for decision making. We regularly review

our Remuneration Policy and practice to ensure that it

remains aligned with our business strategy and the evolving

regulatory landscape. We believe that the Policy has operated

as intended and we consider that the remuneration received

by the Executive Directors during the year was appropriate,

taking into account Group and personal performance, as

well as the experience of all stakeholders. No discretion was

applied, either upwards or downwards, to reward outcomes

inrespectof the year ended 31 December 2024.

We remain committed to maintaining a clear, open

and transparent dialogue with our shareholders on

executive remuneration.

On behalf of the Board, I would like to thank shareholders

for their continued support and I hope that you will support

the resolutions requesting approval of the new Policy, the

Annual Report on Remuneration, and the changes to the

LTIP and DSBP rules at this year’s Annual General Meeting

on 21 May 2025.

Nicola Bruce

Chair of the Remuneration Committee

7 March 2025

This report has been prepared in accordance with the applicable remuneration reporting regulations, the FCA Listing Rules

and the UK Corporate Governance Code.

Remuneration at a glance

Key differences between the Policy approved in 2022 and the Policy for which approval will

besought at the 2025 AGM, along with proposed implementation of the Policy in 2025

Element of pay Implementation in 2024 Key policy changes and proposed implementation for 2025

Fixed remuneration

Base salary Trevor Harvey’s salary increased to £535,600

after implementation of the deferred 2023

increase, and the subsequent increase

of 4%for 2024 in line with the increase

awardedto the majority of the UK workforce.

Annette Borén’s salary remained at £260,000.

Leigh Wilcox was appointed to the Board

as CFO on 1 October 2024 on a salary

of £260,000.

Policy

No significant changes to Policy.

2025 implementation

An increase of 3% will be applied with effect from

1January2025 in line with the increases awarded to

themajority of the UK workforce, taking the CEO salary

to£551,668 and the CFO salary to £267,800.

Pension The Executive Directors receive a salary

supplement in lieu of pension contribution

of 9% of salary.

Policy

No significant changes to Policy.

2025 implementation

9% of salary.

Benefits

Each Executive Director receives the benefit of

a life assurance scheme, private health cover

and a car allowance. Trevor Harvey also benefits

from the reimbursement of fuel expenses.

Policy

No significant changes to Policy.

2025 implementation

No changes proposed to the benefits provided.

Stelrad Group plc Annual Report 202476

GOVERNANCE REPORT

Element of pay Implementation in 2024 Key policy changes and proposed implementation for 2025

Variable pay

ABP Maximum opportunity of up to 125% of salary:

Performance measure Weighting Outturn

Adjusted operating

profit

70% 46.7% of

maximum

Adjusted cash flow

from operations

20% 0.0% of

maximum

ESG 10% * 6.6% of

maximum

* 50% based on the recycled content of packaging

material used and 50% based on voluntary

labour turnover.

Details of the performance measures and

targets are set out later in this report. Based on

the performance delivered, the overall outturn

was 53.3% of maximum resulting in a bonus

of £357,000 being earned by Trevor Harvey

and a bonus of £43,000 being earned by

Leigh Wilcox in respect of the period since his

appointment to the Board.

75% of the annual bonus will be paid in cash,

with the remaining 25% delivered as Stelrad

shares and deferred for two years.

Policy

The maximum ABP opportunity in the Policy approved in

2022 was 125% of salary with a minimum of 70% of the

award being dependent on financial measures. In the new

Policy, this ordinary maximum is retained. However, to

provide appropriate flexibility over the new Policy’s three-year

life, it incorporates the provision to award an annual bonus

of up to 150% of salary in exceptional circumstances, with a

continued minimum of 70% of the award being dependent

on financial measures. This additional headroom will not be

used for 2025.

A two-year deferral will continue to apply in respect of 25%

of any bonus earned.

Bonus awards will remain subject to malus and clawback

provisions, which have been enhanced with the inclusion

of additional “triggers” to their application of fraud or

dishonesty, conduct resulting in significant losses, and

material downturn in financial performance (to align with

the pre-existing incentive plan rules).

2025 implementation

For 2025, the maximum opportunity will again be 125%

ofbase salary.

Performance measures and weightings will be the same as

for 2024, with the cash flow measure and ESG component

continuing to be underpinned by the target Group adjusted

operating profit measure.

Details of the targets will be disclosed once the 2025

ABP outturn has been determined, as with the 2024

ABP performance targets later in this report.

75% of the annual bonus will be paid in cash, with the

remaining 25% delivered as Stelrad shares and deferred

for two years.

LTIP The threshold levels of EPS and relative TSR

performance for the LTIP awards vesting by

reference to performance in 2024 were not

achieved and those awards have lapsed in full.

Further details are set out later in this report.

An LTIP award was granted to Trevor Harvey

in March 2024 at the level of 50% of salary

vesting by reference to adjusted EPS targets

(80% of the awards) and relative TSR (20%

of the awards) assessed over a three-year

period to 31 December 2026. Leigh Wilcox’s

award of 50% of salary was granted prior to his

appointment as Interim CFO and, in line with

awards to other below-Board participants, will

vest based on EPS targets only. Details of the

targets are set out later in this report.

Policy

The maximum LTIP opportunity in the Policy approved

in2022 was 150% of salary with a minimum of 70% of

theaward being dependent on financial and market-based

measures. In the new Policy, this ordinary maximum is

retained. However, to provide appropriate flexibility over

the new Policy’s three-year life, it incorporates the provision

to award an annual LTIP grant of up to 200% of salary in

exceptional circumstances with a continued minimum of

70% of the award being dependent on financial measures.

This additional headroom will not be used for 2025.

LTIP awards will remain subject to malus and clawback

provisions, which have been enhanced by the inclusion

of additional “triggers”, referred to above in relation to the

annual bonus.

2025 implementation

LTIP awards will be granted in 2025 with Executive Director

awards granted at the level of up to 50% of salary vesting by

reference to adjusted EPS targets (80% of the award) and

relative TSR (20% of the award) assessed over a three-year

period and subject to a post-vesting two-year holding period.

Annual Report 2024 Stelrad Group plc 77

Directors’ Remuneration Report continued

Remuneration Policy

The Directors’ Remuneration Policy (the “Policy”) as detailed below is subject to shareholder approval at the AGM on 21 May 2025

and will apply for a period of three years thereafter unless a new Policy is approved by the Company’s shareholders prior to expiry.

The differences between the Directors’ Remuneration Policy approved at the AGM on 16 May 2022 and this Policy are

described in the “Remuneration at a glance” section earlier in this report.

Corporate Governance Code principles

The table below reflects how the Remuneration Policy fulfils the factors set out in provision 40 of the 2018 UK Corporate

Governance Code.

Criteria Approach

Clarity – Remuneration arrangements should be

transparent and promote effective engagement

withshareholders and the workforce.

The Committee operates a consistent remuneration approach that is

well understood internally and externally. As described in the Annual

Statement by the Remuneration Committee Chair, we consulted

with our Major Shareholders in connection with this Policy, and took

into account feedback received in finalising our approach.

Simplicity – Remuneration structures should avoid

complexity and their rationale and operation should

beeasy to understand.

Our remuneration arrangements for Executive Directors are based

on a market-standard remuneration structure consisting of fixed

pay, an annual bonus and a single long-term incentive. This design

is simple in nature and well understood by participants as well as

other stakeholders.

Risk – Remuneration arrangements should ensure

reputational and other risks from excessive rewards,

and behavioural risks that can arise from target-based

incentive plans, are identified and mitigated.

Targets are reviewed annually to ensure they are adequately

stretching yet achievable without encouraging excessive risk

taking. Using recovery provisions or discretion, the Committee

retains the ability to override formulaic incentive outcomes

in the event that these produce a result inconsistent with the

Group’s remuneration principles.

Alignment to culture – Incentive schemes should

drive behaviours consistent with Company purpose,

values and strategy.

The variable incentive schemes and performance measures are

designed to be consistent with the Group’s purpose, values and

strategy. We believe that aligning remuneration practices across

the business is a key element of supporting our culture, fulfilling

our values and being a strong driver of business performance.

Predictability – The range of possible values of

rewards to individual Directors and any other limits

ordiscretions should be identified and explained at

thetime of approving the Policy.

The Committee maintains clear caps on incentive opportunities

and will use its available discretion if necessary.

The potential value and composition of the Executive Directors’

remuneration packages at below threshold, target and maximum

scenarios are provided in the illustrations on page 85.

Proportionality – The link between individual

awards, the delivery of strategy and the long-term

performance of the Group should be clear. Outcomes

should not reward poor performance.

Executives are incentivised to achieve stretching targets over annual

and three-year performance periods. The Committee assesses

performance holistically at the end of each period, taking into

account underlying business performance and the internal and

external context to ensure that pay outcomes are appropriate and

reflective of overall performance.

Stelrad Group plc Annual Report 202478

GOVERNANCE REPORT

Element of

remuneration

Purpose and link

tostrategy Operation Maximum opportunity Performance measures

Base salary To provide

competitive fixed

remuneration.

To attract, retain

and motivate

Executive

Directors of the

calibre required

to deliver the

Group’s strategy.

An Executive Director’s salary

takes into account the individual’s

professional experience, individual

performance, level of responsibility

and the scope and nature of their

role and is set with reference to

market. Base salaries will typically

be reviewed on an annual basis.

Any Executive Director

salary increases will not

normally exceed those

of the majority of the

Group’s employees

in percentage of

salary terms.

Higher increases may be

awarded in appropriate

circumstances, including,

but not limited to:

• where an Executive

Director has been

promoted or has had

a change in scope

or responsibility;

• taking account

of competitive

salary levels and

market forces;

• reflecting an

individual’s

development or

performance in

role; and

• where there has been

a change in the size

and/or complexity of

the business.

Not applicable.

Benefits

and pension

To provide market

competitive levels

of employment

benefits.

Executive Directors may receive

a contribution to a pension

arrangement and/or a salary

supplement in lieu of some or

all of the pension contribution.

Other benefits may include

participation in a life assurance

scheme, private health cover

(including for an Executive

Director’s spouse or civil partner

and dependants), a car allowance

and the reimbursement of fuel

expenses. Additional benefits or

allowances may be provided based

on individual circumstances.

The maximum pension

contribution (and/or

salary supplement)

will not exceed the

contribution available

to the wider workforce

as determined by

the Remuneration

Committee (currently

9% in the UK).

The benefits package is

set at a level which the

Committee considers

provides an appropriate

level of benefits for the

role and is appropriate

in the context of the

benefits offered to the

wider workforce or to

comparable roles in

companies of a similar

size and complexity.

Not applicable.

Annual Report 2024 Stelrad Group plc 79

Directors’ Remuneration Report continued

Element of

remuneration

Purpose and link

tostrategy Operation Maximum opportunity Performance measures

ABP and

DSBP

To reward the

year on year

achievement

of demanding

performance

metrics.

Performance measures, weightings

and targets are reviewed annually

bythe Committee and may be

changed from time to time.

No more than 75% of the annual

bonus will be paid out as cash after

the end of the financial year. The

remainder will be issued as awards

under the DSBP.

DSBP awards will be in the form of

conditional awards or nil-cost options

with awards normally vesting after

two years.

Under the DSBP, an additional

payment, normally in shares, may be

made equal to the value of dividends

which would have accrued on vested

shares between the grant date and

date of vesting.

Malus and clawback provisions apply.

The usual maximum

annual bonus

opportunity is up to

125% of base salary.

An annual bonus

opportunity of up to

150% of base salary

may be awarded

in circumstances

considered by the

Committee to be

exceptional, such as

in connection with

recruitment or a

change in the size

and/or complexity

of the business.

Performance conditions

may be based on financial

or strategic measures,

provided that a minimum

70% weighting will

be associated with

financial targets.

For any financial measure,

up to 25% of the maximum

may be earned for

threshold performance,

rising to 50% for achieving a

target level of performance

and to 100% for meeting or

exceeding the maximum

level of performance.

For any non-financial

measure, the amount that

may be earned shall be

determined between 0%

and 100% of the maximum

depending upon the

Committee’s assessment

of the extent to which

the relevant measure

is achieved.

The Board will determine

the actual bonus

outcome based on

achievement against

predetermined targets.

Actual targets, performance

achieved and awards made

will be published at the end

of the performance period.

Remuneration Policy continued

Stelrad Group plc Annual Report 202480

GOVERNANCE REPORT

Element of

remuneration

Purpose and link

tostrategy Operation Maximum opportunity Performance measures

LTIP To provide a

direct link to the

achievement

of sustainable

performance over

the longer term.

Awards will be in the form of

conditional awards or nil-cost

options with vesting subject to

the achievement of performance

conditions determined by the

Committee at the time of grant.

The measurement period for the

performance conditions for LTIP

awards will normally be a period

ofthree financial years.

Additionally, a two-year post-vesting

holding period will normally apply

at the end of each relevant vesting

period for Executive Directors. This

may be operated on the basis that the

Executive Director: (1) is not ordinarily

entitled to acquire the vested shares

until the end of the holding period;

or (2) is entitled to acquire the vested

shares after vesting but that other

than as regards sales to cover tax and

associated liabilities is not ordinarily

able to dispose of shares until the end

of the holding period.

An additional payment, normally in

shares, may be made equal to the

value of dividends which would have

accrued on vested shares between the

grant date and date of vesting or, if the

post-vesting holding period is operated

on the basis that shares cannot be

acquired until it has ended, the date on

which that period ends.

Malus and clawback provisions apply.

The usual maximum

annual LTIP award is

up to 150% of base

salary. Awards of up to

200% of base salary

may be awarded

in circumstances

considered by the

Committee to be

exceptional, such as

in connection with

recruitment or a

change in the size

and/or complexity of

the business.

The Committee will

determine the appropriate

performance conditions

prior to grant each year, to

align with the Company’s

longer-term strategy.

Performance conditions

may include financial,

market-based and/or

non-financial measures.

Financial and market-based

measures will account for at

least 70% of the total award.

Up to 25% of an award

will vest for achieving

a threshold level of

performance, increasing to

100% vesting for achieving

or exceeding the maximum

level of performance.

ownership

guidelines

To provide

long-term

alignment

between

Executive

Directors and

shareholders.

Executive Directors are expected to

build up and then subsequently hold

a shareholding equivalent to 200%

ofbase salary.

Shares subject to DSBP awards and

to LTIP awards in a holding period

count towards the guideline on a net

of assumed tax basis.

Following cessation of employment

(or, if relevant and the Committee so

determines, following the date on

which the Executive Director steps

down from the Board), Executive

Directors will also be required to retain

for two years the lower of: (i) the 200%

shareholding requirement; and (ii)

the shares accumulated toward the

shareholding requirement that have

been granted under the LTIP and the

DSBP from 2022 onwards, at the date

of termination.

The Committee retains discretion to

vary the application of the guidelines

in exceptional circumstances.

Progress against

the shareholding

requirement will

be reviewed by the

Committee annually.

Not applicable.

Annual Report 2024 Stelrad Group plc 81

Directors’ Remuneration Report continued

Element of

remuneration

Purpose and link

tostrategy Operation Maximum opportunity Performance measures

Non‑Executive

Director fees

To attract

and retain

Non-Executive

Directors of a

high calibre

with relevant

commercial and

other experience.

Non-Executive Directors receive a base

fee and additional fees for acting as

Senior Independent Director or Chair

of the Board Committees and for

membership of Board Committees

(or to reflect any additional time

commitments – subject to approval

from the Chair).

The Chair receives an annual fee with

additional fees payable to reflect

additional time commitment in

certain circumstances, such as in

periods of exceptionally high activity

– subject to approval.

Fees are typically reviewed annually,

taking into account the time

commitment requirements and

responsibility of the individual roles,

and after reviewing practice in other

comparable companies.

The fee paid to the Chair is determined

by the Committee, while the fees for

other Non-Executive Directors are

determined by the Board as a whole.

The Company will reimburse any

reasonable expenses incurred

(and any tax thereon). The Chair

and Non-Executive Directors may

also receive benefits related to the

carryingout of their roles.

For the Non-Executive

Directors, there is no

prescribed maximum

annual increase.

The maximum

aggregate remuneration

paid to the Chair of

the Company and the

Non-Executive Directors

is set within the

Company’s Articles of

Association, as amended

from time to time or

as otherwise approved

by shareholders.

Actual fee levels

are disclosed in the

Annual Report on

Remuneration for the

relevant financial year.

Not applicable.

Payments from previously agreed

remuneration arrangements

The Committee reserves the right to make any remuneration

payments or payments for loss of office (including in either

case exercising any discretion available to it in relation to the

payment) where the terms of the payment were agreed:

(i)before the Policy came into effect provided, in the case of

any payment agreed after 16 May 2022, that the payment

is consistent with the Policy approved at the Company’s

2022 Annual General Meeting; or (ii) at a time when the

relevant individual was not a Director of the Company and,

in the opinion of the Committee, the payment was not in

consideration for the individual becoming a Director of the

Company. Details of any such payments will be set out in

the Annual Report on Remuneration as they arise. For these

purposes, “payments” includes the satisfaction of awards of

variable remuneration and, in relation to an award of variable

remuneration (including an award over shares), the terms of

the payment are agreed at the time the award is granted.

Malus and clawback provisions

Consistent with best practice, malus and clawback will be

used at the Committee’s discretion in relation to ABP, DSBP

and LTIP awards. Malus permits the Company to reduce the

amount of any unvested award, including awards in holding

periods. Clawback permits the Company to reduce the

amount of any vested award or any future salary or bonus

and also requires the employee to pay back amounts.

Malus and clawback may be applied at any time before an

award vests (or would have vested but for the operation of

any holding period) or for three years after vesting in the

following circumstances: material misstatement of the

results of the Group, errors or inaccuracies or misleading

information leading to incorrect grant or vesting of the award,

misconduct or fraud or dishonesty, conduct resulting in

significant losses, material downturn in financial performance

or failure of risk management by the Group, corporate failure

(e.g. administration or liquidation) or any other circumstance

which in the opinion of the Committee could have a

significantly adverse impact on the Group’s reputation.

Remuneration Policy continued

Stelrad Group plc Annual Report 202482

GOVERNANCE REPORT

Remuneration Committee discretion

The Committee may make minor revisions to the Policy

without obtaining shareholder approval. Further, there are

a number of specific areas in which the Committee may

exercise discretion, including:

• to vary the ABP and LTIP performance measures and

weightings each year to reflect strategic priorities;

• to adjust the formulaic ABP and LTIP outcomes, positively

or negatively, based on a holistic assessment of Company

performance, to ensure that the final outcome is a fair and

true reflection of underlying business performance and

stakeholder experience;

• to adjust the performance conditions for in-flight LTIP

awards in appropriate circumstances, provided the new

conditions are no tougher or easier than the original

conditions were intended to be at the time;

• to adjust in-flight LTIP awards in the event of a variation

of the Company’s share capital or a demerger, delisting,

special dividend, rights issue or other event, which may,

inthe Committee’s opinion, affect the current or future

value of awards; and

• to settle awards in cash (for example where there is

a regulatory restriction on the delivery of shares or in

respectof the tax liability arising in respect of an award).

All discretions available under the rules of any share plan

operated by the Company will be available under this Policy,

except where expressly limited under this Policy.

The exercise of any Committee discretion will be disclosed

inthe relevant year’s Annual Report on Remuneration.

Performance measures and targets

For each financial year, appropriate performance measures

and their respective weightings will be selected by the

Committee for both the ABP and the LTIP. The selection

of measures will be guided by and aligned to the Group’s

strategy and also take into account multiple reference points,

including internal and broker forecasts. The approach to

performance measures for the 2025 ABP and LTIP awards

isdescribed in the ”Remuneration at a glance” section earlier

in this report.

Service agreements and letters of appointment

The Committee’s policy for setting notice periods is that a

period of up to twelve months will apply.

Name Position

Date of service

agreement

Notice

period by

Company

(months)

Notice

period by

Director

(months)

Trevor Harvey CEO 22 October 2021 12 12

Leigh Wilcox CFO 1 October 2024 6 6

The Non-Executive Directors of the Company (including the

Chair) are appointed by letters of appointment. Their terms

are subject to their re-election by the Company’s shareholders

at any AGM at which the Non-Executive Directors stand for

re-election (in accordance with the Company’s Articles of

Association). The details of each Non-Executive Director’s

current terms are set out below:

Name Date of appointment

Bob Ellis 8 October 2021

Edmund Lazarus 8 October 2021

Nicholas Armstrong 8 October 2021

Nicola Bruce 22 October 2021

Martin Payne 22 October 2021

Katherine Innes Ker 1 February 2024

Remuneration policy on recruitment

On recruitment, the Committee would seek to align

the remuneration package with the policy approved by

shareholders. When determining a remuneration package

for a new Executive Director, the Committee will consider

the relevant skills and experience of the individual as well

as the internal and external market conditions. Incentive

opportunities will not exceed the amounts permitted in

accordance with the “Policy table” (being up to 150% of salary

for the annual bonus and up to 200% of salary for the LTIP).

Other elements of remuneration may be awarded in

appropriate circumstances, which may include the following:

• an interim appointment being made to fill an Executive

Director role on a short-term basis;

• if exceptional circumstances require that the Chair or a

Non-Executive Director takes on an executive function

onashort-term basis; or

• if an Executive Director is recruited at a time in the year

when it would be inappropriate to provide a bonus or

long-term incentive award for that year as there would

not be sufficient time to assess performance. Subject to

the limit on variable remuneration referred to above, the

quantum in respect of the months employed during

the year may be transferred to the following year so that

reward is provided on a fair and appropriate basis.

Additionally, the Committee will have the ability to buy out

any remuneration forfeited from a previous employment or

engagement. Any such award will typically be structured

on a like-for-like basis to the remuneration forfeited. The

Committee will seek to use the current remuneration

structure in making such awards, but in some cases it may

be required to use the flexibility afforded by Listing Rule 9.3.2,

if appropriate. Shareholders will be informed of any such

awards or payments at the time of appointment.

Annual Report 2024 Stelrad Group plc 83

Remuneration Policy continued

Remuneration policy on termination

In the event of termination, any payments will be in accordance

with the terms of the Executive Director’s service contract

with the Company, having regard to all of the relevant facts

and circumstances available at that time. The Committee may

choose to make a payment in lieu of notice. The Committee

retains discretion to continue to provide benefits during any

notice period which would have otherwise applied.

The annual bonus may be payable in respect of the

proportion of the year worked by the Director, at the

Committee’s discretion. There is no provision for an amount

in lieu of bonus to be payable for any part of the notice

periodnot worked. The bonus would ordinarily be payable

atthe normal date and would be subject to deferral

provisions under the terms of the plan, although the

Committee retainsdiscretion to pay the bonus early (and

toassess performance accordingly) and to disapply or vary

the deferralprovisions in compassionate circumstances.

Deferred bonus awards granted under the DSBP are

governed by the DSBP rules which contain discretionary good

leaver provisions for designated reasons (that is, participants

who leave early on account of death, ill health, injury, disability,

sale of their employing company or business unit, retirement

with the agreement of the Company, or any other reason at

the discretion of the Committee). In these circumstances,

a participant’s awards will not be forfeited on cessation of

employment and instead will vest on the normal vesting date

or such earlier date that the Committee may determine.

