Pre-Close Trading Update

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: [phone]
Mark Bartlett, CEO
Clare Foster, CFO
Zeus (Nominated Advisor and Joint Broker)	[phone]
Nick Cowles / Jordan Warburton (Investment Banking) Dominic King (Corporate Broking)
Stifel Nicolaus Europe Limited (Joint Broker)	[phone]
Matthew Blawat / Francis North
IFC Advisory Limited (Financial PR and IR)	[phone]
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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