Struggling Glen Dimplex reports €7.7 million pre-tax loss due to dwindling demand for heat pumps
Glen Dimplex Overhauls Irish Operations Amid Heat Pump Market Slowdown
Glen Dimplex, a leading manufacturer of heating and renewable energy solutions, has announced a significant overhaul of its Irish operations in response to a slowdown in the European heat pump market.
The company's financial results for the year ending September 202x reveal a drop in revenues, attributed primarily to a decline in the sale of heat pumps. The company experienced a 9% decrease in turnover, amounting to €875.2 million, a stark contrast to the €1.2 billion recorded in the previous year.
This downturn in the heat pump market has been influenced by a decrease in support for heat pump installation by public authorities in core markets, such as France and Germany, where the demand for heat pumps fell by 35% and more than 40%, respectively.
In an attempt to streamline its operations and reduce costs, Glen Dimplex incurred restructuring costs of over €26 million, more than double the costs from the previous year. These costs are associated with the company's "transformation programme", which includes the simplification of its flame and consumer appliances businesses.
As part of this restructuring, Glen Dimplex is seeking around 70 redundancies in the consultation process with workers at the site in Dunleer, Co. Louth. The company also announced the closure of one of the sites that were previously planned for relocation, a distribution centre from north Dublin to Dunleer, and the location of a research and development unit in the town.
However, the company more than trebled its dividend payment to €13.2 million compared to €3.8 million in each of the previous two years. Glen Dimplex Europe Holdings reported an operating loss of €15.5 million, contrasting with a €23.8 million profit in the previous financial year. This loss was partially offset by a €200,000 donation to the Naughton Foundation charity, down from €3 million in 2023.
The restructuring is expected to result in the loss of some 300 jobs across the company's Irish operations. However, it is hoped that the slowdown in state support for heat pump installation is temporary and will regain its momentum.
Despite these challenges, the European heat pump market is currently experiencing steady growth, driven primarily by supportive energy transition policies, climate goals, and increasing consumer demand. Major markets like France and Germany benefit significantly from EU initiatives such as the "REPowerEU" program, which provides government subsidies to boost heat pump adoption.
In this competitive landscape, Glen Dimplex, known for its innovative heating and renewable energy solutions, is likely leveraging the strong policy-driven demand to expand its heat pump offerings. However, to compete effectively, it may need to focus on niche segments or customized product solutions amid rising presence of Asian OEM/ODM suppliers targeting Europe.
The outlook for the European heat pump market aligns with broad market forecasts estimating Europe’s heat pump market will continue its rapid expansion over the coming decade.
In other personnel changes, Fergal Naughton, son of Martin Naughton, has moved into the executive chairman role, succeeding Fergal Leamy. Martin Naughton, the founder of Glen Dimplex, was named "chairman emeritus" of the group's supervisory board.
[1] European Heat Pump Market Size, Share & Trends Analysis Report By Type (Air Source Heat Pumps, Ground Source Heat Pumps), By Application (Residential, Commercial, Industrial), By Country, And Segment Forecasts, 2018 - 2028. Grand View Research, Inc.
[3] Heat Pump Market Size, Share & Trends Analysis Report By Type (Air Source Heat Pumps, Ground Source Heat Pumps), By Application (Residential, Commercial, Industrial), By Country, And Segment Forecasts, 2024 - 2034. Grand View Research, Inc.
- Glen Dimplex, amid the slowdown in the European heat pump market, is focusing on restructuring its business operations, aiming to reduce costs in finance and industry, particularly in its flame and consumer appliances businesses.
- Despite the ongoing restructuring and redundancies in Ireland, Glen Dimplex continues to explore opportunities in the finance and business sectors, particularly in the European heat pump market, with a perspective to expand its offerings and compete effectively against Asian OEM/ODM suppliers.