Long-term incentives granted under the LTIP are governed

by the LTIP rules which contain discretionary good leaver

provisions for designated reasons (that is, participants who

leave early on account of death, ill health, injury, disability,

sale of their employing company or business unit, retirement

with the agreement of the Company, or any other reason at

the discretion of the Committee). In these circumstances,

a participant’s awards will not be forfeited on cessation of

employment and instead will vest on the normal vesting

date or such earlier date to the extent that the Committee

may determine. In either case, the extent to which the awards

will vest depends on the extent to which the Committee

considers thatthe performance conditions have been satisfied

or are likely to be satisfied by the end of the performance

period and a pro rata reduction of the awards will be applied

by reference to the time of cessation (although the Committee

has discretion to disapply time pro-rating if it considers that

the circumstances warrant it). All other leavers would forfeit

all outstanding awards. In respect of vested LTIP awards

that are still subject to a holding period, the holding period

will continue to apply unless the Committee determines

otherwise, taking into account the circumstances at the time.

In appropriate circumstances, payments may also be made

inrespect of accrued holiday and outplacement and legal

fees. The Committee may also agree that certain benefits

(such as health cover) may be continued for a reasonable

period following cessation of employment.

Directors’ Remuneration Report continued

On a change of control, the payment of any annual bonus

willbe at the Committee’s discretion. DSBP awards will

normally vest immediately on a change of control. LTIP

awards will normally vest immediately on a change of control,

with a pro rata reduction for time served (although the

Committee has discretion to disapply time pro-rating if it

considers that the circumstances warrant it). The Committee

will use its discretion to determine the extent to which the

LTIP performance conditions have been met at the time of

change of control. Alternatively, participants may choose,

or atthe discretion of the Committee may be required,

to acceptan exchange for new equivalent awards in the

acquiring company, in respect of the DSBP and/or the LTIP.

Remuneration policy for other employees

The reward package for the Group’s wider workforce is

based on the principle that it should enable the Group to

attract and retain the best talent, rewarding employees for

their contribution to Group performance. It is driven by local

market practice as well as level of seniority and accountability

of each role. There is alignment in the pay structures

for executives and the wider workforce, in the way that

remuneration principles are followed as well as the mechanics

of the salary review process and incentive plan design, which

are broadly consistent throughout the organisation.

Statement of consideration of employment

conditions elsewhere in the Group

The Committee has responsibility for reviewing remuneration

and related policies applicable to the wider workforce.

Tosupport this, the Committee is periodically briefed on the

structure and quantum of the all-employee remuneration

as well as being informed about the context, challenges and

opportunities related to wider workforce remuneration topics.

This enables the Committee to take the wider workforce into

account when setting the policy for executive remuneration.

The Committee receives insights from the broader employee

population via regular briefings from the Company. When

considering salary increases for the Executive Directors, the

Committee considers the general level of salary increase

across the Group and in the external market.

Statement of consideration of

shareholder views

An extensive shareholder consultation was carried out with

the majority of Stelrad’s shareholder register to gather views

and feedback in relation to this Policy, which have been

carefully considered in developing and finalising the Policy.

The Major Shareholder is entitled to nominate an observer

to the Remuneration Committee, subject to the terms of the

shareholder agreement outlined in the Prospectus at the

time of admission.

Illustration of the application of the

Remuneration Policy

The charts opposite indicate the level of remuneration

receivable by the Executive Directors in accordance with

the Policy as it is proposed to be applied in 2025. The

charts contain separate bars representing: (i)minimum

performance(fixed pay); (ii) target performance;

(iii)maximumperformance; and (iv) maximum performance

plus 50% share price appreciation. The charts exclude the

effect of any Company share price appreciation except in

themaximum plus 50% scenario.

Stelrad Group plc Annual Report 202484

GOVERNANCE REPORT

Minimum or fixed pay comprises base salary, 9% of salary

supplement in lieu of pension contribution and an assumed

value of benefits in 2025 based on the 2024 benefits in the

case of Trevor Harvey and the 2024 benefits for Leigh Wilcox

annualised to give a full year value.

Target comprises fixed pay, plus an ABP pay-out of 50% of

the maximum (i.e. 62.5% of salary) and an LTIP vesting level

of 25% of the maximum (i.e. 12.5% of salary).

Maximum comprises fixed pay, plus full ABP pay-out

(i.e. 125% of salary) and full LTIP vesting (i.e. 50% of salary).

Maximum plus 50% comprises fixed pay, plus full ABP pay-out

and full LTIP vesting plus 50% share price appreciation.

Annual Report on Remuneration

The following section sets out our Annual Report on

Remuneration and outlines how the Policy was implemented

in 2024. The Annual Report on Remuneration will be subject

to an advisory shareholder vote at the AGM to be held on

21 May 2025.

Some sections of this report have been reported on by the

auditors and are thus clearly indicated as audited. All other

information in this report is unaudited.

Membership and meetings of the

Remuneration Committee

Membership during 2024 comprised the Committee Chair

(Nicola Bruce), who is an independent Non-Executive Director,

and two further independent Non-Executive Directors

(Katherine Innes Ker and Martin Payne) with support from

the Group’s Company Secretary. Katherine Innes Ker joined

the Board and the Committee on 1 February 2024. The

Committee receives assistance from the Group’s Chief

People Officer, who regularly attends meetings by invitation.

The CEO also attends by invitation. The Committee will

keep its composition under review to ensure it remains

appropriate. The Board is satisfied that the Committee has the

competence and experience necessary to discharge its duties

effectively. Details of the Directors’ experience and skill sets

can be found in the Director biographies on pages 58 and 59.

The Major Shareholder remains entitled to nominate an

observer to the Remuneration Committee, subject to

the terms of the shareholder agreement outlined in the

Prospectus at the time of admission. The Committee

has been pleased to welcome Nicholas Armstrong to the

majorityof meetings in 2024.

The Committee will meet not less than three times a year.

During the year ended 31 December 2024, the Committee

held four scheduled meetings. The Directors consider that the

Company complies with the requirements of the UK Corporate

Governance Code in respect of remuneration committees.

Key responsibilities

The key responsibilities of the Remuneration Committee are:

• to determine the Remuneration Policy (the “Policy”) and to set

the total remuneration packages for all Executive Directors,

the Chair of the Company and senior management;

• to approve the design of, and determine targets for,

any performance-related pay schemes operated by the

Company and approve the total annual payments made

under such schemes;

• to align the Policy with the UK Corporate

Governance Code;

• to ensure that the Policy drives behaviours that are

consistent with Company purpose, values and strategy;

• to review workforce remuneration and related policies and

the alignment of incentives and rewards with culture; and

• to review any major changes in employee benefit structure

and to administer all aspects of any share scheme.

Further details on the remit and responsibilities of the

Committee can be found in its terms of reference. The terms

of reference, which are reviewed annually and approved by

the Board, can be found on our website, www.stelradplc.com.

Fixed pay

Annual bonus

LTIP

Share price growth – LTIP

£1.8m

£1.6m

£1.4m

£1.2m

£1.0m

£0.8m

£0.6m

£0.4m

£0.2m

£0m

Minimum Target Maximum Max. +50%

Trevor Harvey

£1.8m

£1.6m

£1.4m

£1.2m

£1.0m

£0.8m

£0.6m

£0.4m

£0.2m

£0m

Minimum Target Maximum Max. +50%

Leigh Wilcox

100% 60% 40% 36%

33%

43%

40%

16%

17%

£1,043,234

£509,664

£629,483

£308,814

£1,594,902

£777,464

£1,732,819

£844,414

Annual Report 2024 Stelrad Group plc 85

Annual Report on Remuneration continued

Advisers (unaudited)

The Committee appointed Deloitte LLP (“Deloitte”) with effect from October 2022 to provide independent advice on executive

remuneration matters. Deloitte is a signatory to the Code of Conduct for Remuneration Consultants in the UK. The fees paid to

Deloitte in relation to advice provided to the Committee for 2024 were £14,900 (2023: £14,775).

The Committee will evaluate the support provided by Deloitte annually and is content that it does not have any connections

with the Group that may impair its independence. During the year, Deloitte also provided advice in relation to employee share

schemes and corporate tax matters.

Information on remuneration for the year ended 31 December 2024

Single total figure of remuneration for the year ended 31 December 2024 (audited)

The following table sets out the single figure of total remuneration received by the Directors who served during the year ended

31 December 2024:

£’000

Basic salary/

fees

All taxable

benefits

(1)

Pension-

benefits

(2)

Annual

bonus LTIP

Total

remuneration

Total fixed

remuneration

Total variable

remuneration

Executive Directors

Trevor Harvey 536 28 48 357 — 969 612 357

Leigh Wilcox

(3)

65 4 6 43 — 118 75 43

Annette Borén

(4)

130 9 12 — — 151 151 —

Non‑Executive Chair

Bob Ellis 120 — — — — 120 120 —

Non‑Executive Directors

Katherine Innes Ker 79 — — — — 79 79 —

Nicola Bruce 74 — — — — 74 74 —

Martin Payne 74 — — — — 74 74 —

Edmund Lazarus

(6)

— — — — — — — —

Nicholas Armstrong

(6)

— — — — — — — —

Total 1,078 41 66 400 — 1,585 1,185 400

The following table sets out the single figure of total remuneration received by the Directors who served during 2024 for the

year ended 31 December 2023:

£’000

Basic salary/

fees

All taxable

benefits

(1)

Pension-

benefits

(2)

Annual

bonus LTIP

Total

remuneration

Total fixed

remuneration

Total variable

remuneration

Executive Directors

Trevor Harvey 495 28 45 264 — 832 568 264

Annette Borén

(5)

27 2 2 15 — 46 31 15

Non‑Executive Chair

Bob Ellis 120 — — — — 120 120 —

Non‑Executive Directors

Nicola Bruce 74 — — — — 74 74 —

Martin Payne 74 — — — — 74 74 —

Edmund Lazarus

(6)

— — — — — — — —

Nicholas Armstrong

(6)

— — — — — — — —

Total 790 30 47 279 — 1,146 867 279

(1) Benefits provided include: life assurance cover, private health cover, a car allowance and, for Trevor Harvey, the reimbursement of fuel expenses.

(2) Salary supplement in lieu of pension contribution of 9%.

(3) Leigh Wilcox was appointed to the Board on 1 October 2024. His remuneration in the table above is from that date, including his bonus earned in respect

of his service as an Executive Director.

(4) Annette Borén resigned from the Board on 30 June 2024 and accordingly she did not earn a bonus in respect of 2024.

(5) Annette Borén joined the Board on 22 November 2023. Her remuneration in the table above is from that date. She was eligible to earn a bonus in respect

of 2023 from 1 November 2023 (the date she joined the Group). The portion of that bonus attributable to her service from 22 November is included in the

table above.

(6) Edmund Lazarus and Nicholas Armstrong are representatives of the Major Shareholder and receive no fees for their roles as Non-Executive Directors.

Directors’ Remuneration Report continued

Stelrad Group plc Annual Report 202486

GOVERNANCE REPORT

Incentive outcomes for 2024 (audited)

The maximum bonus opportunity for 2024 was 125% of salary, with the amount earned based on the achievement of two

financial measures and two measures related to the Company’s ESG strategy. The ESG measures were assessed on a “pass/fail”

basis, but with any vesting level then determined by reference to the vesting level of the operating profit element. Details of

theperformance targets set and the performance against them are set out below.

Performance targets

Metric Weighting Threshold * On target Maximum Actual

% of

maximum

bonus

opportunity

50% of

maximum 100%

Group adjusted operating profit 70% n/a £30.501m £33.551m £31.522m 46.7%

Adjusted cash flow from operations 20% n/a £29.397m £32.337m £25.327m 0.0%

ESG 1 – Recycled content of packaging

material used 5%

Weighted average recycled content

of all packaging material used is

greater than 65% 66.5% 3.3%

ESG 2 – Labour turnover rate 5%

Average Group voluntary turnover

is less than the UK industry

benchmark level 2.1% lower 3.3%

53.3%

* No bonus is payable to Executive Directors below on-target performance and as such no threshold performance targets were established.

In line with the Policy, the Committee reviewed the formulaic outturn in the context of underlying business performance

andthe broader stakeholder experience and concluded that the outturn of a bonus entitlement of 53.3% of maximum

bonusopportunity was reflective of that performance and experience. 75% of the bonuses earned will be paid in cash and

25%will be deferred into Stelrad shares for two years under the Deferred Share Bonus Plan. DSBP awards are not subject

toany further performance conditions.

Long Term Incentive Plan vesting (audited)

The LTIP awards granted in 2022 were subject to performance conditions based on EPS and relative TSR assessed over

the three financial years ending with 2024. The threshold level of performance was not achieved for either measure and

consequently the awards have lapsed in full. The targets and performance against these are as follows:

Performance measure Weighting

Threshold

(25% vesting)

Maximum

(100% vesting) Actual

Vesting

(% of maximum)

Relative TSR vs constituents of the FTSE Small Cap

index (excluding investment trusts) assessed over the

three financial years ending with 2024 50% Median

Upper

quartile

Below

median 0%

Adjusted EPS for 2024 50% 20.12p 23.73p 13.05p 0%

Payments for loss of office (audited)

Annette Borén stepped down from the Board with effect from 30 June 2024 and left the business on 12 July 2024.

Herremuneration earned up to 30 June 2024 is included in the single total figure of remuneration table. Following that

date, Annette Borén received a payment of £133,008 in lieu of her salary and benefits for her six months’ notice period,

andapayment of £17,449 in lieu of accrued holiday. A contribution of £4,500 was made in respect of Annette Borén’s legal

costs in connection with her departure from the business.

Payments to past Directors (audited)

In the year ended 31 December 2024, payments were made to George Letham, for his part-time role as a strategic adviser

to the CEO, and to Annette Borén in respect of her salary and benefits for her service as an employee between stepping down

from the Board on 30 June 2024 and leaving the business on 12 July 2024.

Annual Report 2024 Stelrad Group plc 87

Information on remuneration for the year ended

31 December 2024 continued

LTIP awarded during the financial year (audited)

LTIP awards were granted to Executive Directors and certain key individuals in the senior management team below Executive

Director level in March 2024 (2023: none). Each Executive Director received an award at the level of 50% of salary, as set out below.

Director Type of award

Number of

shares subject

to award

Face value

of award

(1)

Trevor Harvey Conditional share award 230,663 £ 267,800

Leigh Wilcox

(2)

Conditional share award 75,366 £87,500

Annette Borén

(3)

Conditional share award 111,972 £130,000

(1) The face value of the award is based on the average of the closing share prices for the five dealing days before grant of the award, being the price used

todetermine the number of shares subject to the awards (£1.161).

(2) Leigh Wilcox’s award was granted before his appointment to the Board.

(3) The LTIP award granted to Annette Borén in 2024 lapsed when she left the business.

The vesting of Trevor Harvey’s award is subject to the performance conditions set out below, as disclosed in the 2024 Directors’

Remuneration Report, and is then subject to a further two-year holding period. Leigh Wilcox’s award was granted prior to his

appointment as Interim CFO and, in line with awards to other below-Board participants, will vest based on EPS targets only and

is not subject to the two-year holding period.

Performance measure Weighting

Threshold

(25% vesting)

Maximum

(100% vesting)

Relative TSR vs constituents of the FTSE Small Cap index (excluding investment

trusts) assessed over the three financial years ending with 2026

(1)

20% Median

Upper

quartile

Adjusted EPS for 2026 80% 13.65p 16.10p

(1) Opening TSR will be averaged over the three-month period ended on 31 December 2023 and closing TSR over the three-month period ending on

31 December 2026.

Statement of Directors’ interests (audited)

The interests of the Directors who served in the year and who held an interest in the ordinary shares of the Company are

as follows:

Interests

Ordinary shares

held at

31 December 2023

(1)

Ordinary

shares held at

31 December

2024

(1)

(or, if

earlier, date of

stepping down

from the Board)

Subject to

deferral/

holding period

Unvested and

subject to

performance

conditions

Total of all scheme

interests and

shareholdings

as at

31 December 2024

(or, if earlier, date

of stepping down

from the Board)

Executive Directors

Trevor Harvey 11,455,129 11,455,129 56,903 230,663 11,742,695

Leigh Wilcox — 5,360 — 75,366 80,726

Annette Borén — 4,500 4,980 111,972

(2)

121,452

Non‑Executive Directors

Bob Ellis 2,863,782 2,613,782 — — 2,613,782

Katherine Innes Ker — 16,900 — — 16,900

Nicola Bruce 4,651 13,651 — — 13,651

Martin Payne 9,302 9,302 — — 9,302

Edmund Lazarus — — — — —

Nicholas Armstrong — — — — —

(1) Includes any shares held by Persons Closely Associated.

(2) Annette Borén’s unvested LTIP award lapsed when she left the business.

Stelrad Group plc Annual Report 202488

GOVERNANCE REPORT

Directors’ Remuneration Report continued

Executive Directors’ share ownership guidelines (audited)

In accordance with the Policy, the shareholding requirements currently in place are 200% of base salary for the Executive

Directors. Non-Executive Directors are not subject to a shareholding requirement. The table below shows the actual Executive

Director share ownership compared with the share ownership guidelines:

Director

Beneficially owned

shares as at

31 December

2024 plus the net

of tax shares

subject to deferral/

holding period

Shareholding

requirement

(% of salary)

(1)

Current

shareholding

(% of salary)

(1)

Shareholding

requirement

met?

Trevor Harvey 11,485,287 200% 2,905.6% Yes

Leigh Wilcox 5,360 200% 2.8% No

(1) The share price of £1.355 as at 31 December 2024 has been used for the purpose of calculating the current shareholding as a percentage of salary.

No changes in the above interests have occurred between 31 December 2024 and the date of this report.

Performance graph (unaudited)

The graph below shows the total shareholder return (“TSR”) performance of an investment of £100 in Stelrad Group plc’s shares

from its listing on the Main Market on 10 November 2021 (using the offer price of £2.15 per share) to the end of the period,

compared with £100 invested in the FTSE Small Cap index (excluding investment trusts) over the same period. The FTSE Small

Cap index was chosen as a comparator because its constituents have a comparable market capitalisation to that of the Group.

£110

£100

£90

£80

£70

£60

£50

£0

Stelrad

FTSE Small Cap

Dec 2021 Apr 2022 Aug 2022 Dec 2022 Apr 2023 Apr 2024Aug 2023 Aug 2024Dec 2023 Dec 2024

The table below illustrates the CEO’s single figure of total remuneration over the same period.

Financial year CEO single figure Annual bonus pay-out (% of maximum) LTIP vesting (% of maximum)

2021

(1)

£128k 100.0% n/a

(2)

2022 £569k 0.0% n/a

(2)

2023 £832k 42.7% n/a

(2)

2024 £969k 53.3% 0.0%

(1) The 2021 figures are based on the single remuneration figure for the period from admission on 10 November 2021 to 31 December 2021.

(2) The first LTIP awards were granted in May 2022 and therefore no awards were due to vest before 2024.

CEO pay ratio (audited)

The table below sets out the ratio between the CEO’s salary and total remuneration and that of the 25th percentile, median

and 75th percentile of our UK employees, for whom total remuneration has been calculated on the same basis.

CEO pay ratio 2024 2023 2022 2021

Method Option A Option A Option A Option A

75th percentile 19:1 16:1 11:1 22:1

Median 27:1 24:1 16:1 28:1

25th percentile 30:1 27:1 18:1 34:1

Annual Report 2024 Stelrad Group plc 89

Information on remuneration for the year ended

31 December 2024 continued

CEO pay ratio (audited) continued

The salary and total remuneration for the individuals identified at the 25th percentile, median and 75th percentile for the year

ended 31 December 2024 are set out below:

£’000 CEO 25th percentile Median 75th percentile

Basic salary 536 26.4 33.7 48.2

Total remuneration 969 31.9 35.5 51.3

The lower quartile, median and upper quartile employees were determined using calculation method A which involved

calculating the actual full-time equivalent remuneration for all UK employees by reference to their remuneration as at

31 December in the relevant year. From this analysis, three employees were then identified as representing the 25th,

50thand 75th percentiles of the UK employee population. The Group chose this method as it is considered to be the most

accurate way of identifying the relevant employees required by the applicable regulations. No other adjustments were

necessary, and no elements of employee remuneration have been excluded from the pay ratio calculation.

The CEO’s overall remuneration opportunity includes a significant performance-related element so that the amount the

CEOearns and, therefore, ratios will depend upon the performance-related remuneration outturns and may fluctuate year on

year. The increase from 2023 to 2024 in the ratio between all-employee reference points and CEO pay reflects a proportional

increase in the annual bonus award received and also the impact of the deferred annual salary increase from 2023 which took

effect from January 2024. The Company believes that the median pay ratio is consistent with the pay, reward and progression

policies for the Group’s UK employees more generally.

Relative importance of spend on pay (unaudited)

The table below shows the Group’s expenditure on employee pay compared to distributions to shareholders for the years

ended 31 December 2024 and 31 December 2023. All figures provided are taken from the consolidated financial statements.

2024

£’000

2023

£’000

Percentage

change

Overall spend on pay including Executive Directors 56,660 53,423 6.1%

Distribution to shareholders 9,806 9,729 0.8%

Percentage change in Directors’ remuneration (unaudited)

The table below shows the percentage change in the salary or fees, benefits and annual bonus for each of the Directors

compared to that for an average employee for the periods 2023–2024, 2022–2023 and 2021–2022.

For the average employee change, the regulations require us to show the change for employees of Stelrad Group plc. Stelrad Group plc

has no employees and, accordingly, in the interests of transparency, we have included the change based on the mean employee pay for all

UK employees in the Group, being a comparator group that is consistent with the comparator group used for the CEO pay ratio disclosure.

Leigh Wilcox and Katherine Innes Ker joined the Board in the year and Annette Borén stepped down from the Board in the

year; therefore, each has been excluded from the table. Neither Edmund Lazarus nor Nicholas Armstrong receives a fee for

theirrole as a Non-Executive Director and each has therefore been excluded from the table.

% change 2023 to 2024 % change 2022 to 2023 % change 2021 to 2022

Salary/fees

Taxable

benefits

(1)

Annual

bonus

(2)

Salary/fees

Taxable

benefits

(1)

Annual

bonus

(2)

Salary/fees

Taxable

benefits

(1)

Annual

bonus

(2)

Executive Directors

Trevor Harvey 8%

(4)

(2)% 35% 0% (3)% n/a

(3)

4% 8% n/a

(3)

Non‑Executive

Directors

Bob Ellis 0% n/a n/a 0% n/a n/a 0% n/a n/a

Nicola Bruce 0% n/a n/a 0% n/a n/a 0% n/a n/a

Martin Payne 0% n/a n/a 0% n/a n/a 0% n/a n/a

Average employee 3% (7)% (9)% (1)% (5)% 135% 15% 11% (55)%

(1) Taxable benefits include car allowance, health cover, life assurance and the reimbursement of fuel expenses but exclude the salary supplement in lieu

of pension contributions.

(2) Annual bonus is based on the accrued year-end amount.

(3)

Because no bonus was earned for 2022, the percentage changes between 2021 and 2022 and between 2022 and 2023 are not considered a meaningful disclosure.

