Stelrad Group PLC (SRAD) Earnings Call Transcript & Summary

Good morning. Welcome to this interim results presentation for Stelrad Group PLC. My name is Trevor Harvey. I am the Group CEO, and I'm joined today by Leigh Wilcox, Interim Group CFO. Next slide. This is today's agenda. We'll start with an overview of our performance, followed by a detailed review of the financials. We will then have a business review, followed by a summary and outlook. There will be time for Q&A at the end. Next slide, on next Slide 4, please. Despite challenging market conditions, Stelrad performed strongly in the first half of 2024, and the group is making clear progress against its key strategic objectives. As anticipated, revenue declined by 8.9% as challenging macroeconomic conditions continued. Adjusted operating profit rose by 12.8%, thanks to ongoing operational discipline and margin management actions. Contribution per radiator, a key metric of our performance, rose by 16% to over GBP 20 as the group benefited from a strong product mix in UK & Ireland. Recent data released in May show that in the full year 2023, we extended our position of European market leadership by 1.6 percentage points to 20.8% in the 20 European countries for which 2023 share is available, and which represented around 95% of the market in 2022. As a result of our strong first half performance, we're confident that we will achieve full year consensus expectations, and we're recommending a 2% increase in the interim dividend to 2.98p per share. The outlook for the full year of 2024 is unchanged, and the group remains confident in its long-term growth plans. I'll outline some of the key strategic developments we've made during the period, which gives us that confidence. But for now, let me hand over to Leigh to take you through the numbers.

