Stelrad Group PLC (SRAD) Earnings Call Transcript & Summary

Good morning. My name is Trevor Harvey. I'm Stelrad Group CEO, and here with me today is Leigh Wilcox, Group CFO. The agenda is as shown on the slide. After a brief overview of our results, we'll have a detailed review of Stelrad's financial performance, followed by a business review. From the summary and outlook, we'll then move on to a Q&A session. I'd like to begin with a brief overview of Stelrad's 2024 performance. I am pleased to report a continued strong performance for the business despite the challenging market backdrop. Our adjusted operating profit increased by 7.6% compared to the prior year to GBP 31.5 million, while our focus on proactive margin management initiatives has resulted in a seventh consecutive year of increased contribution per radiator, which in 2024 exceeded GBP 20 per radiator for the first time. In addition to cost and price management actions, we saw positive mix changes, notably in the U.K. market, where increased premium steel panel penetration, combined with volume growth in high output conventional radiators underpin our confidence in the long-term opportunities provided by the structural drivers of increased premiumization and the drive for decarbonization. Macroeconomic conditions remain challenging in 2024. And as a result, revenue declined by 5.7%, but return on capital employed was up 1.6 percentage points relative to 2023 at 27.1%. Those of you who attended our Capital Markets event late last year will recall that providing market-leading levels of customer service and product availability is one of Stelrad's key competitive advantages, alongside flexible low-cost manufacturing and the group's leadership of the European heat emitter market. During 2024, on-time and full delivery performance in the U.K. and Ireland was an impressive 98%. Our strong financial performance has enabled us to increase total dividends in 2024 by 2%. And while we are not expecting the wider market backdrop to improve significantly during the first half of 2025, we entered the year making good progress towards our medium-term targets and remain effectively positioned to outperform our peers and deliver continued growth for our stakeholders independently of future market recovery. I would now like to hand you over to Leigh for a more detailed review of the group's financial performance.