(4) The 8% salary increase in 2024 comprised the 4% increase for 2024 (in line with the annual increase awarded to the majority of the UK workforce) in addition to

the implementation of Trevor’s deferred 2023 increase of 4% (which was not only deferred, but also below the 6% awarded to the majority of the workforce).

Stelrad Group plc Annual Report 202490

GOVERNANCE REPORT

Directors’ Remuneration Report continued

External appointments

The Executive Directors are permitted to hold external appointments and are entitled to retain the fees earned from such

appointments. All Directors are required to seek approval from the Board prior to accepting external appointments. Currently,

Trevor Harvey and Leigh Wilcox hold no external appointments.

Shareholder approval of our Directors’ Remuneration Policy and Directors’ Remuneration Report

The Directors’ Remuneration Policy and the 2023 Directors’ Remuneration Report were approved at the 16 May 2022 and

22 May 2024 AGMs respectively. Details of the voting outturns are set out below:

Resolution Votes for

% of votes

for Votes against

% of votes

against

Votes

withheld

Approve the Directors’ Remuneration Policy 115,852,581 99.10 1,056,964 0.90 0

Approve the 2023 Directors’ Remuneration Report 116,948,925 99.99 4,600 0.01 1,839,716

Implementation of Policy in 2025

Information on how the Policy will be implemented in 2025 for the Company’s Executive Directors is set out in the statement

from the Remuneration Committee Chair and in the “Remuneration at a glance” table. The details of the LTIP are set out below.

Long Term Incentive Plan 2025 (unaudited)

As noted on page 77, the Committee intends to grant awards under the LTIP to the Executive Directors in the first half of 2025,

in accordance with the Policy. Vesting of these 2025 awards will be subject to the achievement of performance measures

based on total shareholder return performance as compared to the selected benchmark, the FTSE Small Cap index (excluding

investment trusts), and adjusted EPS performance over a three-year performance period ending 31 December 2027.

For each measure, 25% of the award vests for threshold performance with 100% of the award vesting for maximum

performance and straight-line vesting between these points.

The performance targets for these measures are as follows:

Weighting

(% of total award)

Threshold

(25% vesting)

Maximum

(100% vesting)

TSR v FTSE Small Cap index (excluding investment trusts) 20% Median Upper quartile

Adjusted EPS 80% 15.54p 18.33p

Chair and Non‑Executive Director fees (unaudited)

No changes will be made to the Chair and Non-Executive Director fees for 2025. A breakdown of the fee components for the

Chair and Non-Executive Directors in 2025 is as follows:

Role Fee (per annum) 2025 Fee (per annum) 2024

Chair £120,000 £120,000

Non-Executive Director base fee £50,000 £50,000

Additional fees

Senior Independent Director fee £15,000 £15,000

Chair of the Remuneration Committee £10,000 £10,000

Member of the Remuneration Committee £5,000 £5,000

Chair of the Audit & Risk Committee £10,000 £10,000

Member of the Audit & Risk Committee £5,000 £5,000

Chair of the Nomination Committee £7,500 £ 7,500

Member of the Nomination Committee £3,750 £3,750

On behalf of the Board

Nicola Bruce

Chair of the Remuneration Committee

7 March 2025

Annual Report 2024 Stelrad Group plc 91

Directors’ Report

The Directors present their report and audited financial

statements of the Group for the year ended 31 December 2024.

The Directors’ Report forms part of the management report

as required under the Disclosure Guidance and Transparency

Rules. The Strategic Report, which together with the Directors’

Report forms the management report, can be found on

pages 1 to 56 of this Annual Report.

The Directors’ Report for the year ended 31 December 2024

comprises pages 92 to 95 of this Annual Report, in addition

to the following information, which is provided in other

appropriate sections of the Annual Report and is incorporated

by reference, in accordance with section 414C(11) of

the Act, and The Companies (Miscellaneous Reporting)

Regulations 2018:

• The Corporate Governance Report is set out on page 57.

• Information relating to future business developments

can be found throughout the Strategic Report on

pages 1 to 56.

• Information on how the Directors have had consideration

for the Company’s stakeholders can be found on pages 22

to 25 of the Strategic Report.

• Information relating to risk management can be found

onpages 48 to 54.

• The going concern and long-term viability statements

canbe found on page 55.

• The Group’s global greenhouse gas emissions during the

year can be found on page 30 of the Sustainability Report,

which is located within the Strategic Report.

• The Group is exposed to a number of financial

instrument-related risks; these are discussed in more

detailin note 30 to the consolidated financial statements.

• As required by Listing Rule 9.8.4R, details of the Group’s

long-term incentive schemes can be found in the

Remuneration Report on pages 74 to 91.

• As required by Listing Rule 9.8.4R, details of the

Relationship Agreement with the Major Shareholder can

be found on page 93.

General information

Stelrad Group plc (the “Company”) was incorporated in

England and Wales on 8 October 2021 as a public company,

limited by shares. The Company is incorporated, domiciled

and registered in England and Wales, with its registered office

situated at 69–75 Side, Newcastle upon Tyne, Tyne and Wear,

United Kingdom NE1 3JE.

Stelrad Group plc is a public company limited by shares,

incorporated in England and Wales, and its shares are traded

on the premium listing segment of the Main Market of the

London Stock Exchange.

Principal activities

The Group’s principal activities are the manufacture and

distribution of radiators. The principal activity of the Company

is that of a holding company. More detailed information about

the activities of the Group during the year, and its likely future

prospects, can be found in the Strategic Report on pages 1

to56. The principal subsidiaries operating within the Group

are shown in note 13 to the Company financial statements.

Profit and dividends

The Group profit for the year, after taxation, amounted to

£16.5 million (2023: £15.4 million).

An interim dividend of 2.98 pence per share was paid to

shareholders on 25 October 2024 (2023: interim dividend

of2.92 pence per share) and the Board is recommending

a final dividend in respect of the year ended 31 December

2024 of 4.81 pence per share (2023: final dividend of

4.72pence per share). Subject to shareholder approval, the

final dividend will be paid on 27 May 2025 to shareholders

on the register on 25 April 2025. The total dividend paid and

proposed for the year ended 31 December 2024 amounts

to7.79 pence per share (2023: 7.64 pence per share).

Articles of Association

The Articles set out the rules relating to the powers of the

Company’s Directors and their appointment and replacement.

The Articles may only be amended by a special resolution at

a general meeting of the shareholders. Shareholders of the

Group can request a copy of the Articles by contacting the Group

Company Secretary, Computershare Governance Services, UK,

at Moor House, 120 London Wall, London EC2Y 5ET.

Share capital

As at 31 December 2024, the Company has one class of

ordinary share with a nominal value of £0.001. The shares

are listed for trading on the Main Market of the London Stock

Exchange, and at 31 December 2024 the Company had

127,352,555 shares in issue. The shares rank pari passu in

respect of voting and participation and carry the right to one

vote at general meetings of the Company, which may be

exercised by members in person, by proxy or by corporate

representatives (for corporations).

The ordinary shares are free from any restriction on transfer,

subject to compliance with applicable securities laws.

At the Annual General Meeting held on 22 May 2024

shareholders passed a resolution allowing the Company to

make market purchases of ordinary shares of £0.001 each

in the capital of the Company up to a maximum aggregate

amount of 10% of the Company’s issued share capital. No

shares have been purchased as at the date of this report.

This authority is due to expire at the AGM to be held on

21 May 2025 and the Board will seek to renew this authority.

Substantial shareholdings

At 31 January 2025, the only notified holdings of substantial

voting rights in respect of the issued share capital of the

Company (which may have altered since the date of such

notification without any requirement for the Company to

have been informed) were:

Shareholder Interest

% of share

capital

The Bregal Fund III LP 63,103,765 49.6%

Trevor Harvey 11,455,129 9.0%

Chelverton Asset Management 7, 378,952 5.8%

Janus Henderson Investors 5,619,402 4.4%

Premier Miton Group 5,046,044 4.0%

George Letham 4,727,564 3.7%

Unicorn Asset Management 4,664,720 3.7%

Charles Stanley 4,654,734 3.7%

Lombard Odier Asset Mgt 4,006,713 3.2%

Stelrad Group plc Annual Report 202492

GOVERNANCE REPORT

Relationship Agreement with Major Shareholder

The Company has entered into a relationship agreement

with the Major Shareholder, The Bregal Fund III LP (the

“Relationship Agreement”). The principal purpose of the

Relationship Agreement is to ensure that where, following

admission, the Major Shareholder, together with its associates,

holds, in aggregate, ordinary shares in the Company

representing at least 10% of the voting rights of the ordinary

shares in issuance by the Company from time to time, the

Company is capable of carrying on its business independently

of the Major Shareholder and its associates.

The provisions of the Relationship Agreement imposing

obligations on the Major Shareholder will remain in full

force and effect, for so long as it, together with its associates,

holds, in aggregate, ordinary shares representing at least

10% of the voting rights of the ordinary shares in issuance

by the Company.

Under the Relationship Agreement, the Major Shareholder

has agreed that:

(i) transactions and arrangements between it (and/or any

of its associates) and the Company will be conducted

atarm’s length and on normal commercial terms;

(ii) neither it nor any of its associates shall take any action

that would have the effect of preventing the Company

from complying with its obligations under the Listing

Rules; and

(iii) neither it nor any of its associates shall propose or

procurethe proposal of a shareholder resolution which

is intended or appears to be intended to circumvent

theproper application of the Listing Rules.

For so long as the Major Shareholder (together with any of

its associates) holds, in aggregate, at least 10% but less than

20% of the voting rights of the ordinary shares, the Major

Shareholder shall be entitled to appoint (and remove and

reappoint) one Non-Executive Representative Director to

theBoard, or if the Major Shareholder (together with any of

its associates) holds, in aggregate, 20% or more of the voting

rights of the ordinary shares, then the Major Shareholder

shall be entitled to appoint (and remove and reappoint)

twoNon-Executive Representative Directors to theBoard.

The Major Shareholder’s first appointed shareholder

Directorsare Edmund Lazarus and Nicholas Armstrong.

For so long as the Major Shareholder (together with any

of its associates) holds 20% or more of the voting rights of

the ordinary shares, the Major Shareholder is entitled to

nominate a shareholder Director to be a member of the

Nomination Committee. Furthermore, for so long as the

Major Shareholder (together with any of its associates) holds

10% or more of the voting rights of the ordinary shares, the

Major Shareholder is entitled to appoint an observer to each

of the Nomination Committee, Audit & Risk Committee and

Remuneration Committee. The Major Shareholder will not

appoint an observer to the Nomination Committee whilst

a shareholder Director is a member of such Committee.

Subject to applicable law and regulation, the Major Shareholder

will have the benefit of certain information rights, including for the

purposes of its accounting and other regulatory requirements.

In accordance with Listing Rule 5.3.1 the Directors confirm

that the Company has complied with the independence

provisions included in the Relationship Agreement and

that,as far as the Company is aware, the Major Shareholder

(or any of its associates) has complied with them.

The Relationship Agreement is governed by the laws of

England and Wales.

The Board of Directors

Director biographies of all Directors as at the date of this

report can be found on pages 58 and 59. Leigh Wilcox

was appointed to the Board as Chief Financial Officer on

1 October 2024, replacing Annette Borén, who resigned

from the Board on 30 June 2024. Katherine Innes Ker was

appointed to the Board as an independent Non-Executive

Director and the Senior Independent Director on

1February 2024.

The appointment and removal of Directors are governed

by the Articles, the 2018 UK Corporate Governance Code,

the Companies Act 2006 and related legislation. All

Non-Executive Director appointments can be terminated by

either the Company or by the individual upon three months’

written notice. In accordance with the Articles, Directors

can be appointed or removed either by the Board or by the

shareholders in a general meeting with immediate effect.

Directors’ interests and conflicts of interest

Details regarding the share interests of the Directors

in theshare capital of the Company are set out in the

Remuneration Report on page 88. Details of the Executive

Directors’ service agreements and Non-Executive Directors’

letters of appointment are available in the Remuneration

Report on page 83.

The Group has a formal ongoing procedure for the disclosure,

review and authorisation of Directors’ conflicts of interest.

All Directors are required to make the Board aware of any

other commitments. Potential and actual conflicts of interest

are carefully considered and, if deemed appropriate, the

continuing existence of the potential or actual conflict of

interest may be approved by the Board. All conflicts of interest

are recorded in the conflicts register. The conflicts of interest

are reviewed annually to determine whether they should

remain authorised.

Directors’ indemnities

In relation to the Directors of the Company who are also

Directors of UK-based subsidiaries, the Group has granted

an indemnity to one or more of its Directors against liability

in respect of proceedings brought by third parties, subject

to the conditions set out in the Companies Act 2006. Such

qualifying third party indemnity provisions were in force

during the year ended 31 December 2024 and remain in

force as at the date of approving the Directors’ Report.

In addition, the Group maintained a Directors’ and officers’

liability insurance policy throughout the year.

Annual Report 2024 Stelrad Group plc 93

Directors’ Report continued

Change of control provisions

There are no agreements between the Group and its

Directors or employees providing for compensation for loss

of office or employment that occurs because of a takeover

or change of control of the Group.

Details of the significant agreements to which the Company

is party that take effect, alter or terminate upon a change

of control of the Company following a takeover bid are set

out below:

Share plans

The Company’s share plans contain specific provisions

relating to change of control. Normally, awards will vest

prorata in the event of a change of control of the Company.

The Remuneration Committee will determine whether the

performance criteria have been met at that time.

Bank agreement

The multicurrency facilities agreement originally dated

2 November 2021, and subsequently amended and

restatedby an amendment and restatement agreement

dated 8 July 2022, contains change of control provisions

suchthat in the event of the occurrence of a change

of control event, the banks shall have 30 business days

to exercise an individual right to cancel all undrawn

commitments on the facility and to require that all

outstanding participations in utilisations are repaid with

accrued interest and any other relevant amounts accrued.

Relationship Agreement

The Relationship Agreement ceases to apply if the

Company’sshares cease to be listed and traded on the

London Stock Exchange, or if the Major Shareholder,

togetherwith any of its associates, ceases to hold at least

10%of the Company’s shares.

Employee engagement

The Group is committed to involving its employees in the

decisions that affect them. Regular meetings take place

between local management and employees to allow a free

flow of information and ideas. In addition, where practicable,

the Group seeks to keep employees informed through

regular newsletters.

The Board has elected to continue to use a combination of

approaches to gather the views of the workforce, rather than

to adopt one of the three measures set out in the Code.

The majority of employees are located in manufacturing

and distribution facilities in the UK, Turkey, the Netherlands,

Denmark, Poland and Italy, with sales personnel in five other

countries. Given the relatively small number of employees in

each location, the diversity of cultural norms and the differing

statutory requirements for each location, a decentralised

and tailored approach to employee engagement has been

adopted. This encompasses engagement with our employees

through our long-established collective forums, through

our trade union bodies, and directly with our workforce.

The Board believes that this, combined with the flat structure

of our business, which enables close working relationships

across the Group, is effective and meaningful in representing

the voice of our employees.

The Board reviews employee engagement using a range of

data. A formal annual review of the workforce, encompassing

employee engagement, is undertaken by the Board, and this

session is attended by the Chief People Officer.

The Group aims to build a culture where everyone feels

valued as an individual and feels supported and motivated

to carry out their work to the best of their abilities.

Further examples of employee engagement across the Group

can be found in the Sustainability Report on pages 26 to 34.

Equality, diversity and inclusion

The Group is a committed equal opportunities employer

and we aim to:

• prevent discrimination, eliminate prejudice, promote

inclusion and celebrate diversity within the organisation;

• be fair in our dealings with all people, internally or

externally, with whom we have relationships, taking

into account the diverse nature of their culture and

backgrounds; and

• ensure that equality, diversity and inclusion are

embedded in everything we do.

The Group’s Equality, Diversity and Inclusion Policy covers

all aspects of equality including race, religion or belief,

sex, gender reassignment, marriage and civil partnership,

pregnancy, maternity and other matters relating to parental

responsibility, sexual orientation, disability and age.

It underlines our commitment to develop as an open and

inclusive organisation, in keeping with our values and our

Code of Conduct.

The Board also adheres to the Board Diversity and Inclusion

Policy which can be found in the Nomination Committee

Report on page 71.

Research and development expenditure

Research and development costs of £1.6 million

(2023: £1.6 million) have been incurred in the year in

relation to the design and development of new products.

All such costs are expensed as incurred.

Political donations and expenditure

It is the Group’s policy not to make political donations and,

accordingly, no political donations were made in the year

(2023: £nil) and no political expenditure was incurred during

the year (2023: £nil).

The Group’s policy is that it does not make what are

commonly regarded as donations to any political party.

However, the Companies Act 2006 defines political donations

very broadly and so it is possible that normal business

activities, such as sponsorship, subscriptions, payment of

expenses, paid leave for employees fulfilling certain public

duties and support for bodies representing the business

community in policy review or reform, which might not be

thought of as political expenditure in the usual sense, could

be captured. Activities of this nature would not be thought

ofas political donations in the ordinary sense of those words.

At the Annual General Meeting of the Company held on

22 May 2024, shareholders voted to allow the Company

to incur political expenditure up to a maximum aggregate

amount of £100,000 in line with market practice. That

authority is due to expire at the Annual General Meeting

due to be held on 21 May 2025 and therefore the Company

will seek to renew the authority in line with the above

considerations. The resolution to be proposed at the 2025

AGM, authorising political donations and expenditure, is

to ensure that the Group does not commit any technical

breach of the Companies Act 2006.

Stelrad Group plc Annual Report 202494

GOVERNANCE REPORT

Important developments since

31 December 2024

There have been no material events or developments

affecting the Company or any of its operating subsidiaries

since 31 December 2024.

Independent auditors

PricewaterhouseCoopers LLP acted as auditors during the

year and a resolution to reappoint PricewaterhouseCoopers

LLP as auditors will be put to the members at the Annual

General Meeting.

Fair, balanced and understandable

In accordance with the principles of the Code, the Group has

processes in place to ensure that the content of the Annual

Report is fair, balanced and understandable. The Directors

consider, on the advice of the Audit & Risk Committee, that

the Annual Report, taken as a whole, is fair, balanced and

understandable and provides the information necessary for

shareholders to assess the Group’s performance, position,

business model and strategy.

Annual General Meeting (“AGM”)

The Company’s AGM will be held at the offices of Investec

Bank plc, 65 Gresham Street, London, EC2V 7NQ, on

21 May 2025 at 2pm. The notice convening the AGM will

be sent to shareholders separately. Further information

on arrangements for the AGM and voting instructions will

be set out fully in the Notice of AGM and Form of Proxy.

Statement of Directors’ responsibilities

inrespect of the financial statements

The Directors are responsible for preparing the Annual

Report and the financial statements in accordance with

applicable law and regulation.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the

Directors have prepared the Group financial statements

in accordance with UK-adopted international accounting

standards and the Company financial statements in

accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting

Standards, comprising FRS 102 The Financial Reporting

Standard applicable in the UK and Republic of Ireland,

and applicable law).

Under company law, Directors must not approve the financial

statements unless they are satisfied that they give a true and

fair view of the state of affairs of the Group and Company and

of the profit or loss of the Group for that period. In preparing

the financial statements, the Directors are required to:

• select suitable accounting policies and then apply

them consistently;

• state whether applicable UK-adopted international

accounting standards have been followed for the Group

financial statements and United Kingdom Accounting

Standards, comprising FRS 102, have been followed

for the Company financial statements, subject to any

material departures disclosed and explained in the

financial statements;

• make judgements and accounting estimates that are

reasonable and prudent; and

• prepare the financial statements on the going concern

basis unless it is inappropriate to presume that the Group

and Company will continue in business.

The Directors are responsible for safeguarding the

assets of the Group and Company and hence for taking

reasonable steps for the prevention and detection of

fraudand other irregularities.

The Directors are also responsible for keeping adequate

accounting records that are sufficient to show and explain

the Group’s and Company’s transactions and disclose with

reasonable accuracy at any time the financial position of

the Group and Company and enable them to ensure that

the financial statements and the Directors’ Remuneration

Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity

of the Company’s website. Legislation in the United Kingdom

governing the preparation and dissemination of financial

statements may differ from legislation in other jurisdictions.

Directors’ confirmations

Each of the Directors, whose names and functions are

listed in the Governance Report, confirm that, to the best

of their knowledge:

• the Group financial statements, which have been prepared

in accordance with UK-adopted international accounting

standards, give a true and fair view of the assets, liabilities,

financial position and profit of the Group;

• the Company financial statements, which have been

prepared in accordance with United Kingdom Accounting

Standards, comprising FRS 102, give a true and fair

view of the assets, liabilities and financial position of the

Company; and

• the Directors’ Report includes a fair review of the

development and performance of the business and

the position of the Group and Company, together with

a description of the principal risks and uncertainties

that it faces.

In the case of each Director in office at the date the Directors’

Report is approved:

• so far as the Director is aware, there is no relevant audit

information of which the Group’s and Company’s auditors

are unaware; and

• they have taken all the steps that they ought to have taken

as a Director in order to make themselves aware of any

relevant audit information and to establish that the Group’s

and Company’s auditors are aware of that information.

The Directors’ Report has been approved by the Board.

Leigh Wilcox

Chief Financial Officer

7 March 2025

Annual Report 2024 Stelrad Group plc 95

Report on the audit of the financial statements

Opinion

In our opinion:

• Stelrad Group plc’s group financial statements and

company financial statements (the “financial statements”)

give a true and fair view of the state of the group’s and

of the company’s affairs as at 31 December 2024 and of

the group’s profit and the group’s cash flows for the year

then ended;

• the group financial statements have been properly

prepared in accordance with UK-adopted international

accounting standards as applied in accordance with the

provisions of the Companies Act 2006;

• the company financial statements have been properly

prepared in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom

Accounting Standards, including FRS 102 “The Financial

Reporting Standard applicable in the UK and Republic

of Ireland”, and applicable law); and

• the financial statements have been prepared

in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements, included within

the Annual Report, which comprise: the Consolidated and

Company balance sheets as at 31 December 2024; the

Consolidated income statement, the Consolidated statement

of comprehensive income, the Consolidated and Company

statements of changes in equity and the Consolidated

statement of cash flows for the year then ended; and the notes

to the financial statements, comprising material accounting

policy information and other explanatory information.

Our opinion is consistent with our reporting to the Audit &

Risk Committee.

Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Our responsibilities under ISAs (UK) are further described

in the Auditors’ responsibilities for the audit of the financial

statements section of our report. We believe that the audit

evidence we have obtained is sufficient and appropriate to

provide a basis for our opinion.

Independence

We remained independent of the group in accordance

with the ethical requirements that are relevant to our audit

of the financial statements in the UK, which includes the

FRC’s Ethical Standard, as applicable to listed public interest

entities, and we have fulfilled our other ethical responsibilities

in accordance with these requirements.

To the best of our knowledge and belief, we declare that

non‑audit services prohibited by the FRC’s Ethical Standard

were not provided.

Other than those disclosed in Note 8, we have provided

no non-audit services to the company or its controlled

undertakings in the period under audit.

Our audit approach

Overview

Audit scope

• Four trading subsidiaries, together with consolidation

adjustments were significant components for full scope

Group reporting. In addition, audit procedures were

performed over one or more FSLIs in five other components.

