![]() # Optimised for growth Stelrad Group plc Annual Report 2025 Stelrad Group plc Annual Report 2025 ![]() # Helping to heat # homes sustainably STRATEGIC REPORT 1 Highlights 2 At a glance 3 Our investment case 4 Chair’s statement 6 Chief Executive Officer’s review 8 Market overview 9 Market trends 10 Our business model 12 Our strategy 14 Strategy in action 17 Strategic summary 18 Key performance indicators 20 Stakeholder engagement 25 Sustainability report 33 Task Force on Climate-related Financial Disclosures 38 Sustainability metrics 41 Finance and business review 46 Risk management 54 Viability statement and going concern 56 Non-financial and sustainability information statement GOVERNANCE REPORT 58 Chair’s introduction to governance 60 Board of Directors 62 Section 172 statement 63 Statement of corporate governance 69 Audit & Risk Committee report 74 Nomination Committee report 79 Directors’ remuneration report 97 Directors’ report FINANCIAL STATEMENTS 102 Independent auditors’ report to the members of Stelrad Group plc 110 Consolidated income statement 110 Consolidated statement of comprehensive income 111 Consolidated balance sheet 112 Consolidated statement of changes in equity 113 Consolidated statement of cash flows 114 Notes to the consolidated financial statements 145 Company balance sheet 145 Company statement of changes in equity 146 Notes to the Company financial statements ADDITIONAL INFORMATION 149 Glossary of terms 150 Shareholder information Stelrad Group plc Annual Report 2025 ![]() # Optimised for growth Stelrad Group plc Annual Report 2025 ![]() # Helping to heat # homes sustainably STRATEGIC REPORT 1 Highlights 2 At a glance 3 Our investment case 4 Chair’s statement 6 Chief Executive Officer’s review 8 Market overview 9 Market trends 10 Our business model 12 Our strategy 14 Strategy in action 17 Strategic summary 18 Key performance indicators 20 Stakeholder engagement 25 Sustainability report 33 Task Force on Climate-related Financial Disclosures 38 Sustainability metrics 41 Finance and business review 46 Risk management 54 Viability statement and going concern 56 Non-financial and sustainability information statement GOVERNANCE REPORT 58 Chair’s introduction to governance 60 Board of Directors 62 Section 172 statement 63 Statement of corporate governance 69 Audit & Risk Committee report 74 Nomination Committee report 79 Directors’ remuneration report 97 Directors’ report FINANCIAL STATEMENTS 102 Independent auditors’ report to the members of Stelrad Group plc 110 Consolidated income statement 110 Consolidated statement of comprehensive income 111 Consolidated balance sheet 112 Consolidated statement of changes in equity 113 Consolidated statement of cash flows 114 Notes to the consolidated financial statements 145 Company balance sheet 145 Company statement of changes in equity 146 Notes to the Company financial statements ADDITIONAL INFORMATION 149 Glossary of terms 150 Shareholder information Stelrad Group plc Annual Report 2025Stelrad Group plc Annual Report 2025 ![]() ## Strong 2025 performance positions ## Stelrad well for sustainable future growth ### Highlights Further progress in adjusted operating profit • Adjusted operating profit of £32.5 million, an increase of 3.0% (2024: £31.5 million), driven by further margin management activities and strategic initiatives to drive favourable product mix. • Statutory operating profit of £17.5 million, after exceptional items of £14.9 million relating to a non-cash impairment charge on the assets of Radiators SpA and cost optimisation led restructuring activities in our Turkish and Danish facilities. • An eighth consecutive year of growth in contribution per radiator to £20.50 (2024: £20.15), demonstrating the Group’s proven ability to continue to drive higher-margin sales mix and the cumulative benefits of operational efficiencies across the Group. • Continued economic uncertainty in core territories of UK & Ireland and Europe resulted in a 3.8% decline in revenue to £279.6 million, albeit at a lower rate of decline than the prior year (2024: (5.7%)). – UK & Ireland: revenue down 4.4% against a volume decline of 6.9%, with revenue supported by an increase in average size of radiators sold. – Europe: revenue down 3.9%, primarily as a result of softer demand in the French DIY market in quarter four. – Turkey & International: revenue increased 3.9% with an improvement in market conditions. • Return on capital employed grew by 3.0 ppts (2024: 1.6 ppts) to 30.1% reflecting higher adjusted operating profit and the impairment of Radiators SpA assets. • Significantly increased free cash flow of £20.5 million (2024: £9.6million) driven by improved working capital control, disciplined capital expenditure and reduced interest costs. • Strong cash management, with leverage at 31 December 2025 improving to 1.16x (2024: 1.37x), based on net debt before lease liabilities. • In December 2025, the Group’s £100 million loan facility was successfully renewed with our long-term banking partners, reducing the Group’s future borrowing costs. • Recommended final dividend up 5% to 5.05 pence per share (2024: 4.81 pence per share), reflecting the Board’s ongoing confidence in Stelrad’s future prospects, the strength of the Group’s balance sheet and cash conversion. Optimised for growth • Significant operational improvements and commercial optimisation throughout the Group’s flexible, low-cost manufacturing base. – Further margin enhancement expected as a result of exit from loss making contract in Radiators SpA and the full-year impact of 2025 restructuring activities. • Industry-leading customer service and product availability, with On Time In Full (“OTIF”) delivery in the UK of 98% (2024: 98%), underpinning the Group’s market share positions and ability to maximise opportunity from a market recovery. • Market leadership in six of Stelrad’s ten core territories, with a top three position in three of the remaining four, provides the Group with a solid platform for future market share growth. Driving structural trends of premiumisation and decarbonisation • Continued progress in strategies to drive adoption of higher- margin and value-added product ranges through leveraging Stelrad’s trade strengths, optimising distribution channels and boosting Stelrad’s consumer appeal delivered a record level of 6.4% premium steel panel mix of total steel panel volume. • In the UK market, the Group’s strategic initiatives to promote high output conventional radiators, develop hybrid products for low temperature systems and introduce electric ranges into core markets have driven 33% annual growth in these products since 2022, positioning Stelrad effectively for decarbonisation. Adjusted operating profit (1) £32.5m (2024: £31.5m) Free cash flow (1) £20.5m (2024: £9.6m) EPS 0.66p (2024: 12.97p) Adjusted EPS (1) 13.08p (2024: 13.05p) Revenue £279.6m (2024: £290.6m) Operating profit £17.5m (2024: £31.4m) (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 149 and reconciled to the appropriate financial statements line item in note 32. Note 32 also outlines the limitations of using alternative performance measures. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 1 ![]() ## Europe’s leading ## radiator manufacturer Europe £133.5m UK & Ireland £131.3m Turkey & International £14.8m Group revenue £279.6m #### Our markets Supported by an extensive sales and marketing network, Stelrad’s well-invested, state-of-the-art manufacturing and distribution operations provide our customers, wherever they are based, with high levels of service and product availability. » Read more in our Market Overview on page 8 1,300 people 500+ customers #### Our products • Standard, premium and low surface temperature steel panel radiators. • Towel warmers. • Column and decorative steel tubular radiators. • Electric, hybrid and dual fuel radiators. #### Our pan‑European #### presence ### At a glance #### Our ESG strategy Stelrad’s Fit for the Future framework underpins our approach to delivering both our business strategy and our sustainability commitments to stakeholders and to the environment. » Read more in the Sustainability section on page 25 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 #### Our brands Europe’s number one brand, sold in all our markets Channel differentiated brand, the Netherlands’ number one Value brand sold mainly into Turkey and Eastern Europe Premium Danish architectural design brand Stylish, innovative Italian design brand 7 locations 40+ countries Stelrad Group plc Annual Report 20252 ![]() ### Our investment case #1 steel panel radiator market share position in Europe, leading in six countries – the UK, Ireland, France, the Netherlands, Belgium and Denmark and with a top 3 position in twelve 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. 14.3% designer radiator mix, an increase of 6.8 ppts since 2019 Attractive long-term dynamics led by replacement demand in mature European markets • Underlying growth in higher value designer 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 15 » Read more about our business model on page 10 500+ 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. 93.7% of our packaging is recyclable 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 the long-term sector transition to a more sustainable heating model. #### Strong #### underlying #### financial #### position #### Long‑term #### focus on #### decarbonisation #### and ESG #### Experienced #### management #### and effective #### strategy » Read more about our strategy on page 12 » Read more about our Board of Directors on pages 60 and 61 » Read more about our KPIs on page 18 » Read more about our ESG priorities on page 26 83.7% growth in contribution per radiator since 2019 A track record of consistent growth • Sector leading margins. • Strong cash generation and return on capital employed (on an adjusted basis). STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 3 ![]() Overview Stelrad has consistently delivered a strong underlying financial performance against a challenging macroeconomic backdrop in recent years and 2025 marked the third consecutive year of progress in adjusted operating profit performance. Our core geographies of the UK and Europe continue to be impacted by the ongoing effects of high interest rates and inflation suppressing activity in both RMI and new build markets. However, Stelrad’s ability to deliver further progress despite these ongoing challenges clearly demonstrates the inherent strengths of our business with the Group’s flexible, low-cost manufacturing footprint, leading levels of customer service and unrivalled product availability underpinning our leading competitive position in the market. While these competitive strengths are ingrained within the business, our highly experienced Executive and Senior Management teams further strengthened and simplified our operations over the last year. As a result, we have positioned the Group to fully capitalise on opportunities within an inherently attractive market, with a stronger, simpler and more operationally efficient Stelrad primed for growth. Performance and results The Group delivered another successive improvement in adjusted operating profit, increasing by 3.0% to £32.5 million (2024: £31.5 million), with an adjusted operating profit margin of 11.6% (2024: 10.8%) despite a decline in revenue to £279.6 million (2024: £290.6 million), making strong progress towards our medium-term targets. Statutory operating profit was £17.5 million (2024: £31.4 million), with the statutory result stated after exceptional items totalling £14.9 million, which are linked to non- cash impairment charges and restructuring initiatives undertaken in the year. This strong performance was the result of clear actions by our highly experienced management team, driving an enhanced product mix combined with tight cost control across our manufacturing sites. As a result, our key contribution per radiator KPI increased for the eighth successive year to £20.50 (2024: £20.15), nearing our medium-term target of £21. 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. #### A stronger, simpler Stelrad #### isprimed for growth. Bob Ellis Chair ### Chair’s statement ## Well positioned to deliver ## continued progress Stelrad Group plc Annual Report 20254 ![]() Environmental, social and governance (“ESG”) objectives continued 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. We continued to make significant progress with initiatives to reduce the Group’s carbon footprint in the year, reducing our energy consumption by 2.3%, along with a 5.6% reduction in our Scope 1 and 2 emissions. We also achieved further progress embedding safety across all of our manufacturing sites, with a substantial reduction in lost time incidents at our Çorlu facility, and several sites recording zero lost time incidents during the year. Board In February 2026, Martin Payne, Non-Executive Director and Chair of the Audit & Risk Committee, notified the Board that he will not be standing for re-election and will retire from the Board at the 2026 AGM. Martin has been a valued member of the Board since the Company’s IPO in October 2021. On behalf of the Board, I would like to thank Martin for the contribution that he has made to the Company over the past four and a half years, and we wish him well for the future. A process is underway to identify a replacement Non-Executive Director and Chair of the Audit and Risk Committee. Dividend The Board is recommending a final dividend of 5.05 pence per share, a rise of 5% on the prior year, reflective of our ongoing confidence in Stelrad’s future prospects and the strength of the Group’s balance sheet. The final dividend will be paid on 26 May 2026 to shareholders on the register on 24 April 2026, subject to approval by shareholders at the Annual General Meeting on 20 May 2026. Summary While there remains a level of uncertainty around the timing of a market recovery, the work of our highly experienced management team over the last three years in executing our strategy has positioned Stelrad incredibly well to deliver continued progress through the cycle, underpinned by our competitive advantages. Bob Ellis Chair 13 March 2026 #### 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. Bob Ellis Chair Our strategy in action Positioning effectively for decarbonisation Demand for decarbonised heating systems will increasingly gain momentum over the longer term. While the recent economic backdrop has led governments to delay more ambitious shorter-term initiatives, long-term net zero targets remain unchanged, driving the installation of higher output, higher value conventional radiators alongside assisted convection hybrid heat emitters and direct electrical radiators. In the UK between 2022 and 2025, the volume of Stelrad’s high output conventional radiators has increased by 33% CAGR. » Read more on page 13 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 5 ![]() #### Stelrad remains well placed to outperform peers and #### benefit from medium-term #### market recovery. Trevor Harvey Chief Executive Officer Continued progress through the market cycle During 2025, Stelrad continued to demonstrate and enhance our operational excellence, underpinned by our core competitive advantages of: • a flexible, low-cost manufacturing footprint; • outstanding customer service; and • unmatched product availability. These competitive advantages allowed us to continue to deliver growth in adjusted operating profits and margins, despite the subdued market environment. This was achieved through a combination of our strategy to drive product mix towards higher specification products and an ongoing focus on cost controls within our operations. Statutory operating profit fell in the year to £17.5 million (2024: £31.4 million) due to exceptional items totalling £14.9 million incurred in the year, the existence of which help position the Group strongly for the future. Reflecting the well documented market conditions in the UK and our core European territories, volumes declined by 4% year on year, albeit with a small improvement in volumes during the second half and encouraging progress in a number of key markets. As a result, revenues during the year declined 3.8% to £279.6 million, a decrease of £11.0 million on the prior year (2024: £290.6 million), primarily driven by revenue declines in the UK & Ireland (4.4% decrease) and Europe (3.9% decrease), with an increase in revenues from our smaller operations in Turkey & International (3.9%). While persisting market headwinds remain frustrating, our performance over the year further underlined Stelrad’s ability to continue to deliver against our strategy through the market cycle. In the last three years we have driven operational excellence within both our manufacturing sites and distribution networks. This is clearly demonstrated by the progress in our contribution per radiator KPI, increasing for the eighth successive year to £20.50, an increase of £0.35 on the prior year. As a stronger, simpler Stelrad, enabled by our competitive advantages and operational excellence, we continue to ensure that our business is well placed to capture the opportunities posed by a market recovery and actively deliver against our four key strategic priorities of: • growing market share; • improving product mix; • optimising our routes to market; and • positioning effectively for decarbonisation. Market leadership provides a platform for growth As we have emphasised previously, our highest priority as a management team is to ensure that Stelrad is well placed to take advantage of a market recovery when it materialises. Key to this is maintaining both our market leadership and the operational capabilities that underpin it, including our customer service and product availability. The Group remains an industry leader when it comes to both of these capabilities, with On Time In Full deliveries in the UK of 98% (2024: 98%). As the clear leader of the European steel panel radiator market, with 24.2% share in 2024, our competitive advantages underpin our market leadership in six of Stelrad’s ten core territories, with a top three position in three of the remaining four. This provides the Group with a solid platform for future targeted, profitable market share growth and positions us as a key beneficiary of a market recovery. ### Chief Executive Officer’s review ## Market leadership and greater ## operational efficiency provide ## growth opportunities Data source: BRG Building Solutions, Europe excluding Russia and Belarus. Stelrad Group plc Annual Report 20256 ![]() Strategic initiatives enable above‑market growth through product mix Market leadership also means we are well positioned to both drive and benefit from long-term structural trends of premiumisation and decarbonisation within our markets. Both of these trends will underpin future demand for higher-margin, higher added-value products, enabling both above-market growth and further margin progression. Premiumisation, the increased customer demand for premium steel panel and designer radiators, remains a key trend and opportunity in our industry, particularly in core territories such as the UK where premium steel panel penetration is currently low. Although the total volume of premium panel radiators decreased by 1.6% to 271k units sold (2024: 276k), reflecting ongoing economic uncertainty, this was at a rate lower than the decline in overall volume. As a result, in 2025, continued progress in our three-pillar strategy to drive adoption of higher-margin and value-added product ranges though leveraging Stelrad’s trade strengths, optimising distribution channels and boosting Stelrad’s consumer appeal, delivered a record level of 6.4% premium steel panel mix of total steel panel volume. Heating system decarbonisation remains a structural tailwind for us, particularly following the implementation of Part L of the UK building regulations. Reflecting this, and for a third consecutive year, in 2025 there was a further increase in the heat output of the UK average radiator size sold, up 1.5% versus 2024. The Group has a clear, three-pillar strategy for decarbonisation growth, which consists of promoting and developing our range of high-output conventional radiators, developing hybrid heat emitters and introducing electric radiators into core markets. In the UK since 2022, Stelrad’s combined sales of high-output conventional and electric radiators have increased by 33% per annum and, at the beginning of 2026, the Group launched our ThermoBreeze hybrid heat emitter into mainland European markets. Embedded operational excellence driving continued progress In tandem with our strategic initiatives, embedding operational and commercial excellence has been a key driver of earnings growth throughout the current market cycle. Over the last three years, we have embedded an array of cost initiatives across all of the Group’s sites, positioning us to benefit from a market recovery and the ensuing increase in volumes with a minimal increase in the Group’s fixed cost base. Prior to the year end, and following the earlier restructuring of our Turkish operations, we restructured our Danish business to further enhance future operational margins in 2026 and beyond, while maintaining our flexible, low-cost manufacturing capability and capacity within these operations. As detailed in the Group’s interim results in August 2025, we took significant steps to restructure our European operations, particularly in Radiators SpA. This included the decision to terminate all supply under a loss-making contract for steel panel radiators. The exit from this contract has been margin-enhancing at a Group level in the first months of 2026. We continue to work to reposition the focus of the Radiators SpA business on electrical and designer products – the key ranges that underpinned the strategic rationale for our acquisition in 2022, with Radiators SpA continuing to provide increased access to new channels to markets, particularly in European territories. These proactive margin management and cost reduction activities across our manufacturing sites, alongside our strategic initiatives to drive a more favourable product mix, resulted in an adjusted operating profit for the year of£32.5 million, an increase of 3.0% or £1.0 million (2024: £31.5 million). With the resulting exceptional items totalling £14.9 million, including non-cash impairment charges of £12.6 million, statutory operating profit reduced to £17.5million (2024: £31.4 million). We continue to assess opportunities to improve the Group’s competitive position and operational efficiency. Outlook The Board is confident in Stelrad making further progress in the current financial year, underpinned by the Group’s competitive advantages, leading market share positions and strategic initiatives. Trading in the early months of the financial year has been in line with management expectations. The Group’s end markets are stable, but market demand remains subdued, and we expect this to continue for at least the first half of 2026. In the meantime, the Group continues to leverage operational opportunities to optimise future growth andprofitability. Whilst there remains a level of uncertainty around the timing of a wider market recovery, we remain confident in the attractiveness of our markets, underpinned by long-term structural growth drivers, and the opportunities that a market recovery present for a stronger, simpler Stelrad. Our leadership across the range of markets where we operate positions the Group well to continue to drive the adoption of higher-margin, value-added products, including premium steel panel radiators and the higher heat output, hybrid and electric radiators particularly suitable for low and zero carbon heating systems. Moreover, the Group’s market leadership in Europe, low-cost manufacturing footprint and outstanding customer proposition are expected to provide opportunities for further market share gains, enabling Stelrad to maximise its exposure to future growth across end markets. Trevor Harvey Chief Executive Officer 13 March 2026 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 7 ![]() An attractive market opportunity, ## with positive underlying dynamics ## and a significant installed base 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. » Read more about our stakeholder engagement on page 20 Data source: BRG Building Solutions, Europe excluding Russia and Belarus. #### Hydronic heating systems #### dominate the market Replacement demand underpins and drives the European heating market. Hydronic systems, which function through water circulation, currently represent 92% 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. In 2024, hydronic systems accounted for 92% of European residential heating 261m homes with central heating 92% hydronic radiators Steel panel radiators represented 65% of European hydronic heat emitter volume in 2024 28m heat emitters sold in 2024 65% steel panel radiators #### Stelrad is well positioned for growth as markets recover. Market leadership, a #### strong emphasis on customer service and product availability and a flexible, #### well-invested, low-cost operational #### platform will drive the Group’s future #### growth in a market underpinned #### by significant long-term replacement demand and #### the key structural growth #### drivers of increasing #### premiumisation and home #### heating decarbonisation. Trevor Harvey Chief Executive Officer » Read more about our market opportunity in our strategic summary on page 17 ### Market overview Stelrad Group plc Annual Report 20258 ![]() ### Market trends #### Three key macro trends Trend Over the past ten years, replacement demand has, on average, represented 56.4% of European steel panel radiator market volume, excluding Russia. In 2024, this fell to 52.8%, as the challenging macroeconomic environment continued to impact household spending negatively. By 2028, replacement demand is forecast to rise to 57.5% share, growing at a faster rate than residential new build, the secondary market volume driver, which represented 25.9% share in 2024. 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. 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. Replacement Primary volume driver Decarbonisation Long-term demand driver Premium and designer radiators Profitable growth potential 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 places 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. Opportunity 2022’s acquisition of Radiators SpA provided Stelrad with a comprehensive manufactured range of designer products to complement the Group’s comprehensive premium steel panel offer. Leveraging Stelrad’s unrivalled channel access in our core markets is enabling profitable growth beyond 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 online channels. 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. 1.4bn estimated installed base ensures long‑term demand for hydronic radiators 53% of 2024 steel panel volume was replacement demand 71.7% growth in Stelrad designer radiator volume since 2019 14.3% Stelrad designer mix in 2025 80% of 2050’s building stock already exists today 92% of existing homes have hydronic heating systems 1 2 33 3 4 Growing market share Improving product mix Optimising routes to market Positioning effectively for decarbonisation Data source: BRG Building Solutions, Europe excluding Russia and Belarus. Links to strategy 1 2 3 4 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 9 ![]() ### Our business model ## 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 1,300 full-time employees and the most stable and experienced management team in the industry, with an average of 18 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. What makes us differentOur resources 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. How we create value Package Design and innovate Recycle and reuse ManufactureDistribute Source Engage, educate and influence Formulate strategy Stelrad Group plc Annual Report 202510 ![]() Shared value People Our people are fundamental to delivering our strategy and driving Stelrad’s future performance. 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. Stelrad’s fully integrated supply chain ensures security of supply and speed to market, driving both quality and competitiveness and ensuring the full support of our suppliers as we pursue our 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 its local communities, Stelrad has clear ESG initiatives in each main operational territory. Aware of the Group’s impact on the environment, this represents a critical part of our decision making and business planning process. 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. » Read more about our ESG priorities on page 26 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 innovate to introduce products as part of a coherent offer for low and zero carbon systems. We strive to 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. Enabling an exceptional workforce Our people are fundamental to the success of our business and we are proud of the 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 Underpinning all that we do is Stelrad’s foundational principle of conducting business responsibly. 