Results for the year ended 31 December 2021

RNS Number : 4742G

Strix Group PLC

30 March 2022

 

 Strix Group Plc

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

Preliminary results for the twelve months ended 31 December 2021

Financial Summary

	Adjusted results1
	FY 2021	FY 2020	FY 2019	Change (21 - 20)	Change (21 - 19)
	£m	£m	£m	%5	%5
Revenue	119.4	95.3	96.9	+25.3%	+23.2%
Revenue - constant currency basis2	122.7	95.3	96.9	+28.8%	+26.6%
Gross profit	47.4	39.4	39.6	+20.3%	+19.7%
EBITDA3	40.5	38.1	36.9	+6.3%	+9.8%
Operating profit	33.7	32.1	31.5	+5.0%	+7.0%
Profit before tax	32.2	30.9	30.2	+4.2%	+6.6%
Profit after tax	31.4	29.5	28.9	+6.4%	+8.7%
Net debt4	51.2	37.2	26.3	+37.6%	+94.7%
Net cash generated from operating activities	22.3	31.2	34.4	-28.5%	-35.2%
Basic earnings per share (pence)	15.2	14.9	15.2	+2.0%	+0.0%
Diluted earnings per share (pence)	14.9	14.3	14.1	+4.2%	+5.7%
Total dividend per share (pence)	8.35	7.85	7.70	+6.4%	+8.4%

1.  Adjusted results exclude exceptional items, which include share based payment transactions, COVID-19 related costs, and  other reorganisation and strategic project costs. Adjusted results are non-GAAP metrics used by management and are not an IFRS disclosure. A table which shows both Adjusted and Reported results is included in the Chief Financial Officer's review.

2.  Revenue - constant currency basis, which is defined as 2021 revenue restated at the exchange rates prevailing in 2020, is a non-GAAP metric used by management and is not an IFRS disclosure.

3.  EBITDA, which is defined as earnings before finance costs, tax, depreciation and amortisation, is a non-GAAP metric used by management and is not an IFRS disclosure.

4.  Net debt excludes the impact of IFRS 16 lease liabilities, pension liabilities, deferred tax liabilities and earn-out provisions on satisfaction of performance conditions and providing post-combination services. Net debt including earn-out provisions was £58.6m.

5.  Figures are calculated from the full numbers as presented in the consolidated financial statements.

Financial Highlights

•	The Group reported  revenue of £119.4m,  an increase of 28.8% on a constant currency basis versus the same period in prior year and an increase of 26.6% on a constant currency basis versus the same period in 2019. This was driven by both organic growth and the acquisition of LAICA which has delivered strong revenue growth over the period.
•	Adjusted EBITDA increased to £40.5m (2020: £38.1m), representing a 6.3% increase compared to the same period last year and an increase of 9.8% versus the comparable period in 2019.  Adjusted EBITDA margin was 33.9% (2020: 40.0%) and a djusted gross profit margin was 39.7% (2020: 41.4%), as a result of of factors including the impact of a number of headwinds which continue to persist including increases in commodity prices, freight cost inflation, supply chainand adverse foreign exchange rates.
•	Net debt (excluding the impact of IFRS 16 lease liabilities) increased to £51.2m (2020: £37.2m) to  fund the LAICA acquisition,  continued  investment in compelling growth opportunities as well as  new manufacturing operations in China. This represents a n et debt/adjusted EBITDA ratio ( calculated on a trailing twelve month basis)  of  1.3 x.
•	Strong free cash flow generation with unique working capital cycle. Operating free cash flow (before financing and tax and exceptional factory capex) to EBITDA conversion of 70%.
•	The Group has significant liquidity providing financial flexibility  to continue to deploy capital consistent with its allocation of capital priorities and is focused on investing in compelling growth opportunities .
•	Adjusted basic earnings per share and adjusted diluted earnings per share were 15.2p (2020: 14.9p) and 14.9p (2020: 14.3p) respectively.
•	The Board is proposing an increased final dividend of 5.60p per share  (2020: 5.25p) which would represent a total dividend of 8.35p per share  (2020: 7.85p) .

  Strategic Highlights

• • • • • •

Remain on track to deliver medium-term targets to double the Group's revenues primarily through growth in its water and appliances categories. Expanded share of the global kettle controls market further 1% to 56% by value. Acquisiton of LAICA continues to be successfully integrated in line with plan to achieve the identified benefits and the trading performance has been strong over the period. New manufacturing operations within Zengcheng district in Guangzhou, China are now fully operatonal and were delivered on time, to budget and executed during a global pandemic. Launches of Aurora and Dual Flo as key extensions of Strix domestic appliance category, both with strong energy saving and sustainability benefits. Excellent recent progress made in Strix's water category in Asia-Pacific, Europe and North America through new distribution and private label contracts with reputable distributors, retailers and brands in those regions.

  Operational Highlights

•	Production efficiency of core kettle products improved with 73% of all assembly lines now fully automated.
•	Launching of sustainability report and "Sustainable. Innovative. Dependable." strategy.
•	Industry leading and ambitious decarbonisation target - scope 1 & 2 net zero by 2023 demonstrates commitment to sustainability agenda.
•	New Strix.com website launched demonstrating the Company's vision of the future.
•	Successfully upgraded to SAP to improve real time data and streamline internal processes.

 Mark Bartlett, Chief Executive Officer of Strix Group plc, said:

" Strix has a robust business model and disciplined execution of our strategies have underpinned the resilience of our performance throughout economic cycles, so we remain confident in our ability to navigate the growing uncertainties ahead and delivering on the medium-term strategic plan and delivering against its targets."

CEO's report:  

Introduction

In 2021 we have delivered a solid trading performance which has strengthened the Group's position across its three product categories; kettle controls, water, and appliances.

This performance demonstrates the 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.

The Group has expanded its market leading value share of the global kettle controls market whilst significantly expanding the size of its water category through both organic growth and the strategically compelling acquisition of LAICA which has delivered strong revenue growth over the period.

In addition, the Group has made solid progress against its medium-term target to double Group revenues primarily through organic growth in its water and appliances categories.

Financial performance

The Group reported  revenue of £119.4m,  an increase of 28.8% on a constant currency basis, versus the same period in prior year and an increase of 26.6% on a constant currency basis, versus the same period in 2019. This was driven by both organic growth and the acquisition of LAICA which has delivered strong revenue growth over the period.

Adjusted EBITDA increased to £40.5m (2020: £38.1m), representing a 6.3% increase compared to the same period in prior year and an increase of 9.8% versus the same period in 2019.  Adjusted EBITDA margin was 33.9% (2020: 40.0%) and a djusted gross profit margin was 39.7% (2020: 41.4%), as a result of LAICA's inclusion alongside a number of factors including the impact of a number of headwinds which continue to persist including increases in commodity prices, freight cost inflation, supply chainand adverse foreign exchange rates.

Strix has a highly cash generative model which incorporates a high ROCE and a high proportion of cash in advance payment terms limits risk of non-payment and working capital fluctuations.

Net debt (excluding the impact of IFRS 16 lease liabilities) increased to £51.2m (2020: £37.2m) to  fund the LAICA acquisition,  continued  investment in compelling growth opportunities as well as the new manufacturing operations in China. This represents a n et debt/adjusted EBITDA ratio ( calculated on a trailing twelve month basis)  of  1.3 x compared to 1.1x at the interim stage.

Strix is in a strong financial position with significant liquidity providing flexibility to continue to deploy capital consistent with its allocation of capital priorities and is focused on investing in compelling growth opportunities, in particular on new product development and compelling acquisition opportunities that supports the medium-term growth ambition of the Group.

Given the Group's performance and confidence in the continued strength of its cash generation, the Board is pleased to propose an increased final dividend of 5.60p per share  (2020: 5.25p) which would represent a total dividend of 8.35p per share  (2020: 7.85p) .

Kettle control category

Overall, the kettle control category reported significant growth in revenue of 6.6% to £85.1m in 2021.

The market has continued to experience strong demand in 2021. Throughout this period, Strix has  grown its market leading position further to 56% of the global kettle controls market by value and is continuing to expand both geographically and in the number of specifications using its latest platform ranges.

The first half of 2021 saw the Regulated segment grow with a strong contribution from the UK, Mainland Europe and North America. Less regulated segments also grew in a strong first half. The Chinese market experienced some weakness during 2020, but this began to show a marked recovery in 2021 and  Strix remains the leading supplier of controls in that market . However, the second half of 2021 had significant headwinds impacting demand for the full year with the total market showing a decline in value but still good growth in volume in line with the market forecast of 3%.

Strix has also continued to focus product development on opportunities and design improvements in a sustainable way to reduce the overall manufactured product footprint within the Regulated, Less Regulated and China markets that will further strengthen Strix's position and support our market share aspirations.

Following the successful launch of the U9 Series during 2017, the Group has successfully produced over 70 million controls to date. The Group continues to develop this series with new variants launched to target the smaller size and split switch kettle appliances to further enhance the portfolio of best-in-class controls.

Continuous improvement initiatives in our manufacturing, measurement and testing processes are a key focus to enhance product performance to help our customers improve their sustainability ambitions, product quality and reduce costs.  Production efficiency of core kettle products improved with 73% of all assembly lines now fully automated.

New product development

New product development remains a fundamental driver in the Group's core business strategy, with specific focus on the identification of cross category opportunities. The Group has made significant headway having delivered on the targets outlined in the product development roadmap with the launch of multiple new products.   The Group has also re-focused its commercialisation strategy, optimising cross category synergies within both our higher value appliance and water categories.

Throughout 2021, in line with its medium-term growth ambitions, Strix has multiple new product launches.  The Group will continue to focus its highly skilled engineering resource towards enhancing our core technologies and innovating into new commercial markets in a sustainable manner.

Appliance category

Overall, the appliance category reported a significant growth in revenue of 244.2% to £12.9m in 2021.

Strix seeks to use its technology and innovation expertise to develop adjacent products to solve problems in tangential markets in a sustainable way. The Group looks to develop products offering meaningful benefits to customers which can then be commercialised through existing relationships with experienced and trusted OEM's and consumer appliance specialists.

In October 2021 the Company announced the launches of Aurora and Dual Flo as key extensions of Strix domestic appliance category, both with strong energy saving and sustainability benefits. Strix's mission within the Appliance category is to develop products that allow consumers to live a safer, more convenient, and sustainable life at home.