Thanks, Trevor. Good morning, all. Moving to Slide 6 and our financial snapshot. The format is consistent with that presented at our interim results and it includes some of our financial KPIs. The full year story continues to be consistent with that we reported at the half year. On a headline basis, despite a decline in revenue, there has been strong improvement in other profit and loss measures significantly, adjusted operating profit has increased by GBP 2.2 million to GBP 31.5 million and adjusted operating profit margin has increased by 1.3 percentage points to 10.8%. Aided by strong profit growth and the devaluation of the euro against GBP, return on capital employed has increased by 1.6 percentage points to 27.1%. The chart also highlights that we are proposed to increase the final dividend by 2%, in line with the interim dividend increase, which reflects balance sheet strength and confidence in the group's future growth prospects and cash generation potential. As flagged previously, we have made an investment in working capital in the year, principally to ensure that we are well placed to respond to market demand. And as a consequence, our operating cash flow conversion is lower in the year, we expect this to recover strongly in the medium term. Positively, despite a lower operating cash flow conversion, our leverage ratio has improved in prior year with strong profitability growth and a small reduction in net debt. Following on this overview, we will now explore performance in more detail, starting with Slide 7. On this slide, we highlight the recent trends in revenue, adjusted operating profit, adjusted earnings per share and dividends per share at group level. In the subsequent slide, we will examine the revenue and adjusted operating profit in more detail at segmental level. Revenue year-on-year reduced by 5.7%. The decline in revenue was due to a 5.8% decrease in sales volume during the year and the impact of the euro devaluing against GBP, partially offset by selling price benefits. Selling prices have benefited from a positive U.K. mix and the impact of the U.K. price increase, which was applied to recover ongoing inflationary cost rises, partially offset by an adverse mix and modest price concessions in some European markets. While sales volumes were down by 5.8% in the year, volumes were down 8% in half 1 and only down 3.5% in half 2, with certain key geographies in Europe showing a year-on-year increase in volumes led by business gains. Despite the revenue reduction, adjusted operating profit has grown by GBP 2.2 million or 7.6% to GBP 31.5 million with a 1.3 percentage point increase in margin. There are many elements to the movement, including favorable product mix in the U.K. with the average size radiator saw increase by over 6%. Ongoing operational control, including the benefits of the Q4 '23 restructure, we saw additional volume shifted to our low-cost Turkish facility and the reduction of fixed costs in our Western European and U.K. businesses. And finally, strong ongoing margin management that helped to ensure that price movements were controlled successfully. Adjusted earnings per share have reduced versus prior year with the comparator benefits from a significant one-off deferred tax credit. Excluding the deferred tax credit, the pleasing earnings growth with the improvement in operating profits only slightly offset by an increase in interest charges. The fourth chart shows the proposed '24 total dividend of 7.79p per share, representing a 2% increase. This chart shows how we have maintained and lastly increased earnings dividend despite the earnings reduction in 2022. A detailed income statement, which highlights the movement in interest and tax is included in the appendices. Now moving to Slide 8, where we can examine the volume and premium panel mix trends in more detail. In respect to volumes, we can see the 5.8% reduction year-on-year with high interest rates and inflation continuing to suppress both RMI and new build activity. Positively, the group has achieved year-on-year volume increases in Belgium, Netherlands and Poland, driven by our sustainable competitive advantages, including our flexible low-cost manufacturing, leading levels of product availability and customer service and a competitive position of scale. The group premium panel penetration percentage grew slightly to 5.7%. Although overall volumes fell in line with the market, there was a pleasing increase in the penetration of premium panel products in the U.K. and Ireland, where traditionally these products are underrepresented. And as outlined at our recent Capital Markets event, this is where we are focusing our efforts. The continued improvement in the group contribution per radiator measure clearly highlights the impact of proactive price cost management in addition to the benefits of strong product mix in U.K. and Ireland. On Slide 9, you can see how revenue developed by operating segment. Despite a 7.2% decline in sales volumes, U.K. and Ireland revenue only fell by 1.5%. In the trend similar to half 1, sales in the segment benefited from an increase in the average size in terms of heat output for each radiator sold and a greater penetration of premium panel radiators. Strong sales of larger K3 vertical radiators have continuing momentum supported by building regulation changes. We were also able to implement a U.K. price increase in half 2 to recover inflationary