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 drive progress in sustainability and corporate strategy. Our number one priority is to keep employees and contractors safe and healthy and we aim for zero harm across all our operations. ESG – Fit for the Future STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 11 ![]() ### Our strategy #### Growing market share Improving product mix Links to risks 1 2 3 4 5 6 7 8 9 Links to risks 1 2 3 4 5 6 1 2 Strive for cost leadership Now • Stelrad has a position of scale as Europe’s #1 radiator manufacturer. • The Group has invested for cost leadership, having recently upgraded all manufacturing facilities, including its low-cost Turkish operation. Future • Stelrad will leverage its cost-leading multi-site manufacturing platform for profitable growth. • Smaller, higher-cost competitors likely to exit the market. Selectively target share growth in key geographic markets Now • Market leader in six countries. • Top 3 position in twelve more. Future • Stelrad will further develop relationships with established players in core geographies. • The Group will continue to leverage its strong brands and adapt to evolving routes to market. Provide market‑leading product availability Now • Standardised core product design facilitates operational flexibility and contingency planning. • Market-leading UK and European distribution centres provide best-in-class logistics. Future • Stelrad will maximise the benefits of product availability in its distribution centres to displace competitors as distributors seek to reduce inventory levels. • To expand the market for higher added-value ranges, the Group will increase availability for premium steel panel and other designer radiators. Act as a market consolidator Now • Stelrad is a long-term player of scale and a proven market consolidator. Future • The Group will maximise opportunities for share gain as continued challenging market conditions increase pressure on the profitability of smaller competitors. • As competitors exit, Stelrad will gain share either through organic gains or by acquisition. Accelerate upselling to premium steel panel and other designer products Now • In 2025, Stelrad’s mix of higher added- value designer radiators was 14.3%. • This represents an increase of 6.8 ppts since 2019. Future • Stelrad is well positioned for profitable growth as European radiator markets recover. • Underlying growth 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 positions to expand the market for designer radiators. • A key focus is the UK, where premium steel panel penetration is at low levels relative to the European average. Pursue complementary acquisition opportunities Now • Stelrad acquired Radiators SpA in 2022 and Danish premium design brand Hudevad in 2018. • The Group has a significant presence in higher added-value designer radiator categories. • Driven by ongoing cost-of-living pressures, this fragmented category has experienced greater relative volume decline compared to higher volume products like standard steel panel radiators. • Designer radiator producers without a position of scale in high volume radiator manufacturing face additional profitability pressures. Future • Stelrad will maximise designer radiator sales across all core markets, through its expanding and well-established sales and distribution network. • Commercial pressure on smaller designer radiator manufacturers may provide acquisition opportunities. Business disruption 1 Customers 2 Loss of competitive advantage 3 IT failure or cyber breach 4 Climate change 9 People and culture 6 Health and safety 7 Political and economic environment 8 Supply chain risk 5 Stelrad Group plc Annual Report 202512 ![]() #### Optimising routes to market Positioning effectively for decarbonisation Links to risks 1 2 3 4 5 6 Links to risks 1 3 5 8 9 3 4 Adapt quickly to channel evolution Now • Stelrad’s multibrand strategy has enabled the Group to manage the evolving dynamics of market channel evolution effectively. • Stelrad continues to maintain unrivalled access to all routes to market, including the traditional trade distribution model, but is also demonstrating growth through DIY and retail outlets. Future • Stelrad will continue to maintain and develop close customer relationships in all core geographies. • The Group will continue to invest in its leading brands to maximise profitable growth as routes to market evolve and the distribution channel consolidates. • Stelrad will continue to develop sales through leveraging improved access to DIY and other retail channels. Embrace digital transformation Now • Stelrad has developed profitable UK sales through online channels and with multichannel players. • Group sales in these channels are strongly orientated towards higher added-value designer radiators. • Stelrad has invested in Building Information Modelling ("BIM") and specification databases for building products to ensure 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, developing 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 • Challenging economic conditions have slowed momentum on decarbonisation but long-term targets remain unchanged. • However, particularly in new housing, legislation to decarbonise heat sources is already driving a requirement for higher output heat emitters compatible with low- temperature systems. Future • With a significant installed base and long replacement cycles, the full impact of decarbonised heating systems will positively impact the heat emitter market for decades. • As markets recover, decarbonisation initiatives must be accelerated in order to meet long-term commitments. • To provide appropriate products for all decarbonised heat sources Stelrad will leverage its technological capabilities in conventional, hybrid and electric heat emitters. • Stelrad’s brand strength, channel access and operational infrastructure position the Group effectively to play a pivotal role in helping to heat homes sustainably. Develop products appropriate for low‑temperature and decarbonised systems Now • In 2025, Stelrad continued to develop its higher output hydronic portfolio. • The Group expanded its electric product offer, notably in the UK. Future • Stelrad’s product development strategy positions the Group effectively for profitable growth in line with longer-term market development. • Stelrad will innovate to promote high output conventional radiators, develop hybrid products for low- temperature systems and introduce electric ranges across its core markets. » Read more in the Sustainability section on page 25 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 13 ![]() ### Strategy in action #### Growing market share 1 In 2024, Stelrad was number one in the European hydronic radiator market and consolidated its leadership of the steel panel radiator market, according to the latest available data. Stelrad is outperforming its traditional competitors The Group’s steel panel market share increased to a record level of 24.2%, a 0.1 ppts’ improvement compared to 2023. This was despite the UK and Turkey, both core markets for Stelrad, representing a smaller share of total European geographic mix in 2024. Number 1 in six countries and top 3 in twelve more In 2024, Stelrad maintained a top 3 position in 18 countries. Stelrad is market leader in the UK, the Netherlands and Denmark, with around 50% share and the Group was also number one in France, Belgium and Ireland. Data source: BRG Building Solutions, Europe excluding Russia and Belarus. ## Supplier of choice regardless of ## market conditions Stelrad Group plc Annual Report 202514 ![]() Data source: BRG Building Solutions, Europe excluding Russia and Belarus. #### During a challenging #### period of sustained volume downturns, #### Stelrad has firstly gained #### and then consolidated market leadership, #### positioning the Group #### effectively for growth #### as markets recover. Trevor Harvey Chief Executive Officer Denmark #1 market position In 2024, Stelrad’s Danish market share increased by 0.9 ppts versus 2023 and reached 49.8%. Since 2022, and driven entirely by organic growth, the Group has delivered 2.5 ppts share gain. The Netherlands #1 market position Stelrad’s market share in the Netherlands increased by 1.6 ppts in 2024, up to 49.2%. Also driven by organic growth, the Group’s market leading share position has increased by 5.6 ppts since 2022. Belgium #1 market position In 2024, Stelrad’s share in Belgium was 43.1% and demonstrated significant growth of 9.4 ppts relative to the prior year. Distributor consolidation of radiator suppliers was a key factor in driving the Group’s organic share growth. 43.1% ↑ 9.449.2% ↑ 1.649.8% ↑ 0.9 2024 2023 2022 2024 2023 2022 2024 2023 2022 Europe #1 market position In 2024, Stelrad’s share of the European steel panel radiator market, excluding Russia, reached a record level of 24.2%. Driven by both organic gains and 2022’s Radiators SpA acquisition, share has increased by 1.9 ppts since 2022. Stelrad’s 10 core countries #1 market position In its ten core geographic markets, Stelrad increased share in 2024 by 0.2 ppts compared to the prior year, from 28.3% to 28.5%. The Group’s focused growth strategy has driven 2.2 ppts’ share gain since 2022. UK #1 market position At 52.1% in 2024, Stelrad’s highest share position is in the UK, Europe’s largest market. The Group’s 2024 share was 0.6 ppts higher than in 2022 and has been in excess of 50% since 2020. 52.1% ↓ 0.528.5% ↑ 0.224.2% ↑ 0.1 2024 2023 2022 2024 2023 2022 2024 2023 2022 52.1% 52.6% 51.5% 28.5% 28.3% 26.3% 24.2% 24.1% 22.3% 43.1% 33.7% 35.3% 49.2% 47.6% 43.6% 49.8% 48.9% 47.3% STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 15 ![]() ### Strategy in action continued #### Improving product mix 2 Recovering markets offer long‑term potential Increased consumer focus on home design as economic conditions improve has the potential to drive growth in higher added-value premium and designer radiators. This is especially true in the UK, which has low penetration levels compared to Stelrad’s other core markets. Clear strategy for profitable growth The Group’s market leadership position provides a platform to capitalise on this key structural growth opportunity. To achieve profitable growth over the long term, Stelrad has a clear three-pillar strategy to leverage its trade strengths, boost its brands’ consumer appeal and optimise its routes to market. Record 2025 performance Stelrad’s focus on improving designer radiators’ share of the mix has resulted in significant growth over the last ten years. Despite challenging market conditions in 2025, the premium steel panel share of total steel panel radiator volume reached a record high of 6.4%, driven by gains in Germany, the Netherlands and Belgium. ## Designer radiators ## represent a significant ## opportunity Stelrad Group plc Annual Report 202516 ![]() The Group is well positioned for ## profitable, sustainable growth ### Strategic summary Attractive market opportunity 261m homes in Europe with central heating 92% have hydronic heating systems 1.4bn hydronic heat emitters currently installed 65% steel panel radiator volume share of European hydronic heat emitter market in 2024 Significant long‑term replacement market regardless of heat source Replacement market recovery VOLUME DRIVER Flexible, lowest‑cost manufacturing Growing market share 1–2% market share improvement >£21.0 contribution per radiator 13% operating profit margin >90% operating cash flow conversion >30% return on capital employed Improving product mix Optimising routes to market Positioning effectively for decarbonisation Increasing premiumisation MARGIN DRIVER Leading customer service and product availability Drive for decarbonisation MARGIN AND DEMAND DRIVER Leading competitive position Sustainable competitive advantages Key structural growth drivers Clear, consistent strategic objectives Key medium‑term targets Data source: BRG Building Solutions, Europe excluding Russia and Belarus. » Read more on page 9 » Read more on page 9 » Read more on page 9 1234 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 17 ![]() ## Measuring and analysing the Group’s performance Revenue £279.6m Adjusted operating profit £32.5m Links to strategy 1 2 3 4 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 £11.0 million or 3.8% mainly due to a decrease in sales volumes of 4.3%, partially offset by the impact of selling price increases and product mix improvements. Links to strategy 1 2 3 4 Description Adjusted operating profit is the Group’s key profit measure to show performance from operations. Performance Adjusted operating profit increased by 3.0% despite lower sales volumes, as a result of proactive margin management and cost reduction activities across its manufacturing sites, enhanced product mix, strong fixed cost control and structural currency benefits. After including exceptional items of £14.9million, operating profit for the year was £17.5 million (2024: £31.4 million). 2023 2024 2025 2022 £290.6m £279.6m £316.3m £308.2m 2021 £272.3m 2023 2024 2025 2022 £31.5m £32.5m £34.0m £29.3m 2021 £33.2m Adjusted EPS 13.08p Links to strategy 1 2 3 4 Description Adjusted EPS is the adjusted profit for the year of the Group per share in issue. Performance Adjusted EPS increased marginally in the year due to an increase in adjusted operating profit of 3.0% and reduced interest charges offset by increased tax costs, which are affected by a 5% increase in the withholding tax charges applied to dividends received from Turkey during 2025 and the country mix of profits. Free cash flow £20.5m Links to strategy 1 2 3 4 Description Free cash flow shows the cash available to make distributions to shareholders. Performance The Group’s free cash flow for the year was £20.5 million (2024: £9.6 million), an increase of £10.9 million. This reflects improved working capital movements, reduced capital expenditure and reduced interest paid year on year, partially offset by increased income tax paid. Selective investments in working capital have been made in the year to enhance customer relationships in the UK market; however, these have been offset by more beneficial payment terms due to a change of steel suppliers. 2024 2025 2022 2023 13.05p 13.08p 19.11p 13.62p 2021 16.92p 2024 2025 2023 £9.6m £20.5m £17.8m 2021 £10.9m 2022 £12.7m 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) Growing market share Improving product mix Optimising routes to market Positioning effectively for decarbonisation 1 2 3 4 ### Key performance indicators Stelrad Group plc Annual Report 202518 ![]() (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 149 and reconciled to the appropriate financial statements line item in note 32. Note 32 also outlines the limitations of using alternative performance measures. Contribution per radiator £20.50 Links to strategy 2 4 Description The value of contribution generated per radiator sold. Performance Contribution per radiator has increased by 1.7%, supported by continued operational control, proactive margin management initiatives and cost reduction activities, as well as the price benefit of larger radiators sold. Return on capital employed 30.1% Links to strategy 1 2 3 4 Description Return on capital employed is adjusted operating profit as a percentage of business capital employed. Performance Return on capital employed increased to 30.1% in the year. This improvement is due to a 3.0% increase in adjusted operating profit and also due to an impairment of assets. 2024 2025 2022 2023 £20.15 £20.50 £16.01 £18.09 2021 £13.74 2024 2025 2022 2023 27.1% 30.1% 27.3% 25.5% 2021 46.5% 2023 2024 2025 2022 4,823k 4,617k 5,404k 5,121k 2021 5,952k 2023 2024 2025 2022 6.3% 6.4% 6.0% 6.2% 2021 6.0% Total radiator volumes sold 4,617k #### units Total premium panel radiator volumes sold as a proportion of total steel panel volume 6.4% Links to strategy 2 Description The proportion of premium panel sales volumes to total steel panel volume across all geographical markets. 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 The proportion of premium panel sales tototal steel panel volume increased by0.1ppts to 6.4% year on year. Links to strategy 1 3 Description The sales volumes of radiators across all geographical segments in the reporting period. Performance Volumes decreased by 4.3% in the year as a result of ongoing challenges in RMI and new build markets, with high interest rates and inflation suppressing activity. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 19 ![]() ### Stakeholder engagement ## We are committed to ## engaging our ## stakeholders in all aspects of ## our strategic ## vision The Board of Directors of Stelrad Group plc, both individually and together, considers that it has 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 2025. » Read more about how stakeholders were taken into account in decision making on page 62 #### 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, 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. Editors’ “Green” event, Kew Gardens At a media event at Kew Gardens, Stelrad gave editors working in the heating industry and in the kitchen, bathroom and electric sectors an update on the radiator marketplace and the Company’s plans for the immediate future. As the Government strives for zero carbon and a greener future, businesses are meeting the challenges of a future increasingly dominated by low-temperature renewable heating systems. Chris Harvey, Marketing Director, commented: “Itwas a great event and an opportunity to get in front of a group of editors who are highly influential in the heating sector and whose media outlets reach well in excess of a million people across the UK. We enjoy a high level of credibility, having developed relationships over 20 years. It’s in part down to these relationships that we are the number one radiator manufacturer not just in the UK but across mainland Europe.” » Read more about how we are improving product mix on page 12 Stelrad Group plc Annual Report 202520 ![]() #### 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 health, safety and wellbeing are valued. How we engage • Our recognition and reward programmes offer competitive pay and attractive benefits. • Training is provided to enable employees to continuously develop and enhance their skills. • Engagement programmes provide an opportunity for employees to provide feedback. • Strong collaborative relationships are maintained with our trade unions and employee representatives. • Regular internal newsletters facilitate information sharing between employees and teams. • Board members visit operating sites and attend meetings with employees 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 are maintained. • Clear, relevant and timely communications to all employees. • Knowledge sharing, process improvement, development of initiatives and management buy-in across the business. Maintenance multi‑skilling, driving efficiency and growth Maintenance multi-skilling demonstrates our longstanding commitment to evolving not only our engineering roles, but our entire workforce beyond traditional boundaries. Multi-skilling and upskilling our maintenance engineers are powerful ways to optimise resources, boost efficiency and maximise asset uptime. Multi-skilled engineers are trained across multiple disciplines, enabling them to: • diagnose faults quickly; • carry out remedial work; and • perform root cause analysis to prevent reoccurrence. The impact of multi-skilling is already clear: • increased technical skills and knowledge; • motivated, engaged staff with improved retention; • formal targeted training aligned to business needs; • stronger teamwork and communication across disciplines; • focused training budget; and • continuous improvement and higher employee satisfaction. » Read more about our workforce in our Sustainability Report on page 30, in particular our spotlight on skills development » Read more in our spotlight on safety days on page 32 of our Sustainability Report » Metrics and targets covering training and development, labour practices, workforce characteristics and health and safety are reported on pages 39 and 40 of our Sustainability Report STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 21 ![]() ### Stakeholder engagement continued #### 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 operational 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 relationships 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. Supplier spotlight Commenting on our relationship, one of our top tier suppliers recently said: “We have enjoyed a strong and lasting partnership based on mutual trust, reliability and shared values for more than 20 years. “Over the decades, we have had the pleasure of supplying a wide range of products to the plumbing and heating industry. As markets and technologies have evolved, so too has our collaboration, expanding from standard products to customised solutions and bespoke packaging designed to meet specific requirements. “What truly defines our relationship is the spirit of co-operation and confidence that has developed between our companies. We deeply appreciate the professionalism and open communication that have always characterised our work together. “We see our partnership as more than just a business relationship; it is a genuine collaboration built on respect and trust, and we are proud to continue it into the future.” » Metrics and targets covering business and supply chain ethics are reported on page 40 of our Sustainability Report #### What truly defines our relationship is the spirit of co-operation and #### confidence that has developed #### between our companies. Supplier Stelrad Group plc Annual Report 202522 ![]() #### Investors Their material priorities • Financial performance and growth that maximise 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. Stelrad site visit Stelrad Group plc’s brokers, alongside a group of institutional investors, visited the Yorkshire manufacturing site in December 2025. An attendee commented: “Hosted by Trevor Harvey and Leigh Wilcox, the visit offered a valuable opportunity to gain deeper insight into Stelrad’s operations, strategic vision and leadership in radiators. “As a stock covered by our research team, it was particularly valuable to see first hand how Stelrad continues to deliver quality and diverse heating products – from traditional and panel radiators to its growing electric radiator and speciality outputs." #### As a stock covered by our #### research team, it was particularly #### valuable to see first hand how #### Stelrad continues to deliver #### quality and diverse heating #### products – from traditional #### and panel radiators to its growing electric radiator and #### speciality outputs. Attendee STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 23 ![]() ### 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 the 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. #### Stelrad was delighted to take #### part in National Manufacturing Day, showcasing our products, processes and people. National #### Manufacturing Day gives us an #### opportunity to open our doors and to interact with students, #### teachers and career advisers #### allowing them to “get behind #### the scenes of success”. David Taylor Group Operations Director National Manufacturing Day Following the overwhelming success of the three previous National Manufacturing Days in 2022, 2023 and 2024, manufacturers up and down the country celebrated the day on 25 September. Stelrad was delighted to take part in this event organised by manufacturing trade body Make UK and Work-Wise Foundation. The aim is to encourage all age groups to consider the possibilities of a career in manufacturing, as well as helping local communities understand more about the businesses on their doorstep. » Read more about our environmental performance in our Sustainability Report on page 27, in particular our spotlights on energy efficiency through maintenance and reducing plastic packaging » Metrics and targets covering energy and carbon, water and waste and materials are reported on page 38 of our Sustainability Report Stelrad Group plc Annual Report 202524 ![]() Embedding sustainability, ## accelerating progress In 2025, we focused on practical initiatives that strengthen our business while responding to the expectations of our stakeholders. Throughout the year, we delivered targeted improvements across our operations, products and supply chain, while continuing to build the systems and capabilities needed to sustain progress over the long term. Addressing climate change remains central to our strategy. During the year, we further developed our product portfolio to support the transition to low-carbon heating and enhanced the quality and transparency of environmental data available to customers. Our portfolio of Environmental Product Declarations now covers over two-thirds of branded sales across the Group and more than 90% of products sold in the UK. At the same time, we reduced the impact of our own operations, with energy consumption decreasing by 2.3% and Scope 1 and 2 emissions reducing by 5.6%. We made tangible progress in reducing the environmental impact of our packaging. A redesigned system introduced at Radiators SpA eliminated more than 2,000 kg of plastic in 2025, while broader initiatives contributed to additional improvements against our packaging metrics. In addition, we evolved our use of lower-carbon steel, supporting the wider decarbonisation of our supply chain and the steel industry. Our people and culture remain fundamental to our progress, and we continue to invest in our workforce. Training provision was maintained above our minimum targets, with health and safety capability strengthened through increased external training. Safety performance improved at multiple sites, and a substantial reduction in lost time incidents was achieved at our Termo Teknik facility. Better yet, several Group facilities recorded zero lost time incidents during the year. We also strengthened our responsible business practices, achieving EcoVadis Gold ratings in both the UK and the Netherlands and reaching our target of auditing 75% of our supplier base ahead of schedule. Together, these actions reflect steady, disciplined progress as we continue building a more sustainable business. Trevor Harvey Chief Executive Officer 13 March 2026 ### Sustainability report Highlights of 2025 • Publication of additional Environmental Product Declarations ("EPDs"), meaning more than two-thirds of branded sales are now supported by an EPD. • Sending zero waste to landfill across the Group, for which we were certified in the UK. • Further expansion of our sustainable product range, including the development and launch of the ThermoBreeze range. • Expansion of health and safety events and the development of ten golden safety rules (see page 32). Next steps for 2026 • Refinement and embedding of our net zero climate transition plan, including making Scope 3 emissions modelling more robust. • Continued implementation of our packaging action plan, with expanded use of plastic alternatives (see page 29). 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 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 25 ![]() ### Sustainability report continued Our Fit for the Future framework covers a variety of strategic issues. 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 Driving better environmental performance 1 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 2 Energy and carbon Managing business activities that consume energy and contribute to climate change through the emission of greenhouse gases Target improvements as part of a long-term journey to net zero carbon emissions within our operations and our wider value chain 3 Upstream lifecycle impacts Managing the environmental impact of the extraction, processing and distribution of raw materials used in our products Understand and quantify our indirect impacts, and engage our value chain to minimise these impacts 4 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 Enabling an exceptional workforce 5 Training and development Developing the skills needed to maintain and enhance our market position Review and strengthen existing training and development programmes 6 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 7 Employee engagement Understanding the motivations of employees and working to foster an engaged workforce Develop employee engagement programmes with ongoing two-way communication 8 Employee wellbeing Supporting employees’ mental, emotional and physical health Provide and foster a safe and supportive working environment that promotes personal wellbeing Conducting business responsibly 9 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 Group 10 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 11 Corporate governance and ethics Ensuring our 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 Stelrad Group plc Annual Report 202526 ![]() ## Driving better environmental performance 64.3% progress 39.9% progress Total market‑based Scope 1 and 2 emissions (tCO 2 e) 11,685 Market‑based Scope 1 and 2 emissions intensity (tCO 2 e/t) 0.10 38.3% progress Total Scope 3 emissions (tCO 2 e) 328,166 Energy from renewable sources (%) 41.4 20% progress 2.6 ppts progress Plastic packaging intensity (kg/t) 11.6 Recycled content of packaging material used (%) 69.1 We have identified four key environmental areas on which our strategy is focused: our mitigation of and adaptation to climate change, our materials sourcing, and the impact of our packaging. Climate change Reducing carbon emissions across our value chain remains a central priority for the Group, whilst decarbonisation is a long-term demand driver, and one of the four strategic objectives set out on pages 12 and 13. This demand is shaped by regulatory change in the heating market, which increasingly prioritises solutions that perform effectively in low-temperature systems. To respond to this shift, we have continued to evolve our portfolio, expanding our available sizes, strengthening our electric, dual fuel and hybrid ranges and introducing the ThermoBreeze radiator – designed specifically for energy-efficient use with heat pumps. The expansion of our range reinforces the suitability of radiators in low-carbon homes, which is supported by independent research from the University of Salford’s Energy House project. The study found that homes heated by air source heat pumps, with radiators installed throughout, achieved 11–13% lower running costs than systems combining underfloor heating and radiators. In parallel, we continue to equip customers with the information they need to make informed product choices. We combine the delivery of training courses to customers with the provision of verified environmental product data through the publication of Environmental Product Declarations (“EPDs”) in selected markets. In 2025, we published additional EPDs, meaning >90% of sales in the UK, and more than two-thirds of branded sales across the Group, are now supported by an EPD. Increased from 62.2% reduction in 2024 Increased from 30.6% in 2024 Reduced from 12.0 in 2024 Reduced from 40.6% reduction in 2024 Reduced from 41.6% in 2024 Increased from 66.5% in 2024 Target: 65% reduction from 2021 by 2030 Target: 20% reduction from 2022 by 2030 Target: Use less than 10 kg/t by 2030 Target: 45% reduction from 2021 by 2030 Target: 45% by 2030 Target: At least 75% by 2030 ‑0.2 ppts progress STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 27 ![]() Alongside adapting to market decarbonisation, we have a strong emphasis on our own carbon emissions. The table summarises the Group’s energy use and carbon emissions during 2025. Our chosen intensity metric is tonnes of carbon dioxide equivalent (“tCO 2 e”) per tonne of product and our baseline year is 2021. Our emissions have been calculated following the GHG Protocol’s standard, with all seven Kyoto gases reported in tCO 2 e. Country-specific emissions factors have been utilised, and residual emissions factors have been used for non-renewable energy reported under market-based calculations. Scope 1 and 2 intensity 2025 2024 Baseline Baseline variance Market-based 0.10 0.10 0.17 -39.9% Location-based 0.21 0.18 0.17 20.4% 2025 2024 YoY varianceUK Non‑UK Total UK Non-UK Total Consumption (MWh) Scope 1 5,185 37,759 42,944 5,468 38,585 44,053 -2.5% Scope 2 5,925 38,863 44,789 4,969 40,767 45,735 -2.1% Total 11,110 76,622 87,733 10,436 79,352 89,788 -2.3% Tonnes of carbon dioxide equivalent (“tCO₂e”) 2025 2024 YoY varianceUK Non‑UK Total UK Non-UK Total Scope 1 967 7,034 8,002 1,025 7,188 8,213 -2.6% Scope 2 Market-based 3 3,680 3,683 3 4,166 4,169 -11.7% Location-based 1,049 14,063 15,111 1,029 12,608 13,637 10.8% Total Scope 1 and 2 Market-based 971 10,714 11,685 1,028 11,353 12,382 -5.6% Location-based 2,016 21,097 23,113 2,054 19,795 21,850 5.8% Scope 3 category 1 39,151 268,226 307, 378 39,620 307,677 347,297 -11.5% Scope 3 category 4 1,818 6,159 7,976 1,722 6,301 8,023 -0.6% Other Scope 3 emissions (1) 2,020 10,792 12,812 2,431 10,903 13,334 -3.9% Total gross Scope 3 emissions 42,989 285,177 328,166 43,773 324,881 368,654 -11.0% Total Scope 1, 2 and 3 emissions (1) Market-based 43,959 295,891 339,851 44,802 336,234 381,036 -10.8% Location-based 45,005 306,274 351,279 45,827 344,676 390,504 -10.0% (1) Category 11 emissions are not included, as products use energy indirectly. Energy efficiency through maintenance Routine maintenance is a key tactic for improving efficiency and reducing energy consumption. For example, regular compressed-air leak surveys are conducted, which lead to the identification and repair of leaks of varying severity. This maintenance is estimated to reduce compressor energy use by 7%. In addition, lower compressed-air demand enables improved compressor optimisation, delivering further energy savings. ### Sustainability report continued #### Driving better environmental #### performance continued Energy and carbon reporting Stelrad Group plc Annual Report 202528 ![]() #### Driving better environmental #### performance continued Energy and carbon reporting continued Our approach to mitigating our carbon impact is summarised in our Environmental Policy, which identifies three goals: • Reduce energy usage: In 2025, our energy use decreased 2.3% and we saw a reduction in energy from all sources. • Reduce our reliance on non-renewable energy sources: In 2025, a colder start to the year increased heating demand and consequently the share of energy from natural gas, reducing the proportion of renewable energy from 41.6% to 41.4%. Despite this, we achieved strong reductions in our use of other fuels, and we remain on track to achieve our 45% renewable energy target by 2030. • Reduce carbon emissions throughout the supply chain: In 2025, we reduced our Scope 1 and 2 emissions by 5.6%. This was mainly a result of a reduction in production output, with emissions intensity increasing 1.2% due to the decline in the proportion of renewable energy. The performance on Scope 3 emissions was positive, with absolute emissions falling 11.0% and emissions intensity reducing by 4.5%. More details can be found in our Carbon Balance Sheet Report, published on our website. Packaging Our efforts to improve the environmental performance of our packaging continue, with a focus on: • reducing the packaging used; • transitioning away from single-use plastics to alternative materials; and • supporting the circular economy by increasing the recycled content and improving recyclability. There have been notable changes made in 2025, such as those mentioned in the case study. These have contributed to great progress towards our medium-term targets in our key metrics: plastic packaging intensity has fallen 3.3%, and the average recycled content of packaging has increased 2.7 ppts to 69.1%. Upstream lifecycle impacts Our purchased goods are responsible for 90% of our total carbon footprint, underlining the critical influence of sourcing on our environmental impact. Progress on carbon reduction is therefore highly dependent on the strength of our supplier relationships and the effectiveness of our procurement practices. Our Sustainable Procurement Policy is designed to deliver optimal whole-life value by embedding environmental, social and economic considerations into purchasing decisions. When combined with our supplier code of conduct, and our supplier auditing process, it sets clear expectations across human rights, labour standards, environmental protection, and materials and resource use, including action to prevent labour exploitation, safeguard nature, reduce supply chain energy consumption, minimise material use and limit single-use plastics. Steel is the most significant raw material, accounting for approximately 96% of product weight. Over the past few years, we have proactively engaged with our steel suppliers, establishing strong relationships with suppliers that have credible and well-developed decarbonisation plans. We plan to increase our purchases from identified key partners, whilst also continuing our strategy of using thinner gauge steel to reduce material usage. The proportion of low-gauge steel reached 15.8% in 2025 after a reduction in 2024 related to changing steel suppliers. In 2025, we also made our first purchases of lower-carbon steel from ArcelorMittal. XCarb ® recycled and renewably produced steel is manufactured in electric arc furnaces using high recycled content and 100% renewable electricity, delivering a 66% reduction in CO₂ emissions compared with conventional steelmaking routes. Reducing plastic packaging In July 2025, Radiators SpA introduced a redesigned packaging system that significantly reduces plastic use while improving overall product protection. In line with the Group strategy, the initiative replaced plastic components, including corner protectors and plastic bags, with responsibly sourced, FSC-certified cardboard and paper solutions that are easier to recycle. Internal performance tests confirmed that the new packaging delivers enhanced protection without increasing costs, and early customer feedback has been positive. These changes have already resulted in more than 2,000 kg of avoided plastic use in 2025. This project was delivered through close collaboration between R&D, sales, marketing and supply chain teams, and incorporated input from customers and suppliers. Its success demonstrates the tangible impact achievable through co-ordinated action on sustainability. Work is now underway to extend this packaging approach across the wider product range. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 29 ![]() ### Sustainability report continued ## Enabling an exceptional workforce Target achieved Training days per employee 2.5 Voluntary labour turnover rate (%) 6.9% Below previous year Managerial positions held by women (%) 19.8% Our people sit at the heart of our success, and we are committed to creating an environment where everyone can perform at their best and contribute to our growth. We focus our workforce efforts on development, equality, diversity and inclusion, engagement, and wellbeing. Our people Across the Group, we have a total of 1,264 employees, with 1,071 of those outside the UK. The table below shows the makeup of our workforce by contract type, showing that the majority of our workers are permanent, full-time staff. Headcount at 31 December 2025 2024 Number of employees 1,264 1,436 Number of permanent employees 1,252 1,426 Number of temporary/ zero hours employees 12 10 Number of non-employee workers 48 55 Number of full-time employees 1,217 1,405 Number of part-time employees 47 31 This international footprint ensures our workforce represents a rich mix of cultures and experiences, which we unite behind a shared set of values: respect, integrity, service, stewardship and excellence. By empowering local teams and keeping our structure lean, we stay close to our people, respond quickly to their needs, and build strong relationships across the Group. Training and development We invest in building the skills and capabilities that we need today, and in the future, and we set a minimum target of providing two training days per employee each year, with a strong emphasis on health and safety training. In 2025, our training provision remained above target, with a particular focus on health and safety, which accounted for 41.4% of training. As a manufacturing business, most of our employees are operatives, and development is focused on structured, hands-on learning. Each site applies a competency framework to define the skills required across the production process, with employees progressing through tailored training and assessment pathways. This ensures our workforce has the capabilities required for the business while continuing to develop in line with individual goals. This approach is illustrated in the case studies on pages 21 and 31. Additionally, all training is enhanced by developing and expanding our provision of online training across the Group. Training platforms are used to ensure consistent training of key elements such as Group policies, as well as being used locally to quickly and easily provide a range of training to a wide audience. This internal training is reinforced through specialist input from suppliers and technical experts, as well as external partnerships, including with local education institutes. We work closely with these partners to inspire the next generation of technical talent. This includes hosting work experience and shadowing placements, engaging with teachers to promote manufacturing careers, awarding scholarships to local students, and participating in initiatives to drive uptake of technical training routes. Remained at the same level as 2024 Reduction from 7.8% in 2024 Reduced 4.0 ppts from 2024 Target: 2 days Target: Lower than the average for UK manufacturers 2024: 23.8% Target achieved Stelrad Group plc Annual Report 202530 ![]() #### Enabling an exceptional #### workforce continued Skills development Our approach to skills development was encapsulated this year in the “Human Capital Empowerment” project implemented in Radiators SpA. This project was developed with help from an external consulting company and involved identification of a sustained training programme aimed at the enhancement of the Company’s internal resources. The aim is to strengthen human capital, support career progression and build on our culture of continuous learning across the business, whilst also improving talent attraction and retention. The programme began with a team building event attended by people from different areas and functions, providing a masterclass on the Group’s core values. Equality, diversity and inclusion Our approach to equality, diversity and inclusion is to provide an environment where everyone feels valued and respected. This commitment is encapsulated by our Group Equality, Diversity and Inclusion Policy, which 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. The charts below show that most of our workforce is male, reflecting wider manufacturing trends. We recognise the importance of improving gender balance and continue to work with local organisations and educational institutions to promote opportunities for women within the business. The proportion of women in management remains a key sustainability indicator, and we support gender equality by voluntarily calculating and publishing our UK gender pay statistics, with the report available on our website. Employee engagement Our approach to employee engagement is decentralised, with local teams using a variety of channels to listen to and communicate with employees, including: • engagement surveys; • feedback schemes; • team meetings; • magazines; and • employee dinners. These two-way communication methods are supported by formal employee representation partnerships, and we maintain established, constructive relationships with trade union partners across our sites. A more detailed review of employee engagement at Board level is shown on page 99. Wellbeing Our approach to physical and mental wellbeing 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. We work with local initiatives at each site, such as the regional Workplace Health Promotion project in Italy, to create a working environment that supports employee wellbeing. This includes promoting healthier eating on site through the introduction of weekly fresh fruit sourced from a local supplier, alongside changes to vending machine offerings to reduce certain products and introduce options higher in fibre and vitamins, while also catering for a range of dietary requirements. All employees Selling, General, and Administrative ("SG&A") Management Male Female Not specified Board 10.4% 12.5% 25.0% 19.8% 33.5% 89.6% 66.5% 80.2% 62.5% STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 31 ![]() ### Sustainability report continued ## Conducting business responsibly (1) Any incident resulting in an employee not being able to attend work the following day is regarded as a lost time incident. Lost time frequency rate (1) 5.97 Increased from 4.75 in 2024 Target: Zero harm 50% progress Lost time severity rate (1) 27.1 Reduced from 54.8 in 2024 Target: Zero harm % of key suppliers with up‑to‑date audits 78.4% 7.7 ppts increase from 2024 Target: Maintain above 75% Our commitment to responsible business is underpinned by a strong values-led culture and robust Board oversight. We prioritise high standards of corporate governance, a safe working environment and responsible supply chain management. Corporate governance and ethics We operate to clearly defined ethical standards, respecting fundamental human rights and complying with all relevant laws and regulations. While implementation is managed locally, it is supported by Group-wide policies and mandatory, annual training for all managers. We continue to use the EcoVadis sustainability assessment platform to benchmark and drive performance. In 2025, our sites in the UK and the Netherlands achieved gold medals, placing them in the top 5% of companies assessed. Furthermore, all our sites achieved at least a bronze medal – placing them in the top 35% of assessed companies. 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. In 2025, we hoped to maintain the record low number of lost time incidents (“LTIs”) in 2024. Whilst we were not able to sustain the same level, we achieved our second lowest frequency rate, whilst also significantly reducing the number of days lost. Notable progress was achieved in Termo Teknik, where the number of LTIs reduced by 37.5% and the number of days lost reduced by 66%. In addition, four sites achieved zero LTIs during the year. The performance of the last two years is encouraging, and as we strive towards our goal of zero harm, we again conducted external safety audits in 2025, assessing the implementation of recommendations identified in previous years. We also increased our high-level safety training, with representatives from across the Group attending National Examination Board in Occupational Safety and Health ("NEBOSH") training. Supply chain management We reviewed our approach to supply chain management during 2025 – focusing on streamlining the process and making it easier to complete without weakening its impact. Audits cover a range of areas including health and safety, human rights, the environment and product quality. During the year, we reached our initial target of 75% of our supplier base being audited, ahead of the 2030 target date. We will now aim to maintain this level, while assessing the suitability of strengthening our target. Safety days In 2025, we expanded our use of safety events, with safety days held in Europe and a whole week of events organised in Turkey. One focus was on the ten golden rules of safety – rules developed by employees to summarise the fundamental behaviours that should be followed whilst at work. These events facilitated a broad discussion of safety, increasing engagement and awareness in production and office staff, and identifying potential areas for improvement. They also included specific safety training such as training on defibrillator use. Feedback from the events was highly positive, with employees reporting increased awareness, ownership and confidence in safe behaviours, contributing directly to a stronger safety culture and improved operational performance. Target achieved Stelrad Group plc Annual Report 202532 ![]() ### Task Force on Climate-related Financial Disclosures #### TCFD Report Overview and basis of preparation This report sets out our climate-related disclosures in line with the eleven TCFD recommendations and is prepared with reference to IFRS Sustainability Disclosure Standards IFRS S1 and S2. Through this report, we are compliant with the UK Climate-related Financial Disclosures regulations. The disclosures demonstrate our progress in identifying, assessing and managing climate-related risks and opportunities that could reasonably be expected to affect the Group’s enterprise value. Our focus is now on mitigating climate-related risks, maximising opportunities and strengthening alignment with IFRS Sustainability Disclosure Standards in preparation for the adoption of the UK Sustainability Reporting Standards. Governance Climate-related risks and opportunities are governed through the same framework as wider sustainability matters, as shown in the diagram. Central to this framework is the sustainability steering group, which comprises cross-functional leaders and operates under defined terms of reference. The Group Sustainability Manager chairs the steering group. The steering group is responsible for reviewing climate strategy and priorities, co-ordinating resources and overseeing the identification and management of climate-related risks and opportunities. A climate risk and opportunity register is maintained by the Group Sustainability Manager and reviewed bi-annually by the working group, the steering group and the Audit & Risk Committee alongside business unit risk registers. Each climate-related risk or opportunity is assigned to a steering group member who is accountable for managing actions and reporting on progress. The Audit & Risk Committee ensures that climate-related matters are appropriately reflected in the Group risk register and that they inform Board decision making. The steering group is also responsible for defining and implementing our transition to a lower-carbon economy, including the setting of climate-related targets and the monitoring and reporting of progress. A climate transition plan is in development, which details our climate-related targets and our process for achieving these. All targets are discussed and agreed by the steering group before being approved by the Chief Executive Officer. The climate transition plan is managed by the sustainability steering group, with annual updates provided to the Board to allow effective oversight. Progress against the transition plan informs strategic planning, capital allocation and investment prioritisation. Strategy Our business strategy (shown on page 12), underpinned by our purpose of helping to heat homes sustainably, explicitly addresses the decarbonisation of the heating sector. This includes managing the risks associated with alternative technologies and capturing opportunities for product and service differentiation. These are outlined on pages 36 and 37 with our other principal climate-related risks and opportunities. These risks and opportunities are derived from multiple sources, taking into account the industry-based guidance on implementing IFRS S2. Each principal risk or opportunity is assessed for its potential effects on the enterprise value of the Group, including the impacts on revenue, operating costs, asset values and capital expenditure and the cost and availability of finance. Thispotential impact is shown on pages 36 and 37. We believe that our strategy, supported by our Fit for the Future framework and our climate transition plan, appropriately addresses the risks and opportunities arising from climate change. 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 Operational teams 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. 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 33 ![]() ### Task Force on Climate-related Financial Disclosures continued #### TCFD Report continued Climate resilience We have identified five principal climate-related risks and one material climate-related opportunity that could reasonably be expected to affect the Group’s strategy, business model and enterprise value. These have been assessed through structured scenario analysis designed to test the resilience of our strategy under a range of plausible future climate outcomes. The modelling covers all Group sites and activities and incorporates a number of assumptions regarding regulatory change and market behaviour, and outputs are therefore subject to estimation uncertainty. Results are used to assess strategic resilience and inform strategic planning rather than to produce financial forecasts. Two publicly available reference pathways were selected to reflect a credible range of potential futures: • transition scenario (RCP1.9 – 1.5°C aligned) – represents a rapid and orderly transition to a low- carbon economy, characterised by earlier and more stringent climate policies, accelerated technology adoption, and changing customer behaviour; and • business as usual scenario (RCP8.5) – assumes limited climate action, continued growth in global emissions and an increase in the severity and frequency of physical climate impacts. We applied two assessment time horizons, chosen to balance analytical value with modelling uncertainty: • 2035 – to evaluate transition risks and opportunities, including regulatory change, market dynamics, and technology substitution; and • 2050 – to evaluate longer-term physical risks, including extreme weather events, chronic temperature increases and water stress. Highest risk/ lowest opportunity Lowest risk/ greatest opportunity T Transition risk P Physical risk O Opportunity Key The circles show the extent of the financial impact under each scenario. The analysis indicates that the Group’s current strategy and business model are resilient across both pathways, with appropriate risk mitigation strategies in place. The analysis will be refreshed periodically to reflect emerging risks. Transition scenario (1.5°C) Business as usual (4°C) Increasing stakeholder expectations on sustainability (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 driving higher 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. Stelrad Group plc Annual Report 202534 ![]() 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 are reviewed in line with the wider risk management process. Business risk Responsibility: steering group • Climate-related risk and opportunity register is 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 a local level, co-ordinated by the sustainability steering group. #### TCFD Report continued Risk management Climate change is identified as a principal risk for the Group, and is managed through our established risk management processes, which are explained on pages 46 to 53. Climate-related risks and opportunities, along with our planned responses, are recorded in our climate register and are reviewed and updated twice a year. The risks in the register include both transition and physical risks. Climate-related risks and opportunities are assigned a risk owner who is responsible for implementing the chosen response in co-ordination with our operational management team. Risks and opportunities are assessed on the likelihood and magnitude of their effects, considering qualitative factors 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. Emissions data is collected centrally, subject to consistent internal validation procedures, and reviewed by the Group Sustainability Manager. Additional industry-based metrics aligned to SASB standards are also available on page pages 38 to 40. Our climate-related targets include: • a 45% reduction in Scope 1 and 2 emissions intensity and a 65% reduction in absolute Scope 1 and 2 emissions by 2030 from a 2021 baseline; • a 20% reduction in absolute Scope 3 emissions by 2030 from a 2022 baseline; • achieving net zero Scope 1, 2 and 3 emissions by 2050, with limited use of carbon offsets; • sourcing 45% of energy from renewable sources by 2030; • at least 75% of packaging material to be from recycled sources by 2030; and • to use less than 10 kg of plastic packaging per tonne of product produced, by 2030. These targets are applicable to the whole Group, aligned with the objectives of the Paris Agreement and reviewed periodically to ensure continued relevance and ambition. The recycled-content packaging target is linked to executive remuneration, with 5% of the annual bonus opportunity tied to climate-related performance. We are extending our climate metrics to ensure full coverage of all material cross-industry disclosures required under IFRS S2. The nature of our business and the risks and opportunities that we face mean that 100% of our business is exposed to transition risks and opportunities. A more detailed calculation of exposure to physical risks will be conducted in the future. Early analysis suggests that impacts from significant weather events will be strongest in the UK and Turkey. We do not currently operate with an internal carbon price. Climate-related risk integration into ERM framework and quantitative modelling as a result of the scenario analysis previously described. This assessment is carried out over three time horizons. The short-term horizon covers the next three years (2026–2028), in line with our business planning process. Medium term covers up to five years (to 2030), and long term considers the impacts beyond this. The likelihood of occurrence is scored from one (unlikely) to three (more likely than not) and evaluated alongside the magnitude of potential financial or reputational impact, with the highest impact events those that could halt our ability to service our customers for a period. Metrics and targets We monitor sustainability performance using a set of key metrics shown on pages pages 27, 30 and 32. Our key metrics include Scope 1, 2 and 3 emissions, shown in detail on page 28, and measured in accordance with the Greenhouse Gas Protocol. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 35 ![]() ### Task Force on Climate-related Financial Disclosures continued #### TCFD Report continued Risk management continued Climate-related risks and opportunities Increasing stakeholder expectations on sustainability Category Transition risk Timeframe Medium Long Financial impact Medium Description Impact Our response Stakeholders, including customers, investors and regulators, increasingly expect strong sustainability and climate performance. Failure to meet these expectations may weaken the Group’s reputation and market position. • Loss of customers to competitors with stronger sustainability performance. • Reduced access to capital or increased cost of finance. • Increased regulatory scrutiny or enforcement action. We maintain a governance framework that prioritises material sustainability matters and ensures regular engagement with key stakeholders to align expectations and performance. Increased climate-related legislation driving higher costs Category Transition risk Timeframe Short Medium Long Financial impact High Description Impact Our response Many nations and regions are introducing measures such as emissions trading schemes and border adjustment mechanisms, designed to accelerate decarbonisation. This legislation may increase the costs of materials by adding costs to suppliers or through funding the investment in lower-carbon alternatives. • Increased raw material and procurement costs. • Changes in the relative product competitiveness due to price restructuring. • Potential reduction in demand due to increased prices. We actively monitor legislative developments and assess impacts through established governance processes to ensure appropriate skills and resources are deployed in a timely manner. Increasingly stringent regulatory requirements Category Transition risk Timeframe Short Medium Long Financial impact Medium Description Impact Our response Regulatory requirements for sustainability reporting and product standards, among others, continue to expand. Entry into new markets or products may expose Stelrad to unfamiliar requirements. • The cost of compliance may increase, for example due to investing in systems or expertise. • Risk of financial or reputational penalties arising from non-compliance. Governance processes exist to identify, assess and respond to regulatory requirements, ensuring compliance is maintained efficiently and effectively. Stelrad Group plc Annual Report 202536 ![]() #### TCFD Report continued Risk management continued Climate-related risks and opportunities continued An increase in the use of alternative technology Category Transition risk Timeframe Medium Long Financial impact High Description Impact Our response Decarbonisation of heating accelerates the adoption of alternative heat emitting technology. This may 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 demand for radiators. • Potential loss of market share and profitability. We monitor legislative and market developments and assess these for their likely impact on product choices. We maintain strong relationships with customers and specifiers. We will continue to introduce alternative technologies where appropriate. Differentiation of our product and service offering Category Opportunity Timeframe Medium Long Financial impact Medium Description Impact Our response Decarbonisation of heating may increase demand for higher output and more efficient products – creating opportunities for new technologies. Buying decisions are likely to involve broader considerations, leading to greater opportunity for differentiation. • New product and service development opportunities. • Diversified or increased revenue streams through growing market share and from new products. We continue to invest in our technical capability, as well as adapting and optimising our product offering, including the launch of low-carbon solutions such as the Green Compact range. Increased severity and frequency of extreme weather events Category Physical risk Timeframe Medium Long Financial impact Medium Description Impact Our response Climate change is increasing the severity and frequency of extreme events with the capability to cause damage. These events include flooding, heatwaves and droughts. • Damage or disruption to our production facilities. • Supply chain interruptions. • Productivity impacts due to changes in working conditions. • Reduced access to water during prolonged periods of heat. All facilities have response plans for acute events. Proactive defences (such as fire prevention or flood defences) are regularly assessed for adequacy. Production volume can be flexed across the Group and key inputs are sourced from multiple regions to ensure resilience. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 37 ![]() ### Sustainability metrics Sustainability metrics table The below table shows our wider set of sustainability metrics, referring to Sustainability Accounting Standards Board (“SASB”) metrics where relevant. Unit of measure SASB reference 2025 2024 2023 Driving better environmental performance Energy and carbon Total energy consumed GJ CG-BF-130a.1 315,838 323,238 319,657 Grid energy % CG-BF-130a.1 58.6% 58.4% 58.5% Renewable energy % CG-BF-130a.1 41.4% 41.6% 41.5% Energy consumed from renewable sources MWh n/a 36,360 37, 388 36,889 Fuel consumed from renewable sources MWh n/a — — — Purchased electricity from renewable sources MWh n/a 34,718 35,630 34,942 Self-generated renewable energy MWh n/a 1,642 1,758 1,947 Global Scope 1 emissions kgCO 2 e EM-IS-110a.1 8,001,625 8,212,882 8,072,896 Global market-based Scope 2 emissions kgCO 2 e n/a 3,683,200 4,168,925 4,049,320 Global location-based Scope 2 emissions kgCO 2 e n/a 15,111,307 13,636,631 13,928,224 Global Scope 3 emissions kgCO 2 e n/a 328,166 368,654 445,516 Market-based Scope 1 and 2 emissions intensity per tonne kgCO 2 e/tonne n/a 104 103 99 Market-based Scope 1 and 2 emissions intensity per net revenue kgCO 2 e/£m n/a 41,792 42,611 39,333 Water and waste Total water withdrawn m 3 EM-IS-140a.1 87,683 83,484 101,298 Water usage in areas of water stress % EM-IS-140a.1 35.3% 37.9% 37.2% Water intensity per tonne l/tonne n/a 784 696 823 Water intensity per net revenue l/£m n/a 314 287 329 Total waste generated tonnes EM-IS-150a.1 7,156 7,515 7,547 Waste intensity kg/tonne n/a 64.0 62.6 61.3 Waste sent to landfill % n/a — 2.1% 2.3% Materials Low-gauge steel purchased % n/a 15.8% 9.9% 17.8% Packaging material used tonnes n/a 3,035 3,014 3,045 Plastic packaging material % n/a 42.6% 47.6% 48.4% Plastic packaging intensity kg/tonne n/a 11.6 12.0 12.0 Recycled content of packaging material used % n/a 69.1% 66.5% 67.0% Stelrad Group plc Annual Report 202538 ![]() Unit of measure SASB reference 2025 2024 2023 Enabling an exceptional workforce Training and development Training days per person days n/a 2.5 2.5 2.9 Labour practices Voluntary employee turnover headcount n/a 90 108 92 Employee turnover rate % n/a 6.9% 7.8% 6.6% Absence rates % n/a 5.1% 5.3% 5.3% Workforce characteristics Total employees at year end headcount n/a 1,264 1,436 1,414 Permanent employees at year end headcount n/a 1,252 1,426 1,413 Temporary employees at year end headcount n/a 12 10 1 Full-time employees at year end headcount n/a 1,217 1,405 1,379 Part-time employees at year end headcount n/a 47 31 35 All employees – female % n/a 10.4% 9.5% 10.5% All employees – male % n/a 89.6% 90.5% 89.5% Management – female % n/a 19.8% 23.8% 22.2% Management – male % n/a 80.2% 76.2% 77.8% Sustainability metrics table continued STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 39 ![]() Sustainability metrics table continued Unit of measure SASB reference 2025 2024 2023 Conducting business responsibly Health and safety Workers covered by ISO 45001 certified management systems % n/a 74.0% 77.2% 73.5% Lost time frequency rate rate n/a 5.97 4.75 8.61 Lost time severity rate rate n/a 27.1 54.8 42.6 Total days lost days n/a 341 750 569 Total recordable incidents number n/a 68 68 76 Total recordable incident rate rate EM-IS-320a.1 5.4 5.0 5.7 Total fatalities number n/a — — — Fatality rate rate EM-IS-320a.1 — — — 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 78.4% 70.1% 64.3% ### Sustainability metrics continued Stelrad Group plc Annual Report 202540 ![]() ## Progress towards our ## medium-term targets Group overview The following table summarises the Group’s results for the years ended 31 December 2025 and 31 December 2024. 