Aurora is powered by Strix's Instant Flow Heater technology, delivering auto-dispensed hot, boiled, and chilled filtered water at the touch of a button. The Aurora Hot was launched in Q4 2021 and is now listed and selling well on Amazon, while the Aurora Chilled is on track to be in the market in the second quarter of 2022.  Aurora products have numerous  environmental and energy saving advantages . The Aurora has recently been awarded the Quiet Mark award  which is an industry accreditation aimed at encouraging companies worldwide to prioritise noise reduction within product design.  Strix recently organised a virtual press event for the Aurora product to demonstrate the product and the consumer insights behind it and raise retail awareness of Strix's recent new product development activity.  

The Visione induction kettle launched in December with a focussed marketing campaign planned to increase awareness and sales this year. It has also recently been awarded both the German Design Award 2022 and the reddot design award, two prestigious awards in the industry.

Water category

Overall, the water category reported a significant growth in revenue of 82.3% to £21.4m in 2021 with the combined contribution of LAICA and HaloPure technology and  has continued to develop its product base and progressed towards our category growth aspirations.

LAICA has a considerable global presence, an established product range and an advanced new product roadmap. The acquisition  continues to be successfully integrated in line with plan to achieve the identified benefits and the trading performance has been strong over the period. It is already  providing some strategic consolidation opportunities in the water treatment range, driving efficiencies and a comprehensive portfolio of products for the Group globally.

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.

Strix previously highlighted that it had secured contracts at a regional government owned livestock company in China and more recently the preliminary result from new product development shows a significant breakthrough to apply the HaloPure technology onto smaller size of livestock farms which will enlarge the target addressable market. The prototype is currently undergoing the field testing phase.

Excellent recent progress has been made in Strix's water category in the  Asia-Pacific ("APAC") , Europe and the North America through new distribution and private label contracts with reputable distributors, retailers and brands in those regions.  

In South-East Asia, Strix recently entered into a significant distribution agreement with a global consumer electronics manufacturer, under which its water filtration technology and products will be introduced to local Asian markets in Q2 2022.

In Europe, Strix has secured the supply of its water filtration technology and products to one of Europe's largest consumer electronics retailers.  Strix has also appointed a new distributor for Denmark who will take a range of Aqua Optima jugs and filters. 

Additionally, new retail listings for the Aqua Optima range have also been won across the UK and Ireland growing the brand's presence across the region with more than 200 additional store listings across well-known high street and independent retailers .  Strix now also h as a presence in  the hardware a nd  garden centre market i n the UK  with listings of its Aqua Optima jugs a nd  filters.

In the US, the Company has recently appointed an additional distributor for the North American region. The distributor has an excellent track record in supplying major consumer electronics brands.

Operations review

The new manufacturing operations  within Zengcheng district in Guangzhou, China are now fully operational and were delivered on time and to budget  during a global pandemic.  The new factory will double the Group's current manufacturing capacity enabling it to grow the business and deliver its stated medium term strategy of doubling revenues.  Efficiencies and further in-sourcing arising from the new manufacturing facility are expected to have a positive effect on margins.   

Additionally, in light of the recent lockdowns in China, Strix is holding finished stock in different districts in order to minimise any disruption and continues to take proactive measures above the governmental regulations being implemented globally.

Barriers to entry and d efence of intellectual property

Strix constantly assesses the risks posed by competitive threats and sees the real benefits of market disruption which drives its determination to constantly evolve its innovative technologies in a sustainable way by investing in its portfolio of intellectual property to protect its new products.

The Group actively monitors the markets in which its operates for violation of our intellectual property rights.  Strix has unique relationships with its brands, OEMs and retailers and provides its support across the value chain and throughout the product lifecycle, including product design and advice on specification and manufacturing solutions. These value-added services and existing strong relationships ensure brands, OEMs and retailers continue to rely on Strix's components and support.

Strix remains committed to consumer safety and continue to prompt regulatory enforcement authorities to remove unsafe and poor quality products from our major markets. Nine such actions  were undertaken in 2021 resulting in product recalls and withdrawal of kettles from Bulgaria. Defence of intellectual property and regulatory enforcement remain core activities of our business and there have now been 66 in total since 2017.

Sustainability

In 2020, the Group reassessed its approach to sustainability with a view of integrating a sustainability strategy within core business activities aligning ourselves with the UN's Sustainable Development Goals (SDGs). Today, Strix is launching its sustainability report and its "Sustainable. Innovative. Dependable." strategy.

An internal management and reporting structure has been put in place to ensure inclusion, responsibility and accountability from the shop floor to the boardroom. Strix has developed metrics of sustainability measures which have been standardised and are being rolled out across the organisation.  The Group's latest and highly ambitious step sees the externalisation of our sustainability KPIs as set out in the sustainability report available via this link:  https://www.strixplc.com/sustainability.html. Measuring, committing and reporting on progress will ensure that these factors will be a key driving force in the direction of the business. 

Strix has focused on climate change and carbon emissions as a key KPI for 2022. Our Scope 1&2 emissions emanate primarily from our manufacturing plants, especially the new facility in China which has been commissioned. Strix has set an ambitious target for net zero Scope 1&2 emissions by 2023. The Group believes this to be 'best-in-class' and far in excess of the Paris 1.5°C scenario requirements.

In addition, our goal is to achieve over 95% of this through reduction of our own emissions with less than 5% from carbon offsets. To achieve this ambitious target, the Group has invested over £0.6m into a solar array at our new Chinese manufacturing site which will provide over 10% of the required electricity with the remainder due to be switched to renewable electricity in 2022.

Diversity is important to Strix as a business and 60% of the work force is female, 40% at the C-suite level and 27% at the senior management level. The target is to further embed diversity thinking throughout the organisation and work to promote gender diversity of the Group's senior management.

LAICA is also targeting a combination of solar and renewable electricity although with the integration currently at the fore this is expected to be implemented through 2022. Strix are also developing a range of programmes to reduce our emissions, for instance China and now the Isle of Man has started to move to electric cars. The Isle of Man will take the  lead on alternative offsetting of our 'hard to remove' emissions using the SBTi mitigation hierarchy.

Our other sustainability KPIs are taken from key operating practices already embedded into our culture. Promotion of the sustainability agenda and KPIs is generating renewed emphasis on these activities. This has included additional planning and pathways to improvement and, where applicable, setting of ambitious future targets. Strix expects to enunciate further on these plans in the coming year. These KPIs are important but the Group also remains committed to other areas of our sustainability agenda. This is highlighted in our community engagement where we have an aspiration to increase volunteer hours by 10% a year.

The next few years will see significant planning and project execution as Strix looks to advance the KPIs and set ever ambitious goals but this is a critical aspect of Strix's vision to establishing a world leading innovative and sustainable technology business.

Dividend policy

Given the Group's performance and confidence in the continued strength of its cash generation the Board proposes an increase in the final dividend to 5.60p per share  (2020: 5.25p) which would represent a total dividend of 8.35p per share  (2020: 7.85p). The Board reiterates its intention to implement a progressive dividend policy that is linked to underlying earnings.

The final dividend will be paid on 10 June 2022 to shareholders on the register at 13 May 2022 and the shares will trade ex-dividend from 12 May 2022. 

Financial Position

Strix is in a strong financial position with  significant liquidity providing flexibility  to continue to deploy capital consistent with its allocation of capital priorities and is focused on investing in compelling growth opportunities, in particular on new product development and commercialisation strategy that supports the medium-term growth ambition of the Group. 

The Company also continues to seek the acquisition of technologies that will add further strategic value across the Group and has a buoyant pipeline of opportunities it is tracking closely. Following the successful integration of LAICA, the Group is now actively considering a number of potential acquisition targets.

Outlook

The Group reported  revenue increase of 28.8% on a constant currency basis, versus the same period in prior year and an increase of 26.6% on a constant currency basis, versus the same period in 2019. This was driven by both organic growth and the acquisition of LAICA which has delivered strong revenue growth over the period.

Strix has successfully implemented price increases on some of its legacy products in both kettle controls and water categories and will also be implementing further increases across the wider range with effect from 1 May 2022, which alongside a range of other efficiency measures and foreign exchange rate and commodity hedging arrangements will help to minimise the impact of any cost inflation.

Notwithstanding the positive demand backdrop, there are a number of headwinds which continue to persist including increases in commodity prices, freight cost inflation, supply chainand adverse foreign exchange rates which implies the Group will continue to face a challenging operating environment.

The Group also has 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.

Strix has a robust business model and disciplined execution of our strategies have underpinned the resilience of performance throughout economic cycles, so remains confident in its ability to navigate the growing uncertainties ahead and remain confident of delivering on the medium-term strategic plan and delivering against its targets.

CFO's report:  

	Adjusted results 1					Reported results
	FY 2021	FY 2020	FY 2019	Change (21 - 20)	Change (21 - 19)	FY 2021	FY 2020	FY 2019	Change (21 - 20)	Change (21 - 19)
	£m	£m	£m	%5	%5	£m	£m	£m	%5	%5
Revenue	119.4	95.3	96.9	+25.3%	+23.2%	119.4	95.3	96.9	+25.3%	+23.2%
Revenue - constant currency basis2	122.7	95.3	96.9	+28.8%	+26.6%	122.7	95.3	96.9	+28.8%	+26.6%
Gross profit	47.4	39.4	39.6	+20.3%	+19.7%	43.8	38.9	39.4	+12.6%	+11.2%
EBITDA 3	40.5	38.1	36.9	+6.3%	+9.8%	30.6	32.6	29.6	-6.1%	+3.4%
Operating profit	33.7	32.1	31.5	+5.0%	+7.0%	23.7	26.6	24.2	-10.9%	-2.1%
Profit before tax	32.2	30.9	30.2	+4.2%	+6.6%	21.5	25.5	22.9	-15.7%	-6.1%
Profit after tax	31.4	29.5	28.9	+6.4%	+8.7%	20.6	24.1	21.5	-14.5%	-4.2%
Net debt 4	51.2	37.2	26.3	+37.6%	+94.7%	51.2	37.2	26.3	+37.6%	+94.7%
Net cash generated from operating activities	22.3	31.2	34.4	-28.5%	-35.2%	22.3	31.2	34.4	-28.5%	-35.2%
Basic earnings per share (pence)	15.2	14.9	15.2	+2.0%	+0.0%	10.0	12.2	11.3	-18.0%	-11.5%
Diluted earnings per share (pence)	14.9	14.3	14.1	+4.2%	+5.7%	9.8	11.7	10.5	-16.2%	-6.7%
Total dividend per share (pence)	8.35	7.85	7.70	+6.4%	+8.4%	8.35	7.85	7.70	+6.4%	+8.4%

6.  Adjusted results exclude exceptional items, which include share based payment transactions, COVID-19 related costs, and other reorganisation and strategic project costs. Adjusted results are non-GAAP metrics used by management and are not an IFRS disclosure. A table which shows both Adjusted and Reported results is included in the Chief Financial Officer's review.

