| Strix - From 2020 Results Onward

25th Mar '21 by sharw

14 comments 1929 reads

Recording of webinar now available here: https://www.equitydevelopment....

The Strix team discussed the opportunities for growth across their three key categories, and provided considerable detail about the recently announced conditional acquisition of Billi. They discussed the strategic rationale for the deal and capital allocation priorities, and answered a wide-ranging Q&A session which has been divided below into two parts - the first focusing on Billi, and the second with broader questions including capex, dividends, own brands, margins and China.

The full video has been divided into chapters for ease of viewing:
0:00:20 - Highlights from H1 2022 & margin analysis (Mark Bartlett, CEO)
0:05:42 - Kettle Control category (Harry Kyriacou, CCO)
0:09:36 - Water category
0:13:25 - Appliances category
0:16:02 - Aurora product video
0:17:44 - Billi acquisition (overview, strategic rationale, medium term targets, capital allocation)
0:31:44 - Outlook statement
0:34:21 - Q & A part 1: focus on Billi (cross-sell opportunity, gross margins, leverage, distribution channels, customer feedback)
0:43:18 - Q & A part 2: capex, debt, dividends, China, margins, own brands

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Coming up - webinar - here is the blurb from Equity Development:

Wednesday 26th October at 11.00am.

Mark Bartlett (CEO) and Harry Kyriacou (Chief Commercial Officer) will discuss the opportunities for growth. They will examine the levers behind maintaining kettle global market share and their margin, as well as discussing the opportunities for growth in the Water and Appliance categories more broadly, including the recent conditional acquisition of Billi.

Since Strix came to market in 2017, management have focused on broadening the business beyond its original profitable core kettle controls. The recent conditional acquisition of Billi is another step on this journey, following the successful integration of the Italian business Laica (bought September 2020), and the integration of the assets from HaloSource (acquired March 2019). Their Water and Appliance categories are growing into meaningful contributors, helping Strix accelerate their target of doubling revenues by 2025.

This session is designed to give participants greater insight into the specific products and opportunities that Strix are pursuing in all three categories, and the way in which these products are playing into consumers desire to be both cost conscious and environmentally sound. The webinar is open to all existing and potential shareholders.

You can register here: https://www.equitydevelopment....

Latest - 5/10/22 acquisition of Billi. SCVR report by Graham here: https://www.stockopedia.com/co...

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wildshot

26th Mar '21

sharw many thanks for this, you are a star :-) Great to see our community helping each other like this when not all of us can attend investor presentations live due to work/life committments.

Appreciate the feedback on the inventory write downs. If just Lacia then hopefully it is a one off impact and profits will not be adversely affected next year.

sharw

27th Mar '21

Recording of the webinar now available - I have put link in the intro at top.

28th May '21

Following yesterday's AGM statement Equity Development has revised its forecasts and put out an 11 page note that you can find here:

https://www.equitydevelopment....

The SP reached all time highs this week but ED says: "Despite recent strong performance, Strix shares PER is at a discount of 34% to peers. Simply placing them at parity with those peers’ ratings indicates a fair value of 350p".

.....and here is a 2 minute video of the new factory in China:

https://player.vimeo.com/video/555060716

shipoffrogs

Inventory write down - did management pick up on it pre- or post-acquisition?

11th Aug '21

Substantial uplift to new all time high sp of 367.5p today.

In another place 'crazycoops' writes: "FYI, Liberum have initiated coverage with a buy rating and 460p price target which probably explains today’s rise".

There is a write-up here: https://www.sharecast.com/news... that talks about a sea change in eps CAGR.

29th Aug '21

Interims will be on 22nd September. There is a presentation for PIs at 11.30am on Friday 24th September. You can sign up here:

https://www.equitydevelopment.co.uk/news-and-events/strix-presentation-sept2021

You will then be sent a zoom link for the meeting.

22nd Sep '21

Interims out today. Equity Development state:

"KETL Record interim results were driven by a combination of increased
demand, as Strix’s key markets emerged from the pandemic-led recession,
and the acquisition of LAICA in October 2020. The new manufacturing
facility opened in Guangzhou Province, with the level of production
automation rising to 73% and significant capacity remaining to
facilitate a further expansion in activity levels.

Several new products were launched, not least Aurora in June in the UK,
with an encouraging pipeline for H2 and into FY22. Although gross
profits improved 48.6% y-o-y, margins declined, which predominantly
reflected the lower returns at LAICA. The record H1 profitability and an
encouraging H2 pipeline of product launches allowed Strix to increase
the dividend by 5.8% to 2.75p.

Our key valuation model suggests that Strix is currently trading on a
discount of between 5% and 28% relative to the peer group averages. We
have increased our Fair Value to 400p/share.

https://www.equitydevelopment.co.uk/research/strong-recovery-underway

They are organising a company presentation at 11 30 on Friday. This requires registration here:

https://www.equitydevelopment....

24th Sep '21

Webcast this morning - you can see the slides here:

https://www.strixplc.com/downl...

Two points I noted:

1) originally with just kettle controls they were only selling to manufacturers but now consumer products are a growing part of the mix, accelerated by the Laica acquisition. They have now moved onto Amazon. The Aurora has now been launched and there was a plug for the 25% discount current offer :

https://www.amazon.co.uk/Aqua-...

2) Interesting question on whether acquisitions were needed to meet the revenue increase target (point 1 slide 4). Answer - no, post Laica can meet organically. Any acquisition would add revenue above target. There could be more acquisitions - post the capex on the new factory in China cash flow would return and enable them.

27th Sep '21

A recording of Friday's webinar is now available to view here:

4th Feb '22

I have updated the header with Jack's comments on last week's trading update and also given a link to comments from Zeus which I also give here: https://www.directorstalkinter...

7th Oct '22

I have updated the top to refer to Graham's comments in the SCVR two days ago as this does not appear in the discussions tab (been happening a lot recently). I have also added a link to the Equity Development note.

10th Oct '22

I have updated the head of the article with details of the webinar just announced.

28th Oct '22

A recording of the webinar is now available here: https://www.equitydevelopment....

I found it really helpful in that it went into a lot more detail on the Billi acquisition than was in the RNS and there were some very interesting bits in the 18 mins. of Q+A.

Strix - from 2020 results onward

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Sharw

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