2025 £m 2024 £m Movement £m Movement % Revenue 279.6 290.6 (11.0) (3.8) EBITDA (1) 44.1 43.5 0.6 1.3 Adjusted operating profit (1) 32.5 31.5 1.0 3.0 Exceptional items (14.9) — (14.9) n/a Amortisation of customer relationships (0.1) (0.1) — 49.6 Operating profit 17.5 31.4 (13.9) (44.3) Net finance costs (7.4) (8.0) 0.6 7.5 Profit before tax 10.1 23.4 (13.3) (56.9) Income tax expense (9.3) (6.9) (2.4) (34.5) Profit for the year 0.8 16.5 (15.7) (94.9) Earnings per share – basic (p) 0.66 12.97 (12.31) (94.9) Adjusted profit for the year (1) 16.7 16.6 0.1 0.2 Adjusted earnings per share – basic (p) (1) 13.08 13.05 0.03 0.2 Total dividend per share (p) 8.09 7.79 0.30 3.9 Return on capital employed (%) (1) 30.1 27.1 n/a 3.0 ppts Net debt before lease liabilities (1) 51.2 59.7 (8.5) (14.3) (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 149 and reconciled to the appropriate financial statements line item in note 32. Note 32 also outlines the limitations of using alternative performance measures. ### Finance and business review #### The Group has delivered #### another year of adjusted #### operating profit growth #### driven by proactive margin #### management initiatives #### and cost reduction #### activities across our #### manufacturing sites. Leigh Wilcox Chief Financial Officer STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 41 ![]() Financial overview The Group delivered another year of adjusted operating profit growth, despite the ongoing suppression of volumes across Stelrad’s core UK and European markets. The resilient adjusted operating performance has been driven by the implementation of proactive margin management initiatives, cost reduction activities and structural currency gains, which have allowed the Group to offset the impact of a continued reduction in demand during 2025. Revenue for the year was £279.6 million, a decrease of £11.0 million, or 3.8%, on last year (2024: £290.6 million). The decline in revenue was due to a 4.3% decrease in sales volumes during the year, partially offset by selling price benefits and product mix improvements. Selling prices have benefited from a third successive annual increase in average radiator size in the UK and the impact of price increases. Promisingly, there was a small improvement in volumes in the second half versus the first half, and year on year there was progress in a number of key markets. Adjusted operating profit for the year was £32.5 million, an increase of £1.0 million, or 3.0%, compared to last year (2024: £31.5 million). Adjusted operating profit increased despite lower sales volumes, as a result of proactive margin management and cost reduction activities across our manufacturing sites, enhanced product mix, strong fixed cost control and structural currency benefits. The structural currency benefits arise from the way the Group has structured its Turkish operations, with the gain being a result of the year-to-date devaluation of the Turkish Lira against the Euro which will continue to benefit the cost base of our Turkish operations in the future. Operating profit for the year was £17.5 million, a decrease of £13.9 million, or 44.3%, compared to last year (2024: £31.4 million). Operating profit is stated after the deduction of exceptional items of £14.9 million (2024: £nil), of which £12.6 million relates to non-cash items, and the amortisation of customer relationships of £0.1 million (2024: £0.1 million). Despite a challenging market environment, proactive management actions have meant that contribution per radiator has increased to £20.50 (2024: £20.15), providing the Group with very strong operating leverage that will drive considerable profitability improvements when volumes recover. The Group continues to focus on the sale of premium, higher added-value products throughout its markets, recognising the additional margin that these products generate. Year on year the proportion of premium panel sales to total steel panel volume increased by 0.1 ppts to 6.4% with further progress expected as the economic environment improves. The statutory profit for the year was £0.8 million (2024: £16.5 million) due to exceptional items of £14.9 million (2024: £nil), of which £12.6 million relates to non-cash items. Adjusted profit for the year increased by £0.1 million, or 0.2%, to £16.7 million (2024: £16.6 million). Interest charges reduced by £0.6 million year on year, despite one-off amortisation charges, as interest rates continue to fall. Tax charges increased year on year due to a 5% increase in the withholding tax charges applied to dividends received from Turkey during 2025, the country mix of profits and the one-off derecognition of some tax losses. Earnings per share was 0.66 pence (2024: 12.97 pence). Adjusted earnings per share was 13.08 pence (2024: 13.05 pence). At 31 December 2025 the Group had cash of £19.0 million (2024: £18.6 million) and undrawn available facilities of £30.6 million (2024: £21.1 million), with net debt before lease liabilities of £51.1 million (2024: £59.7 million). Selective investments in working capital have been made in the year to enhance customer relationships in the UK market, offset by more beneficial payment terms due to a change of steel suppliers. The Group has made pleasing progress towards its medium-term targets in the year, despite challenging market conditions, with growth in contribution per radiator, adjusted operating profit margins, operating ### Finance and business review continued cash flow conversion and return on capital employed. The Board remains confident in the ability for the Group to achieve all medium-term targets. Revenue by geographical market The table below sets out the Group’s revenue by geographical market. Revenue by geographical market 2025 £m 2024 £m Movement £m Movement % UK & Ireland 131.3 137.4 (6.1) (4.4) Europe 133.5 139.0 (5.5) (3.9) Turkey & International 14.8 14.2 0.6 3.9 Total 279.6 290.6 (11.0) (3.8) UK & Ireland The Group’s revenue in UK & Ireland for the year was £131.3million (2024: £137.4 million), a decrease of £6.1 million, or 4.4%. This was principally a result of a decrease in sales volumes of 6.9%, partially offset by a continued increase in the average size of radiators sold, with a 1.5% year on year higher output, though the penetration of premium panel products sold was impacted by low UK consumer confidence. Europe The Group’s revenue in Europe for the year was £133.5 million (2024: £139.0 million), a decrease of £5.5 million, or 3.9%. Revenue has been negatively impacted by a 3.4% decline in sales volumes, with volumes affected by weak demand in the French DIY market in quarter four. Stelrad Group plc Annual Report 202542 ![]() Revenue by geographical market continued Turkey & International The Group’s revenue in Turkey & International for the year was £14.8 million (2024: £14.2 million), an increase of £0.6 million, or 3.9%. This was principally a result of higher volumes sold in Turkey due to an improvement inmarketconditions. 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 2025 £m 2024 £m Movement £m Movement % UK & Ireland 30.0 29.6 0.4 1.4 Europe 7.3 7.9 (0.6) (7.6) Turkey & International 1.2 1.0 0.2 13.5 Central costs (6.0) (7.0) 1.0 14.3 Total 32.5 31.5 1.0 3.0 UK & Ireland The Group’s adjusted operating profit in UK & Ireland for the year was £30.0 million (2024: £29.6 million), an increase of £0.4 million, or 1.4%. The result includes the benefit of favourable material prices and the increase in the average size of radiators sold offset by lower sales volumes. Europe The Group’s adjusted operating profit in Europe for the year was £7.3 million (2024: £7.9 million), a decrease of £0.6 million, or 7.6%. A high fixed cost base in Europe, combined with the sales volume decrease, has led to a reduction in operating margin percentage in recent years. We expect margins for the Europe segment to recover in line with market recovery as variable profit margins remain strong. The Group will continue to focus on improving the margins of Radiators SpA’s sales, with the exit from a significant loss-making contract at the end of 2025 providing renewed opportunity to focus business efforts on the product ranges which are unique to Radiators SpA. Turkey & International The Group’s adjusted operating profit in Turkey & International for the year was £1.2 million (2024: £1.0 million), an increase of £0.2 million, or 13.5%. Turkish operating margins have benefited from the operational efficiencies arising from the restructuring of our Turkish business in the second half of 2025. Central costs Central costs for the year were £6.0 million (2024: £7.0 million), a decrease of £1.0 million, or 14.3%. The reduction is due to the removal of one-off costs from the prior year, supported by strong cost control year on year. Exceptional items During the year, the charge for exceptional items was £14.9 million (2024: £nil), of which £12.6 million relate to non-cash items and £2.3 million relate to cash items. The main elements of the non-cash exceptional items relate to impairment of goodwill of £2.7 million, impairment of customer relationships of £1.4 million, impairment of property, plant and equipment of £5.8 million and a provision against inventories of £2.3 million, all within the Radiators SpA business. The Radiators SpA business has been exposed to declining market volumes in France and Germany since its acquisition in July 2022, resulting in deteriorating operating margins despite active fixed cost management. Since the acquisition, the business has been impacted by a significantly low margin, and latterly a loss-making contract, for the supply of steel panel radiators which has contributed to suppressed European operating margins. Negotiations during the year to reset the price on this contract have been unsuccessful and, in line with the Group’s focus on commercial discipline, decisive action has been taken to terminate all supply under this contract, effective at the end of 2025. Whilst the exit from this loss-making contract will negatively impact future revenue and volumes, it will result in improved contribution and the opportunity to reduce fixed costs in the short term. The exit from the contract presents an increased opportunity to focus attention on the electrical and designer product ranges which are unique to this division and were the key strategic rationale for acquiring the business. The refocused business will be underpinned by a rationalised product profile that will provide greater operational efficiency. Additionally, restructuring costs of £2.7 million have been incurred or provided for as a result of significant proactive margin management initiatives and cost reduction activities across our sites in Turkey, Italy and Denmark. Of these, £2.3 million relate to cash items and £0.4 million relate to non-cash items. 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 £7.4 million (2024: £8.0 million). The decrease of £0.6 million is due to a decrease in the interest rate of the Group’s debt from a blended rate of 6.6% during 2024 to a blended rate of 5.3% during 2025, partially offset by the one-off loan fee amortisation on the pre-existing loan facility of £0.3 million upon refinancing. The refinancing of the Group’s £100 million loan facility, which completed in December 2025, reduces the Group’s future loan margin. The refinanced loan is for an initial period of three years up to December 2028 and includes a two-year extension option. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 43 ![]() ### Finance and business review continued Income tax expense The Group’s income tax expense for the year was £9.3 million (2024: £6.9 million), an increase of £2.4 million, or 34.5%, which includes the derecognition of tax losses in Radiators SpA, connected to the impairment recognised in the year. In 2024, the effective tax rate was 29.4%. In 2025, the Group’s adjusted effective tax rate has risen to 34.4% due to a 5% increase in the withholding tax charges applied to dividends received from Turkey during 2025 and the country mix of profits. Earnings per share and adjusted earnings per share Profit for the year reduced to £0.8 million (2024: £16.5 million) and basic earnings per share was 0.66 pence (2024: 12.97 pence) due to the impact of the exceptional items and one-off refinancing costs, including exceptional tax, of £15.8 million in the year (2024: £nil). The weighted average number of shares was 127.4 million (2024: 127.4 million). Adjusted profit for the year increased by £0.1 million, or 0.2%, to £16.7 million (2024: £16.6 million) and, consequently, basic adjusted earnings per share was 13.08 pence (2024: 13.05 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 5.05 pence per share (2024: 4.81 pence per share) on 26 May 2026 to shareholders on the register at 24 April 2026, an increase of 5% on the 2024 final dividend. The cost to theGroup of the 2025 final dividend is £6.4 million (2024:£6.1 million). The Group paid an interim dividend in respect of the year ended 31 December 2025 of 3.04 pence per share (2024: 2.98 pence), an increase of 2% on the 2024 interim dividend. Therefore, the total dividend in respect of the year ended 31 December 2025 will be 8.09 pence per share (2024: 7.79 pence), an increase of 3.9% on 2024. Cash flow The following table summarises the Group’s cash flow for the years ended 31 December 2025 and 31 December 2024. 2025 £m 2024 £m Movement £m EBITDA (1) 44.1 43.5 0.6 Exceptional items – cash items (2.3) — (2.3) Gain on disposal of property, plant and equipment (0.1) (0.1) — Share-based payment charge 0.7 0.4 0.3 Working capital (0.8) (10.1) 9.3 Working capital – exceptional items 0.3 (2.3) 2.6 Net capital expenditure (7.7) (8.4) 0.7 Cash flow from operations (1) 34.2 23.0 11.2 Income tax paid (8.0) (6.2) (1.8) Net interest paid (5.7) (7.2) 1.5 Free cash flow (1) 20.5 9.6 10.9 Cash flow from operations 34.2 23.0 11.2 Adjusted for Exceptional items – cash items 2.3 — 2.3 Exceptional items impact on working capital (0.3) 2.3 (2.6) Adjusted cash flow fromoperations (1) 36.2 25.3 10.9 2025 2024 Movement Cash flow from operations (1) (£m) 34.2 23.0 11.2 Adjusted cash flow from operations (1) (£m) 36.2 25.3 10.9 Adjusted operating profit (1) (£m) 32.5 31.5 1.0 Cash flow from operations conversion (1) (%) 105.4 73.0 32.4 ppts Adjusted cash flow from operations conversion (1) (%) 111.4 80.3 31.1 ppts (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 149 and reconciled to the appropriate financial statements line item in note 32. Note 32 also outlines the limitations of using alternative performance measures. The Group’s free cash flow for the year was £20.5 million (2024: £9.6 million), an increase of £10.9 million. This reflects improved working capital control, reduced capital expenditure and reduced interest paid year on year, partially offset by increased income tax paid. Selective investments in working capital have been made in the year to enhance customer relationships in the UK market; however, these have been offset by more beneficial payment terms due to a change in steel suppliers. Interest payments have reduced year on year due to reductions in interest rates. Capital expenditure has been reduced due to a planned UK IT infrastructure project that has been deferred until 2026. The increase in income tax paid is impacted by the Group’s UK business becoming cash tax paying in the year, after fully utilising its historical tax losses. Stelrad Group plc Annual Report 202544 ![]() Net debt and leverage At 31 December 2025, net debt (including lease liabilities) of £58.7 million (2024: £67.6 million) comprises £70.1 million (2024: £78.3 million) drawn down against the multicurrency facility and £7.6 million (2024: £7.9 million) lease liabilities net of £19.0 million (2024: £18.6million) cash. 2025 £m 2024 £m Revolving credit facility – GBP 32.3 41.8 Revolving credit facility – Euro 13.1 13.1 Term loan 24.7 23.4 Cash (19.0) (18.6) Net debt before lease liabilities 51.1 59.7 Lease liabilities 7.6 7.9 Net debt 58.7 67.6 EBITDA 44.1 43.5 Debt leverage ratio before lease liabilities 1.16x 1.37x The debt leverage ratio before lease liabilities at 31 December 2025 was 1.16x (2024: 1.37x). Leigh Wilcox Chief Financial Officer 13 March 2026 Cash flow continued The Group’s cash flow from operations for the year was £34.2 million (2024: £23.0 million), an increase of £11.2 million. Adjusted operating profit for the year was £32.5 million (2024: £31.5 million), an increase of £1.0 million. Cash flow from operations conversion for the year was 105.4% (2024: 73.0%), an increase of 32.4 ppts. Adjusted cash flow from operations conversion for the year was 111.4% (2024: 80.3%), an increase of 31.1 ppts. 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 2025 related to various maintenance and upgrade projects, including a successfully completed IT infrastructure upgrade in our Turkish business. Capital expenditure for 2026 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 30.1% (2024: 27.1%), an increase of 3.0 ppts. This improvement is due to an increase in adjusted operating profit and an impairment of assets. Capital allocation considerations remain high on the Group’s agenda, and investment in working capital is considered a key part of the Group’s prioritisation of investment for organic growth under its capital allocation framework set out at the Capital Markets Event in November 2024. Additionally, alongside investment in organic growth, dividends have progressively increased, whilst the Group’s debt leverage ratio before lease liabilities has improved to 1.16x (2024: 1.37x), demonstrating a controlled and balanced approach to capital allocation and balance sheet prudence given the challenging macroeconomic environment. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 45 Capital allocation priorities Investment for organic growth Continued investment in: • New product development • Operational excellence • Customer service Shareholders returns Via a progressive dividend policy Leverage control Targeting a leverage of c.1.0-1.5 x EBITDA \* to enable: • Reduced lending costs • M&A flexibility \* Based on net debt before lease liabilities. Selective acquisitions Based on our consolidation criteria: • Range enhancement • Acquiring routes to market • Acquiring brands Strong free cash flow growth Capital allocation Strategic execution ![]() 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. Monitoring and mitigation of ## existing risks and the early ## identification of emerging risks 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 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. ### Risk management Stelrad Group plc Annual Report 202546 ![]() 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 the 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 47 ![]() ### Risk management continued Principal risks The Board confirms that it has carried out a thorough assessment of the principal and emerging risks facing the Group. Set out opposite 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 the 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 33 to 37 document our approach to climate risk management and our compliance with the TCFD requirements. Risk management and internal controls The Board is responsible for establishing and maintaining adequate internal controls over regular financial reporting for the Group, including the consolidation process. There is a comprehensive system of internal controls in place, including the annual business plan which is reviewed and approved by the Board. Monthly actual results are reviewed by management against both the plan and prioryear results. All data to be consolidated in the Group’s financial statements is reviewed by management to ensure that it complies with relevant accounting policies and presents a true and fair reflection of the financial performance and position of the Group. Growing market share Improving product mix Optimising routes to market Positioning effectively for decarbonisation 1 2 3 4 Risk Risk owner Key stakeholders Link to strategy 1. Business disruption Chief Executive Officer and Group Operations Director Customers, suppliers and people 1 2 3 4 2. Customers Chief Executive Officer and Group Strategic Marketing Director Customers 1 2 3 3. Loss of competitive advantage Chief Executive Officer and Group Strategic Marketing Director Customers 1 2 3 4 4. IT failure or cyber breach Chief Executive Officer, Chief Financial Officer and Group Finance Director Customers, suppliers, people and investors 1 2 3 5. Supply chain risk Chief Executive Officer and Group Operations Director Suppliers 1 2 3 4 6. People and culture Chief Executive Officer and Chief People Officer People 1 2 3 7. Health and safety Chief Executive Officer, Chief People Officer and Group Operations Director People 1 8. Political and economic environment Chief Executive Officer, Chief Financial Officer, Group Operations Director and Group Strategic Marketing Director Customers, suppliers, people and investors 1 4 9. Climate change Chief Executive Officer and Group Strategic Marketing Director Communities and the environment 1 4 Stelrad Group plc Annual Report 202548 ![]() STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 49 Risk appetite Medium Risk rating Low Trend No change 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. • Production volume can be flexed across facilities around the Group. • Business continuity plans are in place and regularly updated. • Appropriate business interruption insurance is in place. Risk appetite Medium Risk rating Low Trend No change 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, including 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 and will take appropriate measures to seek to regain lost customers. • Regular strategic planning sessions are held and analysis of routes to market undertaken, with commercial strategies reviewed and modified as appropriate. • 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. 1. Business disruption 2. Customers ![]() ### Risk management continued Stelrad Group plc Annual Report 202550 Risk appetite Medium Risk rating Low Trend No change 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, resulting in a loss of Group sales volumes. Mitigations • The Group continues to monitor legislative changes and 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 and builds relationships with developers who are most likely to adopt alternative solutions. • The Group invests in the development of new products to maintain a competitive advantage in changing markets. • Appropriate product types are brought to market under the Group’s brands, including the introduction of electrical products across the Group. • 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 will continue to tightly monitor and control costs. • The Group closely monitors and reacts to heating system studies that are published. Risk management in action » Read more about how we are improving product mix on page 12 Risk appetite Low Risk rating High Trend No change 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 a 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. Phishing campaigns are undertaken. • 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 and Information Security Policies are in place. • For major technology change projects, including accounting and operating system upgrades, trusted expert advisers are used, trusted solutions are implemented, working groups are set up, rigorous testing is undertaken and progress against targets is monitored regularly. 3. Loss of competitive advantage 4. IT failure or cyber breach ![]() STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 51 Risk appetite Low Risk rating Medium Trend Increasing Reflecting the risk of changes to steel tariffs 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. 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 and cause uncertainty in the raw materials market. • Reduced security and availability of energy supply could restrict the ability of the Group to manufacture products. • The Group has a 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. Mitigations • Raw material is dual sourced with all key components and materials having a secondary provider; this extends to location dual sourcing. Contracts are entered into with trusted raw material suppliers, where appropriate, to ensure security of supply. • Raw material prices are constantly monitored by the business. For the purchase of raw materials, sufficient stocks are maintained to protect against sharp price rises and buy prices are agreed in advance, largely on an index-linked basis, to ensure visibility of future prices. • Where raw material prices are rising the business has sufficient foresight to implement selling price increases. • Sufficient finished good 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, and 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. • Production volume can be flexed across facilities around the Group. • The Group pays suppliers on a timely basis. • The Group will continue to tightly monitor and control costs and to review and control any discretionary spend. • The Group invests in appropriate energy saving initiatives across its sites, in line with its sustainability strategy, with solar panels in place at the warehouse in the Netherlands and at the 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 » Go to page 40 to view the KPI for suppliers with up-to-date audits 5. Supply chain risk ![]() ### Risk management continued Stelrad Group plc Annual Report 202552 Risk appetite Low Risk rating Medium Trend No change 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 communication, including newsletters. • The Group regularly reviews, updates and broadens its Group policies. Risk management in action » Read more in our spotlight on skills development on page 31 » Go to page 39 to view our KPIs on enabling an exceptional workforce Risk appetite Low Risk rating Low Trend No change 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. • Regular health and safety meetings covering performance, incidents, improvements and best practice are attended by Group and local representatives. • Health and safety key performance indicators are recorded and reported to management and the Board regularly, alongside details of any incidents and improvements. • Health and safety training is provided regularly across the Group, including annual safety days held at manufacturing sites. • Health and safety audits are conducted at least annually at each manufacturing site. • 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 days on page 32 » Go to page 40 to view our health and safety KPIs 6. People and culture 7. Health and safety ![]() STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 53 Risk appetite Low Risk rating Medium Trend Increasing Due to heightened awareness of the impacts of changes in the global climate Risk description Failure to evolve business practices and operations in response to climate change. Impact • See climate-related risks on pages 36 and 37. Mitigations • See climate-related risks on pages 36 and 37. Risk management in action » Read more in our spotlight on energy efficiency through maintenance and reducing plastic packaging on pages 28 and 29 » Go to page 38 to view our KPIs for driving better environmental performance 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 33 to 37. Risk appetite Medium Risk rating Medium Trend No change Risk description Failure to evolve business practices and operations in response to the changing political and economic environment. Impact • A 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 December 2028 with an extension option for two further years. • Production volume can be flexed across facilities around the Group. • The Group undertakes regular going concern modelling and forecasting, including sensitivity analysis and loan covenant monitoring. 9. Climate change8. Political and economic environment ![]() ### Viability statement and going concern Viability statement The Board has considered the viability of the Group over a three-year period to 31 December 2028, 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 2025, the whole term loan was drawn along with £45.397 million of the revolving credit facility. The facility matures in December 2028 with an extension option for two further years. 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 46 to 53. 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 2028. 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 Group’s financial position, cash flows and liquidity position are set out in the financial statements. Furthermore, note 30 to the consolidated financial statements includes the Group’s objectives and policies for capital management, and note 31 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 their 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. Stelrad Group plc Annual Report 202554 ![]() Going concern statement continued 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 December 2028 with an extension option of two further years. At the year-end date the Group had drawn down the whole term loan along with £45.397 million of the revolving credit facility. The remainder of the facility and cash balances of £18.978 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)) of not more than three times and for interest cover of not less than three times. The Group has complied with the covenants during the year ended 31 December 2025 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) are provided in note 32. 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 55 ![]() ### Non-financial and sustainability information statement 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 and our Governance 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 and the Governance Report. The climate-related financial disclosures of the Company are contained within the Task Force on Climate-related Financial Disclosures (“TCFD”) section on pages 33 to 37 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 » 46 » 25 » 33 » 20 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 » 46 » 25 » 33 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 Governanc16e • Audit & Risk Committee Report » 20 » 25 » 79 » 74 » 63 » 69 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 » 20 » 25 Stelrad Group plc Annual Report 202556 ![]() Reporting requirement Relevant policies and standards which govern our approach Read more in this report Page reference 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 » 20 » 25 » 63 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 » 63 » 69 Business model n/a • Our business model • Our strategy » 10 » 12 Principal risk • Risk management framework • Risk management » 46 Non-financial KPIs n/a • Key performance indicators • Sustainability Report » 18 » 25 Compliance statement continued STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 57 ![]() 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 and their biographies; • the Board skills matrix (page 65); • the role of the Board and how it delegates authority (pages 63 and 64); • the key roles of the Board and the division of responsibilities (page 64); • the Audit & Risk Committee Report (pages 69 to 73); • the Nomination Committee Report (pages 74 to 78); • the Remuneration Committee Report (pages 79 to 96); and • the Directors’ Report (pages 97 to 101). 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. #### The Board believes that #### good governance enhances #### long-term shareholder #### value and promotes #### a sustainable business. Bob Ellis Chair ### Chair’s introduction to governance 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 60 and 61. 