7.  Revenue - constant currency basis, which is defined as 2021 revenue restated at the exchange rates prevailing in 2020, is a non-GAAP metric used by management and is not an IFRS disclosure.

8.  EBITDA, which is defined as earnings before finance costs, tax, depreciation and amortisation, is a non-GAAP metric used by management and is not an IFRS disclosure.

9.  Net debt excludes the impact of IFRS 16 lease liabilities, pension liabilities, deferred tax liabilities and earn-out provisions on satisfaction of performance conditions and providing post-combination services. Net debt including earn-out provisions was £58.6m.

10.  Figures are calculated from the full numbers as presented in the consolidated financial statements.

Financial performance

Revenue increased by 25.3% to £119.4m (FY 2020 £95.3m). This was partly due to the inclusion of LAICA S.p.A ("LAICA") revenues of £22.7m in FY 2021 (FY 2020: £4.1m), with the remaining increase of £5.5m (representing a 6.0% increase from comparative prior year) realised from organic growth. Revenue increased by 23.2% above FY 2019 levels.

Revenue on a constant currency basis showed an increase of 28.8% from FY 2020. This was impacted by the weakening of foreign currencies against Pound Sterling during the current year compared to FY 2020, which would have effectively increased the Pound Sterling value of revenues for products that are priced in foreign currency, had the foreign currency exchange rates remained constant.

Adjusted gross profit increased by 20.3% to £47.4m (FY 2020: £39.4m), which included the full year effect of  LAICA's contribution compared to only 2 months' in the prior year. Increase in gross profits was driven by growth in the sale of appliances, which were 59.9% higher compared to the same period in the prior year, realised from new products launched in this category and selling well on Amazon, with more sales expected in FY 2022 in anticipation of increased demand and further planned new product listings. Reported gross profits increased by 12.6% to £43.8m (FY 2020: £38.9m).

Adjusted gross profit margin in FY 2021 was 39.7% (FY 2020: 41.4%), showing a margin dilution of 1.6% attributable mainly to increases in commodity prices and inward freight costs experienced in global supply chains in the wake of the pandemic recovery, adverse foreign currency exchange rate movements due to the weakening of foreign currencies against the Pound Sterling, and  direct labour wage increases as the Group expanded its labour force in line with meeting its medium-term targets. These adverse factors  were partially offset by product price increases in the current year, adoption of lean and automated manufacturing processes with in-sourcing of commodities from increased production capacity at the new manufacturing plant, inclusion of sales from LAICA for the full year with its higher margins products, and market growth in the Group's kettle controls and appliances categories.

Adjusted EBITDA stood at £40.5m (FY 2020: £38.1m), increasing by 6.3%, with the full year effect of LAICA's contribution compared to only 2 months' in the prior year. Adjusted EBITDA is defined as profit before depreciation, amortisation, finance costs, finance income, taxation, and exceptional items including share based payments. Reported EBITDA decreased 6.1% to £30.6m (FY 2020: £32.6m).

Adjusted EBITDA margin in FY 2021 was 33.9% (FY 2020: 40.0%), representing a dilution of 6.1%. In addition to the factors mentioned above which contributed to a 1.6% dilution in the adjusted gross profit margin, other factors which played a role in the dilution of adjusted EBITDA during H1 2021 continued into the second half of the year, which were higher outward carriage and freight costs experienced globally throughout the entire year as the supply chains felt the impacts of recovery from the pandemic, higher payroll costs as the Group continued to increase its headcount in line with management expectations and medium-term targets, and higher advertising and promotional costs as the Group continued to widen its product reach in its water and appliances categories. These cost implications have a similar effect on dilution of the other adjusted KPI margins of operating profit, profit before tax and profit after tax throughout the year.

Adjusted operating profits increased by 5.0% to £33.7m (FY 2020: £32.1m), showing an increase of £1.6m, mainly attributable to LAICA. Reported operating profits were lower by 10.9% to £23.7m (FY 2020: £26.6m) after deducting exceptional costs of £10.0m (FY 2020: £5.5m) which increased mainly due to reason described in the "Costs" section further below.

Adjusted profit before tax was £32.2m (FY 2020: £30.9m), an increase of £1.3m (4.2%) from prior year which included the full year effect of LAICA's contribution. Reported profit before tax was £21.5m (FY 2020: £25.5m). Interest charges recognised were higher than those in the prior year, in line with an increase in the Net Debt, and also due to exceptional finance costs of £0.8m relating to the discounted unwinding of present values of contingent liabilities recognised on acquisition of LAICA in 2020.

Adjusted profit after tax was £31.4m (FY 2020: £29.5m), an increase of £1.9m (6.4% increase). The tax expense decreased in the current year mainly due to certain tax measures adopted  with the move of operations to the new factory. Reported profit after tax was £20.6m (FY 2020: £24.1m). The effective tax rate on adjusted profit before tax in FY 2021 was 2.7% (FY 2020: 4.5%).

Costs

Costs in FY 2021 increased across the board compared to the prior year, partly in support of the increase in sales and the inclusion of LAICA's full year results, but also caused by global inflationary prices increases seen in major supply chain channels in all industries due to remnant impacts of recovery from the COVID-19 pandemic.

Cost of sales (excluding exceptional costs) increased to £72.0m (FY 2020: £55.9m). In addition to increases in line with sales, the main drivers of increase in costs were higher commodity and labour costs, increased inward carriage and freight costs, and higher energy costs, all following general global inflationary trends as the world recovered from the pandemic. Higher costs were also seen for product approvals in line with a number of new product launches within the Group's appliances category which prompted new patent and trademark applications to be filed in line with the Group's vision and mission of offering safer and sustainable products. 

Distribution costs increased to £9.2m (FY 2020: £5.0m), continuing on from the upward trends seen in the first half of the year, with main drivers being higher outward carriage and freight costs, higher payroll costs, and increased advertising and promotional costs as the Group widened its reach to the markets with new product listings. 

Administration costs (excluding exceptional costs) increased to £5.1m (FY 2020: £3.5m), increasing mainly due to the inclusion of LAICA, and also as a result of higher payroll costs seen across all departments as the Group increased its headcount in line with management expectations and medium-term targets, and increased ERP costs as the Group continues to improve on its newly implemented ERP system in the prior year in order to increase operational efficiencies.

Exceptional costs increased mainly due to LAICA acquisition-related strategic costs, the removal and write-off of assets and land and factory relocation costs associated with the move from the old factory to the new Chinese manufacturing plant as of 27 August 2021, which was completed within the budget of circa £20m. Refer to note 6 of the Group's financial statements for details on exceptional items.

Cash flow

Net cash generated from operating activities decreased to £22.3m (FY 2020: £31.2m) mainly due to the Group's investment in net working capital in the current year. Net working capital movements in FY 2021 increased, reflecting a cash outflow of £11.4m compared to prior year (FY 2020: £1.7m outflow). The increase is shown mainly in increased stock holdings at year-end due to forward procurement of commodities to secure future profits, and increased debtors in line with an increase in sales, and also due to Chinese VAT of £4.2m receivable from completion of the new factory, which will be reclaimed in FY 2022/23. Change in creditors remained relatively flat during the year. 

Cash outflows for investing activities decreased by £7.2m from the prior year mainly due to cash outflows in the prior year to fund the acquisition of LAICA, which were much lower in the current year. The new manufacturing plant in China was fully operational as of the 27 August 2021, with production and assembly lines installed, and having been completed on budget and on time. Total factory construction costs were in line with budget of circa £20m.

Cash outflows for financing activities decreased by £3.8m from prior year, driven by the offsetting impact of increased drawdowns from the revolving credit facility to fund investment in anticipated future commodity price inflation.

Balance Sheet

Property, plant and equipment increased to £42.8m (FY 2020: £37.2m), a net increase of £5.6m.  The majority of the increase, amounting to £4.7m (FY 2020: £9.1m) is attributable to capital expenditure in the current year to complete the construction of new factory in China, which became fully operational on 27 August 2021 and was completed on time and within budget of £20m. The remainder of the increase in property, plant and equipment is attributable to  the increase in plant and machinery and production tools of £6.3m for the new factory, and the increase of equipment and other assets of £2.5m, partly in the form of computer equipment in support of the new ERP system that was implemented in the prior year, partially offset by the write-off of old assets from the old factory with a net book value of circa £1.6m, the sale of LAICA buildings with a net book value of circa £1.7m in a sale and leaseback arrangement, and depreciation charges of £4.6m (FY 2020: £4.5m).

Intangible assets increased to £30.5m (FY 2020: £29.7m) reflecting a net increase of £0.8m. The net increase is due to additions of circa £5.1m, the majority of which are capitalised development costs from the new product development projects of circa £3.6m, and computer software and intellectual property totalling  £1.5m. These additions were offset by amounts totalling circa £2.0m relating to foreign exchange losses from translation of intangible assets recognised at acquisition date that are held by LAICA as a foreign operation, reassessment (during the measurement period) of the fair values of LAICA net assets acquired and recognised in the prior year, and transfers of intangible assets under construction to property, plant and equipment. The total amortisation charge was £2.3m (FY 2020: £1.5m).

Current assets increased to £45.5m (FY 2020: £35.9m), an increase of £9.6m. This is attributable mainly to increases in inventories by £4.8m due to higher stocks held at year-end to protect against increases in commodity prices, and increases in trade debtors and prepayments by £4.8m in line with an increase in sales.

Current liabilities (including tax liabilities, but excluding short-term portions of long-term liabilities) decreased to £27.5m (FY 2020: £30.2m), a decrease of £2.7m. The  majority of the decrease is driven by  payments in the current year of additional earn-out entitlements that had been accrued as payable in the prior year for the acquisition of LAICA, as well as a decrease in the tax liabilities due to payments made in the current year. 

Non-current liabilities (including short-term portions) increased to £85.0m (FY 2020: £66.0m), an increase of £18.9m, mainly driven by  further drawdowns in the year from the revolving credit facility as aforementioned, and outstanding amounts accrued as contingent liabilities (earn-out provisions) payable in FY 2022 and FY 2023 to the previous owners of LAICA upon meeting certain performance conditions and providing post-combination services as part of the acquisition of the subsidiary in the prior year.

Net debt

The Group's net debt position, excluding IFRS 16 lease liabilities, pension liabilities, deferred tax liabilities and earn-out provisions, as at 31 December 2021 increased to £51.2m (FY 2020: £37.2m).

Total committed debt facilities at 31 December 2021 amounted to £70.0m, giving available liquidity of £28.8m. Net debt equated to 1.31 times trailing twelve months' EBITDA, which compares favourably to our debt covenant of 2.50 times. This continues to underpin the Group's strong cash generation ability. 

Dividend

The Board proposes an increased final dividend of 5.60p per share (FY 2020: 5.25p) which would represent a total dividend of 8.35p per share (2020: 7.85p) and given the Group's performance in FY 2021 and confidence in the continued strength of its cash generation, reiterates our intention to implement a progressive dividend policy linked to underlying earnings for the full year.

The final dividend will be paid on 10 June 2022 to shareholders on the register at 13 May 2022 and the shares will trade ex-dividend from 12 May 2022. 

Directors' report

for the year ended 31 December 2021

The Directors present their report together with the audited consolidated financial statements of Strix Group Plc ("the Company") for the year ended 31 December 2021.

Principal activities of the Group

The principal activities of Strix Group Plc and its subsidiaries (together "the Group") are 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.

Business review and future developments

The Group has remained resilient during 2021 as the world recovers from the global impact of the COVID-19 pandemic in the wake of a "new normal". As a result of further funding for the completion of the new factory and adverse effects of net working capital movements to fund ongoing operations, the Group's net debt position increased to £51.2m (2020: £37.2m), excluding the impact of IFRS 16 lease liabilities.

The new manufacturing operations within Zengcheng district in Guangzhou, China are now fully operational and were delivered on time and to budget, and all was executed during a global pandemic. 

Results and dividends

The Group recorded revenue in the year of £119.4m (2020: £95.3m) and a profit after tax of £20.6m (2020: £24.1m).

The Directors recommend a final dividend for the year of 5.6p per share which, if approved at the Annual General Meeting ('AGM') on 26 May 2022, will be payable on 10 June 2022 to shareholders who are on the register at 13 May 2022 and the shares will trade ex-dividend from 12 May 2022. Together with the interim dividend paid during the year of 2.75p per share, this will result in a total dividend of 8.35p per share.

Financial risk management

Information relating to the financial risks of the Group have been included within note 22, "Financial risk management".

Directors and their interests

The Directors of the Company who were in office during the year and up to the date of signing the consolidated financial statements were:

·	Mark Bartlett
·	Mark Kirkland
·	Gary Lamb
·	Raudres Wong
·	Richard Sells

Mark Kirkland will retire by rotation in accordance with the Company's Memorandum and Articles of Association and will be proposed for re-election at the AGM on 26 May 2022. The Directors who held office during the year and as at 31 December 2021 had the following interests in the number of ordinary shares of the Company:

Name of Director	2021	2020
Mark Bartlett	2,410,878	3,400,000
Mark Kirkland	8,710	-
Gary Lamb	250,000	500,000
Raudres Wong	1,802,075	2,200,000
Richard Sells	-	-

In addition to the interests in ordinary shares shown above, the Group operates a performance share plan ("the LTIP") for senior executives, under which certain Directors have been granted conditional share awards. Subject to achieving performance targets, the maximum number of ordinary shares which could be issued to Directors in the future under such awards at 31 December 2021 is shown below:

	2021	2020
Mark Bartlett	519,531	603,953
Raudres Wong	499,920	584,197

The market price of the Company's shares at the end of the financial year was 303.5p (2020: 220.0p) and the range of market prices in the year was between 220.0p and 385.0p (2020: between 134.8p and 245.5p).

No changes took place in the interests of Directors between 31 December 2021 and the date of signing the consolidated financial statements.

Directors' indemnities and insurance

The Articles permit the Board to grant the Directors indemnities in relation to their duties as Directors, including third party indemnity provisions (within the meaning of the Isle of Man Companies Act 2006) in respect of any liabilities incurred by them in connection with any negligence, default, breach of duty or breach of trust in relation to the Company. Deeds of indemnity have been granted to each Director, but do not cover criminal acts. Directors' and Officers' liability insurance cover is in place at the date of this report. The Board remains satisfied that an appropriate level of cover is in place and a review of the levels of cover takes place on an annual basis.

Going concern

After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and for at least one year from the date of issue of these consolidated financial statements. As a result, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.

Further details are provided in note 2 of the financial statements.

Independent auditor

The auditor, PricewaterhouseCoopers LLC, has indicated its willingness to continue in office and a resolution concerning reappointment will be proposed at the AGM.

On behalf of the Board

Raudres Wong

Director

29 March 2022

Statement of Directors' responsibilities in respect of the financial statements

for the year ended 31 December 2021

The Directors are responsible for preparing the consolidated financial statements in accordance with applicable laws and regulations. The Directors have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union.

In preparing the consolidated financial statements, the Directors are responsible for:

·	selecting suitable accounting policies and applying them consistently;
·	stating whether IFRSs as adopted by the European Union, have been followed subject to any material departures disclosed and explained in the financial statements;
·	making judgements and accounting estimates that are reasonable and prudent;
·	preparing the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business; and
·	preparing consolidated financial statements which give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Raudres Wong

Director

29 March 2022

Independent auditor's report

Our opinion

In our opinion the consolidated financial statements give a true and fair view of the consolidated financial position of Strix Group Plc (the "Company") and its subsidiaries (together the "Group") as at 31 December 2021 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

What we have audited

Strix Group Plc's consolidated financial statements (the "financial statements") comprise:

·	the consolidated statement of financial position as at 31 December 2021;
·	the consolidated statement of comprehensive income for the year then ended;
·	the consolidated statement of changes in equity for the year then ended;
·	the consolidated statement of cash flows for the year then ended; and
·	the notes to the financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described in the "Auditor's responsibilities for the audit of the financial statements" section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants ("IESBA Code"). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code.

Our audit approach

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the Directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters

How our audit addressed the key audit matters

Revenue Recognition Refer to notes 2 and 7 to the financial statements. Fraud Risk - Revenue recognition through inappropriate manual journal entries. The Directors and management participate in reward and incentive schemes, including share-based payment programs that may incentivise or place pressure on the Directors and management to manipulate revenue recognition. There is a risk that management may override controls to intentionally misstate revenue transactions by recording fictitious revenue transactions through inappropriate manual journal entries.

Our audit work included, but was not restricted to: · Obtaining a detailed understanding of the standard flows of transactions for each material revenue stream; · Employing data analytics tools to trace revenue transactions to cash receipts; and to identify transactions which did not follow the standard flows, which were verified to originating documentation to confirm that the entries were valid; · Considering the stated accounting policy in respect of revenue recognition and whether it is compliant with International Financial Reporting Standard (IFRS) 15 "Revenue from contracts with customers"; · Testing significant controls in relation to the sales process, including the automated generation of invoices and packing lists, and approval of changes to standing data; · Testing revenue cut-off around the year-end by selecting a sample of transactions from either side of the year-end to supporting documentation, as well as reviewing post year-end credit notes issued for indications of revenue manipulation; and · Testing a sample of revenue transactions back to the purchase order, the invoice and proof of receipt from the client to confirm occurrence and accuracy of the transaction. Based on our work we did not identify any evidence of inappropriate management override in respect of the amount of revenue recorded through inappropriate journal entries.

Other information

The other information comprises the Directors' Report and the Statement of Directors' Responsibilities (but does not include the financial statements and our auditor's report thereon), which we obtained prior to the date of the auditor's report, and the other information to be included in the annual report and accounts, which is expected to be made available to us after that date. The Directors are responsible for the other information.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the other information to be included in the annual report and accounts, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the Directors.

Responsibilities of the Directors for the financial statements

The Directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and Isle of Man law, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

·	Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
·	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
·	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
·	Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
·	Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
·	Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.  

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with our engagement letter dated 27 January 2022 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Nicholas Halsall

for and on behalf of PricewaterhouseCoopers LLC

Chartered Accountants

Douglas, Isle of Man

29 March 2022

Consolidated statement of comprehensive income

for the year ended 31 December 2021

	Note	2021	2020
		£000s	£000s
Revenue	7	119,410	95,305
Cost of sales - before exceptional items		(71,986)	(55,896)
Cost of sales - exceptional items	6	(3,578)	(504)
Cost of sales		(75,564)	(56,400)
Gross profit		43,846	38,905
Distribution costs		(9,168)	(5,001)
Administrative expenses - before exceptional items		(5,107)	(3,479)
Administrative expenses - exceptional items	6	(6,363)	(4,952)
Administrative expenses		(11,470)	(8,431)
Share of (losses)/profits from joint ventures		(50)	61
Other operating income		562	1,101
Operating profit		23,720	26,635
Analysed as:
Adjusted EBITDA(1)		40,540	38,080
Amortisation	11	(2,310)	(1,477)
Depreciation	12	(3,173)	(3,042)
Right of use depreciation	12	(1,396)	(1,470)
Exceptional items	6	(9,941)	(5,456)
Operating profit		23,720	26,635
Finance costs	8	(2,226)	(1,194)
Finance income		13	13
Profit before taxation		21,507	25,454
Income tax expense	9	(860)	(1,384)
Profit for the year		20,647	24,070
Other comprehensive (expense)/income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations		(1,693)	31
Total comprehensive income for the year		18,954	24,101
Profit for the year attributable to:
Equity holders of the Company		20,599	24,049
Non-controlling interests		48	21
		20,647	24,070
Total comprehensive income for the year attributable to:
Equity holders of the Company		18,736	24,120
Non-controlling interests		218	(19)
		18,954	24,101
Earnings per share (pence)
Basic	10	10.0	12.2
Diluted	10	9.8	11.7

1.  ^{Adjusted EBITDA, which is defined as earnings before finance costs, tax, depreciation, amortisation, and exceptional items, is a non-GAAP metric used by management and is not an IFRS disclosure}

The notes form part of these consolidated financial statements.

