REG - Strix Group PLC - Pre-Close Trading Update

StrixAnnouncement

25/07/2024 07:00

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RNS Number : 7372X  Strix Group PLC  25 July 2024

 

 

25 July 2024

 

Strix Group Plc

 

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

 

Pre-Close Trading Update

 

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, provides a pre-close trading update for the six-month
period ended 30 June 2024.

 

The Group confirms that it remains on track to report adjusted profit before
tax for the year ending 31 December 2024 ("FY 2024") in line with current
market expectations. Cash conservation actions taken in H1 2024 have resulted
in cash generation for the Group being ahead of market expectations which, in
conjunction with the equity placing that was originated by a reverse enquiry
in June 2024, has supported an accelerated reduction in net debt leverage to
comfortably less than 2.0x as at 30 June 2024. The Group remains focused on
delivering on its stated target to reduce net debt leverage to 1.5x by the end
of FY 2025.

 

The recovery in the Kettle Controls regulated and less regulated markets
continues to show promising signs as Strix moves into the peak season. Whilst
it is too early to determine whether this uptick is due to stock refill or an
underlying improvement in consumer demand, the initial indicators are
encouraging. In addition, a new range of low-cost controls tailored to the
domestic Chinese and less regulated market requirements will be launched in
H2 2024, increasing Strix's target addressable market.

 

The acquisition of Billi allowed the Premium Filtration Systems division to
deliver single-digit growth on a constant currency basis in H1 2024. Strix
anticipates that the roll-out of new product development alongside the
European expansion via strategic sales and service partners in the second half
of the year will see the division produce double-digit growth on a constant
currency basis for FY 2024 versus FY 2023.

 

Restructuring initiatives continue to be successfully implemented across the
Group to support improved efficiency, sustainability and cost control, whilst
building a suitable platform and providing resources for the Group's mid-term
growth objectives. In particular, this has led to a re-focusing of our
Consumer Goods division to concentrate on continuing to drive ongoing
profitable growth in line with management's expectations.

 

The Group remains exposed to commodity price volatility, primarily in relation
to copper and silver in the Kettle Control division, and foreign exchange
headwinds given the impact of the relative weakening of the EUR and AUD on
trading results. To minimise the effects of these pressures on the gross
margin of the Group, Strix is focused on working ever more closely with its
suppliers, improving its product mix and structuring its commodity contracts
and payments in advance.

 

As announced on 12 June 2024, the 5% equity placing originated by a reverse
enquiry has helped the Group to reduce net debt leverage to comfortably below
2.0x earlier than originally anticipated, securing an associated interest
saving benefit due to the margin ratchet mechanism contained within the
current facilities. This earlier leverage reduction facilitates upcoming
discussions and refinancing plans with the Group's banking syndicate. It
remains the Company's intention to finalise a full refinance of its banking
facilities by the end of 2025 to advance the Group's growth aspirations.

 

Notice of Results

 

The Group will provide further detail in its interim results for the six-month
period ended 30 June 2024, which will be announced on 18 September 2024.

 

 

 For further enquiries, please contact:

 Strix Group Plc                                      Tel: +44 (0) 1624 829829
 Mark Bartlett, CEO
 Clare Foster, CFO

 Zeus (Nominated Advisor and Joint Broker)            +44 (0) 20 3829 5000
 Nick Cowles / Jordan Warburton (Investment Banking)

 Dominic King (Corporate Broking)

 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

 

The person responsible for arranging release of this Announcement on behalf of
the Company is Mark Bartlett.

Information on Strix

Founded in 1982, 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, expanding into
complementary products and technologies. The Group's brands include Aqua
Optima, LAICA and Billi providing our customers with market leading water
solutions on a global basis.

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

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