Thanks, Trevor. Good morning. First, we'll move to Slide 6. This slide provides a snapshot of our performance for the half year due to some of our financial KPIs. On a headline basis, it is clear that despite a decline in revenue, there's been strong improvement in the other profit and loss measures. Significantly, adjusted operating profits increased by GBP 1.7 million to GBP 15.7 million, and adjusted operating profit margin is increased by 2.1 percentage points to 11%. The chart also highlights the decision to increase the interim dividend by 2%, which reflects balance sheet strength and confidence in the group's future growth prospects, cash-generation potential. Positively, our leverage ratio has also improved in prior year. And whilst the group operating cash flow conversion percentage has fallen, this is only the case because of the strategic investment in working capital in advance of expected market recovery. Following on with this overview, we'll now explore the performance in more detail starting on Slide 7. On Slide 7, we highlight the recent revenue and adjusted operating profit and adjusted earning per share at group level. Later in this presentation, we've done a revenue and adjusted op profit at more detailed and segmental level. Revenue year-on-year increased by -- reduced by 8.9%. 8% of this were directly related to volume, with the balance due to mix related to a small reduction in average selling price. Sales volume product mix, examine in more detail later on. Despite the revenue reduction, adjusted operating profit decreased by GBP 1.7 million or 12.8% to GBP 15.7 million, a 2.1 percentage point increase in margin. There are many elements of this movement, including favorable volume mix in the U.K. where the average size of radiator saw an increase by over 7%. Ongoing operational control, including the benefits of a Q4 '23 restructure, we saw additional volume shifted to our Turkish facility and a reduction of fixed cost in Western Europe. And finally, strong ongoing margin management to help ensure that price movement was successfully controlled. Adjusted earnings per share was flat year-on-year. There's small increase in interest charges and more significant increase in tax charges due to a one-off tax credit in '23, combining to offset the increase in operating profit. Both the increase in interest and taxation have been communicated previously and have factored into consensus. Detailed income statement, which highlights the movement in interest and tax are included in the appendices. Now moving to Slide 8, where if you look at the volume in Premium panel mix trends in more detail. In respect to volume, you can see the 8% reduction year-on-year with high inflation and high interest rates to continue to express both renovation and new build activity. Despite challenging market environments in recent years, there are some very early items of recovery in selected markets, but year-on-year, half 1 volume increases in Belgium, Netherlands, Poland and Sweden. The trend for premium panel sales is similar to the total market, with the penetration percent to be flat year-on-year. Whilst the group's overall penetration rate was adversely impacted by a reduction of sales volumes to European markets where these products are well established, recently the penetration rate in UK & Ireland increased from 2.8% to 3.1%. The continued improvement of the group contribution per radiator measure clearly highlights the impact of proactive price and cost management in addition to the benefit of strong product mix in UK & Ireland. Seasonally, the contribution per radiator measure is strong across all product categories, including standard steel panel radiator. Slide 9, please. Here, we can see how revenue are developed by operating segment. Despite a 7.2% decline in sales volumes, UK & Ireland revenue only fell by 1.5%. Sales in the segment benefited from an increase in average size in terms of heat output that each radiator sold and a greater penetration of premium panel radiators. Strong sales of larger K3 and vertical radiators are gaining momentum, supported by building regulation changes. Within Europe, sales volume declined by 5.1%. Average country and customer mix in addition to the impact of modest price concessions meant the revenue declined by 12.6%. As noted earlier, there were some positive trends in certain key European geographies. Europe revenue in GBP terms has also been adversely impacted by year-on-year strengthening in the pound against the euro. And finally, sales in Turkey and China have both down in prior year, with ongoing weak economic activity in Turkey. Slide 10. On this slide, we provided a bridge of group adjusted operating profit given an overview of the key movement for later look at the performance at segmental level. The bridge clearly highlights the adverse impact of a 210,000 unit reduction in sales volume, but more importantly, the bridge highlights a favorable impact, the change in mix, margin management and proactive initiatives have made to the group profitability. The improvement in the group profitability are now embedded in a stronger per radiator contribution, which leads the group well positioned for market recovery. Now moving on to Slide 11. The slide shows how change in adjusted operating profit have impacted segmental profitability. In the UK & Ireland, profit increased by GBP 3.6 million or 31.5%. Whilst the segment has been adversely impacted by the most significant volume decline in the group and to benefit it from an improving product mix, favorable material prices and the '23 restructure. Operating profit in Europe has fallen by GBP 1.2 million or 23.5%. In the segment, the adverse impact of decline in sales volumes has only been partially offset by a small increase in the average contribution per radiator. The segment has benefited from '23 restructure and margin management. However, adverse country and customer mix have largely offset these benefits. The performance of Radiators SpA in the Europe segment continues to be below expectations. However, margin for this entity is similar to the entire Europe segment and expected to improve with market recovery. Turkey & International operating profit increased by GBP 0.2 million, with the benefit of favorable material prices and economies of higher Turkey production volumes combined to more than offset a decline in sales volumes. And finally, central costs increased due to LTIP charges and accrued for benefit in addition to one-off consultancy costs related to the appraisal of premium panel strategy. Next slide, please. The Half 1 cash flow highlights the cash flow conversion is down by the year-on-year, mainly owing to the investment in working capital outlined earlier. Otherwise, operating cash flows remain strong, and we expect the conversion percentage to improve in half 2. Cash flow through interest have increased as expected. The tax paid is in line with prior year despite the increased charges, perhaps the noncash nature of the prior year tax credit. Despite the working capital investment, free cash flow is still positive, and we expect this to grow in half 2, along with operating cash flows. Leverage based on net debt before lease liabilities were 1.49x EBITDA, which is a significant improvement on June '23, and only marginally book the full year leverage despite an increase in seasonal and working capital. Leverage has benefited from strong profitability growth and good control of net debt. Slide 13, please. This slide focuses on other key financial areas. I'll go through these in terms of taxation. As noted earlier, the effect of effective tax rate had increased year-on-year to 31.5%, with the one-off credits in '23, reducing the comparative charge. The rate will remain around 30%, mainly due to withholding tax paid and in company dividends received in Turkey. On dividend, as mentioned in the overview, we reiterate the dividend will increase by 2% in the period and return on capital employed, where we can see the measure decreased by 2.5 percentage points to 26.4%, with a measure benefiting from an increase in adjusted operating profit in addition to a reduction in the GBP value of euro assets due to the strengthening of the pound. And finally, we look at group credit facilities, where we highlight that our 2 facilities with total GBP 100 million remain in place until November '26. Our relationship with our banking partners remains strong, and 30th of June '24, group had generate headroom on [indiscernible] facilities and available cash. Slide 14. After financial slide, we provide technical guidance for you to analyst modeling. I won't go through all the points on the slide, I would like to call out few key items, notably, year-on-year volume reduction is expected to moderate in half 2. Investment in working capital, particularly inventories, is expected to be remaining for the remainder of the year with a seasonal reduction in debtors at the year-end. And in summary, the '24 outlook remains unchanged. Thank you. And now I'll hand back over to Trevor, who will cover the business review.

