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

StrixAnnouncement

21/07/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220721:nRSU2168Ta&default-theme=true

RNS Number : 2168T  Strix Group PLC  21 July 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 30 June 2022.

 

Trading Update

 

Strix confirms that despite the significant and well-publicised macro
headwinds, current profit after tax consensus* for the full year remains
broadly in line with expectations.

 

While the global outlook has weakened in recent months, this is based on the
year-to-date performance, an anticipated improvement in trading conditions in
the balance of the year, the second half of the year has proved seasonally
stronger than the first and the resilience of historical H2 performance
through prior macroeconomic cycles including during the COVID-19 pandemic.

 

Alongside this, Strix has successfully implemented further product price
increases across the full kettle controls range and water categories (the most
recent was with effect from 1 May 2022).

 

Strix has previously benefitted from its ability to adjust its highly variable
cost base and it will be implementing a further range of efficiency
measures and strategic initiatives to manage costs during this period in
order to minimise the impact of the challenging operating environment and
ongoing cost inflation.

 

Kettle Safety Controls, Water and Appliance Categories

 

Previously, the Group has indicated it had no direct sales into Russia and any
products sold into that region are typically from a Chinese based OEM which
equated to total revenues of circa £3m in 2021. However, certain peripheral
geographies have been adversely impacted by the ongoing conflict in the
Ukraine and it is estimated that this will now represent total revenues of
circa £5m - £7m across the Group for 2022.

 

Despite some weakness in H1, particularly Q1, the Kettle Safety
Controls category has continued to perform robustly and its market leading
position of 56% of the global kettle controls market by value has been
maintained.

 

Strix's manufacturing operations within Zengcheng district in Guangzhou were
not materially affected by the evolving COVID-19 situation in China. The
proactive approach to minimise potential supply chain disruption
by increasing levels of finished stock means that the Group is well
positioned to benefit from any improvement in consumer demand in H2 which it
is monitoring closely.

 

Within the Appliance category, Aurora (Strix's Instant Flow Heater
technology, delivering auto-dispensed hot, boiled, and chilled filtered water
at the touch of a button) is now starting to show signs of penetrating
consumer markets across the world. The Aurora Hot was launched in Q4 2021 and
is selling well on Amazon, while the Aurora Chilled was launched in the Q2
2022. The Aurora has recently been awarded the Quiet Mark award, which is
a prestigious industry accreditation aimed at encouraging companies worldwide
to prioritise noise reduction within product design and it was also awarded
the honour of Housewares' Sustainable Product of the Year.

 

Dual Flo (which combines Strix's technology with LAICA's classic Italian
design, is believed to be the UK's only combined kettle and one cup hot water
dispenser with an innovative, energy saving facility) was launched in April
2022 and is selling well on Amazon under the LAICA brand. The Visione
induction kettle has recently been awarded both the German
Design Award 2022 and the Red Dot design award, two prestigious awards in
the industry.

 

The Water category has made progress in line with the Group's international
growth aspirations.

 

In addition to key range extensions within the UK and Europe, new contracts
have been secured for key distributors across Europe, Canada, USA and China
which will support the growth ambition during H2 2022. Issues experienced as a
result of Brexit have also been successfully overcome by utilising LAICA as
the European base as well as a resumption of sales through online channels
such as Amazon EU.

 

In addition, online market place launches of the Aqua Optima and LAICA
products have been secured on platforms such as eBay, OnBuy and B&Q as
Strix continues to expand its online presence.

 

Corporate Update

 

As previously announced at the year-end, a VAT receivable of circa £4m from
the completion of the new Chinese manufacturing facility has now been
successfully reclaimed in the period.

 

Financial Position

 

Strix has a robust business model and 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.

 

Notice of Results

 

The Group will be announcing its interim results for the six months ended 30
June 2022 on 21 September 2022.

 

*Current profit after tax consensus for year ended 31 December 2022 is £32.2m
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).

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTURURRUKUBUUR