REG - Strix Group PLC - Pre-Close Trading Update and Notice of Results

StrixAnnouncement

27/01/2022 07:00

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RNS Number : 7732Z  Strix Group PLC  27 January 2022

Strix Group Plc

("Strix", the "Company" or the "Group")

 

Pre-Close Trading Update and Notice of Results

 

Strix Group Plc (AIM: KETL), the global leader in the design, manufacture and
supply of kettle safety controls and other complementary water temperature
management components, is pleased to announce a pre-close trading update for
the six month period ended 31 December 2021.

 

Trading Update

 

Strix has experienced continued positive momentum in H2 2021 and the Group has
achieved circa 30% revenue growth on a constant currency basis and profit
after tax in line with market expectations for 2021*. This outcome underpins
management's confidence in delivering on the medium-term target to double the
Group's revenue by the end of 2025, primarily through organic growth in its
Water and Appliances categories.

 

Strix continues to proactively manage and mostly offset the impact of a number
of headwinds which continue to persist including supply chain, freight cost
inflation and adverse foreign exchange rates. This is being achieved
effectively through price increases on some of its legacy products,
implementing hedging strategies as well as a range of other efficiency
measures and strategic initiatives. Additionally, the Company crystallised a
tax benefit in relation to the factory opening which is expected to result in
a lower effective tax rate in 2021.

 

This strong trading performance demonstrates the continued resilience of
Strix's business model, which benefits from geographical and product
diversification and is strengthened further by the Group's high cash
generation and prudent control of its balance sheet.

 

Kettle Safety Controls, Water and Appliance Categories

 

The Kettle Safety Controls category has continued to experience positive
volume growth as it continues to increase the number of specifications using
its latest platform ranges and regions.

 

With the combined contribution of LAICA and HaloPure technology, the Water
category has made solid progress with its growth aspirations. The trading
performance of LAICA has been particularly strong as the
acquisition continues to be successfully integrated in line with plan to
achieve the identified benefits. The HaloPure technology also continues to
gain wider recognition by the market and has now secured 14 contracts, which
demonstrates the continued focus on commercialising this important product.

 

Within the Appliance category, Aurora (Instant Flow Heater/Chiller) is now
starting to show signs of penetrating consumer markets across the world and is
performing ahead of budget. Strix also continues to work closely with its key
partners and own brands to bring technological innovation to the markets
delivering core benefits in usability and sustainability to the consumer. The
launch of the Induction kettle in December 2021 was an example of that which
also won a highly prestigious German award for excellent product design.

 

Corporate and Operational Review

 

The new manufacturing operations within Zengcheng district in Guangzhou,
China are now fully operational. The factory has doubled the Group's
manufacturing capacity enabling it to grow the business, increase efficiencies
and implement further in-sourcing opportunities which are expected to have a
positive effect on margins over the medium-term.

 

Strix successfully launched its sustainability strategy in September 2021. The
Group remains on track to achieve its ambitious target for net zero Scope
1&2 emissions by 2023 and has also secured the ISO50001 accreditation of
the new Chinese facility.

 

The arrival of a new Chief Technology Officer has brought significant
expertise and, in a short space of time, is already having a positive impact
in supporting Strix's new product development initiatives which are an
important part of the Group's medium-term growth ambition.

 

Financial Position

 

Net debt (excluding the impact of IFRS 16 lease liabilities) as at
31 December 2021 was £51m which is higher than previous guidance as Strix
has proactively invested to minimise the future impact of continued commodity
price inflation.

 

Strix remains in a strong financial position to continue to deploy capital
consistent with its capital allocation priorities and invest in
a compelling growth strategy which includes actively seeking opportunities
that will add value across the Group through niche acquisitions or
technologies.

 

Given the Group's performance in 2021 and the Board's confidence in the
continued strength of its cash generation, the Board confirms its intention to
pay a total dividend in line with its progressive dividend policy that is
linked to underlying earnings.

 

Notice of Results

 

The Group will be announcing its preliminary results for the year ended 31
December 2021 on Wednesday 30 March 2022.

 

*Consensus profit after tax for year ended 31 December 2021 is £31.4m
according to FactSet.

 For further enquiries, please contact:

 Strix Group Plc                                                   +44 (0) 1624 829829

 Mark Bartlett, CEO

 Raudres Wong, CFO

 Zeus Capital Limited (Nominated Advisor and Joint Broker)         +44 (0) 20 3829 5000

 Nick Cowles / Jamie Peel / Jordan Warburton (Corporate Finance)

 Stifel Nicolaus Europe Limited (Joint Broker)                     +44 (0) 20 7710 7600

 Matthew Blawat / Francis North

 IFC Advisory Limited (Financial PR and IR)                        +44 (0) 20 3934 6630
 Graham Herring / Tim Metcalfe / Florence Chandler

 

 

 

ABOUT STRIX GROUP PLC

 

Isle of Man based Strix, is a global leader in the design, manufacture and
supply of kettle safety controls and other components and devices involving
water heating and temperature control, steam management and water filtration.

 

Strix's core product range comprises a variety of safety controls for small
domestic appliances, primarily kettles. Kettle safety controls require
precision engineering and intricate knowledge of material properties in order
to repeatedly function correctly. Strix has built up market leading capability
and know-how in this field since being founded in 1982.

 

Strix trades on the AIM Market of the London Stock Exchange (AIM: KETL).

 

 

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