Once, can we move on to Slide 16, please. Before I go into some of the strategic highlights from the period, I wanted to just remind you of where we sit in the market. We are the clear market leader in the European hydronic heat emitter market operating across 10 core steel panel radiator markets with a highly effective multi-brand strategy. Our 10 core markets have driven our share growth and represented 95% of our total steel panel radiator volume in 2023. We are #1 in 6 of these countries and are undoubtably in the top 3 in 9 of 10. Our customers are served by state-of-the-art operations following a 6-year investment program between 2015 and 2021, and with onboard investment to maximize operational flexibility across all our facilities. As product availability is key to success in the radiator market, all our manufacturing units have associated distribution operations and we also support customers in Poland and Denmark with global stock and distribution capabilities. Slide 17, please. We operate across 3 global territories. With revenue of GBP 69.1 million in H1 2024, the UK & Ireland represented 48.2% of the group total. Revenue was 1.5% lower than in 2023, with a strong product mix, partially mitigating reduced volumes. Standard steel panel radiators represented 94% of product mix with premium steel panel and other design radiators accounting for 6% of volume. Premium steel panel radiators demonstrated a positive growth trend in half 1 2024, and we will look at this in more detail later. In Europe, which represented 46.7% of total group revenue, sales were down 12.6% to GBP 66.8 million, driven primarily by depressed RMI activity. Europe has an attractive product mix with standard steel panels representing 75% product mix and premium steel panels and other design radiators accounting for 11% and 14%, respectively. The acquisition of Radiators SpA has been a key driver of growth in designer radiator volume. Turkey & International represented 5.1% of total group revenue in H1 2024. At GBP 7.2 million, revenue was 30.6% lower than in 2023, with lower levels of economic activity in the Turkish domestic market. Standard steel panel radiators represented 95% of product mix with premium steel panel and other Designer radiators account for 5% volume share. Slide 18. This slide will be familiar to you. And I wanted to spend some time outlining the progress we are making across our 4 key strategic objectives of growing market share, improving product mix, optimize route to market and positioning effectively for decarbonization. Slide 19. Having moved into #1 position for the first time in 2022, Stelrad significantly extended its steel panel radiator market leadership in 2023, delivering on the key strategic objective of growing market share. 2023 data of 20 European countries, which represented 95% of the steel panel radiator market in 2022 was published in May by BRG Building Solutions and showed Stelrad's 2023 market share increased to 20.8%, a 1.6 percentage point gain relative to 2022. Although as the clear U.K. market leader, the group benefited from the relative strength of this market compared to Mainland Europe. Stelrad has a strong track record of share growth over the longer term, whilst our traditional competitors, Purmo and Arbonia have experienced year-on-year share declines. We will continue to leverage our market leadership, strong brands, long-established customer relationships and flexible low-cost operations to build on this position into 2024 and beyond. Slide 20. Organic growth and gains through the acquisition of Radiators SpA would provide access to new routes to market have enabled Stelrad to increase share in key European markets. In Germany, Europe's third largest market, excluding Russia, Stelrad Group share was 15.8% in 2023, consolidating the #3 position gain in 2022. Leveraging the full year benefits of the Radiators SpA acquisition, the group gained 6.7 percentage points share versus the prior year and has gained 9.8 percentage points since 2021. In France, we have consolidated the market leadership position we gained in 2022 with a further 4 percentage point share growth. At 34.6% in 2023, market share is 8.2 percentage points higher than it was in 2021. In its traditional core markets of the Netherlands and the U.K., Stelrad further consolidated market leadership in both countries. In the Netherlands, 2023 market share of 47.6%, represented a 4 percentage point gain over 2022 and a 1.8 percentage points gain compared to 2021. In the U.K., 2023 market share was 52.6%, a 1.1 percentage rise versus the prior year and an increase of 0.5 percentage points compared to 2021. Slide 21. In the U.K., share growth has not been at the expense of profitability. Product mix has improved through increasing penetration of premium steel panel radiators and through sales of products compatible with lower temperature heating systems. In H1 2024, the mix of premium steel panel radiators as a percentage of steel panel volume sold increased by 10% relative to 2 previous years, a 0.3 percentage