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 25 to 32. 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. Stelrad Group plc Annual Report 202558 ![]() Compliance with the 2024 UK Corporate Governance Code The Board is committed to the highest standards of corporate governance. Since admission, we have strived to comply with the UK Corporate Governance Code (the “Code”); further details are included in the Statement of Corporate Governance on page 63. In January 2024, the Financial Reporting Council updated the UK Corporate Governance Code. This new Code applies 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 has considered the implications of this new Code in its activities during the year and in the production of this report. 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. There was no change in the composition of the Board in 2025. In February 2026, Martin Payne, Non-Executive Director and Chair of the Audit & Risk Committee, notified the Board that he will not be standing for re-election and will retire from the Board at the 2026 AGM. A replacement Non-Executive Director and Chair of the Audit and Risk Committee will be appointed in due course. 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 76 and 77. 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 2025 saw the Board visiting the Group’s radiator manufacturing site in Moimacco, Italy. 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. Board evaluation The Board evaluation process continues to gather momentum. It is pleasing to see the actions of the previous evaluations being addressed and also to see additional progressive recommendations being made during the 2025 evaluation. More details on these recommendations can be found in the Nomination Committee Report on pages 77 and 78. Addressing these recommendations will be a key focus for 2026. 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 62 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 13 March 2026 #### 2025 saw the Board visiting the Group’s radiator #### manufacturing site in Moimacco, Italy. 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. Bob Ellis Chair STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 59 ![]() 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. Audit & Risk Nomination Remuneration Chair of Committee Committee key ### Board of Directors N A N R Stelrad Group plc Annual Report 202560 ![]() 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 senior independent director and chair of the remuneration committee at MJ Gleeson plc and chair of the remuneration committee at Ibstock plc. She is also a non-executive director of OFWAT, the economic regulator for England and Wales. 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 and non- executive director of Ground Rents Income Fund plc. 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. 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. Mr Payne was also a director and chair 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. A A A R R R N N N STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 61 ![]() ### Section 172 statement 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 section 172(1)(a–f) of the Act) when making decisions during the year ended 31 December 2025. 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. Decision making by the Board The Stakeholder Engagement section of the Annual Report, on pages 20 to 24, 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 10 and 11 and the Group’s strategy on pages 12 and 13 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 25. 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 63 Board information • Board training and induction, including section 172 training. • Board papers including financial and non-financial information. • Advice and presentations by internal and external experts. • Board engagement with key stakeholders. Board discussion • Section 172 considerations are taken into account in the Board’s discussions, including the long-term impacts on the Group, its stakeholders and the wider environment. • Section 172 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. 1234 Stelrad Group plc Annual Report 202562 ## Acting responsibly towards ## our stakeholders at all times ![]() ### Statement of corporate governance Compliance with the Code The Board is committed to the highest standards of corporate governance and fully supports the principles set out in the UK Corporate Governance Code (the “Code”). The Board confirms compliance with the 2024 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 provision that at least half the Board, excluding the Chair, should be Non-Executive Directors whom the Board considers to be independent. For the period from 1 January 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 outlines that the Board Chair should be independent on appointment when assessed against the circumstances set out in the Code. The Board Chair, Bob Ellis, has in the past held, and continues to hold, various positions with portfolio companies owned by affiliates of 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 60 and 61. 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. This constitutes non-compliance with Provision 9 of the Code. The Chair has been involved with the Group over the last 15 years, and as Chair since 2013, and has made a major contribution to the Group’s growth and success. Whilst a Board Chair succession plan is in place, the Board continues to be unanimously of the opinion that Mr Ellis’ 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 Board 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. Whilst a Board Chair succession plan is in place, the Board is unanimously of the opinion that Mr Ellis’ continued involvement as Chair will help to ensure the ongoing success of the Company. 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 63 ![]() 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 and Nicola Bruce. » The Audit & Risk Committee Report can be found on page 69 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), Martin Payne and Nicola Bruce. • One Major Shareholder Representative Director – Edmund Lazarus. » The Nomination Committee Report can be found on page 74 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 and Martin Payne. » The Remuneration Committee Report can be found on page 79 ### Statement of corporate governance continued Role of the Board and its Committees continued Board continued 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. 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. 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. Stelrad Group plc Annual Report 202564 ![]() Skills matrix Under the 2024 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. Capabilities 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 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 2025. Board Audit & Risk Committee Nomination Committee Remuneration Committee Trevor Harvey — — — Leigh Wilcox — — — Bob Ellis — — — Katherine Innes Ker Martin Payne Nicola Bruce Edmund Lazarus (1) — (2) — Nicholas Armstrong   — — — (1) Edmund Lazarus was unable to attend three meetings due to pre-existing commitments. (2) Bob Ellis was appointed as an alternate member of the Nomination Committee for one meeting. An additional ad hoc Board meeting was held in respect of the Q4 2025 Trading Update. An additional ad hoc Nomination Committee meeting was held during Q4 2025 in respect of Board Chair succession planning. Board meetings and attendance During the year ended 31 December 2025, the Board has met eight times, seven of which were scheduled. The chart below shows Board of Directors activity throughout the year. \* Ad hoc meetings called for specific subjects. January • Board • Remuneration March • Board • Audit & Risk • Remuneration • Nomination November • Board • Q4 update meeting\* • Audit & Risk • Nomination\* May • Board • AGM June • Board • Italy site visit August • Board • Audit & Risk October • Board • Remuneration • Nomination December • Remuneration STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 65 ![]() ### Statement of corporate governance continued Board activities and priorities during 2025 The Board discussed a series of key issues across the year, consistent with the schedule of matters reserved for the Board and the Board’s forward planner: Subject Outcomes Health and safety • Oversight of the continued embedding of health and safety practices across the Group which seek to protect the safety of our workforce, underpin the Group’s safety culture and focus on operational excellence. • Reporting on lost time incidents, safety observations and health and safety external audits. Financial • Setting the 2025 budget and forecasts. • Approval of reporting to stakeholders, including the 2024 Annual Report, the 2025 interim statement and the Q4 2025 Trading Update. • Renewal of the multicurrency facilities agreement. • Review of the going concern model. • Maintaining the Group’s strong financial position and robust business model despite ongoing macroeconomic challenges. Dividends • Recommending the 2024 final dividend of 4.81 pence per ordinary share, a £6.126 million return to shareholders. • Approving the 2025 interim dividend of 3.04 pence per ordinary share, a 2% increase on the 2024 interim dividend. Market developments • Continued focus on the Group’s leading market share position in Europe. • Close attention to volume and mix across European markets along with the factors that underpin our competitive positioning. • Monitoring competitor activity to ensure that the Group maintains and improves its market leadership positions. Remuneration Via the Remuneration Committee: • Total remuneration outcomes for Executive Directors and senior management. • Setting incentive targets for Executive Directors and senior management. Subject Outcomes Board evaluation With the support of the Nomination Committee: • A comprehensive internally managed Board and Committee evaluation confirming that the Board and its Committees are operating effectively. • Actions to address the findings of the Board evaluation. Succession planning With the support of the Nomination Committee: • Commencing a Board Chair succession planning process. • Appointment of a new Chief Commercial Officer role and the Group’s first in house Company Secretary. • Longer-term succession planning focusing on identifying and developing potential successors for key roles. Risk management • Periodic review of the Group’s risk appetite and thorough assessment of the principal and emerging risks facing the Group. • Continued visibility of the Group’s system of internal control and risk management. Cyber security • Cyber security training and education. • Development of a new Cyber Security Dashboard to improve oversight of the cyber security environment. Group policies • Review and approval of Group policies in line with the policy review schedule, supporting our high standards of legislative compliance and robust internal controls. Investor relations • Providing balanced and understandable information to investors, including the AGM, results presentations, open dialogue with shareholders, investor roadshows and hosting visits to our manufacturing sites. • Monitoring significant movements in our shareholder register. Workforce and culture • Reviewing initiatives to enable an exceptional workforce, including the employee engagement programme and ongoing training and development. Stelrad Group plc Annual Report 202566 ![]() 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 was carried out to ensure that performance, contribution, commitment and any training and development needs were addressed. During 2025, the Board evaluated the commission of an external, independent review of the Board’s effectiveness and concluded that an external review should not be commissioned at this time. 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. 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 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 obligations 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. Board activities and priorities during 2025 continued Appointment and election There was no change to the composition of the Board during the year ended 31 December 2025. In February 2026, Martin Payne, Non-Executive Director and Chair of the Audit & Risk Committee, notified the Board that he will not be standing for re-election and will retire from the Board at the 2026 AGM. 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 the Directors will be subject to annual re-election. Therefore, all members of the Board will be standing for election at the 2026 Annual General Meeting to be held on 20 May 2026 except for Martin Payne who will retire from the Board at the 2026 AGM. Board evaluation In line with the Code, the Board reviewed its own effectiveness and that of its Committees during 2025. The 2025 Board evaluation was internally facilitated by the Nomination Committee Chair in conjunction with the Company Secretary. It was conducted during the second half of 2025 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 Nomination Committee Chair and Company Secretary. The findings of the 2025 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. » The Nomination Committee Report can be found on page 74 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 67 ![]() ### Statement of corporate governance continued Board activities and priorities during 2025 continued 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. From 2026, the Board will be responsible for confirming the effectiveness of material controls in line with the requirements of Provision 29 of the 2024 Code. 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 69 to 73. 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 46 to 53. 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. Monitoring culture The Board is responsible for assessing and monitoring culture and how the Group’s desired culture has been embedded. Whilst our geographic span gives us a diversity of cultural norms, the Group’s culture is underpinned by our values of respect, integrity, service, excellence and stewardship. During 2025, the Board has monitored the Group’s culture through reporting on employee engagement, training and development, employee wellbeing, and diversity and inclusion. Board members have carried out operational site visits which include the opportunity to speak to employees directly and understand how our culture operates in practice. In addition, the Board receives regular reports on the Group’s health and safety culture and reviews our whistleblowing channels and our Equality, Diversity and Inclusion Policy. Our culture is fundamental to the success of our business. More details on how we seek to enable an exceptional workforce, supported by our culture and values, can be found on page 30. 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 on the online Board portal. All Directors have access to the advice and services of the 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 76. More details can be found in the Nomination Committee Report on pages 74 to 78 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 74 to 78. Stelrad Group plc Annual Report 202568 ![]() ## Overseeing financial reporting ## and risk management Highlights of 2025 • Completion of the 2024 Annual Report. • Implementation of the updated provisions and principles of the 2024 Code. • An assessment of Provision 29 of the 2024 Code in preparation for its effective date of 1 January 2026. • Continued development of the Group’s risk management framework. • Continued focus on cyber security risk. • Continued development of the Group’s internal audit approach and plan, including procurement audits and follow-up on previous audit recommendations. • Impairment assessment in Radiators SpA. Focus areas for 2026 • Review of the 2025 Annual Report. • Monitor and review the effectiveness of risk management and the internal control framework and confirm the effectiveness of material controls in line with the requirements of Provision 29 of the 2024 Code. • Continued evolution of the Group’s internal audit programme. Committee members • Martin Payne (Chair) • Nicola Bruce • Katherine Innes Ker #### During the year the Committee #### has implemented the updated provisions and principles of #### the 2024 Code and assessed Provision 29 in preparation for #### its effective date of January 2026. 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 2025. 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. As this will be my final report as Chair of the Audit & Risk Committee, I would like to place on record my appreciation for the support of my fellow Committee members, the Board and the Executive team during my tenure. I am confident that the Committee remains well equipped to support strong governance and oversight and I wish the Committee every success in the future. Committee composition The Committee has comprised three independent Non- Executive Directors during the year ended 31 December 2025: Nicola Bruce, Katherine Innes Ker 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. ### Audit & Risk Committee report STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 69 ![]() ### Audit & Risk Committee report continued Committee composition continued 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 60 and 61. 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 meets 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 2025 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 pages 77 and 78. 2025 Committee activities The Committee held three scheduled meetings during the year ended 31 December 2025, and key areas covered at the meetings of the Committee were: • a review of external auditors’ and internal auditors’ effectiveness; • consideration of the relevant elements of the Group’s 2024 Annual Report, including the key accounting judgements and the going concern and viability statement, and of the 2025 interim statement; • a review of the proposed dividends and assessment of distributable reserves; • consideration of the risk management framework and of the Group risk register; • consideration of the Group’s internal control framework; • consideration of the Group’s cyber security risks; • an update on sustainability reporting requirements; • a review of the 2025 internal audit reports covering procurement, undertaken by Grant Thornton LLP, and a follow-up on previous internal audit recommendations; • an assessment of Provision 29 of the 2024 Code in preparation for its effective date of 1 January 2026; and • a review of the UK tax strategy. 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 2025 Annual Report is fair, balanced and understandable in terms of the form and content of the strategic, governance and financial information presented therein. Stelrad Group plc Annual Report 202570 ![]() 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 property, plant and equipment, intangible assets and goodwill in Radiators SpA. The Committee also reviewed the key judgements used. Impairment of inventories The Committee reviewed the inventory provision in Radiators SpA and 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 54 and 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”) was 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 was subsequently appointed as auditors of the Company. For the financial year ending 31 December 2026, 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 2026. 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 within the next 12 months. 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 2025 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 2025 had been effective. The Committee reviewed PwC’s findings in respect of the audit of the financial statements for the year ended 31 December 2025. 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 2025, PwC received total fees of £569,000 (2024: £531,000) comprising £521,000 of audit fees (2024: £485,000) and £48,000 of non-audit service fees (2024: £46,000). The fees for non-audit services during the year ended 31 December 2025 and the year ended 31 December 2024 include: • in 2025, £40,000 related to interim review fees and £8,000 related to bank covenant reporting; and • in 2024, £38,000 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 9 to the financial statements. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 71 ![]() ### Audit & Risk Committee report continued 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 2025, the Group commenced delivery of a risk-based internal audit plan, supported by Grant Thornton UK LLP, with reviews undertaken covering procurement. 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 are key areas 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 46 to 53. 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 Group will engage with a range of professional advisers to support and inform 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. The Committee has also been updated on preparation for upcoming changes to the UK Corporate Governance Code arising from the requirement to review material controls under Provision 29 which will require additional disclosures and a Board declaration regarding the effectiveness of these controls in the year ended 31 December 2026 Annual Report. Stelrad Group plc Annual Report 202572 ![]() System of internal control Governance framework Risk management framework Assurance framework Standards and quality framework Strategic framework Board and board committees Group risk management policy External audit Internal audit Group policies Group executive committees Principal risk self-assessment Risk appetite statement Viability assessment Group compliance Group health and safety Governance manuals Business unit executive committees Corporate support functions Business unit principal risk self-assessment Assurance evaluation Business assurance Business unit policies, procedures, processes and systems Strategic objectives Financial objectives Sustainability goals Internal audit effectiveness The Committee reviewed the effectiveness of the internal audit process by using a discussion-based approach at Audit & Risk Committee meetings. No matters were raised. Management ensures that the providers of internal audit services are 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 68 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 68 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 13 March 2026 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 73 ![]() ## Focused on Board effectiveness ## and succession planning Highlights of 2025 • Undertook the Board and Committee evaluation process, with continuing focus on actions to address recommendations and enhance effectiveness. • Review of Board and senior management succession planning. • 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, including focus on diversity and inclusion. Focus areas for 2026 The Committee will focus on overseeing actions to address the outcomes of the Board evaluation, including: • continued focus on long-term succession planning for the Board and senior management, and oversight of efforts to enhance diversity and inclusion; and • Board assessment of culture. Committee members • Katherine Innes Ker (Chair) • Martin Payne • Nicola Bruce • Edmund Lazarus #### In 2025 the Committee continued to review the #### long-term succession #### planning for the Board #### and senior management. Katherine Innes Ker Chair of the Nomination Committee Dear shareholders I am pleased to present the Nomination Committee Report of Stelrad Group plc for the year ended 31 December 2025. 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 64, and information on the Directors’ experience and skill sets can be found in their biographies on pages 60 and 61 and the Board skills matrix on page 65. Throughout 2025, the Committee comprised a majority of independent Non- Executive Directors, complying with Provision 17 of the 2024 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 makeup 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, 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; ### Nomination Committee report Stelrad Group plc Annual Report 202574 ![]() Nomination Committee remit continued • 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. Succession planning The Committee continues 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 the ongoing review of objectives and timeframes for Board succession planning. Two key senior management appointments were made in 2025: • the appointment of a new Chief Commercial Officer role; and • the appointment of the Group’s first in house Company Secretary. Diversity and inclusion Diversity and inclusion continue 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 on page 76), 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 2025, 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 role as Senior Independent Director. The overall diversity targets for the year were not achieved. The Board’s future composition will continue to focus on broadening diversity among its members, while recognising that two current Non-Executive Directors serve as representatives of the Major Shareholder under the terms of the Relationship Agreement. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 75 ![]() 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 self 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 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. ### Nomination Committee report continued 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 2025, 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 2025 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 4 67.0% Women 2 25.0% 1 2 33.0% Not specified/prefer not to say 1 12.5% — — 0.0% 31 December 2025 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 6 100.0% Not specified/prefer not to say 1 12.5% — — 0.0% Stelrad Group plc Annual Report 202576 ![]() Board diversity disclosures continued Data under Listing Rule 6.6.6(10) continued At 31 December 2024, the composition of the Board and Executive Management was as follows. 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 60.0% Women 2 25.0% 1 2 40.0% Not specified/prefer not to say 1 12.5% — — 0.0% 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 5 100.0% Not specified/prefer not to say 1 12.5% — — 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 it consists of the Chief People Officer, Chief Commercial Officer, Company Secretary, 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 2025. The results of the evaluation, along with an action plan for addressing any identified issues, were reported to the Board in October 2025, 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. 2025 Board evaluation process August–September 2025 October–November 2025 December 2025–January 2026 Separate Board evaluation questionnaires issued for the Board of Directors and each Board Committee. Questionnaires sought responses on a five- point scale with the option for respondents to expand upon their answers by providing narrative comments. Responses collated by the Company Secretary and circulated to each respective Chair. Findings were discussed in detail by the Board of Directors and the Nomination Committee, with Committee specific findings and actions discussed with each Board Committee. The Company Secretary developed an action plan based on the outcome of the process. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 77 ![]() Board evaluation continued 2025 Board evaluation process continued In summary, key areas of focus identified by the evaluation include: • succession planning, with a focus on Board Chair succession. A Board Chair succession plan is in place for 2026; • further strategic discussion to take place in 2026 in relation to market developments, ESG strategy and risk appetite; • investor relations, including focus on understanding the priorities and perspectives of investors; • the approach to compliance with Provision 29 of the 2024 UK Corporate Governance Code; and • the effectiveness of the Long Term Incentive Plan. The 2026 Board and Board Committee evaluation process will be managed internally. To enhance the 2026 process, the Board has requested that the Company Secretary holds individual conversations with each of the Directors to provide richer qualitative outputs. 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 one additional unscheduled meeting during the year ended 31 December 2025. ### Nomination Committee report continued Agenda items for the Committee’s meetings during the year ended 31 December 2025 included: • a review of the Board’s composition and the diversity of Directors’ skills; • a review of Directors’ time commitments and time available to dedicate to the role; • a 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; and • the 2025 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 The 2024 Code provides that all Directors should 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 other than Martin Payne who has notified the Board that he will not be standing for re- election and will retire from the Board at the 2026 AGM. Katherine Innes Ker Chair of the Nomination Committee 13 March 2026 Stelrad Group plc Annual Report 202578 ![]() ### Directors’ remuneration report ## Overseeing how we ## reward our people Highlights of 2025 • Approval of Directors’ Remuneration Policy at the 2025 AGM. • Reviewing CFO remuneration, taking account of the CFO’s performance and development in role, and his salary relative to appropriate comparator roles. • Setting incentive targets and determining incentive outcomes for Executive Directors and senior management. • Review of total remuneration outcomes for Executive Directors and senior management, and their alignment with strategy. Focus areas for 2026 • 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 #### The Remuneration Policy #### has worked well in 2025 #### and continues to support #### our strategy effectively. 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 2025. This report consists of three sections: • the Annual Statement and associated high-level summary (Remuneration at a glance); • a summary of the Directors’ Remuneration Policy approved by shareholders at the 2025 AGM – shareholders will not be asked to vote on the Policy at the 2026 AGM. In line with the applicable regulations, we have not detailed the full Policy but included those parts that we consider that shareholders will find most useful; 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 2025, describing the link between Company performance and remuneration for 2025. We consider that the Policy has worked well in 2025 and continues to support our strategy effectively. Therefore, we will not be asking shareholders to vote on any revisions to this Policy at the 2026 AGM. The Directors’ Remuneration Report (excluding the Policy) will be put to an advisory shareholder vote at the 2026 AGM. In line with the usual three-year timetable, shareholders will be asked to vote on a new Policy at the 2028 AGM. During 2026 we will review the Policy to ensure that it continues to support the delivery of our strategy and the expectations of our key stakeholders. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 79 ![]() Annual Statement by the #### Remuneration Committee #### Chair continued Remuneration outcomes in 2025 The key highlights of the performance of the business during the year can be found in the Strategic Report on pages 1 to 57. Our new Directors’ Remuneration Policy was approved by shareholders at the AGM in May 2025. We were pleased with the exceptionally strong support shown by shareholders with a vote in favour in excess of 99%, a level of support which was also shown for the 2024 Annual Report on Remuneration. As was approved by shareholders last year, our new Policy includes additional headroom for incentive pay to address exceptional circumstances. We did not use that headroom in 2025 and do not propose to use it in 2026. Fixed remuneration The Executive Directors’ salaries were increased by 3% with effect from 1 January 2025 to £551,668 (in the case of Trevor Harvey) and £267,800 (in the case of Leigh Wilcox). These increases were in line with the 3% increase awarded to the majority of the UK workforce and the 3% awarded to other members of senior management. No changes were made to the Executive Directors’ benefits and pensions in 2025, with salary supplements in lieu of pension contributions remaining at the 9% of salary level, in line with the wider UK workforce. Annual bonus The Annual Bonus Plan (“ABP”) structure for 2025 reflected the Policy approved at the 2025 AGM. Each Executive Director was eligible to earn a bonus of up to 125% of salary based on performance against: • Group adjusted operating profit targets (with a 70% weighting); • Group adjusted cash flow targets (with a 20% weighting); and • two ESG targets (each with a 5% weighting). 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 82. Whilst the Group met the adjusted cash flow and ESG targets, the adjusted operating profit target was not achieved. The adjusted operating profit target was an underpin to the other measures. Therefore, based on the performance delivered, no bonuses were earned under the ABP for 2025. LTIP vesting in respect of performance in 2025 LTIP awards were not granted during 2023 and accordingly there was no LTIP capable of vesting in respect of performance in 2025. LTIP granted in 2025 Our LTIP Policy permits the grant of LTIP awards at the level of up to 150% of salary. In 2025, 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 2025 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 2025, we continued to utilise a metric relating to labour turnover as part of the ESG component of our Annual Bonus Plan for Executive Directors. Implementation of the Policy in 2026 Our approach to Executive Directors’ remuneration for 2026 is summarised in the “Remuneration at a glance” table, with further information contained later in this report. The CEO will receive an annual salary increase for 2026 of 3%, in line with the increase awarded to the UK workforce. On appointment, the CFO’s salary was positioned towards the lower end of the market competitive range for the role noting that this was Leigh’s first plc Executive Director appointment and the Committee’s aspiration to increase the salary to the median of the market competitive range over time, subject to his continued positive performance. ### Directors’ remuneration report continued Stelrad Group plc Annual Report 202580 ![]() Annual Statement by the #### Remuneration Committee #### Chair continued Implementation of the Policy in 2026 continued The Board has been delighted with Leigh’s performance and his contribution to the role since appointment in 2024. The Committee is conscious of the importance of paying appropriately for the role and has considered benchmarking data provided by the Committee’s advisers, Deloitte, based on 51 companies with financial years ending up to and including December 2024. This analysis confirmed a lower quartile salary of £300,000 p.a. and median salary of £336,000 p.a. for CFOs of companies of a similar market capitalisation to Stelrad. In view of Leigh’s strong performance to date, the Committee has increased his salary by 12% to £300,000 p.a. from 1 January 2026. The new salary remains at the lower end of the market competitive range and the Committee will continue to keep this matter under review in future years. Both the CEO and CFO 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 view of current economic and market conditions, no LTIP awards will be granted in 2026 for Executive Directors or senior management. 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 2025. 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 resolution requesting approval of the Annual Report on Remuneration at this year’s Annual General Meeting on 20 May 2026. Nicola Bruce Chair of the Remuneration Committee 13 March 2026 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 81 ![]() ### Directors’ remuneration report continued #### Remuneration at a glance Implementation of the Remuneration Policy in 2026 This report has been prepared in accordance with the applicable remuneration reporting regulations, the FCA Listing Rules and the UK Corporate Governance Code. For 2026, the Executive Directors will be remunerated in line with the approved Policy, as summarised in the table below. Element of pay Implementation in 2025 Proposed implementation for 2026 Fixed remuneration Base salary An increase of 3% was applied with effect from 1 January 2025 in line with the increases awarded to the UK workforce, taking the CEO salary to £551,668 and the CFO salary to £267,800. An increase of 3% has been applied to the CEO salary with effect from 1 January 2026 in line with the increases awarded to the UK workforce, taking the CEO salary to £568,218. As noted above, an increase of c.12% has been applied to the CFO salary with effect from 1 January 2026. The increase takes the CFO salary to £300,000. Pension The Executive Directors receive a salary supplement in lieu of pension contribution of 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. Variable pay ABP Bonus opportunities of up to 125% were awarded based on the achievement of: • two financial measures: Group adjusted operating profit (70%); and adjusted cash flow from operations (20%); and • two ESG measures (each with a 5% weighting). Both the cash flow measure and ESG component were underpinned by the target Group adjusted operating profit measure. The targets were stretching, and whilst the Group met the adjusted cash flow and ESG targets, the underpinning operating profit target was not achieved. Therefore, no bonus was earned by the Executive Directors (0% of the maximum). The ABP will award up to a maximum of 125% of base salary based on the achievement of: • two financial measures: Group adjusted operating profit (70%); and adjusted cash flow from operations (20%); and • two ESG measures (each with a 5% weighting). Both the cash flow measure and ESG component will be underpinned by the target Group adjusted operating profit measure. 75% of the annual bonus will be paid in cash, with the remaining 25% delivered as deferred shares. LTIP No LTIP awards were capable of vesting by reference to performance in 2025. LTIP awards were granted to the Executive Directors in March 2025 at the level of 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 to 31 December 2027 and subject to a post-vesting two-year holding period. The Policy provides for an annual LTIP award up to a maximum of 150% of base salary. As noted on page 81, no LTIPs will be awarded in 2026. Stelrad Group plc Annual Report 202582 ![]() #### Remuneration Policy The Group’s Directors’ Remuneration Policy (the “Policy”) was approved by shareholders at the AGM on 21 May 2025. As shareholders will not be asked to vote on the Policy at the 2026 AGM and in line with the applicable regulations, we have not included the full Policy but have summarised those parts that we consider that shareholders will find most useful. The full Policy is set out on pages 78 to 85 of the 2024 Annual Report which is available at https://stelradplc.com/investors-2/results-reports-and-presentations/. Consistent with best practice, the Committee may apply discretion with respect to outcomes that affect the actual level of reward payable to individuals, both upwards and downwards. Such discretion, if exercised, would be disclosed in the report on implementation of the Policy (i.e. the Annual Report on Remuneration) for the year in question. The Policy permits the application of malus and clawback and in line with the Corporate Governance Code requirements the Committee confirms that there was no application of these provisions in the year. Wider workforce considerations and engagement 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 including feedback from employee surveys and Board site visits. 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. Remuneration Policy summary 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, performance and 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 83 ![]() ### Directors’ remuneration report continued #### Remuneration Policy continued Remuneration Policy summary continued Purpose and link to strategy Operation Maximum opportunity Performance measures 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. 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. Stelrad Group plc Annual Report 202584 ![]() #### Remuneration Policy continued Remuneration Policy summary continued 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 85 ![]() ### Directors’ remuneration report continued #### Remuneration Policy continued Remuneration Policy summary continued Purpose and link to strategy Operation Maximum opportunity Performance measures Share 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. 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. Stelrad Group plc Annual Report 202586 ![]() #### Remuneration Policy continued Statement of consideration of shareholder views An extensive shareholder consultation was carried out with the majority of Stelrad’s shareholder register prior to the approval of the Remuneration Policy at the AGM on 21 May 2025. The views and feedback were 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. 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. 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 2 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 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 87 ![]() ### Directors’ remuneration report continued #### Annual Report on Remuneration The following section sets out our Annual Report on Remuneration and outlines how the Policy was implemented in 2025. The Annual Report on Remuneration will be subject to an advisory shareholder vote at the AGM to be held on 20 May 2026. 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 2025 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 Company Secretary. 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 60 and 61. 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 2025. The Committee meets not less than three times a year. During the year ended 31 December 2025, 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 Board Chair 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. 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 2025 were £12,200 (2024: £14,900). 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 corporate tax matters, including transfer pricing and associated international tax advice, and payroll support. Stelrad Group plc Annual Report 202588 ![]() #### Information on remuneration for the year ended 31 December 2025 Single total figure of remuneration for the year ended 31 December 2025 (audited) The following table sets out the single figure of total remuneration received by the Directors who served during the year ended 31 December 2025: £’000 Basic salary/ fees All taxable benefits (1) Pension- related benefits (2) Annual bonus LTIP Total remuneration Total fixed remuneration Total variable remuneration Executive Directors Trevor Harvey 552 29 50 — — 631 631 — Leigh Wilcox 268 17 24 — — 309 309 — Non‑Executive Chair Bob Ellis 120 — — — — 120 120 — Non‑Executive Directors Katherine Innes Ker 86 — — — — 86 86 — Nicola Bruce 74 — — — — 74 74 — Martin Payne 74 — — — — 74 74 — Edmund Lazarus (3) — — — — — — — — Nicholas Armstrong (3) — — — — — — — — Total 1,174 46 74 — — 1,294 1,294 — (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) Edmund Lazarus and Nicholas Armstrong are representatives of the Major Shareholder and receive no fees for their roles as Non-Executive Directors. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 89 ![]() ### Directors’ remuneration report continued 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 2024 for the year ended 31 December 2024: £’000 Basic salary/ fees All taxable benefits (1) Pension- related 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 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 (4) — — — — — — — — Nicholas Armstrong (4) — — — — — — — — Total 948 32 54 400 — 1,434 1,034 400 (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 for the year ended 31 December 2024 is from that date and is in respect of his service as an Executive Director. (4) Edmund Lazarus and Nicholas Armstrong are representatives of the Major Shareholder and receive no fees for their roles as Non-Executive Directors. Stelrad Group plc Annual Report 202590 ![]() #### Information on remuneration for the year ended 31 December 2025 continued Incentive outcomes for 2025 (audited) The maximum bonus opportunity for 2025 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 £34.204m £37.624m £32.471m 0% Adjusted cash flow from operations 20% n/a £29.857m £32.843m £36.172m n/a \*\* ESG 1 – Recycled content of packaging material used 5% Weighted average recycled content of all packaging material used is greater than 65% 69.1% n/a \*\* ESG 2 – Labour turnover rate 5% Average Group voluntary turnover is less than the UK industry benchmark level 2.1% lower n/a \*\* 0% \*\* \* No bonus is payable to Executive Directors below on-target performance and as such no threshold performance targets were established. \*\* Nil bonus awarded due to the Group adjusted operating profit underpin not being achieved. In line with the Policy, the Committee reviewed the formulaic outturn in the context of underlying business performance and the broader stakeholder experience. It was concluded that the outturn of a bonus entitlement of 0% of maximum bonus opportunity reflected that the underpinning operating profit target was not achieved. Long Term Incentive Plan vesting No LTIP awards were capable of vesting by reference to performance in 2025. Payments for loss of office (audited) No payments for loss of office were made during the year under review. Payments to past Directors (audited) No disclosable payments were made to past Directors during the year under review. 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 2025. Each Executive Director received an award at the level of 50% of salary. As was reported last year, LTIP awards were granted to Executive Directors and certain key individuals in the senior management team in March 2024 at the level of 50% of salary. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 91 ![]() ### Directors’ remuneration report continued #### Information on remuneration for the year ended 31 December 2025 continued LTIP awarded during the financial year (audited) continued Director Type of award Number of shares subject to award Face value of award (1) Trevor Harvey Conditional share award 207,238 £275,834 Leigh Wilcox Conditional share award 100,601 £133,900 (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 (£1.331). The vesting of the awards is subject to the performance conditions set out below, as disclosed in the 2025 Directors’ Remuneration Report, with the awards then subject to a further two-year holding period. Performance measure Weighting Threshold (25% vesting) Threshold (100% vesting) Relative TSR vs constituents of the FTSE Small Cap index (excluding investment trusts) assessed over the three financial years ending with 2027 (1) 20% Median Upper quartile Adjusted EPS for 2027 80% 15.54p 18.33p (1) Opening TSR will be averaged over the three-month period ended on 31 December 2024 and closing TSR over the three-month period ending on 31 December 2027. 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 2024 (1) Ordinary shares held at 31 December 2025 (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 2025 (or, if earlier, date of stepping down from the Board) Executive Directors Trevor Harvey 11,455,129 11,455,129 124,041 437,901 12,017,071 Leigh Wilcox 5,360 5,360 8,148 175,967 189,475 Non‑Executive Directors Bob Ellis 2,613,782 2,613,782 — — 2,613,782 Katherine Innes Ker 16,900 26,430 — — 26,430 Nicola Bruce 13,651 21,051 — — 21,051 Martin Payne 9,302 9,302 — — 9,302 Edmund Lazarus — — — — — Nicholas Armstrong — — — — — (1) Includes any shares held by Persons Closely Associated. Stelrad Group plc Annual Report 202592 ![]() #### Information on remuneration for the year ended #### 31December 2025 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 2025 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 11,520,870 200% 2,934.2% Yes Leigh Wilcox 9,678 200% 5.1% No (1) The share price of £1.405 as at 31 December 2025 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 2025 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. 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% 2025 £631k 0.0% n/a (3) (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. (3) No LTIP awards were capable of vesting in respect of performance in 2025. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 93 £120 £110 £100 £90 £80 £70 £60 £50 £0 Stelrad FTSE Small Cap exc. investment trusts Nov 2021 Apr 2022 Aug 2022 Dec 2022 Apr 2023 Apr 2024 Apr 2025Aug 2023 Aug 2024 Aug 2025Dec 2023 Dec 2024 Dec 2025 ![]() ### Directors’ remuneration report continued #### Information on remuneration for the year ended #### 31December 2025 continued CEO pay ratio (unaudited) 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 2025 2024 2023 2022 2021 Method Option A Option A Option A Option A Option A 75th percentile 11:1 19:1 16:1 11:1 22:1 Median 16:1 27:1 24:1 16:1 28:1 25th percentile 19:1 30:1 27:1 18:1 34:1 The salary and total remuneration for the individuals identified at the 25th percentile, median and 75th percentile for the year ended 31 December 2025 are set out below: £’000 CEO 25th percentile Median 75th percentile Basic salary 552 31.4 34.3 50.3 Total remuneration 631 33.4 39.1 56.7 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 decrease from 2024 to 2025 in the ratio between all-employee reference points and CEO pay reflects that no annual bonus was earned by the CEO in 2025. 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 2025 and 31 December 2024. All figures provided are taken from the consolidated financial statements. 2025 £’000 2024 £’000 Percentage change Overall spend on pay including Executive Directors 56,881 56,660 0.4% Distribution to shareholders 9,998 9,806 2.0% 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 2024–2025, 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 2024 and accordingly their remuneration for 2024 has been annualised in order to provide a meaningful comparison. 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. Stelrad Group plc Annual Report 202594 ![]() #### Information on remuneration for the year ended 31 December 2025 continued Percentage change in Directors’ remuneration (unaudited) continued % change 2024 to 2025 % 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) Salary/fees Taxable benefits (1) Annual bonus (2) Executive Directors Trevor Harvey 3% 2% n/a (3) 8% (4) (2)% 35% 0% (3)% n/a (3) 4% 8% n/a (3) Leigh Wilcox 3% 2% n/a (3) n/a n/a n/a n/a n/a n/a n/a n/a n/a Non‑Executive Directors Bob Ellis 0% n/a n/a 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 0% n/a n/a Katherine Innes Ker 0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Martin Payne 0% n/a n/a 0% n/a n/a 0% n/a n/a 0% n/a n/a Average employee 11% 8% (63)% 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 and for 2025, the percentage changes between 2021 and 2022, between 2022 and 2023, and between 2024 and 2025 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). 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 2024 Directors’ Remuneration Report were approved at the 21 May 2025 AGM. 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 124,006,378 99.99% 1,895 0.00% 2,970 Approve the 2024 Directors’ Remuneration Report 124,006,378 99.99% 1,895 0.00% 2,970 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 95 ![]() ### Directors’ remuneration report continued #### Implementation of Policy in 2026 Information on how the Policy will be implemented in 2026 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 2026 (unaudited) In view of current economic and market conditions, no LTIP awards will be granted in 2026 for Executive Directors or senior management. Chair and Non‑Executive Director fees (unaudited) No changes will be made to the Chair and Non-Executive Director fees for 2026. A breakdown of the fee components for the Chair and Non-Executive Directors in 2026 is as follows: Role Fee (per annum) 2026 Fee (per annum) 2025 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 13 March 2026 Stelrad Group plc Annual Report 202596 ![]() ### Directors’ report The Directors present their report and audited financial statements of the Group for the year ended 31 December 2025. 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 57 of this Annual Report. The Directors’ Report for the year ended 31 December 2025 comprises pages 97 to 101 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 63. • Information relating to future business developments can be found throughout the Strategic Report on pages 1 to 57. • Information on how the Directors have had consideration for the Company’s stakeholders can be found on pages 20 to 24 of the Strategic Report. • Information relating to risk management can be found on pages 46 to 53. • The going concern and long-term viability statements can be found on pages 54 and 55. • The Group’s global greenhouse gas emissions during the year can be found on page 28 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 31 to the consolidated financial statements. • Details of the Group’s long-term incentive schemes can be found in the Remuneration Report on pages 79 to 96. • Details of the Relationship Agreement with the Major Shareholder can be found on page 98. 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 57. The principal subsidiaries operating within the Group are shown in note 12 to the Company financial statements. Profit and dividends The Group profit for the year, after taxation, amounted to £0.8 million (2024: £16.5 million). An interim dividend of 3.04 pence per share was paid to shareholders on 24 October 2025 (2024: interim dividend of 2.98 pence per share) and the Board is recommending a final dividend in respect of the year ended 31 December 2025 of 5.05 pence per share (2024: final dividend of 4.81 pence per share). Subject to shareholder approval, the final dividend will be paid on 26 May 2026 to shareholders on the register on 24 April 2026. The total dividend paid and proposed for the year ended 31 December 2025 amounts to 8.09 pence per share (2024: 7.79 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 Company Secretary, Stelrad Group plc, 69–75 Side, Newcastle upon Tyne, Tyne and Wear, United Kingdom NE1 3JE. Share capital As at 31 December 2025, 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 2025 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 21 May 2025 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 20 May 2026 and the Board will seek to renew this authority. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 97 ![]() Substantial shareholdings At 31 January 2026, 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% Moneta Asset Management 8,398,084 6.6% Premier Miton Group 5,759,944 4.5% George Letham 4,727,564 3.7% Charles Stanley 4,315,096 3.4% Chelverton Asset Management 3,981,827 3.1% 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 60 and 61. During 2025 there were no changes to the Board of Directors. The appointment and removal of Directors are governed by the Articles, the 2024 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’ report continued Stelrad Group plc Annual Report 202598 ![]() 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 92. Details of the Executive Directors’ service agreements and Non-Executive Directors’ letters of appointment are available in the Remuneration Report on page 87. 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 2025 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. 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 facility agreement originally dated 2 November 2021, and subsequently amended and restated by an amendment and restatement agreement dated 5 December 2025, 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 ability. Further examples of employee engagement across the Group can be found in the Sustainability Report on pages 25 to 40. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 99 ![]() ### Directors’ report continued Equality, diversity and inclusion We are 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 75. Research and development expenditure Research and development costs of £1.5 million (2024: £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 (2024: £nil) and no political expenditure was incurred during the year (2024: £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 21 May 2025, 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 20 May 2026 and therefore the Company will seek to renew the authority in line with the above considerations. The resolution to be proposed at the 2026 AGM, authorising political donations and expenditure, is to ensure that the Group does not commit any technical breach of the Companies Act 2006. Important developments since 31 December 2025 There have been no material events or developments affecting the Company or any of its operating subsidiaries since 31 December 2025. 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 20 May 2026 at 12:30 pm. 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. Stelrad Group plc Annual Report 2025100 ![]() 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, confirms 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 they face. 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 13 March 2026 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 101 ![]() ### Independent auditors’ report to the members of Stelrad Group plc #### 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 2025 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 balance sheet as at 31December2025; • the Company balance sheet as at 31December2025; • the Consolidated income statement for the year then ended; • the Consolidated statement of comprehensive income for the year then ended; • the Consolidated statement of changes in equity for the year then ended; • the Company statement of changes in equity for the year then ended; • 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 9, 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 scopе Group reporting. In addition, audit procedures were performed over one or more FSLIs in four other components, including the Company. • This accounted for 94% of the total Group revenue and 95% of profit before tax. Key audit matters • Completeness and accuracy of indirect rebates (group). • Impairment of Radiators SpA Cash Generating Unit (CGU) (group). • Impairment of investments (parent). Materiality • Overall group materiality: £2,795,000 (2024: £2,179,000) based on 1.00% (2024:0.75%) of total revenues. • Overall company materiality: £1,159,000 (2024: £1,159,000) based on 1.00% (2024:1.00%) of total assets. • Performance materiality: £2,096,000 (2024: £1,634,000) (group) and £869,000 (2024: £869,000) (company). Stelrad Group plc Annual Report 2025102 ![]() #### Report on the audit of the financial statements continued Our audit approach continued 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. The key audit matters below are consistent with last year. 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 indirect 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 and full year expense for indirect rebates. 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; • challenged and corroborated the value and timing of rebate claims paid in the year through testing the underlying data; • assessed and determined the relationship between monthly gross sales data and monthly rebate claims based on tested historical data; • developed an independent expectation for the value of rebate claims expected to be received on gross sales made in the year to challenge management’s estimate; • compared the independent expectation to the actual charge recognised in the consolidated income statement; • recalculated the expected consolidated balance sheet position of the accrual; • compared the expected position to the actual position on the consolidated balance sheet; • performed sensitivity analysis over the inputs used to calculate the independent expectation; • assessed the movements from prior year to current year in management’s key take up and poundage assumptions; and • performed a retrospective review to challenge the accuracy of management’s estimate in prior periods. Through our work performed we did not identify any issues. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 103 ![]() Key audit matter How our audit addressed the key audit matter Impairment of Radiators SpA Cash Generating Unit (CGU) (group) Refer to note 19 - Intangible assets. Management identified an impairment indicator due to the performance of Radiators SpA being below expectation and the termination of a supply contract after an unsuccessful price negotiation. An impairment of £9.9m was recognised in the year due to the carrying amount of the Radiators SpA CGU being higher than the value-in-use. We identified this as a key audit matter because of the increased risk around the valuation of the CGU due to the existence of impairment indicators and the potential for further material impairment. We obtained management’s assessment of impairment indicators and agree with the conclusion thatimpairment indicators existed in the year 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; • considered management’s forecasts against historical performance of Radiators SpA and considered management’s historical forecasting accuracy up to the date the impairment was recognised; • obtained independent market data for Radiators SpA sales markets to consider any inconsistencies in views being taken by management; • recalculated the impairment charge and agreed this to the charge posted by management; • assessed the allocation of the impairment charge between goodwill, customer relationships and other related assets within the Radiators SpA CGU; • reviewed the impairment indicators as at year end and concluded that there were no additional indications arising from the point the impairment was recognised; and • audited the disclosures in relation to the impairment. Through our work performed we did not identify any issues. We concur with management’s assessment that the recoverable amount was lower than the carrying value of the CGU and that the value of the impairment recognised was reasonable. We also consider the disclosures made in the financial statements to be appropriate. #### Report on the audit of the financial statements continued Our audit approach continued Key audit matters continued ### Independent auditors’ report to the members of Stelrad Group plc continued Stelrad Group plc Annual Report 2025104 ![]() #### Report on the audit of the financial statements continued Our audit approach continued Key audit matters continued Key audit matter How our audit addressed the key audit matter 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 posted by management in 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. 