Consolidated statement of financial position

as at 31 December 2021

	Note	2021	2020
ASSETS		£000s	£000s
Non-current assets
Intangible assets	11	30,468	29,648
Property, plant and equipment	12	42,763	37,205
Investments in joint ventures		28	92
Net investments in finance leases		15	-
Total non-current assets		73,274	66,945
Current assets
Inventories	15	20,022	15,224
Trade and other receivables	16	25,511	20,672
Cash and cash equivalents	17	19,670	15,446
Total current assets		65,203	51,342
Total assets		138,477	118,287
EQUITY AND LIABILITIES
Equity
Share capital and share premium	24	13,139	13,130
Share based payment reserve	23	2,039	1,913
Retained earnings		10,146	6,290
Non-controlling interests		681	716
Total equity		26,005	22,049
Current liabilities
Trade and other payables	18	25,886	27,151
Borrowings	19	1,064	2,220
Future lease liabilities	26	773	1,254
Contingent consideration	14	6,082	-
Current income tax liabilities	18	1,631	3,048
Total current liabilities		35,436	33,673
Non-current liabilities
Future lease liabilities	26	2,598	2,846
Deferred tax liability	14	2,303	2,558
Borrowings	19	69,782	50,426
Contingent consideration	14	1,382	5,380
Post-employment benefits	5(c)	971	1,355
Total non-current liabilities		77,036	62,565
Total liabilities		112,472	96,238
Total equity and liabilities		138,477	118,287

The consolidated financial statements were approved and authorised for issue by the Board of Directors on 29 March 2022 and were signed on its behalf by:

Mark Bartlett    Raudres Wong

Director  Director

Consolidated statement of changes in equity

for the year ended 31 December 2021

	Share capital and share premium	Share based payment reserve	Retained (deficit) / earnings	Total Equity attributable to owners	Non-controlling interests	Total Equity
	£000s	£000s	£000s	£000s	£000s	£000s
Balance at 1 January 2020	1,900	13,063	(14,052)	911	-	911
Profit for the year	-	-	24,049	24,049	21	24,070
Other comprehensive income / (expenses)	-	-	71	71	(40)	31
Total comprehensive income for the year	-	-	24,120	24,120	(19)	24,101
Dividends paid (note 25)	-	-	(15,310)	(15,310)	-	(15,310)
Dividends paid to non-controlling interests	-	-	108	108	(108)	-
Acquisition of LAICA S.p.A. (note 14)	-	-	-	-	843	843
Transfers between reserves (note 23)	-	(13,019)	13,019	-	-	-
Issue of shares (note 24)	11,230	-	-	11,230	-	11,230
Share based payment transactions (note 23)	-	1,869	-	1,869	-	1,869
Total transactions with owners recognised directly in equity	11,230	(11,150)	(2,183)	(2,103)	735	(1,368)
Other transactions recognised directly in equity (note 23)	-	-	(1,595)	(1,595)	-	(1,595)
Balance at 1 January 2021	13,130	1,913	6,290	21,333	716	22,049
Profit for the year	-	-	20,599	20,599	48	20,647
Other comprehensive income / (expenses)	-	-	(1,863)	(1,863)	170	(1,693)
Total comprehensive income for the year	-	-	18,736	18,736	218	18,954
Dividends paid (note 25)	-	-	(16,510)	(16,510)	-	(16,510)
Dividends paid to non-controlling interests	-	-	253	253	(253)	-
Transfers between reserves (note 23)	9	(1,249)	1,240	-	-	-
Share based payment transactions (note 23)	-	1,549	-	1,549	-	1,549
Total transactions with equity holders recognised directly in equity	9	300	(15,017)	(14,708)	(253)	(14,961)
Other transactions recognised directly in equity	-	(174)	137	(37)	-	(37)
Balance at 31 December 2021	13,139	2,039	10,146	25,324	681	26,005

The notes form part of these consolidated financial statements.

Consolidated statement of cash flows

for the year ended 31 December 2021

		2021	2020
	Note	£000s	£000s
Cash flows from operating activities
Cash generated from operations	27	24,206	32,120
Tax paid		(1,916)	(908)
Net cash generated from operating activities		22,290	31,212
Cash flows from investing activities
Purchase of property, plant and equipment		(12,049)	(12,999)
Capitalised development costs	11	(3,609)	(2,808)
Purchase of LAICA S.p.A. net of cash acquired	14	(1,605)	(6,735)
Purchase of other intangibles	11	(1,487)	(1,642)
Proceeds on sale of property, plant and equipment		1,750	-
Finance income		13	13
Net cash used in investing activities		(16,987)	(24,171)
Cash flows from financing activities
Drawdowns under credit facility	19	24,000	22,193
Repayment of borrowings	19	(5,820)	(12,339)
Finance costs paid	19	(1,170)	(1,951)
Principal elements of lease payments	26	(1,562)	(1,455)
Proceeds from issue of new shares	23	-	3,800
Dividends paid	25	(16,510)	(15,310)
Dividends paid to non-controlling interests		(254)	(63)
Net cash used in financing activities		(1,316)	(5,125)
Net increase in cash and cash equivalents		3,987	1,916
Cash and cash equivalents at the beginning of the year		15,446	13,658
Effects of foreign exchange on cash and cash equivalents		237	(128)
Cash and cash equivalents at the end of the year		19,670	15,446

The notes part of these consolidated financial statements.

Notes to the consolidated financial statements

for the year ended 31 December 2021

1.   GENERAL INFORMATION

Strix Group Plc ("the Company") was incorporated and registered in the Isle of Man on 12 July 2017 as a company limited by shares under the Isle of Man Companies Act 2006 with the registered number 014963V. The address of its registered office is Forrest House, Ronaldsway, Isle of Man, IM9 2RG.

The Company's shares were admitted to trading on AIM, a market operated by the London Stock Exchange, on 8 August 2017. The principal activities of Strix Group Plc and its subsidiaries (together "the Group") are the design, manufacture and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management, water filtration and small household appliances for personal health and wellness.

2.   PRINCIPAL ACCOUNTING POLICIES

The Group's principal accounting policies, all of which have been applied consistently to all of the years presented, are set out below.

Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and International Financial Reporting Standards Interpretation Committee ("IFRS IC") interpretations as adopted by the European Union. The financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB). The financial statements have been prepared on the going concern basis.

The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in note 3.

Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

·	contingent consideration - measured at fair value

Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and all of its subsidiary undertakings. Subsidiaries are fully consolidated from the date on which control commences and are deconsolidated from the date that control ceases. The financial statements of all group companies are adjusted, where necessary, to ensure the use of consistent accounting policies.

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group is exposed to or has the rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. Consolidation of subsidiaries ceases from the date that control also ceases.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of financial position, respectively.

Joint ventures

Joint ventures are joint arrangements of which the Group has joint control, with rights to the net assets of those arrangements. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Interests in joint ventures are accounted for using the equity method of accounting (detailed below) after being recognised at cost in the consolidated statement of financial position. 

Equity method of accounting

Under the equity method of accounting, investments in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group's share of the post-acquisition profits or losses from the joint arrangement in profit or loss, and the Group's share of movements in other comprehensive income of the joint arrangement in other comprehensive income. Dividends received from joint ventures are recognised as a reduction in the carrying amount of the investment.

Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group's interest in these entities.

The carrying amount of equity-accounted investments is tested for impairment in accordance with the impairment of assets policy as described below in this note.

Transactions eliminated on consolidation

Intra-group balances, and any gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date with the assets and liabilities of subsidiaries being measured at their fair values. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. The Group measures goodwill at the acquisition date as:

·	the fair value of the consideration transferred; plus
·	the recognised amount of any non-controlling interests in the acquiree; plus
·	if the business combination is achieved in stages, the fair value of the pre-existing interest in the acquiree; less
·	the fair value of the identifiable assets acquired and liabilities assumed.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis at the non-controlling interest's proportionate share of the fair value of the acquired entity's net identifiable assets. Transaction costs that the Group incurs in connection with a business combination are expensed as incurred.

If the initial accounting for a business combination is preliminary by the end of the reporting period in which the business combination occurs, provisional amounts are reported.  Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities recognised to reflect the facts and circumstances that existed as at the acquisition date.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.

Going concern

These consolidated financial statements have been prepared on the going concern basis.

The Directors have made enquiries to assess the appropriateness of continuing to adopt the going concern basis. The Directors no longer consider going concern to be a critical accounting judgement as was previously disclosed in the prior year financial statements. In determining that going concern is no longer a critical accounting judgement they have taken into account the following:

·	the strong historic trading performance of the Group;
·	budgets and cash flow forecasts for the period to December 2023;
·	the current financial position of the Group, including its cash and cash equivalents balances of £19.7m;
·	the availability of further funding should this be required (including the headroom of £10m on the revolving credit facility and the access to the AIM market afforded by the Company's admission to AIM);
·	the low liquidity risk the Group is exposed to;
·	the fact that the Group operates within a sector that is experiencing relatively stable demand for its products, amidst the global COVID-19 pandemic; and
·	that there has been no disruption to the Group's manufacturing or supply chain.

Based on these considerations, the Directors have concluded that there are no material uncertainties that may cast significant doubt on its ability to continue as a going concern and the Group has adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors continue to adopt the going concern basis of accounting in preparing the consolidated financial statements.

Foreign currency translation

Functional and presentational currency

Items included in the financial information of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in Pound Sterling, which is Strix Group Plc's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are recognised in the consolidated statement of comprehensive income within cost of sales.

Group companies

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

·	assets, including intangible assets and goodwill arising on acquisition of those foreign operations, and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position, or at historic rates for certain line items;
·	income and expenses for each statement of comprehensive income presented are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
·	all resulting exchange differences are recognised in other comprehensive income. Such translation differences are reclassified to profit or loss only on disposal or partial disposal of the foreign operation.