points increase to 3.1% overall. In terms of positioning effectively for decarbonization, we continue to develop and expand our portfolio of higher heat output products and are leveraging our long-standing position of credibility and influence with specifiers. Changes to U.K. building regulations, mandated lower temperature heating systems, have driven a 7% increase in average radiator heat output, reflecting the specification of larger radiators. In 2023, we extended our range of Tier 3 triple panel, triple convector radiators and added 900 millimeter high and vertical steel panel radiator variance as well as launching Stelrad's electric series. As a result, the combined volume of these ranges has increased by 78% relative to 2023 and by 119% compared to 2022 levels. Over time, we anticipate that the significant private RMI market will increasingly adopt the lower temperature, low and 0 carbon heating systems, which are now beginning to be installed in the new build segment. As a result, the long-term outlook for Design, higher heat output and electric radiators is extremely positive. Slide 22. Online sales by stelrad.com, the group's U.K. e-commerce platform are growing quickly, as Stelrad invests to ensure it is effectively positioned for the evolution of reach-to-market. Digital transformation is a key trend, accelerating in both B2B and B2C markets. Stelrad continues to invest in building information modeling (BIN) to maintain and develop its leading specification position, whilst in parallel developing stelrad.com as its direct-to-consumer retail platform. I do not want to go into too much detail in terms of specific numbers here as it is commodity sensitive, and I'm sure our competitors would be keen to get hold of this. But revenue between H1 2021 and H1 2024, increased by a compound annual growth rate of 38%, making stelrad.com, our fastest-growing route into the private RMI market. Through stelrad.com, there was a particularly strong mix of Design radiator sold, which represented 50.5% of our volume in H1 2024. In comparison, Stelrad's overall mix of Design radiators over the period was 6.2%. In summary, investment in stelrad.com is enabling share gain in profitable product categories beyond the group's traditional routes to market. Slide 23. In H1 2024, Stelrad has invested to position the group effectively for market recovery by driving sustainable cost savings and enabling greater operational flexibility. As a result, Stelrad is well positioned to respond effectively as macroeconomic conditions improve and volumes recover. Product availability is critical to achieve our key strategic objective of growing market share, and Stelrad's market-leading levels of product availability and customer service drive our competitive advantage. In H1 2024, U.K. On Time In Full delivery performance was over 98%. That figure, we are very proud of and which represents a real differentiator versus the competition. Our customers benefit from having access to the largest distribution centers in both the U.K. and Mainland Europe, supported by regional distribution hubs in Poland and Denmark and by the group's warehousing capability at our low-cost Turkish facility, which has enabled us to further optimize operational efficiency. We have selectively invested in inventory in anticipation of an expected market upturn to ensure Stelrad is well placed for further share gains in the near future. Slide 25, please, summary and outlook. Despite continued macroeconomic challenges across Stelrad's geographies, the group has delivered a strong performance and a subdued volume environment, with inflation and high interest rates continuing to suppress both RMI and new build markets. While revenue fell, our contribution per radiator rose by 16%, and adjusted operating profit rose by 12.8% to GBP 15.7 million, benefiting from ongoing operational flexibility and new designs, combined with operational discipline and margin management. In addition, the group has made selective investments in working capital in advance of an expected market recovery and we are encouraged by some early indicators of recovery in the volumes in some of Stelrad's European territories. The group's outlook for the full year remains unchanged, with the Board remain confident in its long-term growth plans. Stelrad's proactive margin management and cost reduction activities have positioned the group well on the eventual market upturn. The flexibility and resilience of Stelrad's business model continues to underpin confidence in the group's ability to capitalize as markets recover across our core geographies. Stelrad remains well positioned for a sustained period of profitable growth in the future, with the group well placed to benefit from strong underlying replacement demand across Europe and the long-term regulatory tailwinds for decarbonized energy-efficient heating systems. Lastly, in quarter 4, 2024, we intend to hold our first ever Capital Markets Day in London and will confirm the date in the near future. Thank you for your time today.