cost rises. Within Europe, sales volume declined by 0.6% with business gains in Belgium, Netherlands and Poland, enabling a 4% year-on-year growth in half 2. Despite improving volume performance, euro revenue in GBP terms has been adversely impacted by 2.7% due to a year-on-year strengthening of the pound against the euro. Additionally, European revenues were negatively impacted by adverse country and customer mix and the impact of modest price concessions. Sales in Turkey and China are both down on prior year with ongoing weak economic activity in Turkey. On the following slide, we provide a bridge of the group operating profit, given an overview of the key movements before later looking at profit performance at segmental level. The bridge clearly highlights the adverse impact of 298,000 unit reduction in sales volume, but more importantly, the bridge highlights the favorable impact the change in mix, proactive initiatives and margin management have made to the group profitability. We believe that the improvements in the group profitability are now embedded in the stronger per radiator contribution, which leaves the group well positioned for market recovery in the medium term. The next slide shows how changes in adjusted operating profit have impacted segmental profitability. In U.K. and Ireland, profit increased by GBP 5.1 million or 20.7%. Whilst the segment continues to be adversely impacted by the most significant volume decline in the group, it has benefited from an improving product mix, favorable selling and material prices and the 2023 restructure. Operating profit in Europe has fallen by GBP 1.2 million or 12.4%, with improving volumes aiding second half performance. The segment has benefited from the 2023 restructure and margin management. However, adverse country and customer mix, a small reduction in volumes and inflationary cost increases combined to more than offset these benefits. The performance of Radiators SpA within the Europe segment has been impacted by the weakness of the German and French markets in the year, with the latter in particular, providing an attractive product mix. Margins for the Europe segment are expected to improve the market recovery. Turkey and International operating profit decreased by GBP 0.3 million, with the segment impacted by a weak Turkish economy. And finally, central costs increased due to one-off consultancy costs related to the appraisal of premium panel strategies. Moving to cash flow statement. We can see that both cash flow from operations and free cash flow are down compared to the prior year. EBITDA year-on-year improved by GBP 2.3 million. However, this was offset by the cash unwind of provisions for one-off restructuring costs and investments in working capital. A significant working capital investment in the year was in inventories as the group invests to ensure it is able to continue to be well placed to respond to market demand and maintain best-in-class delivery performance. There was also a reduction in trade payables following a change in steel supplier in Italy. Despite the reduction in free cash flow, there's still been a reduction in net debt and leverage based on net debt before lease liabilities is 1.37x EBITDA, which is 0.1x improvement on December '23 with leverage benefited from strong profitability growth. On next slide, we focus on other key financial areas. The taxation, as noted earlier, the effective tax rate has increased year-on-year to 29.4%, with the one-off credit in '23, reducing the comparator charge. For dividends, as mentioned in the overview, we reiterate the final and therefore, total dividend for 2024 will increase by 2%. Return on capital employed, led by strong adjusted operating profit performance, return on capital employed has increased by 1.6 percentage points to 27.1%. The measure has also benefited from a reduction in the GBP value of euro assets due to the strengthening of the pound. And finally, we highlight that our 2 group credit facilities, which totaled GBP 100 million remain in place until November '26. Our relationship with our banking partners remain strong, at the 31st of December '24, the group has generous headroom on both facilities and available cash. And finally, my last slide provides technical guidance for use of analyst modeling. We expect the market environment to remain subdued for at least the first half of 2025. Key input prices are expected to remain stable during 2025. The group will be making a one-off periodic investment in its IT infrastructure during 2025, which will give a modest increase in capital expenditure compared to 2024. During quarter 4 of '24, the group undertook a proactive price realignment exercise on its core range of contract products in the U.K. with equal reduction in both list prices and rebates. The price realignment is a commercial initiative designed at making the price point for our contract products more competitive and also strengthening customer relationships. During 2025, because of the reduction of rebates, there will be a consequential increase in working capital. Leverage based on net debt for lease liabilities is expected to fall during the year after a seasonal increase at the half year. And finally, the group's tax rate is expected to exceed 30% due to a 5% increase in the withholding tax rate payable on dividend from Turkey. Thank you. Now I'll hand you back over to Trevor, who will provide the business review.

