REG - Strix Group PLC - Trading Update

StrixAnnouncement

27/11/2024 07:00

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RNS Number : 7656N  Strix Group PLC  27 November 2024

27 November 2024

 

Strix Group Plc

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

 

Trading Update

 

Strix Group Plc (AIM: KETL), the global provider of innovative sustainable
water technologies, controls and complementary small domestic appliances,
provides an update on trading for the financial year ending 31 December 2024
("FY24").

 

As highlighted in the Group's interim results, the Kettle Controls division
experienced relatively lower trading for parts of Q3 2024, and this has
continued into Q4 2024, particularly in regulated markets. Following the
recent Canton Fair where the Group had the opportunity to engage with its key
customers and partners, it has become apparent that the improvement in sales
trends experienced in the Kettle Controls markets in the first six months of
the year was due to a pipeline refill. The peak season has not shown an
underlying improvement in consumer demand. Whilst Strix has maintained its
dominant market position with stable market share, the macroeconomic and
geopolitical environment has remained challenging. This has been particularly
the case in the UK, Germany and the US, being some of the Group's highest
margin markets. The impact of cost price inflation has been compounded by
uncertainty leading to more cautious discretionary spending around the UK
Autumn Budget.

 

Elsewhere in the Kettle Controls division though, the launch of the new
low-cost control has been well received by the Group's customers in less
regulated markets and sales commenced in China in the second half of the year.
Following planned capital investments in the second half of FY24, the
production of the next generation of innovative controls is making good
progress, with OEMs qualifying their use in new appliances, which will be
ready for launch in 2025, further protecting Strix's market leading position
and supporting barriers to entry.

 

In terms of the wider Group, Billi is performing well with a positive increase
in sales in Europe following successful progress on the division's
geographical roll-out strategy. As expected, the division is anticipated to
return to double-digit growth for Q4 2024. New products are gaining traction
in Australia, which will be launched in the UK in H1 2025, and 6 distributors
are expected to be signed up in Europe by year end. The Consumer Goods
division is expected to deliver revenue in the second half of the year broadly
in line with the same period last year following the previously announced
restructuring initiatives. Some key incremental retail contracts have been
secured for 2025 and during Q4 2024 the Group  began manufacturing appliances
for a leading baby brand in its China factory with further products scheduled
to be introduced in H2 2025.

 

As a result of the above, Strix now expects to report adjusted profit before
tax for FY24 in the range of £18m to £19m (on a constant currency basis).

 

Significant progress has been made on the balance sheet in the first half of
the year, providing the Group with additional resilience and flexibility to
weather the current macro headwinds. This has also been aided by the
restructuring efforts carried out during the year at pace. The Group continues
to evaluate medium-term opportunities for profitable growth.

 

In addition to the structural improvements made across the Group, Strix has
further strengthened its senior leadership enhancing the treasury function,
Billi  leadership as well as the commercial and business development teams to
support its long-term growth ambitions.

 

Strix's debt position has remained a priority for the management team, with
latest reported net debt leverage at c. 2x. Reflecting management's confidence
in the underlying business, it remains the intention to reinstate the FY24
final dividend for payment in 2025.

 

For further enquiries, please contact:

 

 Strix Group Plc                                      +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

 Gracechurch Group (Financial PR and IR)              +44 (0) 20 4582 3500
 Heather Armstrong / Claire Norbury / Harry Chathli

 

Information on Strix

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 is admitted to trading on the AIM Market of the London Stock Exchange
(AIM: KETL).

 

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