[Operator Instructions] We will now take our first question from Aynsley Lammin from Investec.

I've got three questions, if I could. Just firstly, I wondered if you could give a bit more color on the green shoot some of the markets you talked about in Benelux, Sweden? How confident are you that there're kind of sustained signs of sustained recovery? And then second question, just as we kind of see new government in the U.K. pushing plan in interest rate cuts already happened. What your expectation is for the kind of new housing recovery, what the exposure to the group is there? And what's the kind of impact on margin and mix? And then thirdly, just on obviously contribution for radiator, it's very strong at GBP 20. Is there scope for that to move higher? Or is it now just about volumes coming back with the market recovery. And obviously, you'll generate a lot more profit per radiator as the recovery comes through.

You answer those, Leigh, do you want me to.

It's still very early days on the market, Aynsley. And I think in terms of its positivity, the half 1 year-on-year recovery. I think also there's good volume growth in half 2 '23 yet, but it's still pretty early days. And as a percentage of our business, those markets are quite small. In terms of the second question, I think it was around the kind of increase in market with the government initiatives. It is pleasing enough just to see spend with the kind of government incentive. But the idea that government were going to generate growth through kind of new productivity, and we've looked at kind of the markets in the last kind of 12, 18, 24 months has been [ suppressive ] from renovation and new build. And therefore, that any recovery will kind of come through both the channels. And as such, we'd expect kind of the margin and mix of the business to be maintained as the recovery grows. And with a significant injection to say new build, then that would probably have a small dilution on some of our key measures. But overall, we expect recovery across all channels. In terms of the contribution per radiator, it's obviously been very positive year-to-date, and we're very pleased with that. And what is pleasing to see is some of the cost initiatives coming through, which has supported that number which are obviously embedded in that kind of going forward. And also in the UK & Ireland, some of the kind of mix changes, which has really supported that number. So again, we expect that to kind of continue and that kind of mix in terms of average size grows further potentially with decarbonization trend, and that would be a positive for the future. But in terms of immediate terms, we don't expect a significant improvement in half 2, but more of the same, hopefully. Hopefully, that answers those questions, Aynsley.

Yes. Great. Just maybe one last one, actually. Just on the U.K. penetration of the premium went from 2.8 to 3.1%. Just what's the expectation of where that can get toward the median. I think it's quite a bit lower than kind of some markets in Europe like Germany -- I mean structurally, where do you think that can get through in the U.K. from the 3.1% currently?

It's obviously -- I mean, we obviously benchmark that 3.1% versus our Western European entities -- kind of countries present where that's kind of in the mid- to late teens in some territories. So that gives us a benchmark, and we want to move towards that. Still, it's a very different market and one that we're working to understand in more detail currently with the bit work they've been undertaken. So it is very much -- I don't think we haven't gotten a sure medium-term gain, but obviously, there's significant room to improve on that one.

Our next question comes from Andrea Collins from Davy.

Congratulations on the results this morning. Just two questions for me, if that's okay. The first one is just if you could talk us through the pricing environment. I think you mentioned some modest price concessions in Europe in H1. I guess what -- do you expect this to continue in the second half of the year? And could you give kind of some sort of color on the scale of those price decreases? And then my second question then just refers to the overall steel panel radiator market. I know you don't have another kind of increased market share growth in the year. But I guess in your 2 biggest competitors, you mentioned Purmo and Arbonia and the activity that took place with them in H1. Have you seen any changes in behavior from these parties yet? Do you think that will be kind of increasing their focus on radiators? So just some color here on any changes in their activity in H1.

In terms of the price concession, they are modest and some of these price concessions we've to make kind of linked to kind of steel price mechanisms. So they are embedded within kind of an underlying decreasing cost of steel price, so there's nothing more. And the other one in Europe, again, it's very modest in terms of low number. It's really supporting long-term partnerships and things like kind of initiatives with certain -- one of our customers. And Trevor, you're probably best to look at this steel panel market.

If we look across the European market, I think the question was specific about Purmo and Arbonia. And both of those companies have recently undergone change of ownerships or in the process of. In the case of Purmo, we haven't seen any increased aggression in terms of their commercial activity. But Purmo -- we announced there a small 4.5% price increase in the U.K., which was effective in June 2024. Purmo followed a month later with a 4% price increase, which I think indicates that the orderly market that we have enjoyed for 2 or 3 years now, looks set to continue.

Our next question comes from Toby Thorrington from Equity Development.

I've got one or two questions, please, perhaps piggybacking on some of which you've been asked already and tying a couple together actually. I think you mentioned in the central cost piece, that there is a sort of premium panel market review, strategic view. I can't remember exactly what phraseology you used. It sounds like that's ongoing. Is there anything you can share on that? Or do we have to wait for the Capital Markets Day? And related to that, could you just remind us what the position of both Purmo and Arbonia is in premium rounds, please. That's the first one.

Well, I'll answer the first piece Leigh. In terms of the strategic project that we've engaged, that work is in the middle of the project time line at this moment in time. I expect to see the outcome from that until the early part of September. We are working with [ Eden McCallum ] , a consultancy that we've worked with in the past. The original premium panel strategy was developed in conjunction with [ Eden McCallum ] and we are being fortunate enough to be able to secure the same team that worked with us back in 2017 to have another look at this market, and to look at the most appropriate ways to accelerate our growth strategy for premium panel specifically in the U.K. marketplace. In terms of Purmo and Arbonia, there we all have very similar premium panel portfolios. There are some slight changes across the portfolio. Arbonia in particular, are locked into a relatively expensive, a top configuration for most of their products. But Purmo have a portfolio very similar to Stelrad's, but we seem to be leveraging our position a little bit more successfully across Europe.