Standards, amendments and interpretations adopted

The Group has applied the amendments to IFRS 9 in relation to Interest Rate Benchmark Reform in the year. For the borrowings measured using amortised cost measurement where interest rates have been modified to be linked to SONIA rather than LIBOR, this change has been reflected by adjusting the effective interest rate. No immediate gain or loss has been recognised. Other than the above, there are no other standards, amendments to standards or interpretations that the Group has applied for the first time in the reporting period commencing 1 January 2021 that have had a material impact on the financial statements.

Standards, amendments and interpretations which are not effective or early adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2021 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Property , plant and equipment

Initial recognition and measurement

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the
asset to its working condition for its intended use. When parts of an item of property, plant and equipment have different useful lives, the components are accounted for as separate items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying value of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Subsequent measurement

Depreciation is calculated using the straight-line method to allocate the cost of the assets, net of any residual values, over their estimated useful lives as follows:

·	Plant and machinery	3 - 10 years
·	Fixtures, fittings and equipment	2 - 5 years
·	Motor vehicles	3 - 5 years
·	Production tools	1 - 5 years
·	Right of use assets	2 - 8 years, based on the lease terms
·	Land and buildings	50 years

The Group manufactures some of its production tools and equipment. The costs of construction are included within a separate category within property, plant and equipment ("assets under construction") until the tools and equipment are ready for use at which point the costs are transferred to the relevant asset category and depreciated. Any items that are scrapped are written off to the consolidated statement of comprehensive income.

The assets' residual values and useful lives are reviewed at the end of each reporting period.

Fixtures, fittings and other equipment includes computer hardware.

Derecognition

Property, plant and equipment assets are derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of property, plant and equipment, measured as the difference between net disposal proceeds and the carrying amount of the asset, are recognised in the consolidated statement of comprehensive income on derecognition.

Impairment

Tangible assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. 

Intangible assets

Initial recognition and measurement

The Group's intangible assets relate to goodwill, capitalised development costs, intellectual property, customer relationships, brands and computer software. Goodwill is the excess of the consideration paid over the fair value of the identifiable assets, liabilities and contingent liabilities in a business combination and relates to assets which are not capable of being individually identified and separately recognised. Goodwill acquired is allocated to those cash-generating units ("CGUs") expected to benefit from the business combination in which the goodwill arose. Goodwill is measured at cost less any accumulated impairment losses and is held in the functional currency of the acquired entity to which it relates and remeasured at the closing exchange rate at the end of each reporting period, with the movement taken through other comprehensive income. The CGUs represent the lowest level within the Group at which goodwill is monitored for internal management purposes.

Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. Internal costs that are incurred during the development of significant and separately identifiable new products and manufacturing techniques for use in the business are capitalised when the following criteria are met:

·	it is technically feasible to complete the project so that it will be available for use;
·	management intends to complete the project and use or sell it;
·	it can be demonstrated how the project will develop probable future economic benefits;
·	adequate technical, financial, and other resources to complete the project and to use or sell the project output are available; and
·	expenditure attributable to the project during its development can be reliably measured.

Capitalised development costs include employee, travel and other directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management. Refer to note 6(a) for details.

Intellectual property is capitalised where it is probable that future economic benefits associated with the patent will flow to the Group, and the cost can be measured reliably. The costs of renewing and maintaining patents are expensed in the consolidated statement of comprehensive income as they are incurred.

Customer relationships, intellectual property and brands are recognised on acquisitions where it is probable that future economic benefits will flow to the Group.

Computer software is only capitalised when it is probable that future economic benefits associated with the software will flow to the Group, and the cost of the software can be measured reliably. Computer software that is integral to an item of property, plant and equipment is included as part of the cost of the asset recognised in property, plant and equipment.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred.

Subsequent measurement

The Group amortises intangible assets with a limited useful life using the straight-line method over the following periods:

·	Capitalised development costs	2 - 5 years
·	Intellectual property	Lower of useful or legal life
·	Technology and software	2 - 10 years
·	Customer relationships	10 - 13 years
·	Brands	Indefinite useful life

Brands have an indefinite useful life because there is no foreseeable limit on the period during which the Group expects to consume the future economic benefits embodied in the asset. The LAICA brand has been trading since inception and has been a well recognisable brand amongst the Group's trading partners, and the Group does not foresee a time limit by when these partnerships will cease.

Amortisation is charged to the consolidated statement of comprehensive income on a straight-line basis over the estimated useful lives above.

Derecognition

Intangible assets are derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of intangible assets, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in the consolidated statement of comprehensive income when the asset is derecognised. Where a subsidiary is sold, any goodwill arising on acquisition, net of any impairment, is included in determining the profit or loss arising on disposal. 

Impairment

Intangible assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

Intangible assets with indefinite useful lives impairment assessments

Intangible assets with indefinite useful lives arising on business combinations are allocated to the relevant CGU and are treated as the foreign operation's assets.

Impairment reviews are performed at least annually, or more frequently if there are indicators that goodwill might be impaired. The Group has assessed the carrying values of goodwill and brands to determine whether any amounts have been impaired. The recoverable amount of the underlying CGU was based on a value in use model where future cashflows were discounted using a weighted average cost of capital as the discount rate with terminal values calculated applying a long-term growth rate. In determining the recoverable amount, the Group considered several sources of estimation uncertainty and made certain assumptions or judgements about the future. Future events could cause the assumptions used in the impairment review to change with an impact on the results and net position of the group.

Leases

The leasing activities of the Group and how these are accounted for

The Group leases office space, workshops, warehouses and factory space. Rental contracts are typically made for periods of 3 - 10 years, but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

Leases are recognised as a right-of-use ("ROU") assets and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability, finance costs and foreign exchange (where the lease is denominated in a foreign currency). The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Measurement of future lease liabilities

Assets and liabilities arising from a lease are initially measured on a present value basis. Future lease liabilities include the net present value of the following lease payments:

·	fixed payments (including in-substance fixed payments), less any lease incentives receivable
·	variable lease payments that are based on an index or a rate
·	amounts expected to be payable by the lessee under residual value guarantees
·	the exercise price of a purchase option if the lessee is reasonably certain to exercise that options, and
·	the payment of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to the consolidated statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Measurement of right-of-use assets

Right-of-use assets are measured at cost comprising the following:

·	the amount of the initial measurement of lease liability
·	any lease payments made at or before the commencement date less any lease incentives received
·	any initial direct costs, and
·	restoration costs

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the consolidated statement of comprehensive income. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise primarily IT equipment.

Extension and termination options

Extension and termination options are included in a number of property leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts.

Lease income

Lease income from operating leases where the Group is a lessor, and where substantially all the risks and rewards associated with the leased asset remain with the Group, is recognised in other income on a straight-line basis over the lease term.

Financial assets

Classification

The Group classifies its financial assets as financial assets held at amortised cost.  Management determines the classification of its financial assets at initial recognition.

The Group classifies its financial assets as at amortised cost only if both of the following criteria are met:

·	the asset is held within a business model whose objective is to collect the contractual cash flows; and
·	the contractual terms give rise to cash flows that are solely payments of principal and interest.

Financial assets held at amortised cost are initially recognised at fair value, and are subsequently stated at amortised cost using the effective interest method. Financial assets at amortised cost comprise cash and cash equivalents and trade and other receivables (excluding prepayments and the advance purchase of commodities). Trade receivables are amounts due from customers for products sold performed in the ordinary course of business. They are due for settlement either on a cash in advance basis, or generally within 45 days, and are therefore all classified as current. Other receivables generally arise from transactions outside the usual operating activities of the Group.

Impairment of financial assets

The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The Group applies the expected credit loss model to financial assets at amortised cost. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. Given the nature of the Group's receivables, expected lifetime losses are not material.

Financial liabilities

With the exception of contingent consideration, the Group initially recognises its financial liabilities at fair value net of transaction costs where applicable and subsequently they are measured at amortised cost using the effective interest method. Financial liabilities comprise trade payables, payments in advance from customers and other liabilities. They are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Contingent consideration is measured at fair value with changes in fair value recognised in profit or loss.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Other liabilities include rebates.

Borrowing costs

Borrowings, including option-type arrangements, are recognised initially at fair value. Option-type borrowing arrangements are subsequently measured at amortised cost. Fees paid on the establishment of such option-type arrangements are recognised as a 'right to borrow' asset, and are capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which the fees relate. This prepayment has been deducted from the carrying value of the financial liability.

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with a maturity of three months or less. While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, impairment losses are not material.

Employee benefits

The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday entitlements and defined benefit and contribution pension plans.

Short-term benefits

Short-term benefits, including holiday pay and similar non-monetary benefits, are recognised as an expense in the period in which the service is rendered. The Group recognises a liability and an expense for bonuses where contractually obliged or where there is a past practice that has created a constructive obligation.

Pensions

Subsidiary companies operate both defined contribution and defined benefit plans for the benefit of their employees.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. A defined benefit plan is a pension plan that is not a defined contribution plan.

Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors, such as age, years of service or compensation.

The liability recognised in the consolidated statement of financial position in respect of the defined benefit scheme is the present value of the defined benefit obligation at the statement of financial position date less the fair value of the scheme assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated by qualified independent actuaries using the projected unit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

The net pension finance cost is determined by applying the discount rate, used to measure the defined benefit pension obligation at the beginning of the accounting period, to the net pension obligation at the beginning of the accounting period taking into account any changes in the net pension obligation during the period as a result of cash contributions and benefit payments.

Pension scheme expenses are charged to the consolidated statement of comprehensive income within administrative expenses. Actuarial gains and losses are recognised immediately in the consolidated statement of comprehensive income. Net defined benefit pension scheme deficits before tax relief are presented separately in the consolidated statement of financial position within non-current liabilities.

Share-based payments

The Group has issued conditional equity settled share-based options and conditional share awards under a Long-Term Incentive Plan ("LTIP") in the parent company to certain employees. Under the LTIP, the Group receives services from employees as consideration for equity instruments of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense.

The total amount to be expensed is determined by reference to the fair value of the options granted:

·	including any market performance conditions such as the requirement for the Group's shares to be above a certain price for a pre-determined period;
·	excluding the impact of any service and non-market performance vesting conditions, including earnings per share targets, dividend targets, and remaining an employee of the Group over a specified period of time; and
·	including the impact of any non-vesting conditions, where relevant.