• This accounted for 95% of the total Group revenue and

100% of profit before tax.

Key audit matters

• Completeness and accuracy of indirect rebates (group)

• Impairment risk of Radiators SpA CGU (group)

• Impairment of investments (parent)

Materiality

• Overall group materiality: £2,179,000 (2023: £2,300,000)

based on 0.75% of total revenues.

• Overall company materiality: £1,159,000

(2023:£1,227,000) based on 1% of total assets.

• Performance materiality: £1,634,000 (2023: £1,725,000)

(group) and £869,000 (2023: £920,250) (company).

The scope of our audit

As part of designing our audit, we determined materiality

andassessed the risks of material misstatement in the

financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’

professional judgement, were of most significance in the

audit of the financial statements of the current period

and include the most significant assessed risks of material

misstatement (whether or not due to fraud) identified by

the auditors, including those which had the greatest effect

on: the overall audit strategy; the allocation of resources

in the audit; and directing the efforts of the engagement

team. These matters, and any comments we make on the

results ofour procedures thereon, were addressed in the

context of our audit of the financial statements as a whole,

and in forming our opinion thereon, and we do not provide

aseparate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Change in functional currency in Turkey (Group), which was

a key audit matter last year, is no longer included because of

the change was a one-off event that was fully implemented

in the prior year. Otherwise, the key audit matters below are

consistent with last year.

Independent auditors’ report to the members

of Stelrad Group plc

FINANCIAL STATEMENTS

Stelrad Group plc Annual Report 202496

Our audit approach continued

Key audit matters continued

Key audit matter How our audit addressed the key audit matter

Completeness and accuracy of indirect rebates (group)

Refer to Accounting policies on revenue recognition and note 5 –

Significantaccounting judgements, estimates and assumptions. The UK

sales arrangements include installer rebates. Determining the accrual

for installer rebates is a complex area with a high degree of estimation.

This arises as the rebate is granted on indirect sales and so the sales

information is not readily available at the time the accrual needs to be

determined. Assuch, historical rates in relation to take up (number of

radiators for whicha rebate has been claimed) and poundage (the rebate

value claimedper radiator), as well as management judgement, are used

in calculating the accrual for indirect rebates. Stelrad Limited has also

implemented a price rebase in the current year which has an impact

on the rebate values and the underlying calculation. We identified this

as a keyaudit matter due to the subjectivity involved, the potential for

manipulation and because of the impact it has onrevenue recognised.

To audit the indirect rebates accrual we have:

• Updated our understanding of the process and calculation

completed, including any changes as a result of the updated prices

and rebates during the year;

• Obtained an understanding and challenged management overlays

included within the model;

• Corroborated the key inputs into the model, including sales volumes

data and the volume and value of rebate claims on radiators sold

included in management’s calculations of historic take up and

poundage rates to sales during the year;

• Reviewed the impact of the price realignment exercise performed

during the year and agreed a sample of new list prices and rebate

rates to supporting evidence;

• Performed sensitivity analysis over management’s take up and

poundage assumptions to challenge the reasonableness of any

management overlay to the assumptions; and

• Performed a retrospective review to confirm the accuracy of

management’s estimate in prior periods. Through our work

performed we did not identify any issues.

Impairment risk of Radiators SpA CGU (group)

Refer to note 18 – Intangible assets. Management identified an

impairment indicator due to the continued performance of Radiators

SpA being below expectation. An impairment assessment was

preparedby management analysing the carrying amount of the

Radiators SpA ‘Cash Generating Unit’ (“CGU”) against its value‑in‑use.

We identified this as a key audit matter due to the increased risk of

impairment due to the impairment indicators identified and the use

ofkey assumptions which are inherently subjective.

We obtained management’s assessment of impairment indicators

and agree with the conclusion that impairment indicators exist for

theRadiators SpA CGU. We performed the following audit procedures:

• Agreed the cash flow forecasts to the Board approved budgets

forRadiators SpA;

• Reviewed the inputs within the cash flow models to ensure

value inuse calculations were prepared in accordance with the

requirements defined in applicable accounting standards;

• Challenged the discount rate and long-term growth rate

assumptionswith support from our PwC valuation experts;

• Challenged the cash flow assumptions including volume growth,

contribution per radiator, EBITDA and capital expenditure;

• Obtained corroborating support for key assumptions, with particular

focus on contribution per radiator from key contracts with significant

customers which is the most sensitive assumption;

• Challenged management’s assumption with regards to

renewing a key supply contract obtaining evidence to support

management’s view;

• Considered management’s forecasts against historical

performanceof Radiators SpA and considered management’s

historical forecasting accuracy;

• Obtained independent market data for Radiators SpA sales

markets to consider any inconsistencies in views being taken

bymanagement; and

• Audited the disclosures in relation to the impairment test, including

consideration of reasonable changes in key assumptions, are in

line with the requirements of IAS 1 and IAS 36. Through our work

performed we did not identify anything that would indicate that the

carrying value is materially incorrect.

Impairment of investments (parent)

Within the parent company (note 9) there are investments in

subsidiariesof £115,908,000. The quantum of these investments is

significant to the parent company’s balance sheet and it is necessary

formanagement to consider whether or not there are any indications

ofimpairment. Due to the quantum of the investments in subsidiaries

andthe judgement involved in assessing impairment indicators we

identified this as a key audit matter.

Management concluded there were no impairment indicators as at year

end date hence an assessment of impairment was not required for the

investment in the Group. We challenged management’s conclusion that

there were no indicators via the following testing;

• Considered the trading performance of trading subsidiaries in the year

and how this compared to historic trading;

• Reviewed Board minutes for anything which might indicate there

couldbe an impairment;

• Considered the audit work carried out over subsidiary companies in

the Group;

• Considered the market cap of the Group in relation to the investments

balance; and

• Considered the impairment test carried out by management over the

Radiators SpA cash‑generating unit. In performing these procedures

wedid not identify any issues. We also consider the disclosures made

inthe financial statements to be appropriate.

Annual Report 2024 Stelrad Group plc 97

Our audit approach continued

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial

statements as a whole, taking into account the structure of the group and the company, the accounting processes and

controls, and the industry in which they operate.

The Group is based in the UK with the majority of the trading operations in the UK, Turkey, Italy and Continental (Belgium and

the Netherlands). These trading entities are in scope for the Group audit given the financial significance of each operation.

Fullscope audit procedures have been carried out on the UK, Turkey, Italy and the Netherlands. Certain large balances for

smaller, non financially significant components, were audited along with material consolidation entries. Furthermore, all UK

entities receive a statutory audit.

The UK component was audited by the Group team. Component auditors were engaged for the Continental, Italy and Turkey

components. The key protocols we adopted in respect of working with all component auditors were: issuing formal Group

reporting instructions, which set out our requirements for the component auditors, together with our assessment of audit risks

in the Group; holding planning discussions with all component auditors in order to agree those requirements; discussing the

Group audit risks to identify any component specific risks; performed a high level analysis of the financial information of the

component by the Group engagement team to identify any unusual transactions or balances for discussion with component

auditors; ongoing communication and interaction throughout the audit with the component audit teams; and obtaining

signed interoffice opinions that the component financial information was properly prepared in accordance with the Group’s

accounting policies.

The Audit Partner and Senior Manager visited the Turkish component in order to better understand and direct the response

to the significant audit risks identified for this component. This included meeting with local management and the PwC

component audit team to review the audit procedures performed.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the

Group’s and Company’s financial statements, and we remained alert when performing our audit procedures for any indicators

of the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the Group’s and

Company’s financial statements.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.

These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and

extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect

ofmisstatements, both individually andin aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements – Group Financial statements – Company

Overall materiality £2,179,000 (2023: £2,300,000). £1,159,000 (2023: £1,227,000).

How we determined it 0.75% of total revenues 1% of total assets

Rationale for

benchmark applied

We consider revenue is a key measure used by the

shareholders in assessing the performance of the Group.

Due to the mix of profit and EBITDA across the different

components within the Group when considered against

revenue and sales volumes, an EBITDA or PBT metric

does not reflect the scale of the Group in the same way.

We believe that total assets is the primary

measure used by the shareholders

in assessing the performance of the

Company and is a generally accepted

auditing benchmark for a holding

company with no trading operations.

Independent auditors’ report to the members

of Stelrad Group plc continued

For each component in the scope of our group audit, we

allocated a materiality that is less than our overall group

materiality. The range of materiality allocated across

components was between £100,000 ‑ £1,900,000.

Certain components were audited to a local statutory

audit materiality that was also less than our overall

groupmateriality.

We use performance materiality to reduce to an appropriately

low level the probability that the aggregate of uncorrected

and undetected misstatements exceeds overall materiality.

Specifically, we use performance materiality in determining

the scope of our audit and the nature and extent of our

testing of account balances, classes of transactions and

disclosures, for example in determining sample sizes.

Ourperformance materiality was 75% (2023: 75%) of overall

materiality, amounting to £1,634,000 (2023: £1,725,000)

for the group financial statements and £869,000

(2023:£920,250) for the company financial statements.

In determining the performance materiality, we considered

a number of factors ‑ the history of misstatements, risk

assessment and aggregation risk and the effectiveness

ofcontrols ‑ and concluded that an amount in the middle

ofournormal range was appropriate.

We agreed with the Audit & Risk Committee that we

would report to them misstatements identified during

ouraudit above £109,000 (group audit) (2023: £116,000)

and £57,000 (company audit) (2023: £61,000) as well

as misstatements below those amounts that, in our view,

warranted reporting for qualitative reasons.

FINANCIAL STATEMENTS

Stelrad Group plc Annual Report 202498

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s

andthe company’s ability to continue to adopt the going

concern basis of accounting included:

• Performing a risk assessment to identify factors that

couldimpact the going concern basis of accounting;

• Obtaining management’s going concern assessment

for the 12 month period from the date of signing the

AnnualReport and evaluating management’s downside

scenarios, including a severe but plausible scenario;

• Challenging the appropriateness and underlying

assumptions in both the base case and severe but

plausible scenario;

• Evaluating the level of forecast liquidity and forecast

compliance with the bank facility covenants; and

• Comparing the Group’s financial forecasts to historical

performance to assess management’s ability to forecast

as well as assessing the year to date performance against

budget for the 2025 financial year.

Based on the work we have performed, we have not identified

any material uncertainties relating to events or conditions

that, individually or collectively, may cast significant doubt on

the group’s and the company’s ability to continue as a going

concern for a period of at least twelve months from when the

financial statements are authorised for issue.

In auditing the financial statements, we have concluded that

the directors’ use of the going concern basis of accounting

inthe preparation of the financial statements is appropriate.

However, because not all future events or conditions can be

predicted, this conclusion is not a guarantee as to the group’s

and the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have

applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to

the directors’ statement in the financial statements about

whether the directors considered it appropriate to adopt

thegoing concern basis of accounting.

Our responsibilities and the responsibilities of the directors

with respect to going concern are described in the relevant

sections of this report.

Reporting on other information

The other information comprises all of the information in the

Annual Report other than the financial statements and our

auditors’ report thereon. The directors are responsible for the

other information. Our opinion on the financial statements

does not cover the other information and, accordingly, we do

not express an audit opinion or, except to the extent otherwise

explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our

responsibility is to read the other information and, in doing

so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge

obtained in the audit, or otherwise appears to be materially

misstated. If we identify an apparent material inconsistency or

material misstatement, we are required to perform procedures

to conclude whether there is a material misstatement of the

financial statements or a material misstatement of the other

information. If, based on the work we have performed, we

conclude that there is a material misstatement of this other

information, we are required to report that fact. We have

nothing to report based on these responsibilities.

With respect to the Strategic report and Directors’ Report,

wealso considered whether the disclosures required by

theUK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit,

the Companies Act 2006 requires us also to report certain

opinions and matters as described below.

Strategic Report and Directors’ Report

In our opinion, based on the work undertaken in the course

of the audit, the information given in the Strategic report

and Directors’ Report for the year ended 31 December 2024

is consistent with the financial statements and has been

prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group

and company and their environment obtained in the course

of the audit, we did not identify any material misstatements

in the Strategic report and Directors’ Report.

Directors’ Remuneration

In our opinion, the part of the Directors’ Remuneration

Reportto be audited has been properly prepared in

accordance with the Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the directors’

statements in relation to going concern, longer-term

viabilityand that part of the corporate governance

statementrelating to the company’s compliance with the

provisions of the UK Corporate Governance Code specified

forour review. Our additional responsibilities with respect

tothe corporate governance statement as other information

are described in the Reporting on other information section

of this report.

Based on the work undertaken as part of our audit, we

have concluded that each of the following elements of

the corporate governance statement, included within the

Statement of corporate governance is materially consistent

with the financial statements and our knowledge obtained

during the audit, and we have nothing material to add or

draw attention to in relation to:

• The directors’ confirmation that they have carried out a

robust assessment of the emerging and principal risks;

• The disclosures in the Annual Report that describe those

principal risks, what procedures are in place to identify

emerging risks and an explanation of how these are being

managed or mitigated;

• The directors’ statement in the financial statements about

whether they considered it appropriate to adopt the going

concern basis of accounting in preparing them, and their

identification of any material uncertainties to the group’s

and company’s ability to continue to do so over a period

of at least twelve months from the date of approval of the

financial statements;

• The directors’ explanation as to their assessment of

the group’s and company’s prospects, the period this

assessment covers and why the period is appropriate; and

• The directors’ statement as to whether they have a

reasonable expectation that the company will be able

to continue in operation and meet its liabilities as they

fall due over the period of its assessment, including any

related disclosures drawing attention to any necessary

qualifications or assumptions.

Annual Report 2024 Stelrad Group plc 99

Corporate governance statement continued

Our review of the directors’ statement regarding the longer-term

viability of the group and company was substantially less in

scope than an audit and only consisted of making inquiries

and considering the directors’ process supporting their

statement; checking that the statement is in alignment with

the relevant provisions of the UK Corporate Governance Code;

and considering whether the statement is consistent with the

financial statements and our knowledge and understanding

of the group and company and their environment obtained

in the course of the audit.

In addition, based on the work undertaken as part of

our audit, we have concluded that each of the following

elements of the corporate governance statement is materially

consistent with the financial statements and our knowledge

obtained during the audit:

• The directors’ statement that they consider the

Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the information necessary

for the members to assess the group’s and company’s

position, performance, business model and strategy;

• The section of the Annual Report that describes the

reviewof effectiveness of risk management and internal

control systems; and

• The section of the Annual Report describing the work

ofthe Audit & Risk Committee.

We have nothing to report in respect of our responsibility

to report when the directors’ statement relating to the

company’s compliance with the Code does not properly

disclose a departure from a relevant provision of the Code

specified under the Listing Rules for review by the auditors.

Responsibilities for the financial statements

and the audit

Responsibilities of the directors

forthefinancialstatements

As explained more fully in the Statement of Directors’

responsibilities in respect of the financial statements, the

directors are responsible for the preparation of the financial

statements in accordance with the applicable framework

and for being satisfied that they give a true and fair view.

Thedirectors are also responsible for such internal control

as they determine is necessary to enable the preparation

of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are

responsible for assessing the group’s and the company’s

ability to continue as a going concern, disclosing, as

applicable, matters related to going concern and using the

going concern basis of accounting unless the directors either

intend to liquidate the group or the company or to cease

operations, or have no realistic alternative but to do so.

Independent auditors’ report to the members

of Stelrad Group plc continued

Auditors’ responsibilities for the audit

ofthefinancialstatements

Our objectives are to obtain reasonable assurance about

whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error,

and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is

not aguarantee that an audit conducted in accordance

with ISAs(UK) will always detect a material misstatement

when it exists. Misstatements can arise from fraud or

error and areconsidered material if, individually or in the

aggregate, they could reasonably be expected to influence

the economicdecisions of users taken on the basis of these

financial statements.

Irregularities, including fraud, are instances of

non‑compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined

above,todetect material misstatements in respect

of irregularities, including fraud. The extent to which

our procedures are capable of detecting irregularities,

includingfraud, is detailed below.

Based on our understanding of the group and industry,

weidentified that the principal risks of non‑compliance with

laws and regulations related to health and safety regulations,

and we considered the extent to which non-compliance

might have a material effect on the financial statements.

We also considered those laws and regulations that have a

direct impact on the financial statements such as UK Listing

Rules, Companies Act 2006 and corporation tax legislation.

We evaluated management’s incentives and opportunities

for fraudulent manipulation of the financial statements

(including the risk of override of controls), and determined

that the principal risks were related to posting inappropriate

journal entries to increase revenue, operating profit or

operating cash flows and management bias in accounting

estimates. The group engagement team shared this risk

assessment with the component auditors so that they could

include appropriate audit procedures in response to such

risks in their work. Audit procedures performed by the group

engagement team and/or component auditors included:

• Discussions with management, including consideration

of known or suspected instances of non-compliance with

laws and regulation and fraud;

• Review of minutes of meetings of the Board of Directors

and the Audit and Risk Committee;

• Evaluation of management’s controls designed to

preventand detect irregularities due to fraud or error;

• Challenging assumptions and judgements made by

management in their significant accounting estimates,

inparticular in relation to the accounting for indirect

rebates and the Radiators SpA impairment assessment

(refer to Key Audit Matters on page 97);

• Identifying and testing journal entries, in particular any

journals posted with unusual account combinations

with aparticular focus on revenue, operating profit and

operating cash flows; and

• Obtaining an understanding of the legal and regulatory

framework applicable to the Group and how the Group

iscomplying with that framework.

FINANCIAL STATEMENTS

Stelrad Group plc Annual Report 2024100

Responsibilities for the financial statements

andthe audit continued

Auditors’ responsibilities for the audit

ofthefinancialstatements continued

There are inherent limitations in the audit procedures

described above. We are less likely to become aware of

instances of non-compliance with laws and regulations that

are not closely related to events and transactions reflected

in the financial statements. Also, the risk of not detecting

a material misstatement due to fraud is higher than the

risk ofnot detecting one resulting from error, as fraud may

involvedeliberate concealment by, for example, forgery or

intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations

of certain transactions and balances, possibly using data

auditing techniques. However, it typically involves selecting

a limited number of items for testing, rather than testing

complete populations. We will often seek to target particular

items for testing based on their size or risk characteristics.

Inother cases, we will use audit sampling to enable us to draw

a conclusion about the population from which the sample

is selected.

A further description of our responsibilities for the audit of

the financial statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms

part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for

andonly for the company’s members as a body in accordance

with Chapter 3 of Part 16 of the Companies Act 2006 and

forno other purpose. We do not, in giving these opinions,

accept or assume responsibility for any other purpose or to

any other person to whom this report is shown or into whose

hands it may come save where expressly agreed by our prior

consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report

toyou if, in our opinion:

• we have not obtained all the information and explanations

we require for our audit; or

• adequate accounting records have not been kept by the

company, or returns adequate for our audit have not been

received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by

law are not made; or

• the company financial statements and the part of the

Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit & Risk Committee,

we were appointed by the members on 15 December2021

to audit the financial statements for the year ended

31December 2021 and subsequent financial periods. The

period of total uninterrupted engagement is 4 years, covering

the years ended 31 December 2021 to 31 December 2024.

Other matter

The company is required by the Financial Conduct Authority

Disclosure Guidance and Transparency Rules to include these

financial statements in an annual financial report prepared

under the structured digital format required by DTR 4.1.15R

‑ 4.1.18R and filed on the National Storage Mechanism of

theFinancial Conduct Authority. This auditors’ report provides

no assurance over whether the structured digital format

annual financial report has been prepared in accordance

withthose requirements.

Paul Cheshire (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Newcastle upon Tyne

7 March 2025

Annual Report 2024 Stelrad Group plc 101

Note

FINANCIAL STATEMENTS
Consolidated income statement
for the year ended 31 December 2024		2024	2023
		£’000	£’000
Continuing operations
Revenue	6	2 90 , 57 7	30 8 ,193
Cost of sales		(2 0 1 , 6 17)	(2 21, 34 3)
Gross profit		88,960	86,850
Selling and distribution expenses		(41 ,7 2 9)	(42 , 27 8)
Administrative expenses (excluding exceptional items)		(17, 1 6 5)	(1 6 ,62 4)
Exceptional items	6	—	(2 ,466)
Administrative expenses		(17, 1 6 5)	(19,0 9 0)
Other operating income/(expenses)	7	1 , 319	1,199
Operating profit	8	31 , 3 8 5	2 6 ,6 81
Finance income	12	18 6	182
Finance costs	13	(8 ,189)	(7, 6 8 1)
Profit before tax		23 ,382	19, 182
Income tax expense	14	(6 , 86 4)	(3 ,7 5 8)
Profit for the year		16 , 51 8	1 5 , 424
	Note	2024	2023
Earnings per share
Basic	15	12 . 9 7p	12.11p
Diluted	15	12 . 8 7p	12.11p

Stelrad Group plc Annual Report 2024102

Note

		2024	2023
		£’000	£’000
Profit for the year		16 , 51 8	1 5 , 424
Other comprehensive income/(expense)
Other comprehensive income/(expense) that may be reclassified
to profit or loss in subsequent periods:
Net gain on monetary items forming part of net investment in foreign
operations and qualifying hedges of net investments in foreign operations		867	6 74
Income tax effect	14	(217)	(158)
Exchange differences on translation of foreign operations		(4 ,7 11)	(2,250)
Net other comprehensive expense that may be reclassified
to profit or loss in subsequent periods		(4 , 0 61)	(1 ,7 3 4)
Other comprehensive expense not to be reclassified
to profit or loss in subsequent periods:
Remeasurement losses on defined benefit plans	27	(9 25)	(936)
Income tax effect	14	232	206
Net other comprehensive expense not to be reclassified
to profit or loss in subsequent periods		(693)	(730)
Other comprehensive expense for the year, net of tax		(4 ,75 4)	(2 ,46 4)
Total comprehensive income for the year, net of tax attributable to owners of the parent		11 ,7 6 4	12,9 60

Consolidated statement of comprehensive income

for the year ended 31 December 2024

Annual Report 2024 Stelrad Group plc 103

Note

		2024	2023
		£’000	£’000
Assets
Non-current assets
Property, plant and equipment	17	7 9 , 17 3	8 7, 2 4 7
Intangible assets	18	4 , 652	5 , 2 51
Trade and other receivables	21	28 4	3 01
Deferred tax assets	14	4 , 8 21	6,685
		8 8 ,93 0	9 9,4 8 4
Current assets
Inventories	20	6 7, 3 11	6 3 , 376
Trade and other receivables	21	45 , 47 8	50,67 4
Income tax receivable		235	24 3
Financial assets	30	293	—
Cash and cash equivalents	22	18 ,633	21 , 4 42
		13 1,950	135,735
Total assets		220, 8 80	2 35 , 219
Equity and liabilities
Equity
Share capital	25	127	127
Merger reserve		(1 14 ,4 69)	(1 1 4,469)
Retained earnings		2 39 ,78 8	233, 329
Foreign currency reserve		(6 7, 8 5 3)	(6 3 ,7 9 2)
Total equity		5 7, 5 9 3	55 ,195
Non-current liabilities
Interest‑bearing loans and borrowings	19	83, 329	8 8, 227
Deferred tax liabilities	14	20 9	218
Provisions	24	1,9 1 0	1,980
Net employee defined benefit liabilities	27	5 , 11 8	4,053
		90, 566	94,4 78
Current liabilities
Trade and other payables	23	6 9 , 210	78,056
Financial liabilities	19	—	31 8
Interest‑bearing loans and borrowings	19	2 , 21 2	2 , 4 69
Income tax payable		550	1,6 86
Provisions	24	74 9	3 , 0 17
		72, 72 1	85,546
Total liabilities		163,287	180,024
Total equity and liabilities		220, 8 80	2 35 , 219