Okay. Great. I was also going to ask the final question, I think, for now, regarding increase in volumes in due course. I know you've got sort of flexible manufacturing certainly in the U.K., and I think Turkey as well a number of lines that you have. Could you just talk us through if the market turns on by this time next year, what you need to do, perhaps by reference to headcount and shift patterns and any other actions that you think you might need to take to increase volumes again, please?

Will you answer that Leigh?

I mean we think -- we believe that as it stands, we're probably shooting for 5 million radiator per annum, and we could easily go up to 7 million radiator, so a 40% increase with no real structural changes. The only investment we need to make is in additional blue collar labor within -- in Turkey and some training time associated with those individuals. We -- the current configuration can easily do that without any investment in fixed costs across the group.

Okay. Just relatedly, what's the sort of headcount, group headcount currently, just for a point of reference, please?

I think it's just under 1,400.

Now take our next question from Charlie Campbell.

Charlie Campbell from Stifel. I think a couple of questions, please. So the first one, just I think, follows on from Toby's question. Just wondering if you could sort of remind us roughly where you think U.K. volumes are probably more for the market than for yourselves? So U.K. radiator volumes are compared to kind of recent peak, just to put some of those comments about kind of recovery paths into context. And then secondly, I just wonder if you could just give us a bit more color on the sort of the actions you're taking to improve returns in SpA. Just wondering what's happening there, any progress in recovering margins there?

In terms of -- I mean looking at the kind of steel panel radiator volumes in the U.K. I guess, (37:49)in what you term to 2018, 2019, which is probably kind of the last kind of like-for-like comparable year, they were about 6.2 million. And for '24, we expect in terms of market volumes to be kind of definitely below, contributing about 5 million. So there's been a significant decline since that period in terms of overall market volume. In terms of Radiators SpA, I mean we always -- there's quite a few bits and pieces to look at there in terms of -- we are improving their product mix in terms of they've introduced a new kind of higher decarbonized-friendly product, which will enhance their margin. We're still working with the customers to kind of improve legacy contribution and commercial position for the -- with some of their products. Also what we're doing primarily in the short term is to really leverage our kind of group experience and operational experience to improve the efficiency of their manufacturing. So they are the 2, 3 things there. But it's similar to our Europe segment in general, with that business, it's simply bought. It has had a significant market decline, which had led to kind of volume decline. And therefore, any kind of business in that scenario is kind of having that negative operational leverage impact. So we're hoping that with market recovery or we expect that with market recovery that that business will start to improve at a massive due course.

And our next question comes from Sam Cullen from Peel Hunt.

Just got one kind of follow-up really. On the statistic that your average heat output is increasing by 7%, are you taking kind of a what you might call kind of a leading role in trying to curate that from the point of view of kind of plumbers and heating engineers, and encouraging them to kind of upsize homeowners' radiator size in advance of changing their heating systems or even if they're using a gas boiler and -- will stay using gas boiler, but might have a heat pump in 10 years or so. Are you trying to get [indiscernible] heaters to increase output in advance of that change? Or are these changes that are happening as people are putting in different heating systems? I think then you can tell that, I guess.

I think what we're trying to do is to anticipate the direction of the market. And clearly, new build next year goes to low carbon heating systems, primarily air-source heat pumps. And what we've done is we've extended significantly our portfolio of products that are ideally suited for lower temperature heating systems. And these are Tier 3 triple panel, triple convector products, 900-millimeter high vertical products and even electrical products. And we have seen huge interest in these, and they are being specified extensively across both RMI and new build. So I think we are probably slightly ahead of the curve when it comes to positioning our portfolio, and we have certainly seen the benefits of that in the first half of '24, particularly in the U.K. and Ireland.

Thanks. With this, I'd like to hand the call over for any webcast questions. Leigh, over to you.

Great. We've got one question from the webcast which is from James Workman at Canaccord. What is the reason for Stelrad having not entered the Swiss market?

Which market?

Swiss.

Swiss market?

I've had a quick look to start, Trevor. I think the main issue here is that the market is very small. I think the entire market for radiator is 166,000 with only 4,000 steel panel radiator in that market, which given that our core business is historically focused on steel panel, it's not a great market for us to go at.

Great. Thanks. As there are no further questions, that concludes today's presentation. Thank you for joining.