These awards are measured at fair value on the date of the grant using an option pricing model and expensed in the consolidated statement of comprehensive income on a straight-line basis over the vesting period, after making an allowance for the estimated number of shares that will not vest. The level of vesting is reviewed and adjusted bi-annually in the consolidated statement of comprehensive income, with a corresponding adjustment to equity.

If the terms of an equity settled award are modified, at a minimum, an expense is recognised as if the terms had not been modified. An additional expense is recognised for any modification that increases the total fair value of the share-based payment, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity award is cancelled by forfeiture, where the vesting conditions (other than market conditions) have not been met, any expense not yet recognised for that award as at the date of forfeiture is treated as if it had never been recognised. At the same time, any expense previously recognised on such cancelled equity awards is reversed, effective as at the date of forfeiture.

The dilutive effect, if any, of outstanding options is included in the calculation of diluted earnings per share.

Further details on the awards is included in note 23.

Inventories

Inventories consist of raw materials and finished goods which are valued at the lower of cost and net realisable value. Cost is determined using the weighted average cost formula. Cost comprises expenditure which has been incurred in the normal course of business in bringing the products to their present location and condition, and include all related production and engineering overheads at cost. Net realisable value is the estimated selling price in the ordinary course of business, less applicable selling expenses. At the end of each reporting period, inventories are assessed for impairment. If inventory is impaired, the identified inventory is reduced to its selling price less costs to complete and an impairment charge is recognised in the consolidated statement of comprehensive income.

Revenue

The Group primarily recognises revenue from the sales of goods to its customers. The amount of revenue relating to the provision of services is minimal and the Group does not undertake any significant long-term contracts with its customers where revenue is recognised over time.

The transaction price is based on the sales agreement with the customer. Revenue is reported net of sales rebates, which are based on a certain volume of purchases by a customer within a given period. Other than sales rebates, there is no variable consideration. Rebates are contractually agreed taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. No element of financing is deemed present because the sales are made under normal credit terms, which is consistent with market practice. Revenues associated with sales rebates are recognised on an expected value approach.

The performance obligation is the delivery of goods to customers, and revenue is recognised on dispatch for most revenue transactions. Otherwise, revenue is recognised when the products have been shipped to a specific location, or when the risks of obsolescence and loss have been transferred to the OEM or wholesaler. There are a very small number of revenue transactions where different performance obligations and/or recognition patterns occur. All of the amounts recognised as revenue are based on contracts with customers. 

The Group does not create any contract assets and all amounts are recognised as trade receivables as there are no performance conditions other than the passage of time. Payment terms for the majority of customers are to pay cash in advance of the goods being delivered. The Group recognises these balances within trade and other payables on the consolidated statement of financial position as "Payments in advance from customers". At the point the revenue is recognised, these balances are transferred from "Payments in advance from customers" to revenue. For the majority of other customers payment is normally due within 30 to 45 days from the date of sale.

Due to the simple nature of the Group's revenue no significant judgments have been made in the application of IFRS 15.

All revenue is derived from the principal activities of the Group.

Cost of sales

Cost of sales comprise costs arising in connection with the manufacture of thermostatic controls, cordless interfaces, and other products such as water jugs and filters. Cost is based on the cost of purchases on a first in, first out basis and includes all direct costs and an appropriate portion of fixed and variable overheads where they are directly attributable to bringing the inventories into their present location and condition. This also includes an allocation of non-production overheads, costs of designing products for specific customers and amortisation of capitalised development costs.

Exceptional items

An item is treated as exceptional if it is considered unusual by its nature or size, and is of such significance that separate disclosure is required in order to assess the underlying operating performance of the Group. These items are unusual or infrequent in nature, and also meet the following criteria of classification:  

·	if a certain event (defined as exceptional) had not occurred, the costs would not have been incurred or the income would not have been earned; or the costs attributable to the event have been identified using a reliable methodology of splitting amounts on an ongoing basis; and
·	economic resources have been expended in order to directly contribute towards the related activities; and
·	costs have been incurred that cannot be recovered due to the event and the related activities.

The Board considers the quantitative and qualitative factors in classifying items as exceptional in nature, including frequency and predictability of occurrence of the related event, as well as the nature and size of the items, looked at individually and in aggregate with other items of a similar nature. Exceptional items charges are excluded from EBITDA to calculate adjusted EBITDA. Refer to note 6(b) for further details.

Research and development

Research expenditure is written off to the consolidated statement of comprehensive income within cost of sales in the year in which it is incurred. Development expenditure is written off in the same way unless the Directors are satisfied as to the technical, commercial and financial viability of the individual projects. In this situation, the expenditure is classified on the consolidated statement of financial position as a capitalised development cost.

Finance costs

Finance costs comprise interest charges on lease liabilities, pension liabilities, interest on non-current borrowings, and finance charges relating to letters of credit. Finance costs are recognised when the right to make a payment is established.

Finance income

Finance income comprises bank interest receivable on funds invested. Finance income is recognised when the right to receive a payment is established.

Income tax  

Income tax for the years presented comprises current tax. Income tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the statement of financial position date in the countries where the Company and its subsidiaries operate and generate taxable income, and any adjustment to tax payable in respect of previous years.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Income tax (continued)

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Share capital and share premium

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction from the proceeds. Share premium arising on the issue of shares is distributable. Share capital and share premium have been grouped for the purposes of financial statement presentation.

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the Directors. In the case of final dividends, this is when approved by the shareholders at the AGM.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Board of Directors. The Board of Directors consists of the Executive Directors and the Non-Executive Directors.

Government grants

Subsidiary companies receive grants from the Isle of Man and Chinese governments towards revenue and capital expenditure. Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received and all attached conditions complied with.

Revenue grants are recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. The grant income is presented within other operating income in the consolidated statement of comprehensive income.

Capital grants are initially recognised as deferred income liabilities when received, and subsequently recognised as other income in profit or loss on a straight-line basis over the useful life of the related asset. The grants are dependent on the subsidiary company having fulfilled certain operating, investment and profitability criteria in the financial year, primarily relating to employment.

EBITDA and adjusted EBITDA - non-GAAP performance measures

Earnings before Interest, Taxation, Depreciation and Amortisation ("EBITDA") and adjusted EBITDA are non-GAAP measures used by management to assess the operating performance of the Group. Exceptional items charges are excluded from EBITDA to calculate adjusted EBITDA.

The Directors primarily use the adjusted EBITDA measure when making decisions about the Group's activities. As these are non-GAAP measures, EBITDA and adjusted EBITDA measures used by other entities may not be calculated in the same way and hence are not directly comparable.

3.   CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

In the application of the Group's accounting policies, which are described in Note 2, the directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. There is no change in applying accounting policies for critical accounting estimates and judgements from the prior year.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the entity's accounting policies

Functional currency

The Directors consider the factors set out in paragraphs 9, 10 and 11 of IAS 21, "The effects of changes in foreign currency" to determine the appropriate functional currency of its overseas operations. These factors include the currency that mainly influences sales prices, labour, material and other costs, the competitive market serviced, financing cash flows and the degree of autonomy granted to the subsidiaries.

The Directors have applied judgement in determining the most appropriate functional currency for all entities to be Pound Sterling, with the exception of Strix (Hong Kong) Ltd which has a Hong Kong Dollar functional currency, Strix (USA), Inc. which has a United States Dollar functional currency, HaloSource Water Purification Technology (Shanghai) Co. Ltd which have a Chinese Yuan functional currency, LAICA S.p.A and LAICA Iberia Distribution S.L. which both have a Euro functional currency, and LAICA International Corp. and Taiwan LAICA Corp. which both have a Taiwan Dollar functional currency. This may change as the Group's operations and markets change in the future.

Capitalisation of development costs

The Directors consider the factors set out in the paragraphs entitled 'Intangible assets - initial recognition and measurement' in note 2 with regard to the timing of the capitalisation of the development costs incurred. This requires judgement in determining when the different stages of development have been met.

4.  SEGMENTAL REPORTING

Management has determined the operating segments based on the operating reports reviewed by the Board of Directors that are used to assess both performance and strategic decisions. Management has identified that the Board of Directors is the chief operating decision maker in accordance with the requirements of IFRS 8 'Operating Segments'.

The Group's activities consist of the design, manufacture and sale of thermostatic controls, cordless interfaces, and other products such as water jugs and filters, primarily to Original Equipment Manufacturers ("OEMs") based in China and Italy.

The Board of Directors has identified 3 reportable segments from a product perspective, namely: kettle controls, water category and appliances.

The Board of Directors primarily uses a measure of gross profit to assess the performance of the operating segments, broken down into revenue and cost of sales for each respective segment which is reported to them on a monthly basis. Information about segment revenue is disclosed below, as well as in note 7.

	Reported gross profit
	2021
	(£000s)
	Kettle controls	Water categories	Appliances	Total
Revenue	85,117	21,404	12,889	119,410
Cost of sales	(52,880)	(14,617)	(8,067)	(75,564)
Gross profit	32,237	6,787	4,822	43,846
	Reported gross profit 2020
	(£000s)
	Kettle controls	Water categories	Appliances	Total
Revenue	79,816	11,744	3,745	95,305
Cost of sales	(44,022)	(9,387)	(2,991)	(56,400)
Gross profit	35,794	2,357	754	38,905

Included in cost of sales are amounts of depreciation and amortisation totalling £4,072,000 for kettle controls, £1,168,000 for water category, and £609,000 for appliances (2020: £3,910,000 for kettle controls, £834,000 for water category, and £266,000 for appliances).

	Adjusted gross profit 1
	2021
	(£000s)
	Kettle controls	Water categories	Appliances	Total
Revenue	85,117	21,404	12,889	119,410
Cost of sales	(49,455)	(14,500)	(8,031)	(71,986)
Gross profit	35,662	6,904	4,858	47,424
	Adjusted gross profit 1 2020
	(£000s)
	Kettle controls	Water categories	Appliances	Total
Revenue	79,816	11,744	3,745	95,305
Cost of sales	(43,582)	(9,334)	(2,980)	(55,896)
Gross profit	36,234	2,410	765	39,409

  ^{1. Adjusted gross profit excludes exceptional items, which include strategic project costs as detailed in note 6(b). Adjusted results are non-GAAP metrics used by management and are not an IFRS disclosure}

  Assets and liabilities

No analysis of the assets and liabilities of each operating segment is provided to the Board of Directors as part of monthly management reporting. Therefore, no analysis of segmented assets or liabilities is disclosed in this note.