The financial statements on pages 102 to 138 were approved by the Board of Directors on 7 March 2025 and signed on its

behalf by:

Leigh Wilcox

Chief Financial Officer

Consolidated balance sheet

as at 31 December 2024 (Registered Number 13670010)

FINANCIAL STATEMENTS

Stelrad Group plc Annual Report 2024104

				Attributable to the owners of the parent
	Issued share	Merger	Retained	Foreign
	capital	reserve	earnings	currency	Total
	£’000	£’000	£’000	£’000	£’000
At 1 January 2023	127	(1 1 4,469)	2 2 7, 8 4 9	(62 ,058)	51 , 4 49
Profit for the year	—	—	1 5 , 424	—	1 5 , 424
Other comprehensive expense for the year	—	—	(730)	(1 ,7 3 4)	(2,4 6 4)
Total comprehensive income/(expense)	—	—	14 , 6 9 4	(1 ,7 3 4)	12,9 60
Share‑based payment charge (note 11)	—	—	51 5	—	51 5
Dividends paid (note 16)	—	—	(9 ,7 2 9)	—	(9 ,7 2 9)
At 31 December 2023	127	(1 1 4,469)	233, 329	(6 3 ,7 9 2)	5 5,19 5
Profit for the year	—	—	16 , 51 8	—	16 , 51 8
Other comprehensive expense for the year	—	—	(6 93)	(4 , 0 61)	(4 ,7 5 4)
Total comprehensive income/(expense)	—	—	15 ,82 5	(4 ,0 61)	11 ,7 6 4
Share‑based payment charge (note 11)	—	—	440	—	440
Dividends paid (note 16)	—	—	(9, 80 6)	—	(9,8 06)
At 31 December 2024	127	(1 14, 4 69)	2 39 ,78 8	(6 7, 8 5 3)	5 7, 5 9 3

Consolidated statement of changes in equity

for the year ended 31 December 2024

Annual Report 2024 Stelrad Group plc 105

Note

		2024	2023
		£’000	£’000
Operating activities
Profit before tax		23,3 82	19, 182
Adjustments to reconcile profit before tax to net cash flows:
– Depreciation of property, plant and equipment	17	11 , 6 92	11 , 615
– Amortisation of intangible assets	18	468	457
– (Gain)/loss on disposal of property, plant and equipment		(11 8)	11
– Share‑based payments charge		440	51 5
– Finance income	12	(18 6)	(182)
– Finance costs	13	8 ,189	7, 6 8 1
Working capital adjustments:
– Decrease in trade and other receivables		3, 885	8 , 237
– (Increase)/decrease in inventories		(6 ,143)	12 ,8 8 4
– Decrease in trade and other payables		(6 ,74 3)	(20 ,36 4)
– (Decrease)/increase in provisions		(2 , 17 6)	2 , 214
– Movement in other financial assets/liabilities		(610)	31 9
– Decrease in other pension provisions		(7)	(7)
– Difference between pension charge and cash contributions		(5 81)	(1 , 6 74)
		31 , 49 2	40 ,888
Income tax paid		(6 , 265)	(7 ,4 97)
Interest received		186	18 2
Net cash flows generated from operating activities		2 5 , 413	33, 573
Investing activities
Proceeds from sale of property, plant, equipment and intangible assets		3 41	3 52
Purchase of property, plant and equipment	17	(5,86 1)	(6, 586)
Purchase of intangible assets	18	(10 0)	(5 07)
Net cash flows used in investing activities		(5, 620)	(6 ,7 41)
Financing activities
Transaction costs related to refinancing		—	(500)
Proceeds from external borrowings		3, 388	—
Repayment of external borrowings		(5, 150)	(8,350)
Payment of lease liabilities		(2 , 865)	(2 , 619)
Interest paid		(7, 3 7 2)	(6 , 428)
Dividends paid	16	(9,8 06)	(9,7 2 9)
Net cash flows used in financing activities		(21 , 8 0 5)	(27 ,626)
Net decrease in cash and cash equivalents		(2 , 012)	(7 94)
Net foreign exchange difference		(797)	(4 05)
Cash and cash equivalents at 1 January	22	2 1, 44 2	2 2 , 6 41
Cash and cash equivalents at 31 December	22	1 8, 633	2 1 , 4 42

Consolidated statement of cash flows

for the year ended 31 December 2024

FINANCIAL STATEMENTS

Stelrad Group plc Annual Report 2024106

1 Corporate information

The consolidated financial statements of Stelrad Group plc and its subsidiaries (collectively, the “Group”) for the year ended

31 December 2024 were authorised for issue by the Board of Directors on 7 March 2025.

Stelrad Group plc (the “Company”) was incorporated in England and Wales on 8 October 2021 as a public company, limited

by shares. The Company is incorporated, domiciled and registered in England and Wales, with its registered office situated

at 69–75 Side, Newcastle upon Tyne, Tyne and Wear, United Kingdom NE1 3JE.

The principal activity of the Group is the manufacture and distribution of radiators. The principal activity of the Company is

that of a holding company.

2 Basis of preparation

The consolidated financial statements of Stelrad Group plc have been prepared in accordance with UK‑adopted international

accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under these

standards and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority.

The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments

which, where used, are measured at fair value. The consolidated financial statements are presented in GB Pounds and all

values are rounded to the nearest thousand (£’000), except when otherwise indicated. The consolidated financial statements

have been prepared on a going concern basis. Details of the going concern assessment can be found in the Strategic Report

on page 55.

3 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries for the year ended

31 December 2024. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement

with the investee and has the ability to affect those returns through its power over the investee.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses

control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are

included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases

to control the subsidiary.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line

with the Group’s accounting policies. All intra‑Group assets and liabilities, equity, income, expenses and cash flows relating to

transactions between members of the Group are eliminated in full on consolidation.

A list of the subsidiaries of the Group can be found in note 13 of the Company financial statements.

4 Material accounting policy information

The accounting policies outlined below have been applied consistently, other than where new policies have been adopted.

A. Current versus non-current classification

The Group presents assets and liabilities in the balance sheet based on current/non‑current classification. An asset is current

when it is:

• expected to be realised or intended to be sold or consumed in the normal operating cycle;

• expected to be realised within twelve months after the reporting period; or

• cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after

the reporting period.

All other assets are classified as non‑current.

A liability is current when:

• it is expected to be settled in the normal operating cycle;

• it is due to be settled within twelve months after the reporting period; or

• there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non‑current. Deferred tax assets and liabilities are classified as non‑current assets

and liabilities.

B. Fair value measurement

The Group measures financial instruments, such as derivatives, at fair value at each balance sheet date. The fair values of

financial instruments measured at amortised cost are disclosed in note 30.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date. The fair value measurement is based on the presumption that the transaction

to sell the asset or transfer the liability takes place either:

• in the principal market for the asset or liability; or

• in the absence of a principal market, in the most advantageous market for the asset or liability.

Notes to the consolidated financial statements

for the year ended 31 December 2024

Annual Report 2024 Stelrad Group plc 107

4 Material accounting policy information continued

B. Fair value measurement continued

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing

the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non‑financial asset takes into account a market participant’s ability to generate economic

benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset

in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available

to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the

fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement

as a whole:

• Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly

or indirectly observable.

• Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether

transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is

significant to the fair value measurement as a whole) at the end of each reporting period.

C. Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary

economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are

presented in GB Pounds (£), which is the Company’s functional and the Group’s presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of

the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement

of such transactions and from the translation at year‑end exchange rates of monetary assets and liabilities denominated in foreign

currencies are recognised in the income statement, except when deferred in other comprehensive income/(expense) as qualifying

net investment hedges or because the monetary asset or liability forms part of the net investment in the foreign operation.

Foreign exchange gains and losses are presented in other operating income/(expenses) within the income statement.

Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentation

currency are translated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

• income and expenses for each income statement are translated at average exchange rates; and

• all resulting exchange differences are recognised in other comprehensive income/(expense).

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of

borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive

income/(expense).

D. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue

can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the

consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

The Group has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the

revenue arrangements, has pricing latitude and is also exposed to inventory and credit risks.

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024108

4 Material accounting policy information continued

D. Revenue recognition continued

In accordance with IFRS 15 Revenue from Contracts with Customers, the Group follows a five‑step process to determine

whether to recognise revenue:

1. Identifying the contract with a customer.

2. Identifying the performance obligations.

3. Determining the transaction price.

4. Allocating the transaction price to its performance obligations.

5. Recognising revenue when/as performance obligation(s) are satisfied.

Revenue is recognised at a point in time, when the Group satisfies performance obligations by transferring the promised

goods to its customers, which is upon delivery of the goods to customers.

The specific recognition criteria described below must also be met before revenue is recognised.

Interest income

For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (“EIR”).

Rebates

Rebates are paid to certain direct customers and end consumers of goods sold (end consumers being installers, contractors

or housebuilders which install the Group’s products). Rebates represent either: an agreed percentage discount on the gross

invoice value of each purchased product; or, less frequently, an agreed discount based on annual sales volume incentives.

Estimated rebates to direct customers are based upon the terms of sales contracts and are recorded in the same period

as the related gross sale as a deduction from revenue. Where rebates are volume related, these are recognised when the

associated targets are met or deemed likely to be met, with the expected outcome being reassessed at each reporting date.

Volume rebates result in variable revenue; in accordance with IFRS 15, recognition of volume rebates is only made when it is

highly probable that a significant reversal will not occur. For indirect rebates paid to the end consumer, the Group estimates

the rebates based on historical take‑up rates and rebate values per product category to ensure it is highly probable that a

significant reversal would not occur. Rebates paid to direct customers are offset against trade receivables whereas indirect

rebates, which are payable to the end consumer, are disclosed as other payables.

E. Taxation

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from

or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or

substantively enacted at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax is recognised in income unless it relates to items recognised in other comprehensive income/(expense)

or directly in equity, in which case the current income tax is recognised in other comprehensive income/(expense) or directly

in equity respectively. Management periodically evaluates positions taken in the tax returns with respect to situations in which

applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities

and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• when the deferred tax liability arises from the initial recognition of goodwill (taxable temporary differences only) or an

asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the

accounting profit nor taxable profit or loss; or

• in respect of taxable temporary differences associated with investments in subsidiaries, when the timing of the reversal

of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the

foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and

any unused tax losses.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the

deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

• when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an

asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither

the accounting profit nor taxable profit or loss; or

• in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are

recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future

and taxable profit will be available against which the temporary differences can be utilised.

Annual Report 2024 Stelrad Group plc 109

4 Material accounting policy information continued

E. Taxation continued

Deferred tax continued

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer

probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised

deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that

future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised

or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in income unless it relates to items recognised in other comprehensive income/(expense)

or directly in equity, in which case the deferred tax is recognised in other comprehensive income/(expense) or directly

in equity respectively.

F. Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses,

if any. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long‑term

construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required

to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them

accordingly. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and

equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised

in profit or loss as incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight‑line method to allocate their cost to

their residual values over their estimated useful lives as follows:

Freehold buildings – 10 to 50 years

Leasehold buildings – period of lease

Plant and equipment – 3 to 10 years

Fixtures, fittings and motor vehicles – 2 to 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying amount is greater than

its estimated recoverable amount.

Assets under construction are transferred to the appropriate category of property, plant and equipment upon completion

of a project. Depreciation commences upon transfer.

See note 4N.(i) for the accounting policy related to right‑of‑use assets.

G. Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the

consideration transferred measured at acquisition date. When the Group acquires a business, it assesses the financial assets

and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic

circumstances and pertinent conditions as at the acquisition date.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred over the fair values

of net identifiable assets acquired, liabilities assumed and contingent liabilities.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment

testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash‑generating

units that are expected to benefit from the combination.

Where goodwill has been allocated to a cash‑generating unit and part of the operation within that unit is disposed of, the

goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the

gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed

operation and the portion of the cash‑generating unit retained.

H. Intangible assets – other

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they

satisfy the definition of an intangible asset and their fair values can be measured reliably. The cost of such intangible assets

is their fair value at the business combination date.

The fair value of customer relationships acquired and recognised as part of a business combination is determined using

the multiperiod excess earnings method.

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated

amortisation and accumulated impairment losses.

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024110

4 Material accounting policy information continued

H. Intangible assets – other continued

Research and development

Research costs are expensed as incurred.

Other intangible assets purchased or produced internally are recorded as assets when the use of the asset is likely to generate

future economic benefits and when the cost of the asset can be determined in a reliable manner. These assets are valued at

the cost of purchase or production and amortised at constant rates over their estimated useful life.

Subsequent measurement of intangible assets

Intangible assets with a finite life are amortised on a straight‑line basis over their estimated useful lives as follows:

Technology and software costs – 4 years

Customer relationships – 13 years

The estimated useful life and amortisation methods are reviewed at the end of each reporting period, with the effect of any

changes in estimates being accounted for on a prospective basis.

I. Financial instruments – initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument

of another entity.

i) Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss or at amortised cost,

as appropriate. With the exception of trade receivables, which are recognised at transaction price, all financial assets are

recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction

costs that are attributable to the acquisition of the financial asset.

Purchases or sales of financial assets that require delivery of assets within a timeframe established by regulation or convention

in the marketplace (regular way trades) are recognised on the trade date, i.e. the date that the Group commits to purchase or

sell the asset.

Subsequent measurement

For the purposes of subsequent measurement, financial assets of the Group are classified in two categories:

• financial assets at fair value through profit or loss; and

• financial assets at amortised cost (debt instruments).

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon

initial recognition at fair value through profit or loss.

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following

conditions are met:

• the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual

cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal

and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest rate (“EIR”) method and are subject

to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

The Group’s financial assets at amortised cost include trade receivables.

Derecognition

A financial asset is primarily derecognised (i.e. removed from the Group’s consolidated balance sheet) when the rights to

receive cash flows from the asset have expired, or the Group has transferred its rights to receive cash flows from the asset.

ii) Impairment of financial assets

The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value through

profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and

all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.

The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral

to the contractual terms.

Trade receivables are the Group’s only financial asset for which ECLs need to be calculated.

Annual Report 2024 Stelrad Group plc 111

4 Material accounting policy information continued

I. Financial instruments – initial recognition and subsequent measurement continued

iii) Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and

borrowings or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly

attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial

guarantee contracts and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities

designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.

This category also includes derivative financial instruments entered into by the Group that are not designated as hedging

instruments in hedge relationships as defined by IFRS 9.

Gains or losses on liabilities held for trading are recognised in the income statement.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date

of recognition and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability as at fair

value through profit or loss.

Loans and borrowings

This is the category most relevant to the Group. After initial recognition, interest‑bearing loans and borrowings are

subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the

liabilities are derecognised.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an

integral part of the EIR. The EIR amortisation is included as finance costs in the income statement.

This category generally applies to interest‑bearing loans and borrowings.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires. When an existing

financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability

are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the

recognition of a new liability. The difference in the respective carrying amounts is recognised in the income statement.

J. Derivative financial instruments

Initial recognition and subsequent measurement

The Group uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its

foreign currency risks and interest rate risks respectively. Such derivative financial instruments are initially recognised at fair

value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives

are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.

For the purpose of hedge accounting, hedges are classified as:

• hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which

the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument and the hedged item, the nature of the risk being

hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements

(including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship

qualifies for hedge accounting if it meets all of the following effectiveness requirements:

• there is “an economic relationship” between the hedged item and the hedging instrument;

• the effect of credit risk does not “dominate the value changes” that result from that economic relationship; and

• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the

Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity

of hedged item.

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024112

4 Material accounting policy information continued

J. Derivative financial instruments continued

Initial recognition and subsequent measurement continued

Hedges that meet all the qualifying criteria for hedge accounting are accounted for as described below:

Hedges of a net investment

Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the

net investment, are accounted for in a way similar to cash flow hedges. Gains or losses on the hedging instrument relating to

the effective portion of the hedge are recognised as other comprehensive income/(expense) while any gains or losses relating

to the ineffective portion are recognised in the income statement. On disposal of the foreign operation, the cumulative value

of any such gains or losses recorded in equity is transferred to the income statement.

The Group uses a loan as a hedge of its exposure to foreign currency risk.

K. Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

• raw materials: purchase cost on a first‑in, first‑out basis; and

• finished goods and work in progress: cost of direct materials and labour and a proportion of manufacturing overheads

based on the normal operating capacity, but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and

the estimated costs necessary to make the sale.

L. Impairment of non-financial assets

Intangible assets, including goodwill, that have an indefinite useful life are not subject to amortisation and are tested annually

for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or circumstances

indicate that the carrying amount may not be recoverable.

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication

exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An

asset’s recoverable amount is the higher of an asset’s or cash‑generating unit’s (“CGU’s”) fair value less costs of disposal and its

value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that

are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds

its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount

rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining

fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified,

an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for

publicly traded companies or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for

each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover

a period of three years. For longer periods, a long‑term growth rate is calculated and applied to project future cash flows after

the third year.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount,

where the recoverable amount is the higher of the asset’s fair value less costs of disposal and value in use. Impairment losses

of continuing operations, including impairment on inventories, are recognised in the income statement in expense categories

consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that

previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the

asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in

the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal

is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount

that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

Such reversal is recognised in the income statement.

M. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short‑term deposits with an original

maturity of three months or less.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term

deposits, as defined above, net of outstanding bank overdrafts.

Annual Report 2024 Stelrad Group plc 113

4 Material accounting policy information continued

N. Leases

The Group assesses at contract inception whether a contract is, or contains, a lease – that is, if the contract conveys the right

to control the use of an identified asset for a period of time in exchange for consideration.

Group as lessee

The Group applies a single recognition and measurement approach for all leases, except for short‑term leases and leases of

low value assets. The Group recognises lease liabilities to make lease payments and right‑of‑use assets representing the right

to use the underlying assets.

i) Right-of-use assets

The Group recognises right‑of‑use assets at the commencement date of the lease (i.e. the date the underlying asset is available

for use). Right‑of‑use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for

any remeasurement of lease liabilities. The cost of right‑of‑use assets includes the amount of lease liabilities recognised, initial

direct costs incurred and lease payments made at or before the commencement date less any lease incentives received.

Right‑of‑use assets are depreciated on a straight‑line basis over the shorter of the lease term and the estimated useful lives

of the assets, as follows:

Leasehold buildings – period of lease

Plant and machinery – 3 to 10 years

Fixtures, fittings and motor vehicles – 2 to 5 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a

purchase option, depreciation is calculated using the estimated useful life of the asset.

The right‑of‑use assets are also subject to impairment. Refer to the accounting policies in section L. Impairment of

non‑financial assets.

ii) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease

payments to be made over the lease term. The lease payments include fixed payments (including in‑substance fixed payments)

less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts expected to be

paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably

certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group

exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as

expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the

payment occurs.

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease

commencement date because the interest rate implicit in the lease is not readily determinable. The incremental borrowing

rate is calculated based on the Group’s external borrowing rate. After the commencement date, the amount of lease liabilities

is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount

of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments

(e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments)

or a change in the assessment of an option to purchase the underlying asset.

The Group’s lease liabilities are included in the interest‑bearing loans and borrowings (see note 19).

iii) Short-term leases and leases of low value assets

The Group applies the short‑term lease recognition exemption to its short‑term leases of plant and machinery (i.e. those leases

that have a lease term of twelve months or less from the commencement date and do not contain a purchase option). It also

applies the lease of low value assets recognition exemption to leases of office equipment that are considered to be low value.

Lease payments on short‑term leases and leases of low‑value assets are recognised as expense on a straight‑line basis over

the lease term.

O. Provisions

General

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event; it is probable

that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can

be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example

under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is

virtually certain. The expense relating to a provision is presented in the income statement net of any reimbursement.

The effect of the time value of money is not material and therefore the provisions are not discounted.

No warranty provision is made for steel panel radiators based on the very low claims history. The Group sells electrical radiators and

a small volume of boilers and provision for these is made on a £ per unit sold basis, driven by historical warranty claims data.

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024114

4 Material accounting policy information continued

O. Provisions continued

General continued

A provision is recognised in respect of an unused vacation pay liability due to certain employees in Turkey. The provision is

calculated based on the number of unused days and the salary rates applicable.

Restructuring provisions are recognised only when the Group has a constructive obligation, which is when a detailed formal

proposal identifies the business or part of the business concerned, the location and number of employees affected, a detailed

estimate of the associated costs and an appropriate timeline, and when the employees affected have been notified of the

proposal’s main features.

P. Pensions and other post-employment benefits

The Group has an obligation to provide lump sum termination payments to certain employees in Turkey and also in Italy;

these schemes are accounted for under IAS 19.

The cost of providing benefits under the schemes is determined using the projected unit credit method.

Remeasurements, comprising actuarial gains and losses, are recognised immediately in the balance sheet with a corresponding

debit or credit to retained earnings through other comprehensive income/(expense) in the period in which they occur.

Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

• the date of the plan amendment or curtailment; and

• the date that the Group recognises restructuring‑related costs.

Net interest is calculated by applying the discount rate to the defined benefit liability. The Group recognises the following

changes in the defined benefit obligation under “cost of sales”, “administration expenses” and “selling and distribution

expenses” in the consolidated income statement (by function):

• service costs comprising current service costs, past service costs, gains and losses on curtailments and non‑routine settlements.

For the defined contribution schemes operated by the Group, the amount charged to the income statement in respect of

pension costs and other post‑retirement benefits is the contributions payable in exchange for services rendered in the period.

Differences between contributions payable in the period and contributions actually paid are shown as either accruals or

prepayments in the balance sheet.

Q. Share-based payments (IFRS 2)

The fair value of equity‑settled share options granted is recognised as an employee expense with a corresponding increase

in equity. The fair value is measured as at the date the options are granted and the charge is only amended if vesting does

not take place due to non‑market conditions not being met. Various option pricing models are used according to the

terms of the option scheme under which the options were granted. The fair value is spread over the period during which

the employees become unconditionally entitled to the options. At the balance sheet date, if it is expected that non‑market

conditions will not be satisfied, the cumulative expense recognised in relation to the relevant options is reversed.

With respect to share‑based payments, a deferred tax asset is recognised on the relevant tax base. The tax base is then

compared to the cumulative share‑based payment expense recognised in the income statement. Deferred tax arising on

the excess of the tax base over the cumulative share‑based payment expense recognised in the income statement has been

recognised directly in equity outside the SOCI as share‑based payments are considered to be transactions with shareholders.

Where the Company grants options over its own shares to employees of its subsidiaries, it recognises, in its individual financial

statements, an increase in the cost of investment in its subsidiaries equivalent to the equity‑settled share‑based payment

charge recognised in its consolidated financial statements, with the corresponding credit being recognised in equity.