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, including Belgium, 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; review of component auditor working papers; and obtaining signed interoffice opinions that the component financial information was properly prepared in accordance with the Group’s accounting policies. Members of the Audit team visited the Belgian and Dutch components in order to better understand and direct the response to the significant audit risks identified for this component. This included meeting with local management. The Company is subject to a full scope audit of its financial information due to the separate presentation of the Company financial statements. The Company audit was also performed by the Group audit team. The Company is principally a holding company and there are no branches outside the UK. The Company is audited on a stand-alone basis, and hence, testing has been performed on all material financial statement line items. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 105 ![]() #### Report on the audit of the financial #### statements continued Our audit approach continued 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 £2,795,000 (2024: £2,179,000) £1,159,000 (2024: £1,159,000) How we determined it 1.00% (2024: 0.75%) of total revenues 1.00% (2024: 1.00%) 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. 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. 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 £164,000 and £2,500,000. 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% (2024: 75%) of overall materiality, amounting to £2,096,000 (2024:£1,634,000) for the group financial statements and £869,000 (2024: £869,000) 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 at the upper end 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 £140,000 (group audit) (2024: £109,000) and £57,000 (company audit) (2024: £57,000) as well as misstatements below those amounts that, inour view, warranted reporting for qualitative reasons. 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; • corroborating the availability of the bank facilities throughout the going concern period, including consideration of the refinancing in December 2025; 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 2026 financial year. ### Independent auditors’ report to the members of Stelrad Group plc continued Stelrad Group plc Annual Report 2025106 ![]() #### Report on the audit of the financial #### statements continued Conclusions relating to going concern continued 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2025 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 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 107 ![]() #### Report on the audit of the financial #### statements continued 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 enquiries 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. 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 corporate tax legislation in the group’s key territories. 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 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 regulations and fraud; • review of minutes of meetings of the Board of Directors and the Audit & 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 (refer to Note 5 on page 123); • identifying and testing journal entries, in particular any journals posted with unusual account combinations with a particular focus on revenue and operating profit; and • obtaining an understanding of the legal and regulatory framework applicable to the Group and how the Group is complying with that framework. ### Independent auditors’ report to the members of Stelrad Group plc continued Stelrad Group plc Annual Report 2025108 ![]() #### Report on the audit of the financial #### statements continued 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 We were first appointed by the company for the financial year ended 31December2021. Our uninterrupted engagement covers 5 financial years. #### 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 13March2026 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 109 ![]() | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | Note | £’000 | £’000 | | Continuing operations | | | | | Revenue | 6 | 279, 59 8 | 29 0, 57 7 | | Cost of sales | | (193 , 327) | (2 01 , 617) | | Gross profit | | 8 6 , 271 | 88,960 | | Selling and distribution expenses | | (40 , 58 8) | (41 ,7 2 9) | | Administrative expenses | | (16 , 2 8 2) | (17, 16 5) | | Other operating income/(expenses) | 7 | 3 , 0 01 | 1 , 31 9 | | Exceptional items | 8 | (14 , 92 5) | — | | Operating profit | 9 | 17, 47 7 | 31 , 38 5 | | Finance income | 13 | 17 3 | 18 6 | | Finance costs | 14 | (7, 57 6) | (8 , 18 9) | | Profit before tax | | 10 , 0 74 | 23, 3 82 | | Income tax expense | 15 | (9, 23 0) | (6 , 86 4) | | Profit for the year | | 844 | 16 , 518 | | | Note | 2025 | 2024 | | Earnings per share | | | | | Basic | 16 | 0.66p | 12 . 97p | | Diluted | 16 | 0.6 6p | 1 2 . 8 7p | ### Consolidated statement ### of comprehensive income for the year ended 31 December 2025 | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | Note | £’000 | £’000 | | Profit for the year | | 844 | 16, 518 | | Other comprehensive income/(expense) | | | | | Other comprehensive income/(expense) that may be reclassified to profit or loss in subsequent periods: | | | | | Net (loss)/gain on monetary items forming part of net investment in foreign operations and qualifying | | | | | hedges of net investments in foreign operations | | (916) | 867 | | Income tax effect | 15 | 229 | (2 17 ) | | Exchange differences on translation of foreign | | | | | operations | | 5,0 09 | (4 ,7 1 1) | | Net other comprehensive income/(expense) | | | | | thatmay be reclassified to profit or loss in subsequent periods | | 4 , 322 | (4 , 0 61) | | Other comprehensive (expense)/income not to be reclassified to profit or loss in subsequent periods: | | | | | Remeasurement losses on defined benefit plans | 28 | (11 3) | (925) | | Income tax effect | 15 | 28 | 232 | | Net other comprehensive expense not to be reclassified to profit or loss in subsequent periods | | (85) | (693) | | Other comprehensive income/(expense) for the year, netof tax | | 4 , 2 37 | (4 ,7 5 4) | | Total comprehensive income for the year, net of tax attributable to owners of the parent | | 5, 0 81 | 11 ,76 4 | ### Consolidated income statement for the year ended 31 December 2025 Stelrad Group plc Annual Report 2025110 ![]() ### Consolidated balance sheet as at 31 December 2025 (Registered Number 13670010) | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | Note | £’000 | £’000 | | Assets | | | | | Non-current assets | | | | | Property, plant and equipment | 18 | 7 2 , 491 | 7 9 , 17 3 | | Intangible assets | 19 | 3 47 | 4 ,6 52 | | Trade and other receivables | 22 | 29 9 | 28 4 | | Deferred tax assets | 15 | 4 , 836 | 4, 8 21 | | | | 7 7, 9 7 3 | 8 8 ,93 0 | | Current assets | | | | | Inventories | 21 | 62 , 4 02 | 6 7, 3 11 | | Trade and other receivables | 22 | 47, 1 6 4 | 4 5 , 47 8 | | Income tax receivable | | 34 8 | 235 | | Financial assets | 31 | — | 293 | | Cash and cash equivalents | 23 | 18 , 9 78 | 18 ,6 3 3 | | | | 1 28,89 2 | 131,950 | | Total assets | | 20 6 , 86 5 | 2 20 ,880 | | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | Note | £’000 | £’000 | | Equity and liabilities | | | | | Equity | | | | | Share capital | 26 | 127 | 127 | | Merger reserve | | (11 4 , 4 6 9) | (1 1 4,469) | | Retained earnings | | 23 1,253 | 23 9, 78 8 | | Foreign currency reserve | | (6 3 , 5 31) | (6 7, 8 5 3) | | Total equity | | 53 , 38 0 | 57, 59 3 | | Non-current liabilities | | | | | Interest-bearing loans and borrowings | 20 | 74 , 411 | 8 3, 329 | | Deferred tax liabilities | 15 | 222 | 20 9 | | Provisions | 25 | 1 , 832 | 1 , 910 | | Net employee defined benefit liabilities | 28 | 4 ,625 | 5 , 11 8 | | | | 81 , 0 9 0 | 9 0, 566 | | Current liabilities | | | | | Trade and other payables | 24 | 6 7, 0 5 8 | 69, 210 | | Financial liabilities | 20 | 2 21 | — | | Interest-bearing loans and borrowings | 20 | 2 , 57 9 | 2 , 21 2 | | Income tax payable | | 1,466 | 550 | | Provisions | 25 | 1 , 0 71 | 74 9 | | | | 7 2 , 395 | 72, 72 1 | | Total liabilities | | 153, 4 85 | 16 3 , 2 8 7 | | Total equity and liabilities | | 206 , 8 65 | 2 2 0,880 | The financial statements on pages 110 to 144 were approved by the Board of Directors on 13 March 2026 and signed on its behalf by: Leigh Wilcox Chief Financial Officer STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 111 ![]() ### Consolidated statement of changes in equity for the year ended 31 December 2025 | | | | | | | | --- | --- | --- | --- | --- | --- | | | | | | 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 2024 | 127 | (1 1 4,46 9) | 23 3 , 329 | (6 3 ,7 9 2) | 5 5, 195 | | Profit for the year | — | — | 16 , 51 8 | — | 16 , 51 8 | | Other comprehensive expense for the year | — | — | (69 3) | (4 , 0 61) | (4 ,7 5 4) | | Total comprehensive income/(expense) | — | — | 15, 8 25 | (4 , 0 61) | 1 1 ,7 6 4 | | Share-based payment charge (note 12) | — | — | 440 | — | 440 | | Dividends paid (note 17) | — | — | (9 ,806) | — | (9 ,806) | | At 31 December 2024 | 127 | (1 1 4,46 9) | 23 9, 78 8 | (6 7, 8 5 3) | 5 7, 59 3 | | Profit for the year | — | — | 844 | — | 844 | | Other comprehensive income/(expense) for the year | — | — | (85) | 4, 322 | 4 , 237 | | Total comprehensive income | — | — | 759 | 4 , 322 | 5 , 0 81 | | Share-based payment charge (note 12) | — | — | 70 4 | — | 704 | | Dividends paid (note 17) | — | — | (9,9 98) | — | (9, 99 8) | | At 31 December 2025 | 127 | (11 4 , 4 6 9) | 231,253 | (6 3, 531) | 53 , 3 8 0 | Stelrad Group plc Annual Report 2025112 ![]() ### Consolidated statement of cash flows for the year ended 31 December 2025 | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | Note | £’000 | £’000 | | Operating activities | | | | | Profit before tax | | 1 0 , 0 74 | 23,3 82 | | Adjustments to reconcile profit before tax to net | | | | | cash flows: | | | | | – Depreciation of property, plant and equipment | 18 | 11 , 3 9 3 | 11, 69 2 | | – Amortisation of intangible assets | 19 | 33 0 | 468 | | – Gain on disposal of property, plant and equipment | | (80) | (11 8) | | – Share-based payments charge | | 70 4 | 440 | | – Exceptional items – non-cash elements | | 12 , 6 6 3 | — | | – Finance income | 13 | (1 73) | (18 6) | | – Finance costs | 14 | 7, 5 76 | 8 , 18 9 | | Working capital adjustments: | | | | | – Decrease in trade and other receivables | | 5 17 | 3,8 8 5 | | – Decrease/(increase) in inventories | | 4 , 690 | (6 , 14 3) | | – Decrease in trade and other payables | | (4 , 43 0) | (6 , 74 3) | | – Increase/(decrease) in provisions | | 94 | (2 , 176) | | – Movement in other financial assets/liabilities | | 531 | (610) | | – Decrease in other pension provisions | | (1) | (7) | | – Difference between pension charge and cashcontributions | | (1,9 2 1) | (5 81) | | | | 4 1,96 7 | 31 , 49 2 | | Income tax paid | | (8,000) | (6, 265) | | Interest received | | 17 3 | 18 6 | | Net cash flows generated from operating activities | | 34 ,14 0 | 2 5 , 41 3 | | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | Note | £’000 | £’000 | | Investing activities | | | | | Proceeds from sale of property, plant, equipment | | | | | and intangible assets | | 185 | 3 41 | | Purchase of property, plant and equipment | 18 | (5 , 215) | (5 , 8 61) | | Purchase of intangible assets | 19 | (35) | (10 0) | | Net cash flows used in investing activities | | (5 ,0 65) | (5 ,620) | | Financing activities | | | | | Transaction costs related to refinancing | | (733) | — | | Proceeds from external borrowings | | — | 3, 38 8 | | Repayment of external borrowings | | (10 , 21 9) | (5 ,150) | | Payment of lease liabilities | | (2 , 6 6 2) | (2 , 8 65) | | Interest paid | | (5 , 9 05) | ( 7, 3 7 2) | | Dividends paid | 17 | (9,9 9 8) | (9 ,806) | | Net cash flows used in financing activities | | (29,517) | (2 1,80 5) | | Net decrease in cash and cash equivalents | | (4 42) | (2 , 01 2) | | Net foreign exchange difference | | 787 | (797) | | Cash and cash equivalents at 1 January | 23 | 18 , 633 | 2 1 , 4 42 | | Cash and cash equivalents at 31 December | 23 | 18, 9 78 | 18, 6 33 | STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 113 ![]() ### Notes to the consolidated financial statements for the year ended 31 December 2025 1 Corporate information The consolidated financial statements of Stelrad Group plc and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2025 were authorised for issue by the Board of Directors on 13 March 2026. 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 pages 54 and 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 2025. 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 12 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 31. 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. 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. Stelrad Group plc Annual Report 2025114 ![]() 4 Material accounting policy information continued B. Fair value measurement continued 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. 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 115 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 4 Material accounting policy information continued D. Revenue recognition continued 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. 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. Stelrad Group plc Annual Report 2025116 ![]() 4 Material accounting policy information continued 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 the 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. 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 117 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 4 Material accounting policy information continued 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. 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. Stelrad Group plc Annual Report 2025118 ![]() 4 Material accounting policy information continued I. Financial instruments – initial recognition and subsequent measurement continued iii) Financial liabilities continued 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. 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 119 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 4 Material accounting policy information continued 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. 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. Stelrad Group plc Annual Report 2025120 ![]() 4 Material accounting policy information continued N. Leases continued Group as lessee continued 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 20). 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 an 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. 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. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 121 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 4 Material accounting policy information continued P. Pensions and other post-employment benefits continued 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 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. Interest income For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (“EIR”). T. 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. U. New standards applied in the year The following amendments and interpretations applied for the first time in 2025, but do not have a material impact on the consolidated financial statements of the Group: • Lack of exchangeability – Amendments to IAS 21 V. 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) | | 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 | | Contracts Referencing Nature-dependent Electricity – | | | Amendments to IFRS 9 and IFRS 7 | 1 January 2026 | | Presentation and Disclosure in Financial Statements – IFRS 18 | 1 January 2027 | | Subsidiaries without Public Accountability: Disclosures – IFRS 19 | 1 January 2027 | The Group anticipates that the adoption of IFRS 18 may have an impact on the Group’s consolidated financial statements in future periods. The Group continues to assess the full impact of IFRS 18, however, the impact will depend on the facts and circumstances at the point of adoption and upon the transition choices adopted. The Group does not anticipate that the adoption of the remaining standards will 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. Stelrad Group plc Annual Report 2025122 ![]() 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 and depreciation are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Details of the impairment assessment of goodwill and other assets, which includes key estimates, are disclosed in note 19. Impairment of inventories Following the exit from a loss making contract in the Radiators SpA business in the year, the Group has reduced the operational complexity and product range of the business, resulting in a one-off inventory provision of £2.3 million. The inventory provision has been classified as exceptional in nature because of the direct link between the exit from the loss making contract and the reduction in operational complexity of the business, and resultant product range rationalisation. 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 makes 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. 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 | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | UK & Ireland | 131,254 | 137,351 | | Europe | 133,526 | 138,971 | | Turkey & International | 14,818 | 14,255 | | Total revenue | 279,598 | 290,577 | The revenue arising in the UK, being the Company’s country of domicile, was £126,046,000 (2024: £134,442,000). All revenue arising in the UK was to external customers. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 123 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 6 Segmental information continued Adjusted operating profit by geographical market | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | UK & Ireland | 29,959 | 29,548 | | Europe | 7,331 | 7,937 | | Turkey & International | 1,183 | 1,042 | | Central costs | (6,002) | (7,005 ) | | Adjusted operating profit | 32,471 | 31,522 | | Exceptional items | (14,925) | — | | Amortisation of customer relationships | (69) | (137 ) | | Operating profit | 17,477 | 31,385 | Further detail on the exceptional items can be found in note 8. 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 (2024: one). Non-current operating assets | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | UK | 14,662 | 16,324 | | The Netherlands | 16,779 | 17,453 | | Turkey | 26,622 | 25,549 | | Italy | 13,916 | 23,894 | | Other | 859 | 605 | | Total | 72,838 | 83,825 | The CODM reviews 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. 7 Other operating income/(expenses) | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Net gain on disposal of property, plant and equipment | 80 | 118 | | Foreign currency gains | 3,559 | 723 | | Net losses on forward derivative contracts | (1,052) | (35) | | Sundry other income | 414 | 513 | | | 3,001 | 1,319 | 8 Exceptional items | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Impairment of goodwill | 2,694 | — | | Impairment of customer relationships | 1,392 | — | | Impairment of property, plant and equipment | 5,814 | — | | Inventory provision | 2,307 | — | | Restructuring costs | 2,718 | — | | | 14,925 | — | During the year ended 31 December 2025, the charge for exceptional items was £14,925,000, of which £2,262,000 relates to cash items and £12,663,000 relates to non-cash items. During the year, an impairment was recognised in respect of the Radiators SpA cash- generating unit, resulting in an impairment of goodwill of £2,694,000, an impairment of customer relationships of £1,392,000, an impairment of property, plant and equipment of £5,814,000 and an inventory provision of £2,307,000, which has arisen due to the circumstances surrounding the impairment. Additionally, restructuring costs of £2,718,000 have been incurred or provided for as a result of proactive margin management initiatives and cost reduction activities across our sites in Turkey, Italy and Denmark. Further detail can be found in the Finance and Business Review within the exceptional items section on page 43. 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. Stelrad Group plc Annual Report 2025124 ![]() 9 Operating profit Operating profit is stated after charging/(crediting): | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Auditors’ remuneration: | | | | – Audit of the Company and consolidated financial statements | 180 | 169 | | – Audit of subsidiaries | 341 | 316 | | | 521 | 485 | | – Non-audit services – interim review fee | 40 | 38 | | – Non-audit services – other | 8 | 8 | | | 48 | 46 | | Total auditors’ remuneration | 569 | 531 | | Depreciation of owned assets | 8,744 | 8,926 | | Depreciation of right-of-use assets | 2,649 | 2,766 | | | 11,393 | 11,692 | | Amortisation of customer relationships | 69 | 137 | | Amortisation of other intangibles | 261 | 331 | | | 330 | 468 | | Profit on sale of property, plant and equipment and other intangibles | (80) | (118) | | Other exchange gains | (2,507) | (688) | | Research and development costs | 1,488 | 1,552 | 10 Employee benefits expense | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Wages and salaries | 44,196 | 44,815 | | Social security costs | 8,506 | 8,323 | | Other pension costs | 3,475 | 3,082 | | Share-based payment charge (note 12) | 704 | 440 | | | 56,881 | 56,660 | The average monthly number of employees during the year was made up as follows: | | | | | --- | --- | --- | | | 2025 | 2024 | | | Number | Number | | Cost of sales | 735 | 779 | | Selling and distribution | 481 | 526 | | Administration | 126 | 130 | | | 1 , 3 42 | 1,435 | 11 Directors’ remuneration The Remuneration Policy is described in the Remuneration Report on pages 83 to 87. | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Aggregate remuneration | 1,294 | 1,735 | The amounts in respect of the highest paid Director are as follows: | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Aggregate remuneration | 630 | 969 | 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 (2024: £nil). Further details on Directors’ remuneration can be found in the Remuneration Report on pages 79 to 96. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 125 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 12 Share-based payments Long Term Incentive Plans | | | | | --- | --- | --- | | The Executive Directors and selected members of the senior management team across | | 2025 2024 | | the Group participate in the Stelrad Group plc Long Term Incentive Plan (“LTIP”), which | Outstanding at the beginning of the year | 1,256,515 985,729 | | was set up and launched during the year ended 31 December 2022. A third award was | Granted during the year | 1,360,110 1,368,487 | | made during the year ended 31 December 2025. The LTIP provides for the Executive | Lapsed during the year — (985,729) | | | Directors and selected members of the senior management team to be awarded nil-cost | Forfeited during the year | (123,353) (111,972) | | 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 79 to 96 for further details of the LTIP. The expense recognised for the LTIP during the year ended 31 December 2025 was £704,000 (2024: £339,000). During the year ended 31 December 2025, 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 2025, 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 2025. The inputs to the model used for the awards granted in the year ended 31 December 2025 were: | | | | --- | --- | | | 2025 | | Stelrad Group plc: | | | Share price at date of grant | £1.29 | | 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% | 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: Outstanding at the end of the year 2,493,272 1,256,515 The weighted average share price of the share awards at the year end was £1.41 (2024: £1.36). The weighted average fair value of awards granted during the year ended 31 December 2025 was £1.29 (2024: £1.17). The weighted average remaining contractual life of the awards was 1.71 years (2024: 2.21 years). There were no awards exercised in the year (2024: 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 79 to 96 for further details of the DSBP. The expense recognised for the DSBP during the year ended 31 December 2025 was £nil (2024: £101,000). 75,286 share awards have been granted under the DSBP during the year ended 31 December 2025 (2024: 95,266). 13 Finance income | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Interest on cash deposits | 173 | 186 | Stelrad Group plc Annual Report 2025126 ![]() 14 Finance costs | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Interest on bank loans | 4,461 | 5,723 | | Amortisation of loan issue costs | 692 | 375 | | Interest expense on defined benefit liabilities | 1,047 | 921 | | Finance charges payable on lease liabilities | 97 | 129 | | Other finance charges | 1,279 | 1,041 | | | 7,576 | 8,189 | Amortisation of loan issue costs includes £342,000 related to a one-off loan fee amortisation upon refinancing, which has been classified as one-off refinancing costs in note 16 when calculating the adjusted earnings per share. 15 Income tax expense The major components of income tax expense are as follows: | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Consolidated income statement | | | | Current income tax: | | | | Current income tax charge | 8,794 | 5,083 | | Adjustments in respect of current income tax charge of previous year | (41) | (127) | | Deferred tax: | | | | Relating to origination and reversal of temporary differences | 477 | 1,908 | | Income tax expense reported in the income statement | 9,230 | 6,864 | | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’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 | (28) | (232) | | Current tax on monetary items forming part of net | | | | investment and on hedges of net investment | (229) | 217 | | Income tax credited to other comprehensive income | (257) | (15) | Reconciliation of tax expense and the accounting profit at the tax rate in the United Kingdom of 25% (2024: 25%): | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Profit before tax | 10,074 | 23,382 | | Profit before tax multiplied by standard rate of corporation | | | | tax in the UK of 25% (2024: 25%) | 2,519 | 5,846 | | Adjustments in respect of current income tax charge of previous year | (41) | (127) | | Non-deductible expenses | 2,883 | 352 | | Differences arising due to tax losses | 1,048 | 286 | | Other timing differences (including exceptional charges) | 2,150 | 721 | | Benefit of overseas investment incentives | — | (220) | | Withholding tax on dividend income | 1,508 | 1,032 | | Effect of different overseas tax rates | (837) | (1,026) | | Total tax expense reported in the income statement | 9,230 | 6,864 | STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 127 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 15 Income tax expense continued Deferred tax Deferred tax relates to the following: | | | | | | | --- | --- | --- | --- | --- | | | | Consolidated balance sheet | | Consolidated income statement | | | 2025 | 2024 | 2025 | 2024 | | | £’000 | £’000 | £’000 | £’000 | | Capital allowances | (784) | (641) | 11 | (742) | | Pension | 901 | 1,010 | (189) | 99 | | Fixed asset fair value adjustments | (184) | (1,303) | 1,165 | 58 | | Losses available for offsetting | | | | | | against future income | 2,343 | 3,322 | (1,069) | (965) | | Other temporary differences | 2,338 | 2,224 | (395) | (358) | | Deferred tax charge | | | (477) | (1,908) | | Net deferred tax assets | 4,614 | 4,612 | | | | Reflected in the balance sheet as: | | | | | | Deferred tax assets | 4,836 | 4,821 | | | | Deferred tax liabilities | (222) | (209) | | | | Deferred tax assets, net | 4,614 | 4,612 | | | Reconciliation of deferred tax assets, net | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Opening balance as at 1 January | 4,612 | 6,467 | | Tax charge recognised in income statement | (477) | (1,908) | | Tax income recognised in other comprehensive income/ | | | | (expense) | 28 | 232 | | Exchange adjustment | 451 | (179) | | Closing balance as at 31 December | 4,614 | 4,612 | 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 £602,000 (2024: £2,118,000) have been recognised in respect of two (2024: two) loss-making subsidiary companies; these are recognised on the grounds of future projected performance. Deferred tax asset recognition 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 | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Capital allowances | 14 | 13 | | Losses available for offsetting against future income | 2,741 | 3,486 | | | 2,755 | 3,499 | The Group has tax losses which arose in the United Kingdom of £10,964,000 (2024: £13,944,000) 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. Stelrad Group plc Annual Report 2025128 ![]() 16 Earnings per share | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Net profit for the year attributable to owners of the parent | 844 | 16,518 | | Exceptional items | 14,925 | — | | Amortisation of customer relationships | 69 | 137 | | Refinancing costs (note 14) | 342 | — | | Tax on exceptional items | 582 | — | | Tax on amortisation of customer relationships | (19) | (38) | | Tax on refinancing costs | (86) | — | | Adjusted net profit for the year attributable to owners | | | | of the parent | 16,657 | 16,617 | | | | | | --- | --- | --- | | | 2025 | 2024 | | | Number | Number | | Basic weighted average number of shares in issue | 127,352,555 | 127,352,555 | | Diluted weighted average number of shares in issue | 127,474,048 | 128,389,983 | | Earnings per share | | | | Basic earnings per share (pence per share) | 0.66 | 12.97 | | Diluted earnings per share (pence per share) | 0.66 | 12.87 | | Adjusted earnings per share | | | | Basic earnings per share (pence per share) | 13.08 | 13.05 | | Diluted earnings per share (pence per share) | 13.07 | 12.94 | 17 Dividends paid The Board is recommending a final dividend of 5.05 pence per share (2024: 4.81 pence per share), which, if approved, will mean a final dividend payment of £6,431,000 (2024: £6,126,000). 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. | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Declared and paid during the year | | | | Equity dividend on ordinary shares: | | | | Final dividend for 2024: 4.81p per share (2023: 4.72p per share) | 6,126 | 6,011 | | Interim dividend for 2025: 3.04p per share (2024: 2.98p per share) | 3,872 | 3,795 | | | 9,998 | 9,806 | | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Dividend proposed (not recognised as a liability) | | | | Equity dividend on ordinary shares: | | | | Final dividend for 2025: 5.05p per share (2024: 4.81p per share) | 6,431 | 6,126 | STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 129 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 18 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 2024 | 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 | | Additions | 201 | 706 | 2,243 | 2,748 | 1,267 | 7,165 | | Transfers | 34 | — | (1,346) | 1,114 | 198 | — | | Disposals | (259) | (1,422) | — | (11,869) | (1,065) | (14,615) | | Exchange adjustment | 1,961 | 669 | 60 | 4,601 | 411 | 7,702 | | At 31 December 2025 | 46,802 | 12,181 | 2,717 | 85,714 | 13,100 | 160,514 | | Accumulated depreciation and impairment | | | | | | | | At 1 January 2024 | 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 | | Depreciation charge | 1,415 | 1,486 | — | 6,745 | 1,747 | 11,393 | | Disposals | (260) | (1,422) | — | (11,853) | (1,061) | (14,596) | | Impairment (note 19) | 5,815 | — | — | (23) | 22 | 5,814 | | Exchange adjustment | 654 | 388 | — | 3,002 | 279 | 4,323 | | At 31 December 2025 | 23,578 | 7,356 | — | 47,136 | 9,953 | 88,023 | | Net book value | | | | | | | | At 31 December 2025 | 23,224 | 4,825 | 2,717 | 38,578 | 3,147 | 72,491 | | 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 | Stelrad Group plc Annual Report 2025130 ![]() 18 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: | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Leasehold buildings | 4,819 | 5,299 | | Plant and equipment | 1,546 | 1,175 | | Fixtures, fittings and motor vehicles | 1,040 | 1,255 | | | 7,405 | 7,729 | Right-of-use asset additions within property, plant and equipment, by line item, during the year are: | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Leasehold buildings | 706 | 214 | | Plant and equipment | 736 | 523 | | Fixtures, fittings and motor vehicles | 508 | 413 | | | 1,950 | 1,150 | Depreciation of right-of-use assets within property, plant and equipment, by line item, during the year is: | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Leasehold buildings | 1,465 | 1,462 | | Plant and equipment | 577 | 565 | | Fixtures, fittings and motor vehicles | 607 | 739 | | | 2,649 | 2,766 | Land and buildings with a carrying amount of £12,024,000 (2024: £18,095,000) 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. 