Thanks, Leigh. By way of a reminder, we are Europe's market-leading radiator manufacturer. According to the latest available 2023 market share data, we held the #1 position in both the hydronic heat emitter market overall and the steel panel market in particular, with shares of 11.8% and 20.2%, respectively. We serve over 500 customers across 40 countries, have a clear strategic focus on 10 core European markets and operate 5 strong brands: Stelrad, Henrad, Hudevad, Termoteknik and DL Radiators. Stelrad operates in 3 geographic territories. The U.K. and Ireland represents 47% of total group revenue. Europe represents 48%, while Turkey and international represents 5%. As we outlined at our Capital Markets event in November, the 2 key structural growth drivers of increasing premiumization and the drive for decarbonization will improve our product mix and margin and enable above-market growth. And we have 3 competitive advantages that put us in prime position to take advantage of these market opportunities, namely the flexibility of our low-cost manufacturing facilities and processes, our leading levels of customer service and product availability; and finally, our market-leading competitive position. Four clear consistent strategic objectives continue to provide focus and direction, growing market share, improving product mix, optimized routes to market and positioning effectively for decarbonization. Taken together, the group's market opportunity, structural growth drivers and competitive advantages underpinned by robust strategy translate into a set of ambitious medium-term targets, which deliver clear stakeholder value, an increase in contribution per radiator, an operating margin of 13%, cash conversion of more than 90% and a return on capital employed of over 30%. And these medium-term targets exclude the benefits of an underlying market recovery for which Stelrad is very well positioned. To deliver on the structural growth drivers of increasing premiumization and the drive for decarbonization, we have a focused 3-point strategy. To capitalize on the opportunities presented by increasing premiumization in the U.K. market, we're leveraging Stelrad's traditional trade strengths with key initiatives to maximize the benefits of our brand positions, ensure that installers and merchant staff are supported in upselling to higher-value products and through installer-oriented marketing activities to remove any perceived barriers to recommending design radiators to homeowners. In 2025, we'll boost Stelrad's consumer appeal by the further development of our stelrad.com e-commerce platform, supported by refocused investment in targeted consumer marketing. We continue to evaluate opportunities to develop channel partnerships for design radiators where these are in the best long-term interest of the group. In the drive for decarbonization, our strategic focus is on development of our product range and optimizing our routes to market. As you will see later on, we have been successful in promoting high output conventional radiators, which represent the most practical and cost-effective solution in lower temperature heating systems. And we're continuing to extend our portfolio of multi-panel multi-convector products. For heat pump systems, operating at very low system temperatures, we're innovating to introduce new hybrid radiator ranges, which combine a traditional hydronic heat emitter with forced electrical convection to increase the heat output. In 2024, we launched one such product range into our German market in cooperation with a leading heat source and system provider, a long-established customer of Radiators SpA. This low temperature Radiator has been well received by the market. Lastly, through the acquisition of Radiators SpA, Stelrad gained access to a comprehensive portfolio of electric Radiators, which were not previously commercialized outside of Italy, France and Germany. We're now able to leverage our leading market position, trusted brands, access to market channels and long-standing specifier and customer relationships to introduce a focused electrical offer into our other core markets. The electric series in the U.K. market is a notable example. And from a standing start, we are now building a meaningful project pipeline. I'd now like to give you some concrete examples of our progress in 2024 towards improving product mix and positioning effectively for decarbonization. In terms of product mix improvement, driven by increasing premiumization, Stelrad's premium steel panel mix represented 5.7% of the group's volume in total. As a percentage of all steel panel volume, premium steel panel reached a record mix of 6.3% in 2024. This was an increase of 0.1 points versus 2023. And despite challenging macroeconomic conditions has now exceeded the levels seen during the post-COVID renovation peak in 2020 and 2021. Indeed, since 2015, our premium steel panel volume has grown at 3.4% per annum, while sales of standard steel panels have fallen by a CAGR of 2.6% over the same period. It's extremely pleasing to see the underlying underdeveloped U.K. market as the key driver of this improvement. U.K. premium steel panel mix rising from 2.9% in 2023 to 3.1% in 2024. As those of you who attended our Capital Markets event may remember, the U.K. market represents a significant opportunity for Stelrad. In 8 of our 10 core markets, premium steel panel has between 5% and 26% penetration of the total steel panel radiator market. In comparison, the U.K. is underpenetrated in premium panel radiators, where Stelrad has sustainable competitive advantage and profitability levels are high. Guided by our recent work with strategic consultants, Eden McCallum, we continue to leverage our leading market position and #1 brand to maximize this profitable opportunity through both traditional and emerging routes to market. We're making good progress in development sales of higher heat output conventional radiators. Following changes to Part L of the U.K. building regulations, Stelrad has worked closely with specifiers and heating system designers, particularly in the new build sector to find practical, cost-effective solutions capable of meeting the demands of lower temperature heating systems. As a result, in 2024, we saw significant growth in the U.K. sales of our higher value, higher heat output vertical K3 and 900-millimeter high radiators. Volume increased by 66% over the prior year, which was in turn 34% higher than in 2022. This contributed to a 6.4% overall increase in Stelrad U.K.'s average heat output per radiators sold relative to 2023 levels. We are also making good progress on ESG, driven by our strategic sustainability framework fit for the future. Our #1 priority is to keep our employees and contractors safe, and we aim for zero harm across our operations. In 2024, our continued focus on safety standards resulted in us setting a new benchmark for Lost Time Incidents with Lost Time Frequency rate falling by 45% to 4.75. Environmental product declarations, EPDs, provide transparent verified information on the environmental impact of a product, and we are increasingly being requested by specifiers. This is particularly the case in Scandinavian markets. And in 2024, Stelrad published targeted EPDs for core ranges to ensure ongoing specifications in Denmark and Sweden. We will be publishing further EPDs during 2025, notably for our U.K. Green series, which is manufactured with low carbon steel. Another incredible achievement in 2024 was achieving U.K. certification for sending zero waste to landfill, while we are also proud to support the new United Nations Global Compact initiative. And in 2024, we committed to align our business with the 10 universally accepted principles in the areas of human rights, labor, environment and anticorruption and to act in support of sustainable development goals. So turning to the summary and outlook. Stelrad performed strongly in 2024, and the group remains well positioned for sustainable profitable growth in the future. In challenging market conditions last year, we put in a robust performance, driving margin improvement through our total commitment to operational excellence. For the seventh year running, we delivered an increase in our contribution per radiator, having set a new benchmark for premium steel panel radiator mix and having seen significant growth in our high output conventional radiators in the U.K. market. Although we don't expect the current challenging market conditions to improve for at least the first half of 2025, Stelrad is very competitively positioned for 2025 and beyond. With 3 sustainable competitive advantages of flexible low-cost manufacturing, leading levels of product availability and a position of scale as the European market leader in hydronic heat emitters, we believe that our considerable experience of successfully steering the business through other challenging market cycles will enable the group to navigate the current conditions and deliver another year of progress. As we outlined at our November Capital Markets event, long-term trends for the group are favorable. We have an attractive market opportunity with positive underlying dynamics in the hydronic heat emitter market and a significant installed base ready for a replacement cycle that we expect to come through in the medium term. In premiumization and decarbonization, we have 2 structural drivers that will enable above-market growth through product mix and margin gains. Our resilient business model, clear, consistent and robust strategy and market leadership position underpin these opportunities and will enable Stelrad's profit growth over the coming years. With that, we'll move over to questions.