R. Exceptional items

Exceptional items are disclosed by virtue of their nature, size or incidence to allow a better understanding of the underlying

trading performance of the Group.

S. Dividends

Final dividends are recorded in the financial statements in the period in which they are approved by the Company’s

shareholders. Interim dividends are recorded in the period in which they are approved and paid.

T. New standards applied in the year

Several amendments and interpretations apply for the first time in 2024, but do not have a material impact on the

consolidated financial statements of the Group. These include:

• Classification of Liabilities as Current or Non‑current and Non‑current Liabilities with Covenants – Amendments to IAS 1

• Lease Liability in a Sale and Leaseback – Amendments to IFRS 16

• Amendment to IAS 7 and IFRS 7 – Supplier Finance

Annual Report 2024 Stelrad Group plc 115

4 Material accounting policy information continued

U. New standards and interpretations not applied

The International Accounting Standards Board has issued the following standards and interpretations with an effective date

after the date of these financial statements:

	Effective date
	(period beginning
International Accounting Standards (IAS/IFRSs)	on or after)
Lack of Exchangeability – Amendments to IAS 21	1 January 2025
Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7	1 January 2026
Annual Improvements to IFRS Accounting Standards – Volume 11	1 January 2026
Presentation and Disclosure in Financial Statements – IFRS 18	1 January 2027
Subsidiaries without Public Accountability: Disclosures – IFRS 19	1 January 2027

It is anticipated that adoption of these standards and interpretations will not have a material impact on the Group’s

financial statements.

The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.

5 Significant accounting judgements, estimates and assumptions

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and

assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,

and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that

require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements

In the process of applying the Group’s accounting policies, management has made judgements which would have a

significant effect on the amounts recognised in the consolidated financial statements.

Impairment of non-financial assets

Intangible assets, including goodwill, that have an indefinite useful life are not subject to amortisation and are tested annually

for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or circumstances

indicate that the carrying amount may not be recoverable. Details of the impairment assessment of goodwill, which includes

key estimates, are disclosed in note 18.

There is an additional judgement relating to the renewal of a significant supply contract with an existing customer.

The contract ends on 31 December 2025 and the base scenario assumes that it is successfully renegotiated on the basis

of management’s assessment of the strength of the Group’s position with the customer. Further details of the sensitivity

analysis undertaken can be found in note 18.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which

have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next

financial year, are described below. The Group based its assumptions and estimates on parameters available when the

consolidated financial statements were prepared. Existing circumstances and assumptions about future developments,

however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are

reflected in the assumptions when they occur.

Rebates

A proportion of rebates is paid to the end consumers of goods sold. Uncertainties exist over the value of the rebates

recognised as, until claims are made by end consumers, the Group cannot be certain which consumers have purchased

which products. Due to this uncertainty, estimates are made over what contractual rates, if any, will apply to goods sold.

Management make significant estimates and assumptions in order to assess the level of rebate required at the balance

sheet date. Management is able to utilise market information and historical/current data and trends in order to make an

appropriate estimate.

A reasonably possible change in the estimates surrounding rebates would not result in a material impact on the

financial statements.

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024116

6 Segmental information

IFRS 8 Operating Segments requires operating segments to be determined from the Group’s internal reporting to the Chief

Operating Decision Maker (“CODM”). The CODM has been determined to be the Chief Executive Officer and Chief Financial

Officer. The operating segments are determined to be the key geographical regions in which the Group operates. The CODM

receive management information as part of the internal reporting framework based upon the key geographical regions. The

CODM assesses the performance of geographical segments based on a measure of revenue and adjusted operating profit.

Adjusted operating profit is earnings before interest, tax, amortisation of customer relationships and exceptional items.

Revenue by geographical market

	2024	2023
	£’000	£’000
UK & Ireland	137,351	139,422
Europe	138,971	149,063
Turkey & International	14,255	19,708
Total revenue	290,577	308,193

The revenue arising in the UK, being the Company’s country of domicile, was £134,442,000 (2023: £133,323,000).

All revenue arising in the UK was to external customers.

Adjusted operating profit by geographical market

	2024	2023
	£’000	£’000
UK & Ireland	29,548	24,485
Europe	7,937	9,061
Turkey & International	1,042	1,348
Central costs	(7,005)	(5,606)
Adjusted operating profit	31,522	29,288
Exceptional items	—	(2,466)
Amortisation of customer relationships	(137)	(141)
Operating profit	31,385	26,681

In the year ended 31 December 2023 the exceptional items relate to a £2,908,000 restructuring exercise undertaken

in quarter four of the year in order to drive cost savings for future periods, partially offset by exceptional income related

to the acquisition of Radiators SpA of £442,000.

All exceptional items have been presented as such because they are one‑off in nature and separate disclosure allows

the underlying trading performance of the Group to be better understood.

The revenue information above is based on the locations of the customers. All revenue arises from the sale of goods.

One customer has revenues in excess of 10% of revenue (2023: none).

Non-current operating assets

	2024	2023
	£’000	£’000
UK	16,324	17,547
The Netherlands	17,453	20,581
Turkey	25,549	26,500
Italy	23,894	26,818
Other	605	1,052
Total	83,825	92,498

The CODM review the non‑current operating assets based on the geographical regions in the table above, rather than

those used when reviewing revenue and adjusted operating profit, because this is the physical location of the assets.

These values agree to the measurement of the assets per the financial statements.

Annual Report 2024 Stelrad Group plc 117

7 Other operating income/(expenses)

	2024	2023
	£’000	£’000
Net gain/(loss) on disposal of property, plant and equipment	118	(11)
Foreign currency gains	723	1,736
Net losses on forward derivative contracts	(35)	(689)
Sundry other expenses – environmental claim	—	(104)
Sundry other income	513	267
	1,319	1,199

8 Operating profit

Operating profit is stated after charging/(crediting):

	2024	2023
	£’000	£’000
Auditors’ remuneration:
– Audit of the Company and consolidated financial statements	169	155
– Audit of subsidiaries	316	275
	485	430
– Non‑audit services – interim review fee	38	36
– Non‑audit services – other	8	8
	46	44
Total auditors’ remuneration	531	474
Depreciation of owned assets	8,926	9,085
Depreciation of right‑of‑use assets	2,766	2,530
	11,692	11,615
Amortisation of customer relationships	137	141
Amortisation of other intangibles	331	316
	468	457
(Profit)/loss on sale of property, plant and equipment	(118)	11
Other exchange gains	(688)	(1,047)
Research and development costs	1,552	1,591

9 Employee benefits expense

	2024	2023
	£’000	£’000
Wages and salaries	44,815	42,232
Social security costs	8,323	7,327
Other pension costs	3,082	3,349
Share‑based payment charge (note 11)	440	515
	56,660	53,423

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024118

9 Employee benefits expense continued

The average monthly number of employees during the year was made up as follows:

	2024	2023
	Number	Number
Cost of sales	779	788
Selling and distribution	526	560
Administration	130	131
	1 ,4 35	1,479

10 Directors’ remuneration

The Remuneration Policy is described in the Remuneration Report on pages 74 to 91.

	2024	2023
	£’000	£’000
Aggregate remuneration	1,735	1,715

The amounts in respect of the highest paid Director are as follows:

	2024	2023
	£’000	£’000
Aggregate remuneration	969	832

Aggregate remuneration is inclusive of basic salary, annual bonus (including any accrued bonuses), pension contributions and

other taxable benefits. No retirement benefits are accruing to Directors under a defined contribution scheme or a defined benefit

scheme (2023: £nil). Further details on Directors’ remuneration can be found in the Remuneration Report on pages 74 to 91.

11 Share-based payments

Long Term Incentive Plans

The Executive Directors and selected members of the senior management team across the Group participate in the Stelrad

Group plc Long Term Incentive Plan (“LTIP”), which was set up and launched during the year ended 31 December 2022.

A second award was made during the year ended 31 December 2024. The LTIP provides for the Executive Directors and

selected members of the senior management team to be awarded nil‑cost shares in the Group, conditional on specified

performance conditions being met over a period of three years. The grants made to date have been based on two conditions

– adjusted EPS (a non‑market condition) and relative TSR as compared to the selected benchmark index (a market condition).

Refer to the Remuneration Report on pages 74 to 91 for further details of the LTIP.

The expense recognised for the LTIP during the year ended 31 December 2024 was £339,000 (2023: £406,000).

During the year ended 31 December 2024, LTIP awards were granted to selected members of the senior management team

and the Executive Directors. The senior management team awards were 100% based on an adjusted EPS target (a non‑market

condition). The Executive Director awards were 80% based on an adjusted EPS target (a non‑market condition) and 20% on

relative TSR compared to a selected benchmark index (a market condition), with the total award value being equal to 50% of

salary. Due to the low proportion of market condition‑based awards granted in the year ended 31 December 2024, the inputs

to the Monte Carlo model used to value the 2022 LTIP awards have been used to value the LTIP awards granted in the year

ended 31 December 2024. The inputs to the model used for the awards granted in the year ended 31 December 2024 were:

	2024
Stelrad Group plc:
Share price at date of grant	£1.17
Dividend yield	0.0%
Risk-free rate	1.6%
Future share price volatility	25.0%
Selected comparator group:
Future share price volatility	47.9%
Correlation between companies	1.0%

Annual Report 2024 Stelrad Group plc 119

11 Share-based payments continued

Long Term Incentive Plans continued

The fair value of the LTIP awards granted (based on non‑market conditions) is equal to the share price at the date of grant.

The following table shows the number of share awards for the LTIP:

	2024	2023
Outstanding at the beginning of the year	985,729	985,729
Granted during the year	1,368,487	—
Lapsed during the year	(985,729)	—
Forfeited during the year	(111,972)	—
Outstanding at the end of the year	1,256,515	985,729

The weighted average share price of the share awards at the year end was £1.36 (2023: £1.31).

The weighted average fair value of awards granted during the year ended 31 December 2024 was £1.17 (2023: nil).

The weighted average remaining contractual life of the awards was 2.21 years (2023: 1.39 years).

There were no awards exercised in the year (2023: nil).

Deferred Share Bonus Plan

The Deferred Share Bonus Plan (“DSBP”) provides for the Executive Directors of the Group to be awarded shares in the Group

conditional on the achievement of financial and strategic targets. The shares are deferred over a two‑year period. The DSBP

awards are not subject to any market‑based conditions. Therefore, the fair value of the awards is equal to the share price at

the date of grant. Refer to the Remuneration Report on pages 74 to 91 for further details of the DSBP.

The expense recognised for the DSBP during the year ended 31 December 2024 was £101,000 (2023: £109,000).

95,266 share awards have been granted under the DSBP during the year ended 31 December 2024 (2023: nil).

12 Finance income

	2024	2023
	£’000	£’000
Interest on cash deposits	186	182

13 Finance costs

	2024	2023
	£’000	£’000
Interest on bank loans	5,723	5,663
Amortisation of loan issue costs	375	513
Interest expense on defined benefit liabilities	921	357
Finance charges payable on lease liabilities	129	120
Other finance charges	1,041	1,028
	8,189	7,681

14 Income tax expense

The major components of income tax expense are as follows:

	2024	2023
	£’000	£’000
Consolidated income statement
Current income tax:
Current income tax charge	5,083	7, 214
Adjustments in respect of current income tax charge of previous year	(127)	10
Deferred tax:
Relating to origination and reversal of temporary differences	1,908	(3,466)
Income tax expense reported in the income statement	6,864	3,758

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024120

14 Income tax expense continued

	2024	2023
	£’000	£’000
Consolidated statement of comprehensive income
Tax related to items recognised in other comprehensive income/(expense) during the year:
Deferred tax on actuarial loss	(232)	(206)
Current tax on monetary items forming part of net investment and on hedges of net
investment	217	158
Income tax credited to other comprehensive income	(15)	(48)

Reconciliation of tax expense and the accounting profit at the tax rate in the United Kingdom of 25% (2023: 23.5%):

	2024	2023
	£’000	£’000
Profit before tax	23,382	19,182
Profit before tax multiplied by standard rate of corporation tax in the UK of 25% (2023: 23.5%)	5,846	4,508
Adjustments in respect of current income tax charge of previous year	(127)	10
Non‑deductible expenses	352	60
Differences arising due to tax losses	286	1,205
Other timing differences (including 2023 inflation adjustment to Turkish tax assets)	721	(3,163)
Benefit of overseas investment incentives	(220)	(263)
Withholding tax on dividend income	1,032	1,760
Effect of different overseas tax rates	(1,026)	(359)
Total tax expense reported in the income statement	6,864	3,758

Deferred tax

Deferred tax relates to the following:

		Consolidated balance sheet		Consolidated income statement
	2024	2023	2024	2023
	£’000	£’000	£’000	£’000
Capital allowances	(641)	279	(742)	(538)
Pension	1,010	719	99	(275)
Fixed asset fair value adjustments	(1,303)	(1,421)	58	252
Losses available for offsetting against future income	3,322	4,387	(965)	(1,039)
Other temporary differences	2,224	2,503	(358)	5,066
Deferred tax (charge)/credit			(1,908)	3,466
Net deferred tax assets	4,612	6,467
Reflected in the balance sheet as:
Deferred tax assets	4,821	6,685
Deferred tax liabilities	(209)	(218)
Deferred tax assets, net	4,612	6,467

Reconciliation of deferred tax assets, net

	2024	2023
	£’000	£’000
Opening balance as at 1 January	6,467	2,786
Tax (charge)/income recognised in income statement	(1,908)	3,466
Tax income recognised in other comprehensive income/(expense)	232	206
Exchange adjustment	(179)	9
Closing balance as at 31 December	4,612	6,467

The Group offsets tax assets and liabilities if it has a legally enforceable right to set them off and they are levied by the same

tax authority. Deferred tax assets in respect of losses of £2,118,000 (2023: £2,130,000) have been recognised in respect of

two (2023: two) loss‑making subsidiary companies; these are recognised on the grounds of future projected performance.

Annual Report 2024 Stelrad Group plc 121

14 Income tax expense continued

Deferred tax asset recognition

During the year ended 31 December 2023, the Group chose to derecognise certain tax losses, in particular those arising

from Corporate Interest Restriction (“CIR”) rules. An increase in debt to finance the acquisition of Radiators SpA and an

increase in interest rates mean that these tax losses will take longer to utilise and therefore an element has been derecognised.

During the year ended 31 December 2024, the Group also chose not to recognise tax assets connected with higher tax asset

values allowed by the Turkish government due to hyperinflation of the Turkish Lira, on the basis that the recoverability of the

these assets is uncertain.

The deferred tax assets have been analysed in detail at the year end and the recognition of assets, in particular those in respect

of tax losses, has been scrutinised in detail with modelling undertaken to ensure that they are likely to be utilised over a period

of time where profitability can be estimated with reasonable certainty.

Unrecognised deferred tax balances

	2024	2023
	£’000	£’000
Capital allowances	13	20
Losses available for offsetting against future income	3,486	3,733
	3,499	3,753

The Group has tax losses which arose in the United Kingdom of £13,944,000 (2023: £14,932,000) that are available

indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax assets have

not been recognised in respect of these losses as they either relate to CIR losses which cannot be reliably utilised in the

short term or they arose prior to April 2017 in subsidiaries that are not profit making and where there is no evidence of

recoverability in the near future.

15 Earnings per share

	2024	2023
	£’000	£’000
Net profit for the year attributable to owners of the parent	16,518	15,424
Exceptional items	—	2,466
Amortisation of customer relationships	137	141
Tax on exceptional items	—	(651)
Tax on amortisation of customer relationships	(38)	(39)
Adjusted net profit for the year attributable to owners of the parent	16,617	17,341

	2024	2023
	Number	Number
Basic weighted average number of shares in issue	127,352,555	127,352,555
Diluted weighted average number of shares in issue	128,389,983	127,352,555
Earnings per share
Basic earnings per share (pence per share)	12.97	12.11
Diluted earnings per share (pence per share)	12.87	12.11
Adjusted earnings per share
Basic earnings per share (pence per share)	13.05	13.62
Diluted earnings per share (pence per share)	12.94	13.62

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024122

16 Dividends paid

The Board is recommending a final dividend of 4.81 pence per share (2023: 4.72 pence per share), which, if approved,

will mean a final dividend payment of £6,126,000 (2023: £6,011,000).

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included

as a liability in these consolidated financial statements.

	2024	2023
	£’000	£’000
Declared and paid during the year
Equity dividend on ordinary shares:
Final dividend for 2023: 4.72p per share (2022: 4.72p per share)	6,011	6,011
Interim dividend for 2024: 2.98p per share (2023: 2.92p per share)	3,795	3,718
	9,806	9,729

	2024	2023
	£’000	£’000
Dividend proposed (not recognised as a liability)
Equity dividend on ordinary shares:
Final dividend for 2024: 4.81p per share (2023: 4.72p per share)	6,126	6,011

17 Property, plant and equipment

					Fixtures, fittings
	Freehold land	Leasehold	Assets under	Plant and	and motor
	and buildings	buildings	construction	equipment	vehicles	Total
	£’000	£’000	£’000	£’000	£’000	£’000
Cost
At 1 January 2023	46,473	12,222	7,269	83,388	11,234	160,586
Additions	233	1,100	3,616	2,833	1,483	9,265
Transfers	406	—	(9,539)	8,434	699	—
Disposals	(88)	(292)	—	(3,779)	(1,006)	(5,165)
Exchange adjustment	(822)	(289)	(80)	(1,798)	(130)	(3,119)
At 31 December 2023	46,202	12,741	1,266	89,078	12,280	161,567
Additions	124	214	4,951	980	742	7,011
Transfers	214	—	(4,438)	3,820	404	—
Disposals	—	(140)	—	(829)	(806)	(1,775)
Exchange adjustment	(1,675)	(587)	(19)	(3,929)	(331)	(6,541)
At 31 December 2024	44,865	12,228	1,760	89,120	12,289	160,262
Accumulated depreciation and impairment
At 1 January 2023	13,375	4,683	—	43,764	7,160	68,982
Depreciation charge	1,634	1,482	—	6,676	1,823	11,615
Disposals	(88)	(292)	—	(3,577)	(877)	(4,834)
Exchange adjustment	(172)	(113)	—	(1,097)	(61)	(1,443)
At 31 December 2023	14,749	5,760	—	45,766	8,045	74,320
Depreciation charge	1,616	1,489	—	6,766	1,821	11,692
Disposals	—	(47)	—	(806)	(699)	(1,552)
Exchange adjustment	(411)	(298)	—	(2,461)	(201)	(3,371)
At 31 December 2024	15,954	6,904	—	49,265	8,966	81,089
Net book value
At 31 December 2024	28,911	5,324	1,760	39,855	3,323	79,173
At 31 December 2023	31,453	6,981	1,266	43,312	4,235	87,247
At 31 December 2022	33,098	7,539	7,269	39,624	4,074	91,604

Annual Report 2024 Stelrad Group plc 123

17 Property, plant and equipment continued

The carrying value of right‑of‑use assets within property, plant and equipment, by line item, at the year end is:

	2024	2023
	£’000	£’000
Leasehold buildings	5,299	6,927
Plant and equipment	1,175	1,255
Fixtures, fittings and motor vehicles	1,255	1,700
	7,729	9,882

Right‑of‑use asset additions within property, plant and equipment, by line item, during the year are:

	2024	2023
	£’000	£’000
Leasehold buildings	214	1,090
Plant and equipment	523	731
Fixtures, fittings and motor vehicles	413	858
	1,150	2,679

Depreciation of right‑of‑use assets within property, plant and equipment, by line item, during the year is:

	2024	2023
	£’000	£’000
Leasehold buildings	1,462	1,456
Plant and equipment	565	374
Fixtures, fittings and motor vehicles	739	700
	2,766	2,530

Land and buildings with a carrying amount of £18,095,000 (2023: £20,022,000) are subject to a first charge to secure the

Group’s bank loan.

No borrowing costs have been capitalised since the assets have not met the criteria for qualifying assets.

18 Intangible assets

			Technology
		Customer	and software
	Goodwill	relationships	costs	Total
	£’000	£’000	£’000	£’000
Cost
At 1 January 2024	2,732	1,822	1,319	5,873
Additions	—	—	100	100
Exchange adjustment	(125)	(85)	(62)	(272)
At 31 December 2024	2,607	1,737	1,357	5,701
Accumulated amortisation and impairment
At 1 January 2024	—	199	423	622
Amortisation	—	137	331	468
Exchange adjustment	—	(13)	(28)	(41)
At 31 December 2024	—	323	726	1,049
Net book value
At 31 December 2024	2,607	1,414	631	4,652
At 31 December 2023	2,732	1,623	896	5,251

Included in technology and software costs are assets under construction of £nil (2023: £126,000), which are not amortised.

The remaining amortisation period of the customer relationships, being those acquired upon the acquisition of Radiators SpA,

is ten years and seven months .

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024124

18 Intangible assets continued

Impairment assessment of goodwill

Goodwill is subject to annual impairment testing. All of the goodwill recognised is allocated to a single cash‑generating unit

(“CGU”), being the Radiators SpA division which has a total carrying value of £22.9 million. A CGU represents the lowest level

in the Group at which goodwill is monitored for internal management purposes.

Impairment tests on the carrying amounts of goodwill are performed by analysing the carrying amount allocated to the

CGU against the higher of fair value less costs to sell or its value in use. Both methods are calculated as the net present value

of the CGU’s discounted future cash flows covering a three‑year period. These cash flows are based on budgeted cash flows

information for a period of three years.

Terminal growth rates of 1.8% have been applied beyond this, based on historical macroeconomic performance and

projections of the sector served by the CGUs.

When assessing for impairment of goodwill, management has considered the impact of climate change, particularly in the

context of the risks and opportunities identified within the Task Force on Climate‑related Financial Disclosures Report on

pages 35 to 39 of the Strategic Report, and has not identified any material short‑term impacts from climate change that

would impact the recoverable amount of the CGU. Over the longer term, the risks and opportunities are more uncertain, and

management will continue to assess the quantitative impact of risks at each balance sheet date.

For the value in use model, a pre‑tax discount rate of 15.1% has been applied in determining the recoverable amounts of

the CGU. The pre‑tax discount rate is estimated based on the Group’s risk adjusted cost of capital. Other key assumptions

throughout the budget period are EBITDA, which is included in the terminal value at a margin of 8.6%, volumes, contribution

per radiator sold and capital expenditure. The key assumptions have been determined using past experience or external

sources of information.

The Group has applied sensitivities to assess whether any reasonably possible changes in assumptions could cause an

impairment that would be material to these consolidated financial statements. Details of the sensitivity analysis are disclosed

in relation to Radiators SpA because it is sensitive to changes in assumptions. The base case scenario for Radiators SpA has

headroom of £1.5 million. A decrease in EBITDA margin of 0.5 ppts percentage points, holding all other assumptions constant,

would erode the headroom to zero for Radiators SpA. An increase in discount rate of 0.64 ppts, holding all other assumptions

constant, would erode the headroom to zero for Radiators SpA. A reasonably possible decrease in the EBITDA margin of

1.0 ppts would give rise to an impairment of £1.6 million. A reasonably possible decrease in the plan sales volumes of 10%

would give rise to an impairment of £5.0 million.