19 Intangible assets | | | | | | | --- | --- | --- | --- | --- | | | | | Technology | | | | | Customer | and software | | | | Goodwill | relationships | costs | Total | | | £’000 | £’000 | £’000 | £’000 | | Cost | | | | | | At 1 January 2025 | 2,607 | 1,737 | 1,357 | 5,701 | | Additions | — | — | 35 | 35 | | Disposals | — | — | (210) | (210) | | Exchange adjustment | 146 | 97 | 73 | 316 | | At 31 December 2025 | 2,753 | 1,834 | 1,255 | 5,842 | | Accumulated amortisation | | | | | | and impairment | | | | | | At 1 January 2025 | — | 323 | 726 | 1,049 | | Amortisation | — | 69 | 261 | 330 | | Disposals | — | — | (124) | (124) | | Impairment | 2,694 | 1,392 | — | 4,086 | | Exchange adjustment | 59 | 50 | 45 | 154 | | At 31 December 2025 | 2,753 | 1,834 | 908 | 5,495 | | Net book value | | | | | | At 31 December 2025 | — | — | 347 | 347 | | At 31 December 2024 | 2,607 | 1,414 | 631 | 4,652 | Included in technology and software costs are assets under construction of £nil (2024: £nil), which are not amortised. Impairment Goodwill is subject to annual impairment testing. All of the goodwill recognised was allocated to a single cash-generating unit (“CGU”), being the Radiators SpA division which, after the impairment was recognised, had a total carrying value of £13.9 million. A CGU represents the lowest level in the Group at which goodwill is monitored for internal management purposes. Management is required to assess CGUs for impairment where it believes there are triggers for impairment. During the year, management identified that there were triggers for impairment with respect to the Radiators SpA CGU and performed an impairment review as set out below. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 131 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 19 Intangible assets continued Impairment continued Impairment assessment of goodwill continued Impairment tests were 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 used the net present value of the CGU’s discounted future cash flows covering a three-year period. Terminal growth rates of 1.8% were applied beyond this, based on historical macroeconomic performance and projections of the sector served by the CGUs. When assessing for impairment, 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 33 to 37 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. For the value in use model, a pre-tax discount rate of 14.8% has been applied in determining the recoverable amounts of the CGU. The pre-tax discount rate was estimated based on the Group’s risk adjusted cost of capital. Other key assumptions throughout the budget period are EBITDA, which has been included in the terminal value at a margin of 7%, volumes, contribution per radiator sold and capital expenditure. The key assumptions have been determined using past experience or external sources of information. Further detail on the impairment can be found in the Finance and Business Review within the exceptional items section on page 43. Based on the impairment tests performed, the recoverable amount calculated in the impairment review of the Radiators SpA CGU was lower than the carrying amount. As a result, an impairment has been recognised, reducing goodwill by £2,694,000, customer relationships by £1,392,000 and property, plant and equipment by £5,814,000. Inventories are not included in the carrying value of the CGU; however, the circumstances surrounding the impairment have resulted in an additional inventory provision of £2,307,000. The tax impact of the total impairment was a charge of £856,000. 20 Financial liabilities Financial liabilities – other – not interest bearing Financial instruments through profit or loss reflect the 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. | | | | | --- | --- | --- | | | 2025 | 2024 | | Liabilities | £’000 | £’000 | | Financial instruments at fair value through profit or loss | | | | Derivatives not designated as hedges – foreign exchange | | | | forward contracts | 221 | — | | Total instruments at fair value through profit or loss | 221 | — | | Current | 221 | — | | Non-current | — | — | Financial liabilities – interest-bearing loans and borrowings | | | | | | | --- | --- | --- | --- | --- | | | Effective | | | | | | interest rate | | 2025 | 2024 | | | % | Maturity | £’000 | £’000 | | Current interest-bearing | | | | | | loans and borrowings | | | | | | Lease liabilities | | | 2,579 | 2,212 | | | | | 2,579 | 2,212 | | Non-current interest-bearing | | | | | | loans and borrowings | | | | | | Lease liabilities | | | 4,979 | 5,671 | | Revolving credit facility – GBP | SONIA + 1.75% | 4 Dec 2028 | 32,300 | 41,750 | | Revolving credit facility – Euro | Euribor + 1.75% | 4 Dec 2028 | 13,097 | 13,146 | | Term loan | Euribor + 1.75% | 4 Dec 2028 | 24,750 | 23,436 | | Unamortised loan costs | | | (715) | (674) | | | | | 74,411 | 83,329 | | Total interest-bearing loans | | | | | | and borrowings | | | 76,990 | 85,541 | Stelrad Group plc Annual Report 2025132 ![]() 20 Financial liabilities continued Financial liabilities – interest-bearing loans and borrowings continued 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 (“RCF”) and a €28.346 million term loan facility. During the year ended 31 December 2025, the £100 million loan facility was renewed. The renewed facility is for an initial three-year term until December 2028, with an extension option for two further years, and is provided by the two existing lenders. 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 | | | 2025 | Cash flows | changes | 2025 | | | £’000 | £’000 | £’000 | £’000 | | Liabilities from financing activities | | | | | | Revolving credit facility – GBP | 41,750 | (9,450) | — | 32,300 | | Revolving credit facility – Euro | 13,146 | (769) | 720 | 13,097 | | Term loan | 23,436 | — | 1,314 | 24,750 | | Lease liabilities | 7,883 | (712) | 387 | 7,558 | | | 86,215 | (10,931) | 2,421 | 77,705 | | Other assets | | | | | | Cash and cash equivalents | (18,633) | 442 | (787) | (18,978 ) | | | (18,633) | 442 | (787) | (18,978 ) | | Net liabilities arising from financing | | | | | | activities | 67,582 | (10,489) | 1,634 | 58,727 | The non-cash changes all relate to foreign exchange differences. 21 Inventories | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Raw materials | 23,183 | 23,818 | | Work in progress | 2,796 | 3,388 | | Finished goods | 33,350 | 37,063 | | Other consumables | 3,073 | 3,042 | | | 62,402 | 67,311 | The cost of inventories recognised as an expense in the year was £193,327,000 (2024: £201,617,000). The provision for the impairment of stocks increased in the year, giving rise to a cost of £3,754,000 (2024: cost of £760,000), of which £2,307,000 was recognised as an exceptional item (note 8). At 31 December 2025, the provision for the impairment of stocks was £7,958,000 (2024: £3,974,000). 22 Trade and other receivables 2025 £’000 2024 £’000 Current | | | | | --- | --- | --- | | Trade receivables | 43,508 | 42,279 | | Other receivables | 2,842 | 2,629 | | Prepayments | 814 | 570 | | | 47,164 | 45,478 | | Non-current | | | | Other receivables | 299 | 284 | | | 299 | 284 | STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 133 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 22 Trade and other receivables continued The table below sets out the movements in the allowance for expected credit losses of trade receivables: | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | At 1 January | 548 | 806 | | Charge for the year | — | 14 | | Utilised | (20) | — | | Unused amounts reversed | (7) | (246) | | Exchange adjustment | 31 | (26) | | At 31 December | 552 | 548 | As at 31 December, the ageing of trade receivables (gross of impairment) is as follows: | | | | | | | | --- | --- | --- | --- | --- | --- | | | Total | Current | <30 days | 30–90 days | >90 days | | | £’000 | £’000 | £’000 | £’000 | £’000 | | 2025 | | | | | | | Gross carrying amount | 44,060 | 32,679 | 9,881 | 1,500 | — | | 2024 | | | | | | | Gross carrying amount | 42,827 | 33,241 | 5,464 | 3,873 | 249 | 23 Cash and cash equivalents | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Cash at bank and on hand | 18,978 | 18,633 | 24 Trade and other payables | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Current | | | | Trade payables | 44,040 | 46,581 | | Other payables and accruals | 17,168 | 18,485 | | Other taxes and social security | 5,595 | 3,822 | | Interest payable | 255 | 322 | | | 67,058 | 69,210 | 25 Provisions | | | | | | | | --- | --- | --- | --- | --- | --- | | | | Compensation | | Unused | | | | Warranty | fund | Restructuring | vacation | Total | | | £’000 | £’000 | £’000 | £’000 | £’000 | | At 1 January 2024 | 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 | | Arising during the year | 362 | 3 | 332 | 626 | 1,323 | | Released | — | (115) | — | — | (115) | | Utilised | (310) | (65) | (9) | (461) | (845) | | Exchange adjustment | 27 | 67 | 24 | (237) | (119) | | At 31 December 2025 | 531 | 1,177 | 656 | 539 | 2,903 | | Current | 116 | — | 656 | 299 | 1,071 | | Non-current | 415 | 1,177 | — | 240 | 1,832 | 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 Group-wide restructuring programmes 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. Stelrad Group plc Annual Report 2025134 ![]() 26 Share capital and reserves | | | | | | | --- | --- | --- | --- | --- | | | 2025 | 2025 | 2024 | 2024 | | | 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 | 27 Commitments and contingencies Commitments Amounts contracted for but not provided in the financial statements amounted to £1,349,000 (2024: £177,000) 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 $846,000 (2024: $17,917,000) and $36,444,000 (2024: $18,071,000) respectively. Termo Teknik Ticaret ve Sanayi A.S. has also issued letters of guarantee denominated in Turkish Lira totalling TL28,993,000 (2024: TL26,514,000). 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 2025 is £13,863,000 (2024: £12,123,000) on purchases and £23,750,000 (2024: £17,500,000) on sales. The fair value of the unsettled forward contracts held at the balance sheet date, determined by reference to their market values, is a liability of £221,000 (2024: asset of £293,000). As part of the £100 million loan facility, renewed in December 2025, 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. 28 Pensions and other post-employment plans | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Net employee defined benefit liability | | | | Turkish scheme – IAS 19 | 3,977 | 4,476 | | Italian scheme – IAS 19 | 605 | 600 | | Other retirement obligations – non-IAS 19 | 43 | 42 | | | 4,625 | 5,118 | 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 £3,977,000 (2024: £4,476,000). There are no assets held in this plan (2024: £nil). The expected contributions to the plan for the next reporting period to cover benefits paid are £245,000. The service cost in the year was £610,000 (2024: £383,000). 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 £605,000 (2024: £600,000). The expected contributions to the plan for the next reporting period to cover benefits paid are £39,000. The service cost in the year was £nil (2024: £nil). 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 £1,610,000 (2024: £1,577,000). STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 135 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 28 Pensions and other post-employment plans continued 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 £1,255,000 (2024: £1,122,000). There were outstanding contributions totalling £69,000 (2024: £66,000) due to the scheme at the balance sheet date. IAS 19 accounting – Turkish and Italian schemes Movement in defined benefit obligation | | | | | | | --- | --- | --- | --- | --- | | | Italian | Turkish | Italian | Turkish | | | scheme | scheme | scheme | scheme | | | 2025 | 2025 | 2024 | 2024 | | | £’000 | £’000 | £’000 | £’000 | | At 1 January | 600 | 4,476 | 860 | 3,148 | | Current service cost | — | 645 | — | 380 | | Interest cost | — | 1,099 | 26 | 893 | | Plan curtailments – service cost | — | (35) | — | 3 | | Plan curtailments – interest cost | — | (53) | — | 2 | | Amounts recognised in income statement | — | 1,656 | 26 | 1,278 | | Actuarial losses/(gains) | — | 113 | (3) | 928 | | Benefits paid | (28) | (1,169) | (248) | (326) | | Exchange differences | 33 | (1,099) | (35) | (552) | | At 31 December | 605 | 3,977 | 600 | 4,476 | Amounts recognised in other comprehensive income/(expense) | | | | | | | --- | --- | --- | --- | --- | | | Italian | Turkish | Italian | Turkish | | | scheme | scheme | scheme | scheme | | | 2025 | 2025 | 2024 | 2024 | | | £’000 | £’000 | £’000 | £’000 | | Experience adjustments – obligation | — | (60) | 3 | (1,010) | | Changes in demographic assumptions – | | | | | | obligation | — | (153) | — | (35) | | Changes in financial assumptions – | | | | | | obligation | — | 100 | — | 117 | | At 31 December | — | (113) | 3 | (928) | Principal actuarial assumptions | | | | | | | --- | --- | --- | --- | --- | | | Italian | Turkish | Italian | Turkish | | | scheme | scheme | scheme | scheme | | | 2025 | 2025 | 2024 | 2024 | | Discount rate (per annum) | 3.4% | 29.6% | 3.2% | 29.3% | | Future salary increases (per annum) | n/a | 24.6% | n/a | 25.6% | Quantitative sensitivity analysis | | | | | | | --- | --- | --- | --- | --- | | | 2025 | Discount rate | 2025 | Future salary | | | (per annum) | | increases (per annum) | | | | +1% | -1% | +1% | -1% | | | £’000 | £’000 | £’000 | £’000 | | (Decrease)/increase in defined benefit | | | | | | obligation – Italian scheme | (40) | 44 | — | — | | (Decrease)/increase in defined benefit | | | | | | obligation – Turkish scheme | (93) | 95 | 71 | (77) | 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. 29 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 £4,000 (2024: £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 £nil (2024: £2,000). During the year, the Group made purchases of £3,217,000 (2024: £4,047,000) 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 £420,000 (2024: £441,000). 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: | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Short-term employment benefits | 1,487 | 1,975 | Contributions to Group pension plans are disclosed in note 28. Stelrad Group plc Annual Report 2025136 ![]() 30 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 26. Details of interest-bearing loans and borrowings are shown in note 20. 31 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 2025 | £’000 | £’000 | £’000 | £’000 | | (Liabilities)/assets measured at fair value | | | | | | Derivative financial (liabilities)/assets | | | | | | Foreign exchange forward contracts – | | | | | | GBP/EUR | (229) | (229) | — | — | | Foreign exchange forward contracts – | | | | | | EUR/USD | 8 | 8 | — | — | | | (221) | (221) | — | — | | | | | | | | --- | --- | --- | --- | --- | | | 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 | — | — | 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 2025 and at 31 December 2024 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 2025 and 31 December 2024. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 137 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 31 Financial instrument disclosures continued C. Fair value of financial instruments at amortised cost | | | | | | | --- | --- | --- | --- | --- | | | | Carrying amount | Fair value | | | | 2025 | 2024 | 2025 | 2024 | | | £’000 | £’000 | £’000 | £’000 | | Financial liabilities | | | | | | Lease liabilities | 7,558 | 7,883 | 7,558 | 7, 883 | | Revolving credit facility – GBP | 32,300 | 41,750 | 32,300 | 41,750 | | Revolving credit facility – Euro | 13,097 | 13,146 | 13,097 | 13,146 | | Term loan | 24,750 | 23,436 | 24,750 | 23,436 | | | 77,705 | 86,215 | 77,705 | 86,215 | 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. 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 2024 and 31 December 2025, no interest rate swaps were in place. Approximately 10% (2024: 9%) of the Group’s borrowings are at a fixed rate of interest. Stelrad Group plc Annual Report 2025138 ![]() 31 Financial instrument disclosures continued D. Financial risk management objectives and policies continued Market risk continued 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 2025 | decrease | £’000 | | SONIA/Euribor | +0.5% | (404) | | SONIA/Euribor | -0.5% | 404 | | | | | | --- | --- | --- | | | | Effect on | | | | profit | | | Increase/ | before tax | | Year ended 31 December 2024 | decrease | £’000 | | SONIA/Euribor | +0.5% | (464) | | SONIA/Euribor | -0.5% | 464 | 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 2025 and 31 December 2024. 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 | | 2025 | +10% | 10 | | | -10% | (13) | | 2024 | +10 % | 68 | | | -10% | (83) | | | | | | --- | --- | --- | | | | Effect on profit | | | Change in | before tax | | | USD rate (1) | £’000 | | 2025 | +10% | 30 | | | -10% | (36) | | 2024 | +10 % | 74 | | | -10% | (91) | (1) A + movement indicates GBP strengthening relative to the other currency. | | | | | --- | --- | --- | | | | Effect on profit | | | Change in | before tax | | | TL rate (1) | £’000 | | 2025 | +10% | 641 | | | -10% | (783) | | 2024 | +10 % | (230) | | | -10% | 281 | (1) A + movement indicates GBP strengthening relative to the other currency. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 139 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 31 Financial instrument disclosures continued D. Financial risk management objectives and policies continued Market risk continued 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. 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. The 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 22 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 2025. 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 3.3% of the Group’s debt will mature in less than one year at 31 December 2025 (2024: 2.6%) 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 2025, the Group had available £30,630,000 (2024: £21,131,000) of undrawn committed borrowing facilities. Stelrad Group plc Annual Report 2025140 ![]() 31 Financial instrument disclosures continued D. Financial risk management objectives and policies continued Liquidity risk continued 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 2025 | £’000 | £’000 | £’000 | £’000 | | Lease liabilities | 2,653 | 5,159 | — | 7,812 | | Interest-bearing loans | 3,456 | 74,806 | — | 78,262 | | Trade and other payables | 61,463 | — | — | 61,463 | | Derivatives not designated as hedges – | | | | | | foreign exchange forward contracts | 229 | — | — | 229 | | | 67,801 | 79,965 | — | 147,766 | | | | | | | | --- | --- | --- | --- | --- | | | <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 | Supplier finance arrangements The Group participates in a supply chain financing arrangement. 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 2025 | | Carrying amount of liabilities that are part of | | | supplier financing arrangements | | | Presented within trade and other payables | | | – of which suppliers have received payment from finance provider (£’000) | 15,984 | | 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 December 2024 | | Carrying amount of liabilities that are 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 | STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 141 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 32 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 149. 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 | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Profit for the year | 844 | 16,518 | | Adjusted for: | | | | Exceptional items | 14,925 | — | | Amortisation of customer relationships | 69 | 137 | | Refinancing costs | 342 | — | | Tax on exceptional items | 582 | — | | Tax on amortisation of customer relationships | (19) | (38) | | Tax on refinancing costs | (86) | — | | Adjusted profit for the year | 16,657 | 16,617 | | Basic weighted average number of shares in issue | 127,352,555 | 127,352,555 | | Diluted weighted average number of shares in issue | 127,474,048 | 128,389,983 | | Earnings per share | | | | Basic earnings per share (pence per share) | 0.66 | 12.97 | | Diluted earnings per share (pence per share) | 0.66 | 12.87 | | Adjusted earnings per share | | | | Basic earnings per share (pence per share) | 13.08 | 13.05 | | Diluted earnings per share (pence per share) | 13.07 | 12.94 | Reconciliation of adjusted operating profit and EBITDA | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Operating profit | 17,477 | 31,385 | | Adjusted for: | | | | Exceptional items | 14,925 | — | | Amortisation of customer relationships | 69 | 137 | | Adjusted operating profit | 32,471 | 31,522 | | Adjusted for: | | | | Depreciation | 11,393 | 11,692 | | Amortisation (excluding customer relationships) | 261 | 331 | | EBITDA | 44,125 | 43,545 | Reconciliation of cash flow from operations, adjusted cash flow from operations and free cash flow | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | EBITDA (see reconciliation above) | 44,125 | 43,545 | | Adjusted for: | | | | Exceptional items – cash items | (2,262) | — | | Gain on disposal of property, plant and equipment | (80) | (118) | | Share-based payments | 704 | 440 | | Working capital adjustments | (520) | (12,375) | | Net capital expenditure | (7,727) | (8,485) | | Cash flow from operations | 34,240 | 23,007 | | Income tax paid | (8,000) | (6,265) | | Interest paid – net | (5,732) | ( 7,186) | | Free cash flow | 20,508 | 9,556 | | Cash flow from operations (see reconciliation above) | 34,240 | 23,007 | | Adjusted for: | | | | Exceptional items | 2,262 | — | | Exceptional items’ impact on working capital | (330) | 2,320 | | Adjusted cash flow from operations | 36,172 | 25,327 | Stelrad Group plc Annual Report 2025142 ![]() 32 Reconciliation of alternative performance measures continued Reconciliation of cash flow from operations, adjusted cash flow from operations and free cash flow continued | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Decrease in trade and other receivables | 517 | 3,885 | | Decrease/(increase) in inventories | 4,690 | (6,143) | | Decrease in trade and other payables | (4,430) | (6,743) | | Increase/(decrease) in provisions | 94 | (2,176) | | Movement in other financial assets/liabilities | 531 | (610) | | Decrease in other pension provisions | (1) | (7) | | Difference between pension charges and cash contributions | (1,921) | (581) | | Working capital adjustments | (520) | (12,375) | | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Proceeds from sale of property, plant, equipment and intangible assets | 185 | 341 | | Purchase of property, plant and equipment | (5,215) | (5,861) | | Purchase of intangible assets | (35) | (100) | | Payment of lease liabilities | (2,662) | (2,865) | | Net capital expenditure | (7,727) | (8,485) | Reconciliation of business capital employed and return on capital employed | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Property, plant and equipment | 72,491 | 79,173 | | Technology and software costs | 347 | 631 | | Inventories | 62,402 | 67,311 | | Trade and other receivables | 47,463 | 45,762 | | Trade and other payables | (67,058) | (69,210) | | Provisions | (2,903) | (2,659) | | Net employee defined benefit liabilities | (4,625) | (5,118) | | Financial (liabilities)/assets | (221) | 293 | | Business capital employed | 107,896 | 116,183 | | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Adjusted operating profit | 32,471 | 31,522 | | Business capital employed | 107,896 | 116,183 | | Return on capital employed | 30.1% | 27.1% | Reconciliation of net debt and leverage | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Total interest-bearing loans and borrowings | 76,990 | 85,541 | | Cash and cash equivalents | (18,978) | (18,633) | | Adjusted for: | | | | Unamortised loan costs | 715 | 674 | | Net debt | 58,727 | 67,582 | | EBITDA (see reconciliation above) | 44,125 | 43,545 | | Debt leverage ratio | 1.33 | 1.55 | Reconciliation of net debt and leverage before lease liabilities | | | | | --- | --- | --- | | | 2025 | 2024 | | | £’000 | £’000 | | Total interest-bearing loans and borrowings | 76,990 | 85,541 | | Cash and cash equivalents | (18,978) | (18,633) | | Adjusted for: | | | | Unamortised loan costs | 715 | 674 | | Lease liabilities | (7,558) | ( 7,88 3) | | Net debt before lease liabilities | 51,169 | 59,699 | | EBITDA (see reconciliation above) | 44,125 | 43,545 | | Debt leverage ratio before lease liabilities | 1.16 | 1.37 | STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 143 ![]() ### Notes to the consolidated financial statements continued for the year ended 31 December 2025 32 Reconciliation of alternative performance measures continued Loan facility covenant calculations | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | | £’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) | | 58,727 | 67,582 | | Adjusted for: | | | | | IFRS 16 lease liabilities | | (6,745) | (7,036) | | Interest payable | | 255 | 322 | | Non-obligor cash excluded from the covenant calculation | | 1,712 | 1,863 | | Net debt (excluding IFRS 16 lease liabilities) | | 53,949 | 62,731 | | EBITDA (see reconciliation above) | | 44,125 | 43,545 | | Adjusted for: | | | | | Foreign currency gains (in 2024 only) | | — | (723) | | Net losses on forward derivative contracts (in 2024 only) | | — | 35 | | Adjusted EBITDA (before exceptional items and, in 2024, | foreign exchange differences) | 44,125 | 42,857 | | Leverage for loan facility covenant | | 1.22 | 1.46 | | | | | | | --- | --- | --- | --- | | | | 2025 | 2024 | | | | £’000 | £’000 | | Interest cover calculation | | | | | Adjusted EBITDA (before exceptional items and, in 2024, foreign exchange differences)/covenant interest | | | | | Adjusted EBITDA (before exceptional items and, in 2024, (see reconciliation above) | foreign exchange differences) | 44,125 | 42,857 | | Finance costs | | 7,576 | 8,189 | | Finance income | | (173) | (186) | | Adjusted for: | | | | | Interest expense on defined benefit liabilities | | (1,047) | (921) | | Amortisation of loan issue costs | | (692) | (375) | | Finance charges payable on IFRS 16 lease liabilities | | (97) | (124) | | Covenant interest | | 5,567 | 6,583 | | Interest cover for loan facility covenant | | 7.93 | 6.51 | Stelrad Group plc Annual Report 2025144 ![]() Note 2025 £’000 2024 £’000 Assets Non-current assets Investments 9 115,908 115,908 Total assets 115,908 115,908 Equity and liabilities Equity Called up share capital 11 127 127 Retained earnings 112,266 111,868 Total equity 112,393 111,995 Current liabilities Amounts due to subsidiary undertakings 10 3,515 3,913 Total liabilities 3,515 3,913 Total equity and liabilities 115,908 115,908 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 £9,692,000 for the year ended 31 December 2025 (2024: profit of £1,669,000). 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 145 to 148 were approved by the Board of Directors on 13 March 2026 and signed on its behalf by: Leigh Wilcox Chief Financial Officer ### Company balance sheet as at 31 December 2025 ### Company statement of changes in equity for the year ended 31 December 2025 Attributable to the owners of the parent Called up share capital £’000 Retained earnings £’000 Total £’000 At 1 January 2024 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 Profit for the year — 9,692 9,692 Total comprehensive income — 9,692 9,692 Share-based payment charge — 704 704 Dividends paid (note 8) — (9,998) (9,998) At 31 December 2025 127 112,266 112,393 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 145 ![]() ### Notes to the Company financial statements for the year ended 31 December 2025 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 December 2028, 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 £45.397 million of the revolving credit. The remainder of the facility and significant cash balances of £18.978 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 pages 54 and 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 12 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. Stelrad Group plc Annual Report 2025146 ![]() 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 11) of the consolidated financial statements and the Directors’ Remuneration Report on pages 79 to 96. 7 Auditors’ remuneration The Company has incurred audit fees of £8,000 (2024: £8,000) which are borne by Stelrad Management Limited. 8 Dividends See note 17 of the consolidated financial statements for further detail of the dividends ofthe Company. 9 Investments £’000 At 31 December 2024 and 31 December 2025 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 12. 10 Amounts due to subsidiary undertakings 2025 £’000 2024 £’000 Amounts due to subsidiary undertakings 3,515 3,913 The amounts due to subsidiary undertakings are repayable on demand. No interest is charged on amounts due to subsidiary undertakings. 11 Called up share capital 2025 Number 2025 £ 2024 Number 2024 £ 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 26 of the consolidated financial statements for further detail of the called up share capital of the Company. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 147 ![]() ### Notes to the Company financial statements continued for the year ended 31 December 2025 12 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 2025 % 2024 % 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 SRO (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 Dormant \*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 of the Group, which are held indirectly, comprise: Woolamai Group UK Limited and Henrad (UK) Limited. Both are incorporated in the UK (1) and 100% of the ordinary shares are owned. Stelrad Group plc Annual Report 2025148 ![]() 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. 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. 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. Net debt: The sum of revolving credit facilities, term loan and 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, 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 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS ADDITIONAL INFORMATION Stelrad Group plc Annual Report 2025 149 ![]() 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 Richard Johnston ACG 69–75 Side Newcastle upon Tyne Tyne and Wear NE1 3JE 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 Singer Capital Markets 1 Bartholomew Lane London EC2N 2AX 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 Annual Report 2025150 ![]() Stelrad Group plc’s commitment to environmental issues is reflected in this Annual Report, which has been printed on Respecta Satin, 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. Produced by Design Portfolio www.design-portfolio.co.uk ![]() Stelrad Group plc 69–75 Side Newcastle upon Tyne Tyne and Wear NE1 3JE Stelrad Group plc Annual Report 2025 ![]() Stelrad Group plc’s commitment to environmental issues is reflected in this Annual Report, which has been printed on Respecta Satin, 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. Produced by Design Portfolio www.design-portfolio.co.uk ![]() Stelrad Group plc 69–75 Side Newcastle upon Tyne Tyne and Wear NE1 3JE Stelrad Group plc Annual Report 2025