[Operator Instructions] The first question comes from the line of Aynsley Lammin from Investec.

I think I've got 2 questions. Firstly, just obviously, this year, unlikely to see much volume growth. So just wondering, when you look at the kind of price management and cost management, are you confident if we assume that volumes are flat across the group that you could at least hold the contribution per radiator? So I guess a bit more color around pricing and cost? And then the second question, just in the U.K., if you could remind us again your exposure to new build and RMI. And are you seeing any kind of pickup or better confidence among the new housebuilders and maybe a bit more color on the RMI market as well.

I'll take that, Leigh.

Okay.

I think the first part of the question was about contribution per radiator, Aynsley. And you comment, do we see any further upside? Or are we confident of maintaining it? I think at this early stage, despite market uncertainty, I think we'll have a high degree of confidence that we can at least maintain the current contribution per radiator to the record level that we've achieved in 2024. But we have set out some slightly more ambitious targets at the CME event for the medium term, and that was to exceed GBP 21 per radiator. In terms of the current market conditions, I would agree with you, Aynsley, that the commentary coming out of new build is certainly a little bit more positive than it has been for the last 18 to 24 months. However, Stelrad at this stage hasn't seen any benefit from that. But of course, the heating system is one of the last elements installed into a new home. So it will likely be probably 5 or 6 months before we see the benefits of any increased new build activity at the beginning of the year. Does that answer your question, Aynsley?

Yes. And anything on the RMI market, any more color in the U.K.?

I mean RMI has been struggling somewhat because of poor consumer confidence. And although there is some early signs of some consumer confidence recovering, it's not significant enough to feed through into increased RMI activity.

Just a reminder, Aynsley, in the U.K., new build is about 25% of our U.K. volume and the remainder is RMI commercial.

The next question comes from the line of Andrea Collins from Davy.

Congrats on the results this morning. I guess I have 2 questions, if that's okay. The first one is just in relation to the premium panel radiators. You mentioned there's kind of further growth in penetration rate in 2024. So I guess I'm wondering what are your expectations for this side of the business in '25. And I guess you kind of alluded to those key initiatives that you have in place now to assist premium panel growth in the U.K. When do you think we'll start to see an impact from these? Or is it still too early to kind of see an impact there? And then my second question is on contribution per radiator, if I can come back to that if that's easier.

Do you want to answer that, Leigh?

Yes. I mean in terms of the kind of premium panel mix is very different per geography. So in terms of the kind of the actual growth in that kind of mix this year we're at 5.7%, I guess, depending on what happens where, for example, Germany, which is a market where we're struggling in recent years, the percentage of penetration there is around 20%. So where it goes in the immediate future depends on kind of the wider kind of economic recovery. But as you alluded to, the significant challenge for us is growing that U.K. percentage. And whilst the growth was modest from, I think, 2.9% to 3.1% during '24 for our largest market, that's a significant change in what we're looking to focus on. So -- and that feeds into the kind of premium panel strategies, implementing that EMK kind of strategic work stream. And I think in terms of time line, there's obviously investment, not so much a cash investment, more of a process investment to ensure that the website, which is the first main lever is ready for -- is fit for purpose in terms of pushing that kind of consumer sales. And we're looking to get that online by the kind of quarter 3, I think. So in terms of back end of this year, we look to get some more traction on that moving into 2026.

Perfect. That makes sense. And then the second one is just on the contribution per radiator. I guess, could you give any more color on how this grew across the different product types, so standard versus premium versus design? And is there any kind of color on different geographies as well?

I think the -- it is mainly by product type. When you look at contribution per radiator across different geographies, it varies, but mainly because of the product mix. And it is still that kind of what we always say that on average is about 20. But if you're looking at a standard panel versus a premium, you're talking 5x, 6x the contribution. So the kind of upscale benefit from moving from a standard to a premium is more or less 5x, 6x contribution. And it's similar kind of not as high, but kind of similar uptick on other products like [indiscernible] and electric, there's that significant uptick in contribution per radiator.