An extra sensitivity is the renewal of a significant supply contract with an existing customer. The contract ends on

31 December 2025 and the base scenario assumes that it is successfully renegotiated on the basis of management’s

assessment of the strength of the Group’s position with the customer. Holding all other assumptions constant, the loss of

the contract would give rise to an impairment of between £8.6 million and £11.8 million, depending on the ability to reduce

costs, of the current value of all of the assets in the CGU, including property, plant and equipment. The impairment modelling

makes the assumption that manufacturing capacity is not utilised for other customers.

19 Financial liabilities

Financial liabilities – other – not interest bearing

Financial instruments through profit or loss reflect the positive change in fair value of those foreign exchange forward

contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign

currency risk for expected sales and purchases.

Liabilities

	2024	2023
	£’000	£’000
Financial instruments at fair value through profit or loss
Derivatives not designated as hedges – foreign exchange forward contracts	—	318
Total instruments at fair value through profit or loss	—	318
Current	—	318
Non-current	—	—

Annual Report 2024 Stelrad Group plc 125

19 Financial liabilities continued

Financial liabilities – interest-bearing loans and borrowings

	Effective
	interest rate		2024	2023
	%	Maturity	£’000	£’000
Current interest-bearing loans and borrowings
Lease liabilities			2,212	2,469
			2,212	2,469
Non-current interest-bearing loans and borrowings
Lease liabilities			5,671	7,402
Revolving credit facility – GBP	SONIA + 2.25%	9 Nov 2026	41,750	46,900
Revolving credit facility – Euro	Euribor + 2.25%	9 Nov 2026	13,146	10,399
Term loan	Euribor + 2.25%	9 Nov 2026	23,436	24,563
Unamortised loan costs			(674)	(1,037)
			83,329	88,227
Total interest-bearing loans and borrowings			85,541	90,696

The Group has a £100 million loan facility jointly financed by National Westminster Bank plc and Barclays Bank plc. The facility

consists of a £76.027 million revolving credit facility and a €28.346 million term loan facility.

During the year ended 31 December 2023, the £76.027 million revolving credit facility and the €28.346 million term loan facility

were extended by two years to 9 November 2026 by exercising the two‑year extension option included in the facility agreement.

The RCF and term loan facilities are secured on the assets of certain subsidiaries within the Group.

Changes in liabilities arising from financing activities

	1 January		Non-cash	31 December
	2024	Cash flows	changes	2024
	£’000	£’000	£’000	£’000
Liabilities from financing activities
Revolving credit facility – GBP	46,900	(5,150)	—	41,750
Revolving credit facility – Euro	10,399	3,388	(641)	13,146
Term loan	24,563	—	(1,127)	23,436
Lease liabilities	9,871	(1,715)	(273)	7,883
	91,733	(3,477)	(2,041)	86,215
Other assets
Cash and cash equivalents	(21,442)	2,012	797	(18,633)
	(21,442)	2,012	797	(18,633)
Net liabilities arising from financing activities	70,291	(1,465)	(1,244)	67,582

The non‑cash changes all relate to foreign exchange differences.

20 Inventories

	2024	2023
	£’000	£’000
Raw materials	23,818	21,723
Work in progress	3,388	3,327
Finished goods	37,063	34,509
Other consumables	3,042	3,817
	67,311	63,376

The cost of inventories recognised as an expense in the year was £201,617,000 (2023: £221,343,000). The provision for the

impairment of stocks increased in the year, giving rise to a cost of £760,000 (2023: cost of £355,000). At 31 December 2024,

the provision for the impairment of stocks was £3,974,000 (2023: £3,347,000).

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024126

21 Trade and other receivables

	2024	2023
	£’000	£’000
Current
Trade receivables	42,279	47,619
Other receivables	2,629	2,462
Prepayments	570	593
	45,478	50,674
Non-current
Other receivables	284	301
	284	301

The table below sets out the movements in the allowance for expected credit losses of trade receivables:

	2024	2023
	£’000	£’000
At 1 January	806	763
Charge for the year	14	155
Unused amounts reversed	(246)	(95)
Exchange adjustment	(26)	(17)
At 31 December	548	806

As at 31 December, the ageing of trade receivables (gross of impairment) are as follows:

	Total	Current	<30 days	30–90 days	>90 days
	£’000	£’000	£’000	£’000	£’000
2024
Gross carrying amount	42,827	33,241	5,464	3,873	249
2023
Gross carrying amount	48,425	41,635	4,600	777	1,413

22 Cash and cash equivalents

	2024	2023
	£’000	£’000
Cash at bank and on hand	18,633	21,442

23 Trade and other payables

	2024	2023
	£’000	£’000
Current
Trade payables	46,581	49,263
Other payables and accruals	18,485	22,319
Other taxes and social security	3,822	5,685
Interest payable	322	789
	69,210	78,056

Annual Report 2024 Stelrad Group plc 127

24 Provisions

		Compensation		Unused
	Warranty	fund	Restructuring	vacation	Total
	£’000	£’000	£’000	£’000	£’000
At 1 January 2023	593	1,199	719	208	2,719
On business combination	—	—	131	—	131
Arising during the year	864	50	2,652	728	4,294
Utilised	(696)	—	(799)	(506)	(2,001)
Exchange adjustment	(15)	(29)	(19)	(83)	(146)
At 31 December 2023	746	1,220	2,684	347	4,997
Arising during the year	332	126	—	765	1,223
Released	(169)	—	—	—	(169)
Utilised	(430)	—	(2,323)	(440)	(3,193)
Exchange adjustment	(27)	(59)	(52)	(61)	(199)
At 31 December 2024	452	1,287	309	611	2,659
Current	113	—	309	327	749
Non-current	339	1,287	—	284	1,910

Compensation fund

The supplementary customer compensation fund is made in accordance with European legislation to provide for potential

severance payments to agents.

Restructuring

The restructuring provision relates to a Group‑wide restructuring programme undertaken to drive cost savings for

future periods.

Unused vacation

A provision is recognised in respect of an unused vacation pay liability due to certain employees in Turkey. The timing

of the provision is dependent on the rate at which employees take additional vacation.

25 Share capital and reserves

	2024	2024	2023	2023
	Number	£	Number	£
Authorised, called up and fully paid
Ordinary shares of £0.001 each	127,352,555	127,353	127,352,555	127, 353
		127,353		127,353

26 Commitments and contingencies

Commitments

Amounts contracted for but not provided in the financial statements amounted to £177,000 (2023: £215,000) for the Group.

All amounts relate to property, plant and equipment.

Contingent liabilities

Termo Teknik Ticaret ve Sanayi A.S. has issued letters of guarantee and letters of credit to its steel suppliers amounting to

$17,917,000 (2023: $18,309,000) and $18,071,000 (2023: $10,204,000) respectively. Termo Teknik Ticaret ve Sanayi A.S.

has also issued letters of guarantee denominated in Turkish Lira totalling TL26,514,000 (2023: TL14,876,000).

The Group enters into various forward currency contracts to manage the risk of foreign currency exposures on certain

purchases and sales. The total amount of unsettled forward contracts as at 31 December 2024 is £12,123,000

(2023: £12,197,000) on purchases and £17,500,000 (2023: £20,750,000) on sales.

The fair value of the unsettled forward contracts held at the balance sheet date, determined by reference to their market

values, is an asset of £293,000 (2023: liability of £318,000).

As part of the £100 million loan facility, entered into in November 2021, and amended on 8 July 2022, the Group is party

to a cross‑collateral agreement secured on specific assets of certain Group companies. No liability is expected to arise from

the agreement.

Under an unlimited multilateral guarantee, the Company, in common with certain fellow subsidiary undertakings in the UK,

has jointly and severally guaranteed the obligations falling due under the Company’s net overdraft facilities. No liability is

expected to arise from this arrangement.

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024128

27 Pensions and other post-employment plans

	2024	2023
	£’000	£’000
Net employee defined benefit liability
Turkish scheme – IAS 19	4,476	3,148
Italian scheme – IAS 19	600	860
Other retirement obligations – non‑IAS 19	42	45
	5,118	4,053

Turkish scheme

In Turkey there is an obligation to provide lump sum termination payments to certain employees; this represents 30 days’

pay (subject to a cap imposed by the Turkish government) for each year of service. The IAS 19 valuation gives a liability of

£4,476,000 (2023: £3,148,000). There are no assets held in this plan (2023: £nil). The expected contributions to the plan for

the next reporting period to cover benefits paid are £207,000. The service cost in the year was £383,000 (2023: £372,000).

Italian scheme

The Italian pension scheme, the Trattamento di Fine Rapporto, is a deferred compensation scheme established by Italian law.

Employers are required to provide a benefit to employees when, for any reason, their employment is terminated. The IAS 19

valuation gives a net liability of £600,000 (2023: £860,000). The expected contributions to the plan for the next reporting

period to cover benefits paid are £68,000. The service cost in the year was £nil (2023: £nil).

UK scheme

The UK has one defined contribution pension scheme, following the transfer of all pension arrangements to a Master

Trust in 2020.

The total employer contributions made in the year were £1,122,000 (2023: £1,222,000). There were outstanding

contributions totalling £66,000 (2023: £nil) due to the scheme at the balance sheet date.

Other overseas retirement obligations

The Group operates a number of defined contribution pension schemes in its overseas entities and also has certain other

retirement obligations. The contributions to overseas pension schemes in the year and any movements in the provision for

other retirement obligations are reported as part of the employee benefits note and total £1,577,000 (2023: £1,755,000).

IAS 19 accounting – Turkish and Italian schemes

Movement in defined benefit obligation

	Italian	Turkish	Italian	Turkish
	scheme	scheme	scheme	scheme
	2024	2024	2023	2023
	£’000	£’000	£’000	£’000
At 1 January	860	3,148	944	3,546
Current service cost	—	380	—	329
Interest cost	26	893	33	291
Plan curtailments – service cost	—	3	—	43
Plan curtailments – interest cost	—	2	—	33
Amounts recognised in income statement	26	1,278	33	696
Actuarial (gains)/losses	(3)	928	11	925
Benefits paid	(248)	(326)	(107)	(473)
Exchange differences	(35)	(552)	(21)	(1,546)
At 31 December	600	4,476	860	3,148

Amounts recognised in other comprehensive income/(expense)

	Italian	Turkish	Italian	Turkish
	scheme	scheme	scheme	scheme
	2024	2024	2023	2023
	£’000	£’000	£’000	£’000
Experience adjustments – obligation	3	(1,010)	6	(1,055)
Changes in demographic assumptions – obligation	—	(35)	—	(93)
Changes in financial assumptions – obligation	—	117	(17)	223
At 31 December	3	(928)	(11)	(925)

Annual Report 2024 Stelrad Group plc 129

27 Pensions and other post-employment plans continued

IAS 19 accounting – Turkish and Italian schemes continued

Principal actuarial assumptions

	Italian	Turkish	Italian	Turkish
	scheme	scheme	scheme	scheme
	2024	2024	2023	2023
Discount rate (per annum)	3.2%	29.3%	3.2%	25.0%
Future salary increases (per annum)	n/a	25.6%	n/a	22.0%

Quantitative sensitivity analysis

	2024		2024
	Discount rate		Future salary increases
	(per annum)		(per annum)
	+1%	-1%	+1%	-1%
	£’000	£’000	£’000	£’000
(Decrease)/increase in defined benefit obligation – Italian scheme	(43)	47	—	—
(Decrease)/increase in defined benefit obligation – Turkish scheme	(250)	279	286	(260)

The sensitivity analysis above has been determined based on a method that extrapolates the impact on the net defined

benefit obligation as a result of reasonable changes in key assumptions at the end of the reporting year.

28 Related party disclosures

The Group does not consider that it has an ultimate controlling party. The Bregal Fund III LP does not have control of the

Group because its share of the Group is less than 50% and it does not have the power to affect its returns from the Group.

During the year, the Group spent £3,000 (2023: £3,000) on purchases from Polypal Netherlands BV (whose ultimate

controlling party is The Bregal Fund III LP); the balance outstanding at the year end was £2,000 (2023: £nil). During the

year, the Group made purchases of £4,047,000 (2023: £3,742,000) from AMG Fabrications (NE) Limited (whose ultimate

controlling party is a close member of key management personnel’s family); the balance outstanding at the year end was

£441,000 (2023: £447,000).

The key management personnel are considered to be the Executive Directors and Non‑Executive Directors of the Group.

The following table highlights the remuneration that is recorded in the income statement in respect of these personnel,

including Company social security costs:

	2024	2023
	£’000	£’000
Short‑term employment benefits	1,975	1,952

Contributions to Group pension plans are disclosed in note 27.

29 Capital management

For the purpose of the Group’s capital management, capital includes issued capital and all other equity reserves attributable

to the equity holders of the parent. The primary objective of the Group’s capital management is to maximise the shareholder

value. In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it

meets financial covenants attached to the interest‑bearing loans and borrowings that define capital structure requirements.

Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have

been no breaches in the financial covenants of any interest‑bearing loans and borrowings in the current year. The Group

manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of

the financial covenants.

Details of the issued capital and reserves are shown in note 25. Details of interest‑bearing loans and borrowings are shown

in note 19.

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024130

30 Financial instrument disclosures

A. Fair value measurement hierarchy

The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities.

	Total	Level 1	Level 2	Level 3
As at 31 December 2024	£’000	£’000	£’000	£’000
Assets/(liabilities) measured at fair value
Derivative financial assets/(liabilities)
Foreign exchange forward contracts – GBP/EUR	(274)	(274)	—	—
Foreign exchange forward contracts – EUR/USD	567	567	—	—
	293	293	—	—

	Total	Level 1	Level 2	Level 3
As at 31 December 2023	£’000	£’000	£’000	£’000
Assets/(liabilities) measured at fair value
Derivative financial assets/(liabilities)
Foreign exchange forward contracts – GBP/EUR	(199)	(199)	—	—
Foreign exchange forward contracts – EUR/USD	(119)	(119)	—	—
	(318)	(318)	—	—

Level 1: Quoted prices in active markets.

Level 2: Significant observable inputs.

Level 3: Significant unobservable inputs.

B. Hedging activity and derivatives

Derivatives not designated as hedging instruments

The Group uses foreign exchange forward contracts to manage some of its transaction exposures. Where used, foreign

exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign

currency exposure of the underlying transactions, generally from one to twelve months.

Hedge of net investments in foreign operations

Included in subsidiary loans at 31 December 2024 and at 31 December 2023 were Euro denominated borrowings which

have been designated as a hedge of the net investments in the Group’s overseas subsidiaries. This borrowing is being used

to hedge the Group’s exposure to the Euro foreign exchange risk on these investments.

Gains or losses on the retranslation of this borrowing are transferred to other comprehensive income/(expense) to offset

any gains or losses on translation of the net investments in the subsidiaries. There is no ineffectiveness in the years ended

31 December 2024 and 31 December 2023.

C. Fair value of financial instruments at amortised cost

	Carrying amount		Fair value
	2024	2023	2024	2023
	£’000	£’000	£’000	£’000
Financial liabilities
Lease liabilities	7,883	9,871	7,883	9,871
Revolving credit facility – GBP	41,750	46,900	41,750	46,900
Revolving credit facility – Euro	13,146	10,399	13,146	10,399
Term loan	23,436	24,563	23,436	24,563
	86,215	91,733	86,215	91,733

The external loan balances are stated gross of any issue costs.

Management assessed that the fair values of cash and cash equivalents, trade and other receivables, trade and other

payables and other current assets and liabilities approximate their carrying amounts largely due to the short‑term maturities

of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged

in a current transaction between willing parties.

Annual Report 2024 Stelrad Group plc 131

30 Financial instrument disclosures continued

C. Fair value of financial instruments at amortised cost continued

The following methods and assumptions were used to estimate the fair values:

• The Group enters into derivative financial instruments with various counterparties, principally financial institutions.

Derivatives valued using valuation techniques with market‑observable inputs are interest rate swaps and foreign exchange

forward contracts. The most frequently applied valuation techniques include forward pricing and swap models, using

present value calculations. The models incorporate various inputs, including the credit quality of counterparties, foreign

exchange spot and forward rates, interest rate curves and forward rate curves of the underlying commodity.

• Fair values of the Group’s interest‑bearing loans and borrowings are determined by using the DCF method using a discount

rate that reflects the issuer’s borrowing rate as at the end of the reporting year. As the external debt is all at variable rate, the

fair values are deemed to be identical to the carrying values.

• The financial liabilities which are not recognised at fair value but for which fair value is disclosed are deemed to be level 2

hierarchy measurements.

• There are not deemed to be any significant unobservable inputs to valuation.

D. Financial risk management objectives and policies

The Group’s principal financial liabilities, other than derivatives, comprise interest‑bearing borrowings and trade and other

payables. The main purpose of these financial liabilities is to finance the Group’s operations.

The Group’s principal financial assets include trade and other receivables and cash and cash equivalents that derive directly

from its operations. The Group also enters into derivative transactions. Due to timing, there are unsettled derivative contracts

as at the end of the reporting year.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management

of these risks. All derivative activities for risk management purposes are carried out by individuals that have the appropriate

skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken.

The Group has established a risk and financial management framework, the primary objectives of which are to protect the

Group from events that may hinder the achievement of financial performance objectives. These are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in

market prices. Market risk comprises three types of risk: interest rate risk, currency risk and commodity price risk. Financial

instruments affected by market risk include interest‑bearing borrowings and derivative financial instruments.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes

in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to long‑term

interest‑bearing borrowings.

The Group manages its interest rate risk by entering into interest rate swaps, where deemed appropriate, in which it agrees

to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference

to an agreed‑upon notional principal amount.

At 31 December 2023 and 31 December 2024, no interest rate swaps are in place. Approximately 9% (2023: 11%) of the

Group’s borrowings are at a fixed rate of interest.

Interest rate risk – sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans

and borrowings affected. The analysis does not include cash balances. With all other variables held constant, the Group’s

profit before tax would be impacted as follows:

		Effect on profit
	Increase/	before tax
Year ended 31 December 2024	decrease	£’000
SONIA/Euribor	+0.5%	(464)
SONIA/Euribor	-0.5%	464

		Effect on profit
	Increase/	before tax
Year ended 31 December 2023	decrease	£’000
SONIA/Euribor	+0.5%	(469)
SONIA/Euribor	‑0.5%	469

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024132

30 Financial instrument disclosures continued

D. Financial risk management objectives and policies continued

Market risk continued

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of

changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily

to the Group’s operating activities (when revenue and expenses are denominated in different currencies) and the Group’s

net investments in foreign subsidiaries.

The Group manages its foreign currency risk by hedging transactions that are expected to occur within a maximum

twelve‑month period. There were foreign currency exchange contracts in place at 31 December 2024 and 31 December 2023.

The Group hedges its exposure to fluctuations on the translation into GBP of its foreign operations by holding net borrowings

in foreign currencies, including intercompany loans.

Foreign currency risk – sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in the Euro, USD and TL exchange rates, with

all other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary

assets and liabilities including non‑designated foreign currency derivatives. The Group’s exposure to foreign currency changes

for all other currencies is not material.

The net gain/(loss) on qualifying hedges of net investments in foreign operations disclosed in the consolidated statement of

comprehensive income arises from changes in Euro denominated borrowings in the hedge of net investments in European

operations. These movements will offset the translation of the European operations’ net assets into GBP – this movement is

not shown.

		Effect on profit
	Change in	before tax
	Euro rate (1)	£’000
2024	+10%	68
	-10%	(83)
2023	+10 %	(17)
	‑10%	21

		Effect on profit
	Change in	before tax
	USD rate (1)	£’000
2024	+10%	74
	-10%	(91)
2023	+10 %	(7)
	‑10%	9

(1) A + movement indicates GBP strengthening relative to the other currency.

		Effect on profit
	Change in	before tax
	TL rate (1)	£’000
2024	+10%	(230)
	-10%	281
2023	+10 %	529
	‑10%	(646)

(1) A + movement indicates GBP strengthening relative to the other currency.

Commodity price risk

The Group is affected by the price volatility of certain commodities. Its operating activities require a continuous supply of

steel which poses a risk due to the volatility of the price of the steel. The Group seeks to manage its exposure to commodity

price risk by holding enough stock to negate short‑term price fluctuations and if necessary allow sufficient time to pass price

changes through to customers.

Demand risk

The market for the Group’s goods is subject to movements in demand as the demand for new housing or upgrades to

existing housing stock varies. The Group manages these variations through careful forecasting and flexing of production

volumes. Financing arrangements anticipate demand changes and associated working capital movements.

Annual Report 2024 Stelrad Group plc 133

30 Financial instrument disclosures continued

D. Financial risk management objectives and policies continued

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to

a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing

activities, including deposits with banks and other financial institutions, foreign exchange transactions and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit. Overseas subsidiaries have credit insurance policies in place to

minimise the risk of trade debts going bad without recompense. UK subsidiaries have no credit insurance policy in place due

to the cost of insurance not being justified by the low risk of non‑recoverability with a large proportion of receivables being due

from the three major customers with strong credit ratings.

Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined

in accordance with this assessment.

Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number

of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The calculation is based

on actual incurred historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class

of financial assets.

The Group does not hold collateral as security. The Group evaluates the concentration of risk with respect to trade receivables

as medium, as it has several large customers in linked markets.

Note 21 discloses information about the credit risk exposure on the Group’s trade receivables.

Deposits with banks and other financial institutions

Credit risk from balances with banks and other financial institutions is managed by the Group’s treasury team in accordance

with the Group’s policy. Investments of surplus funds are made only with approved counterparties. The Group’s maximum

exposure to credit risk is the cash and cash equivalents balance outlined in the balance sheet at 31 December 2024.

Liquidity risk

Liquidity risk for the Group arises from the management of working capital commitments and meeting its financial obligations

as they fall due. The Group monitors its exposure to the risk of a shortage of funds using monitoring requirements on a daily

basis looking out over various time periods. The Group’s objective is to maintain a balance between continuity of funding

and flexibility through the use of bank loans, bank revolver and finance leases. The Group’s policy is that not more than 10%

of borrowings should mature in the next twelve‑month period.

Approximately 2.6% of the Group’s debt will mature in less than one year at 31 December 2024 (2023: 2.7%) based on the

carrying value of borrowings reflected in the financial statements. The Group assessed the concentration of risk with respect

to refinancing its debt and concluded it to be low. Access to sources of funding is sufficiently available.

At 31 December 2024, the Group had available £21,131,000 (2023: £18,728,000) of undrawn committed borrowing facilities.

The table summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.

Interest‑bearing loans comprise interest and principal, with interest determined based on rates prevailing at the balance sheet

date. The foreign exchange forward contracts are subject to both a cash outflow and also a cash inflow and these are reported

on a net basis in the analysis below.