The next question comes from the line of Sam Cullen from Peel Hunt.

I've got 3. I think they should be pretty brief though. The first one is in terms of the strategy piece, you mentioned kind of support for installers and merchants. What kind of support do they need? Is it more training around the product, kind of more marketing materials to help with the upselling? I presume it's not kind of showrooms that they need. So just interested to explore that. The second one is around Slide 20 and the increase in higher output radiators. Can you give any commentary around what channel you're seeing that? Is it coming in the new build sector or the RMI sector? And then the last one, and I probably should know the answer to this, the hybrid and the electric ranges, you said you're designing them. Are you manufacturing those as well? And if you're not, would you seek to?

I'll answer those 3 Leigh. Thanks for the question, Sam. I think the first one in terms of merchant installer support, Eden McCallum research highlighted the need to have some more focused marketing activity to reduce certain misconceptions about the complexity of installing premium and design products. And we have instigated a training program and a targeted marketing campaign towards installers to get the message across in terms of how easy these products are to install and how cost competitive they are. In terms of your question in terms of Slide 20 high output conventional radiators, we recognize the growing popularity of low-temperature systems driven primarily on the back of the building regulations changes of Part L. We have been very active with all sorts of specifiers, both across new build, social housing. And we have seen those specifications come through in significant increased demand for those high output products specifically targeted at low temperature heating systems. And your last question was about the German initiative that Radiators SpA had with one of their main customers for Germany. That is a product which I'm pleased to report, Sam, is manufactured in-house.

The next question comes from the line of Edward Prest from Berenberg.

I've got 2, please. Firstly, in relation to sales channels, do you have any sense of how much stock is currently being held in merchanting and retail channels and how this is relative to a normal level? And secondly, back to contribution per radiator, obviously, increasing for 7 consecutive years. As and when the U.K. recovers, given it's the relatively lower share of premium compared to other markets, would a U.K. -- is it reasonable to think a U.K. recovery might lead to a decrease in the contribution per radiator? Or is it actually sort of in line with the broader group average?

Do you want to answer those, Leigh?

Yes. I mean in terms of the U.K. stock channel, I've not had as much availability in the European stock channel than U.K. We get the information year-on-year, and there's been no significant change in terms of the level of stock in the channel. I think stock is critical to kind of the availability of radiators and the ability for that distribution to work. So we've not seen any movement in that. In terms of contribution per radiator, yes, there is kind of a mix element across the group. And in terms of if the U.K. was to recover significantly faster than Europe, there could be a change in contribution per radiator. That said, European economies have been equally suppressed in recent years. And furthermore, the development of the U.K. market we hope to kind of push that premium trend in line with that development. So we're optimistic on that basis that we would be able to sustain if not grow the contribution per radiator.

There are no further questions from the phone line. So handing over to Louise to take questions from the webcast.

We have one question from Charlie Campbell of Stifel. Can you explain the increase in inventories given the subdued outlook? Is there a mix shift here?

There's no mix shift to speak of. I think we've spoken about sustainable competitive advantages and product availability and customer service is key to that. What we realized kind of in recent years is that the ability to supply our customers with the right products at the right time is just a significant advantage and one we're keen to take advantage to make sure we make the most of. And that's the only kind of development there.

Our next question is from James Wood at Canaccord. Is on-time in full delivery of Europe a trackable KPI? And if so, what are the trends for this region?

When we -- we've been tracking our on-time in full for over 10 years. But interestingly, it was only last year during one of these events that we have an investor actually inquiry about on-time in full. And he identified that it was a key measure that he was particularly interested in. So you will have noticed at the Capital Markets event in November, we made a point of measuring on-time in full for the U.K. marketplace. We've made comment on on-time and full for the U.K. in this particular presentation. It's a measure that is very important in the U.K. given the structure of the U.K. marketplace. And we have seen merchants adjust their stock levels down slightly because the reliability of their supplies from Stelrad are so good. So yes, we have a long history of measuring on-time and full, but it's only relevant for the U.K. marketplace, which is 47% of our revenues.

Thank you, Trevor. There appears to be no further questions on the webcast. That concludes today's presentation. Thank you, everyone,