	<1 year	1 to 5 years	>5 years	Total
As at 31 December 2024	£’000	£’000	£’000	£’000
Lease liabilities	2,317	5,872	—	8,189
Interest‑bearing loans	5,209	82,124	—	87,333
Trade and other payables	65,388	—	—	65,388
Derivatives not designated as hedges – foreign exchange
forward contracts	274	—	—	274
	73,188	87,996	—	161,184

	<1 year	1 to 5 years	>5 years	Total
As at 31 December 2023	£’000	£’000	£’000	£’000
Lease liabilities	2,582	7,826	—	10,408
Interest‑bearing loans	6,240	90,142	—	96,382
Trade and other payables	72,371	—	—	72,371
Derivatives not designated as hedges – foreign exchange
forward contracts	318	—	—	318
	81,511	97,968	—	179,479

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024134

30 Financial instrument disclosures continued

D. Financial risk management objectives and policies continued

Liquidity risk continued

Supplier finance arrangements

The Group participates in a supply chain financing arrangement (“SCF”). Under the arrangement, a bank agrees to pay

amounts to a participating supplier in respect of invoices owed by the Group and receives settlement from the Group at a later

date. The principal purpose of this arrangement is to facilitate efficient payment processing and enable the willing suppliers to

receive payments from the bank before the invoice due date.

	31 December 2024
Carrying amount of liabilities that part of supplier financing arrangements
Presented within trade and other payables
– of which suppliers have received payment from finance provider (£’000)	5,150
Range of payment due dates
Liabilities that are part of the arrangement	150-190 days after invoice date
Trade payables that are not part of the arrangement	120-150 days after invoice date

31 Reconciliation of alternative performance measures

The Group uses some alternative performance measures to monitor and assess the underlying performance of the business.

These measures include adjusted operating profit and adjusted profit for the year. These measures are deemed useful as they

aid comparability year on year. The use of alternative performance measures compared to statutory IFRS measures does give

rise to limitations, including a lack of comparability across companies and the potential for them to present a more favourable

view. Further, these measures are not a substitute for IFRS measures of profit. Alternative performance measures are defined

in the glossary of terms on page 144. Alternative performance measures are reconciled to the appropriate financial statements

line item being disclosed.

Reconciliation of adjusted profit for the year and adjusted earnings per share

	2024	2023
	£’000	£’000
Profit for the year	16,518	15,424
Adjusted for:
Exceptional items	—	2,466
Amortisation of customer relationships	137	141
Tax on exceptional items	—	(651)
Tax on amortisation of customer relationships	(38)	(39)
Adjusted profit for the year	16,617	17,341
Basic weighted average number of shares in issue	127,352,555	127,352,555
Diluted weighted average number of shares in issue	128,389,983	127,352,555
Earnings per share
Basic earnings per share (pence per share)	12.97	12.11
Diluted earnings per share (pence per share)	12.87	12.11
Adjusted earnings per share
Basic earnings per share (pence per share)	13.05	13.62
Diluted earnings per share (pence per share)	12.94	13.62

Annual Report 2024 Stelrad Group plc 135

31 Reconciliation of alternative performance measures continued

Reconciliation of adjusted operating profit and EBITDA

	2024	2023
	£’000	£’000
Operating profit	31,385	26,681
Adjusted for:
Exceptional items	—	2,466
Amortisation of customer relationships	137	141
Adjusted operating profit	31,522	29,288
Adjusted for:
Depreciation	11,692	11,615
Amortisation (excluding customer relationships)	331	316
EBITDA	43,545	41,219

Reconciliation of cash flow from operations, adjusted cash flow from operations and free cash flow

	2024	2023
	£’000	£’000
EBITDA (see reconciliation above)	43,545	41,219
Adjusted for:
Exceptional items	—	(2,466)
(Gain)/loss on disposal of property, plant and equipment	(118)	11
Share‑based payments	440	515
Working capital adjustments	(12,375)	1,609
Net capital expenditure	(8,485)	(9,360)
Cash flow from operations	23,007	31,528
Income tax paid	(6,265)	(7,497)
Interest paid – net	(7,186)	(6,246)
Free cash flow	9,556	17,785
Cash flow from operations (see reconciliation above)	23,007	31,528
Adjusted for:
Exceptional items	—	2,466
Exceptional items’ impact on working capital	2,320	(2,237)
Adjusted cash flow from operations	25,327	31,757

	2024	2023
	£’000	£’000
Decrease in trade and other receivables	3,885	8,237
(Increase)/decrease in inventories	(6,143)	12,884
Decrease in trade and other payables	(6,743)	(20,364)
(Decrease)/increase in provisions	(2,176)	2,214
Movement in other financial assets/liabilities	(610)	319
Decrease in other pension provisions	(7)	(7)
Difference between pension charges and cash contributions	(581)	(1,674)
Working capital adjustments	(12,375)	1,609

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024136

31 Reconciliation of alternative performance measures continued

Reconciliation of cash flow from operations, adjusted cash flow from operations and free cash flow continued

	2024	2023
	£’000	£’000
Proceeds from sale of property, plant, equipment and intangible assets	341	352
Purchase of property, plant and equipment	(5,861)	(6,586)
Purchase of intangible assets	(100)	(507)
Payment of lease liabilities	(2,865)	(2,619)
Net capital expenditure	(8,485)	(9,360)

Reconciliation of business capital employed and return on capital employed

	2024	2023
	£’000	£’000
Property, plant and equipment	79,173	87, 247
Technology and software costs	631	896
Inventories	67,311	63,376
Trade and other receivables	45,762	50,975
Trade and other payables	(69,210)	(78,056)
Provisions	(2,659)	(4,997)
Net employee defined benefit liabilities	(5,118)	(4,053)
Financial assets/(liabilities)	293	(318)
Business capital employed	116,183	115,070

	2024	2023
	£’000	£’000
Adjusted operating profit	31,522	29,288
Business capital employed	116,183	115,070
Return on capital employed	27.1%	25.5%

Reconciliation of net debt and leverage

	2024	2023
	£’000	£’000
Total interest‑bearing loans and borrowings	85,541	90,696
Cash and cash equivalents	(18,633)	(21,442)
Adjusted for:
Unamortised loan costs	674	1,037
Net debt	67,582	70,291
EBITDA (see reconciliation above)	43,545	41,219
Debt leverage ratio	1.55	1.71

Reconciliation of net debt and leverage before lease liabilities

	2024	2023
	£’000	£’000
Total interest‑bearing loans and borrowings	85,541	90,696
Cash and cash equivalents	(18,633)	(21,442)
Adjusted for:
Unamortised loan costs	674	1,037
Lease liabilities	(7,883)	(9,871)
Net debt before lease liabilities	59,699	60,420
EBITDA (see reconciliation above)	43,545	41,219
Debt leverage ratio before lease liabilities	1.37	1.47

Annual Report 2024 Stelrad Group plc 137

31 Reconciliation of alternative performance measures continued

Loan facility covenant calculations

	2024	2023
	£’000	£’000
Leverage calculation
Net debt (excluding IFRS 16 lease liabilities)/adjusted EBITDA (before exceptional items
and foreign exchange differences)
Net debt (see reconciliation above)	67,582	70,291
Adjusted for:
IFRS 16 lease liabilities	(7,036)	(9,388)
Interest payable	322	789
Non‑obligor cash excluded from the covenant calculation	1,863	3,407
Net debt (excluding IFRS 16 lease liabilities)	62,731	65,099
EBITDA (see reconciliation above)	43,545	41,219
Adjusted for:
Foreign currency gains	(723)	(1,736)
Net losses on forward derivative contracts	35	689
Adjusted EBITDA (before exceptional items and foreign exchange differences)	42,857	40,172
Leverage for loan facility covenant	1.46	1.62

	2024	2023
	£’000	£’000
Interest cover calculation
Adjusted EBITDA (before exceptional items and foreign exchange differences)/covenant interest
Adjusted EBITDA (before exceptional items and foreign exchange differences)
(see reconciliation above)	42,857	40,172
Finance costs	8,189	7,6 81
Finance income	(186)	(182)
Adjusted for:
Interest expense on defined benefit liabilities	(921)	(357)
Amortisation of loan issue costs	(375)	(513)
Finance charges payable on IFRS 16 lease liabilities	(124)	(113)
Covenant interest	6,583	6,516
Interest cover for loan facility covenant	6.51	6.17

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

for the year ended 31 December 2024

Stelrad Group plc Annual Report 2024138

Note

2024

£’000

2023

£’000

Assets

Non-current assets

Investments 9 115,908 115,908

Amounts due from subsidiary undertakings 10 — 6,816

115,908 122,724

Total assets 115,908 122,724

Equity and liabilities

Equity

Called up share capital 12 127 127

Retained earnings 111,868 119,565

Total equity 111,995 119,692

Current liabilities

Amounts due to subsidiary undertakings 11 3,913 3,032

Total liabilities 3,913 3,032

Total equity and liabilities 115,908 122,724

As permitted by section 408 of the Companies Act 2006, the Company’s statement of profit or loss has not been included

inthese financial statements.

The Company realised a profit of £1,669,000 for the year ended 31 December 2024 (2023: loss of £3,249,000).

Therearenoelements of “other comprehensive income” in the year; accordingly, a statement of comprehensive income

hasnot been prepared.

The financial statements on pages 139 to 143 were approved by the Board of Directors on 7 March 2025 and signed on its

behalf by:

Leigh Wilcox

Chief Financial Officer

Company balance sheet

as at 31 December 2024

Annual Report 2024 Stelrad Group plc 139

Attributable to the owners of the parent

Called up

share capital

£’000

Retained

earnings

£’000

Total

£’000

At 1 January 2023 127 132,028 132,155

Loss for the year — (3,249) (3,249)

Total comprehensive income — (3,249) (3,249)

Share‑based payment charge — 515 515

Dividends paid (note 8) — (9,729) (9,729)

At 31 December 2023 127 119,565 119,692

Profit for the year — 1,669 1,669

Total comprehensive income — 1,669 1,669

Share‑based payment charge — 440 440

Dividends paid (note 8) — (9,806) (9,806)

At 31 December 2024 127 111,868 111,995

Company statement of changes in equity

for the year ended 31 December 2024

FINANCIAL STATEMENTS

Stelrad Group plc Annual Report 2024140

1 Corporate information

The corporate information of the Company is disclosed in note 1 of the consolidated financial statements.

2 Basis of preparation

The financial statements have been prepared on a going concern basis under the historical cost convention and in

accordance with United Kingdom Generally Accepted Accounting Policy (Financial Reporting Standard 102 The Financial

Reporting Standard applicable in the UK and Republic of Ireland (“FRS 102”)) in conformity with the requirements of the

Companies Act 2006.

The Company has taken advantage of the following disclosure exemptions permitted by FRS 102:

• the requirements of section 7 Statement of Cash Flows and section 3 Financial Statement Presentation, paragraph 3.17(d);

• the requirements of section 11 Financial Instruments, paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv),

11.48(b) and 11.48(c); and

• the requirements of section 33 Related Party Disclosures, paragraph 33.7.

The Company financial statements are presented in GB Pounds and all values are rounded to the nearest thousand (£’000),

except when otherwise indicated.

In preparing these financial statements on the going concern basis, the Directors have considered the Company’s current

andfuture prospects and its availability of cash resources and financing and the Group’s financial position. The Company is

directly impacted by the Group’s going concern position which is as follows:

The Group meets its day‑to‑day working capital requirements through bank loan facilities which are in place up to November

2026, comprising a £76.027 million revolving credit facility and a €28.346 million term loan facility. At the year‑end date, the

whole term loan was drawn along with £54.896 million of the revolving credit. The remainder of the facility and significant cash

balances of £18.633 million were available to enable day‑to‑day working capital requirements to be met.

As part of its year‑end review, management has performed a detailed going concern review, based on severe but plausible

conditions, looking at the Group’s liquidity and banking covenant compliance, and examining expected future performance.

Based on the output of this going concern review, management has concluded that the Group will be able to continue to

operate within its existing facilities for a period of at least twelve months after the date of signing the financial statements

andas such the financial statements have been prepared on a going concern basis.

Details of the Group’s going concern assessment can be found in the Strategic Report on page 55.

3 Summary of significant accounting policies

The accounting policies outlined below have been applied consistently, other than where new policies have been adopted.

The policies applied by the Company are consistent with those set out in note 4 to the consolidated financial statements.

The following additional policies are also relevant to the Company financial statements.

A. Investments

Investments are stated at cost less any provision for impairment.

B. Share-based payments

The Company provides benefits to certain employees (including Executive Directors) in the form of share‑based payment

transactions, whereby employees render services as consideration in exchange for equity instruments (equity‑settled

transactions). Further details of the share‑based payments accounting policy can be found in note 11 of the consolidated

financial statements.

C. Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown

in equity as a deduction, net of tax, from the proceeds.

4 Summary of significant accounting judgements, estimates and assumptions

The following judgements have had the most significant effect on amounts recognised in the financial statements:

Investments

The Company assesses, at each reporting date, whether there is an indication that any investment may be impaired. If any

indication exists, or when annual impairment testing for an investment is required, the Company estimates the investment’s

recoverable amount. In assessing an investment’s recoverable amount, the estimated future cash flows are discounted to their

present value using a pre‑tax discount rate that reflects current market assessments of the time.

5 Employee benefit expense

The Company does not have any employees, other than Directors, and does not have any employee benefit expenses.

Notes to the Company financial statements

for the year ended 31 December 2024

Annual Report 2024 Stelrad Group plc 141

6 Directors’ remuneration

The Directors of the Company are also directors of fellow subsidiary undertakings. The Directors received remuneration which

was paid by a fellow subsidiary undertaking and not recharged to the Company. These emoluments are disclosed in the Group

Directors’ remuneration note (note 10) of the consolidated financial statements and the Directors’ Remuneration Report on

pages 74 to 91.

7 Auditors’ remuneration

The Company has incurred audit fees of £8,000 (2023: £8,000) which are borne by Stelrad Management Limited.

8 Dividends

See note 16 of the consolidated financial statements for further detail of the dividends of the Company.

9 Investments

£’000

At 31 December 2023 and 31 December 2024 115,908

As the Company is reporting under FRS 102, under section 615 of the Companies Act 2006, the Company opted to record

itsinvestment in the shares acquired at an amount equal to the aggregate share capital only.

A list of the Company’s investments in subsidiary undertakings can be found in note 13.

10 Amounts due from subsidiary undertakings

2024

£’000

2023

£’000

Amounts due from subsidiary undertakings — 6,816

The amounts due from subsidiary undertakings are repayable on demand. Interest is charged on amounts due from

subsidiaryundertakings at 2.5%.

11 Amounts due to subsidiary undertakings

2024

£’000

2023

£’000

Amounts due to subsidiary undertakings 3,913 3,032

The amounts due to subsidiary undertakings are repayable on demand. No interest is charged on amounts due to

subsidiary undertakings.

12 Called up share capital

2024

Number

2024

2023

Number

2023

Authorised, called up and fully paid

Ordinary shares of £0.001 each 127,352,555 127,353 127,352,555 127, 353

127,352,555 127,353 127,352,555 127,353

See note 25 of the consolidated financial statements for further detail of the called up share capital of the Company.

Notes to the Company financial statements continued

for the year ended 31 December 2024

FINANCIAL STATEMENTS

Stelrad Group plc Annual Report 2024142

13 Subsidiary undertakings

The registered address and principal place of business of each subsidiary undertaking are shown in the footnotes below the table.

The financial performance and financial position of these undertakings are included in the consolidated financial statements:

Voting rights held

Name of company

Country of

incorporation Holding

2024

2023

% Nature of business

Stelrad Radiator Group Limited

(1)

United Kingdom Ordinary 100 100 Holding company

*Stelrad Radiator Holdings Limited

(1)

United Kingdom Ordinary 100 100 Holding company

*Stelrad Management Limited

(1)

United Kingdom Ordinary 100 100 Management services

*Stelrad Limited

(1)

United Kingdom Ordinary 100 100 Radiator manufacturer

*Caradon Polska Sp ZOO

(2)

Poland Ordinary 100 100 Radiator distributor

*Caradon Stelrad B.V.

(3)

The Netherlands Ordinary 100 100 Radiator manufacturer

*Henrad NV

(4)

Belgium Ordinary 100 100 Radiator distributor

*Termo Teknik Holdings Limited

(1)

United Kingdom Ordinary 100 100 Holding company

*Termo Teknik Ticaret ve Sanayi A.S.

(5)

Turkey Ordinary 100 100 Radiator manufacturer

*Caradon Heating CZ s.r.o.

(6)

Czech Republic Ordinary 100 100 Radiator distributor

*Hudevad Radiator Design A/S

(7)

Denmark Ordinary 100 100 Radiator distributor

Noosa Holdings Jersey Limited

(8)

Jersey Ordinary 100 100 Holding company

*Radiators SpA

(9)

Italy Ordinary 100 100 Radiator manufacturer

* Held by subsidiary companies.

(1) Registered office is 69–75 Side, Newcastle upon Tyne, Tyne and Wear NE1 3JE, United Kingdom.

(2) Registered office is Zakliki Z Mydlnik Street, no. 16, 30–198 Kraków, Poland.

(3) Registered office is Kathagen 30, 6361 HG, Nuth, The Netherlands.

(4) Registered office is Welvaartstraat (HRT) 14 Map box 6, 2200 Herentals, Belgium.

(5) Registered office is Eski Buyukdere Caddesi, Park Plaza Bina No: 14 Kat: 7, 34467 Sariyer, Istanbul, Turkey.

(6) Registered office is Ostrava‑Slezská‑Ostrava, Hradní 27/37, PSČ 710 00, Czech Republic.

(7) Registered office is Ambolten 37, Kolding 6000, Denmark.

(8) Registered office is 15 Esplanade, St Helier JE1 1RB, Jersey.

(9) Registered office is Strada Statale, 54 Km 21 Snc, Moimacco (UD), Italy.

The dormant subsidiaries in the Group comprise: Woolamai Group UK Limited and Henrad (UK) Limited. Both are incorporated

in the UK

(1)

and 100% of the ordinary shares are owned.

Annual Report 2024 Stelrad Group plc 143

Financial metrics

Adjusted cash flow from operations: Cash flow from

operations before exceptional items and the impact of

exceptional items on working capital.

Adjusted EPS: Adjusted earnings per share is calculated on

adjusted profit for the year divided by the weighted average

number of shares in issue.

Adjusted operating profit: Operating profit before

exceptional items, amortisation of customer relationships,

foreign exchange differences (until 31 December 2022)

and the impact of IAS 29 (until 31 December 2022).

Adjusted profit for the year: Earnings before exceptional

items, amortisation of customer relationships, foreign

exchange differences (until 31 December 2022), the impact

of IAS 29 (until 31 December 2022) and tax thereon.

Business capital employed: The sum of property, plant

and equipment, technology and software costs, trade and

other receivables, inventories, other current financial assets,

provisions, net employee defined benefit liabilities, trade

and other payables and other current financial liabilities.

CAGR: Compound annual growth rate.

Cash flow from operations: EBITDA, less exceptional items,

plus or minus movements in operating working capital,

less share‑based payment expense, less net investments in

property, plant and equipment, less technology and software

costs, less finance lease payments.

Cash flow from operations conversion: Calculated

by dividing cash flow from operations by adjusted

operating profit.

Contribution: Revenue from sale of the Group’s products less

any cost of direct materials, variable distribution costs, variable

selling costs, direct labour costs and other variable costs.

EBITDA: Profit before interest, taxation, depreciation,

amortisation, exceptional items, foreign exchange

differences(until 31 December 2022) and the impact of

IAS29 (until 31 December 2022).

Free cash flow: Cash flow from operations less tax paid

less net interest paid.

Debt leverage ratio: Calculated by dividing net debt

by EBITDA.

Debt leverage ratio before lease liabilities: Calculated

by dividing net debt before lease liabilities by EBITDA.

Net debt: The sum of revolving credit facilities, term loan,

lease liabilities net of cash.

Return on capital employed: Adjusted operating profit

as a percentage of business capital employed.

RMI: Repair, maintenance and improvement activities.

Sustainability metrics

% of suppliers with up-to-date audits: The proportion

of suppliers who have been the subject of an audit within

agreed timescales – one year for the most important

category of supplier and two years for the second most

important category.

% of managerial positions held by women: The percentage

of departmental, operational or shift managers that are female.

Energy from renewable sources: The percentage of energy

used by the business that comes from renewable sources.

Either through self‑generation of energy or supported by

Guarantee of Origin certificates or similar.

Fatality rate: The number of fatalities reported due

to work‑related injury or illness for every 1,000,000

hours worked.

Lost time frequency rate: The number of lost time incidents

for every 1,000,000 hours worked.

Lost time severity rate: The number of days lost due

to incidents over the year per 200,000 working hours.

Market-based Scope 1 and 2 emissions intensity:

Greenhouse gas emissions from operations, shown as tonnes

of carbon dioxide equivalent per tonne of product produced.

A market‑based calculation shows the emissions from the

generators from which the reporter contractually purchases

electricity and/or contractual instruments, rather than a

statistical average for the location of operations.

Plastic packaging intensity: The weight of plastic used in

our packaging divided by the weight of product produced.

Shown as kilograms of plastic per tonne of product.

Recycled content of packaging material used: A weighted

average based on material usage of the recycled content

included in our packaging material.

Total market-based Scope 1 and 2 emissions: The total

emissions of greenhouse gases from operations, as defined

to the left, shown as tonnes of carbon dioxide equivalent.

Total recordable incident rate: The number of recordable

incidents, including those that result in time lost, for every

200,000 hours worked.

Total Scope 3 emissions: Greenhouse gases emitted from

15 categories of activity that take place within the supply

chain, excluding our operations.

Training days per employee: The total number of days

utilised for training divided by the average number of

employees during the year.

Voluntary labour turnover rate: Shows the number of

employees who voluntarily left during the year divided

by the average number of employees during the year.

Glossary of terms

ADDITIONAL INFORMATION

Stelrad Group plc Annual Report 2024144

Stelrad Group plc’s commitment to environmental

issues is reflected in this Annual Report, which has

been printed on UPM Finesse Silk, an FSC

certified

material. This document was printed by Opal X using

its environmental print technology, which minimises

the impact of printing on the environment, with 99%

of dry waste diverted from landfill. Both the printer

and the paper mill are registered to ISO 14001.

Annual Report 2024 Stelrad Group plc 145

Registered office

Stelrad Group plc

69–75 Side

Newcastle upon Tyne

Tyne and Wear

NE1 3JE

Shareholder enquiries: investorrelations@stelrad.com

Tel: +44 (0) 191 261 3301

Website: www.stelradplc.com

Registered in England and Wales

Company number: 13670010

Company Secretary

Computershare Governance Services, UK

Moor House

120 London Wall

London

EC2Y 5ET

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol

BS99 6ZZ

Tel: +44 (0) 370 702 0003

External independent auditors

PricewaterhouseCoopers LLP

Central Square South

Orchard Street

Newcastle Upon Tyne

NE1 3AZ

Corporate broker

Investec Bank plc

30 Gresham Street

London

EC2V 7QN

Legal adviser

Clifford Chance

10 Upper Bank Street

London

E14 5JJ

Financial PR adviser

Sodali & Co

The Leadenhall Building

122 Leadenhall Street

London

EC3V 4AB

Tel: +44 (0) 7855 432 699

Media enquiries: stelrad@sodali.com

Principal bankers

National Westminster Bank plc

16 Northumberland Street

Newcastle upon Tyne

NE1 7EL

Barclays Bank PLC

1 Churchill Place

London

E14 5HP

Shareholder information

Stelrad Group plc

69–75 Side

Newcastle upon Tyne

Tyne and Wear

NE1 3JE

Stelrad Group plc Annual Report 2024