Non-current assets (i) attributed to country of domicile and (ii) attributable to all other foreign countries

A geographical analysis of revenue from external customers has not been presented, as the OEMs to whom the majority of sales are made are primarily based in China and Italy.

In accordance with IFRS 8, the following table discloses the non-current assets located in both the Company's country of domicile (the Isle of Man) and foreign countries, primarily China, where one of the Group's principle subsidiaries is domiciled.

	2021	2020
	£000s	£000s
Country of domicile
Intangible assets	9,756	8,888
Property, plant and equipment	2,742	2,958
Total country of domicile non-current assets	12,498	11,846
Foreign countries
Intangible assets	20,712	20,760
Property, plant and equipment	40,021	34,247
Total foreign non-current assets	60,733	55,007
Total non-current assets	73,231	66,853

  Major customers

In 2021, there were two major customers that individually accounted for at least 10% of total revenues (2020: two customers). The revenues relating to these customers in 2021 were £15,390,000 and £12,133,000 (2020: £13,683,000 and £11,618,000).

5.  EMPLOYEES AND DIRECTORS

(a) Employee benefit expenses

	2021	2020
	£000s	£000s
Wages and salaries	28,167	18,347
Defined contribution pension cost (note 5(c)(i) and 5(c)(ii))	684	631
Employee benefit expenses	28,851	18,978
Share based payment transactions (note 23)	1,549	1,869
Total employee benefit expenses	30,400	20,847

 (b) Key management compensation

The following table details the aggregate compensation paid in respect of the key management, which includes the Directors and the members of the Trading Board, representing members of the senior management team from all key departments of the Group.

	2021	2020
	£000s	£000s
Salaries and other short-term employee benefits	2,025	1,673
Post-employment benefits	149	160
Termination benefits	-	99
Share based payment transactions	311	404
	2,485	2,336

- There are no defined benefit schemes for key management. Pension costs under defined contribution schemes are included in the post-employment benefits disclosed above.

 (c) Retirement benefits

(i) The Strix Limited Retirement Fund

The Strix Limited Retirement Fund is a defined contribution scheme under which the assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents costs payable by the Group to the fund and amounted to £684,000 (2020: £611,000).

  (ii) LAICA S.p.A. Termination Indemnity

LAICA S.p.A. operates a defined benefit plan for its employees in accordance with the Italian Termination Indemnity (named "Trattamento di Fine Rapporto" or "TFR") provisions defined by the National Civil Code (Article 2120). In accordance with IAS 19, the TFR provision is a defined benefit plan, which is based on the principle to allocate the final cost of benefits over the periods of service which give rise to an accrual of deferred rights under each particular benefit plan.

The calculation of the liability is based on both the length of service and on the remuneration received by the employee during that period of service. Article 2120 states that severance pay is due to the employee by the companies in any case of termination of the employment contract. For each year of service, severance pay accruals are based on total annual compensation divided by 13.50. Although the benefit is paid in full by the employer, part (0.5% of pay) of the annual accrual is paid to Istituto Nazionale della Previdenza Sociale (INPS) by the employer, and is subtracted from the severance pay accruals for the contribution reference period. As of 31 December of every year, the severance pay accrued as of 31 December of the preceding year is revalued by an index stipulated by law as follows: 1.5% plus 75% of the increase over the last 12 months in the consumer price index, as determined by the Italian Statistical Institute.

In accordance with IAS 19, the determination of the present value of the liability is carried out by an independent actuary under the projected unit method. This method considers each period of service provided by workers at the company as a unit of additional right. The actuarial liability must therefore be quantified based on seniority reached at the valuation date and re-proportioned based on the ratio between the years of service accrued at the reference date of the assessment and the overall seniority reached at the time scheduled for the payment of the benefit. Furthermore, this method provides to consider future salary increases, due to any cause (inflation, career, contract renewals, etc.), up to the time of termination of the employment relationship.

The below chart summarises the defined benefit pension liability of LAICA S.p.A. at 31st December 2021:

	2021	2020
	£000s	£000s
Liability as at 1 January	898	878
Current service cost for the period	58	20
Exchange differences on translation of foreign operations	(59)	-
Liability as at 31 December	897	898

The key actuarial assumptions used in arriving at these figures include:

·	annual discount rate of 0.87% (2020: 2.5%)
·	annual price inflation of 1.6% (2020: 6.0%)
·	annual TFR increase of 2.7% (2020: 2.1%)
·	demographic assumptions based on INPS published data

The remainder of the post-employment benefit liability of £74,000 (2020: £457,000) as at 31 December 2021 is made up of contractual post-employment liabilities within LAICA S.p.A. that do not meet the definition of a defined benefit plan in accordance with IAS 19.

6.  EXPENSES

(a) Expenses by nature

	2021	2020
	£000s	£000s
Employee benefit expense	28,851	18,978
Depreciation charges	3,173	3,042
ROU depreciation charges	1,396	1,470
Amortisation and impairment charges	2,310	1,477
Exceptional items (see below)	9,941	5,456
Foreign exchange losses	186	505

Research and development expenditure totalled £5,324,000 (2020: £4,117,000), and £3,609,000 (2020: £2,808,000) of development costs have been capitalised during the year.

(b) Exceptional items

The main categories of exceptional items relate to major exceptional events or projects impacting the Group's underlying operations, namely strategic projects undertaken relating to the construction of, and relocation to, the new Chinese factory for costs which were not eligible for capitalisation, strategic projects relating to mergers and acquisitions with particular reference to the acquisition of LAICA in the prior year and its continued integration into the Group in the current year, COVID-19 related costs and related impacts on Group operations, reorganisation and restructuring projects, and the Group's share incentive initiatives for conditional share options and awards issued to certain employees of the Group (refer to note 23 for further details).

Exceptional items have been broken down as follows:

	2021	2020
	£000s	£000s
Exceptional items in cost of sales:
Assets written off due to relocation to new factory	1,679	-
Other costs relating to relocation to new factory	1,596	-
COVID-19 related costs	226	439
Reorganisation costs	77	65
	3,578	504
Exceptional items in administrative expenses:
Share-based payments	1,549	1,869
Other costs relating to relocation to new factory	1,140	-
Mergers and acquisitions related costs	2,749	2,623
COVID-19 related costs	819	191
Reorganisation costs	106	269
	6,363	4,952
Total exceptional items	9,941	5,456

Also included as an exceptional item are finance costs of £780,000 (2020: £NIL) relating to the discount unwinding of the present values of contingent liabilities recognised per note 14. These costs have been included within finance costs in note 8.

Costs relating to the new Chinese factory project were made up of assets written off with a net book value of £1.7m which could not be relocated as they would not be fit for the manufacturing operations at the new factory, and other relocation costs totalling £2.7m relating to disassembly of machinery at the old factory, moving costs, reassembly of machinery at the new factory, labour costs incurred for the relocation, set-up and cleaning costs, logistics services, approvals and inspections, consultancy and security services, and other costs directly related to the relocation.

Mergers and acquisitions exceptional costs relate mainly to the accrual of costs amounting to £1.7m for 2021 as part of a supplemental consulting arrangement with the vendor shareholders of LAICA relating to compensation for post-combination services as these services are rendered to LAICA in 2021 and 2022 (refer to note 14). Other mergers and acquisitions costs totalling £1.0m relate to legal and consultancy fees incurred relating to the downstream merger of Strix Italy S.R.L and LAICA in 2021, other legal and professional costs relating to the LAICA acquisition, and labour costs incurred on integration of LAICA into the Group.

COVID-19 related exceptional costs are those items that are incremental and directly attributable to COVID-19. These are costs that would not have been incurred if the COVID-19 pandemic had not occurred and are not expected to recur once the effects have largely receded. In the current year, these mainly consisted of incremental labour costs as a result of the pandemic. Other COVID-19 exceptional costs included mothballing of certain activities as resources were reorganised in response to the impact of COVID-19 on the Group's operations, additional cleaning and sanitation costs incurred as part of infection control or prevention, and exceptional freight and carriage costs paid to fill shortages of supplies, materials and products directly caused by impacts of COVID-19 on shipping and freight supply chains.

Reorganisation exceptional costs related to costs incurred to relocate to new premises for the Group's US office.

(c) Auditor's remuneration

During the year the Group (including its subsidiaries) obtained the following services from the Company's auditor as detailed below:

	2021	2020
	£000s	£000s
Fees payable to Company's auditor and its associates for the audit of the consolidated financial statements	201	178
Fees payable to Company's auditor and its associates for other services:
- the audit of Company's subsidiaries	8	24
- other assurance services	56	12
- tax compliance and other	4	7
	269	221

7.   REVENUE

The following table shows a disaggregation of revenue into categories by product line:

	2021	2020
	£000s	£000s
Kettle controls	85,117	79,816
Water category	21,404	11,744
Appliances	12,889	3,745
Total revenue	119,410	95,305

8.  FINANCE COSTS

	2021	2020
	£000s	£000s
Letter of credit charges	95	89
Right-of-use lease interest	105	103
Discount unwinding of present value of contingent liabilities	780	-
Borrowing costs	1,246	1,002
Total finance costs	2,226	1,194

The discount unwinding of present values relating to the contingent liabilities recognised per note 14. The amount has been included in finance costs as an exceptional item (refer to note 6).

9.  TAXATION

	2021	2020
Analysis of charge in year	£000s	£000s
Current tax (overseas) and deferred tax
Current tax on overseas profits for the year	1,115	1,384
Movement in deferred tax liabilities	(255)	-
Total tax charge	860	1,384

Overseas tax relates primarily to tax payable by the Group's subsidiaries in China and Italy. During 2016, the Group's Chinese subsidiary paid additional tax of £1.1m following a benchmarking assessment by the Chinese tax authorities relating to contract processing businesses in the years 2009 to 2014. The potential additional liabilities for 2015 to 2018 of £0.9m (2020: £0.9m), has been included within the current tax liability balance in the consolidated statement of financial position as a result. The Chinese subsidiary converted to an import processing model in 2019.

A deferred tax liability of £2,303,000 (2020: £2,558,000) relates to timing differences arising on the recognition of intangible assets in LAICA S.p.A. Reconciliation of the movement in deferred tax liabilities has been presented below:

		2021	2020
		£000	£000
Deferred tax liability on 1 January		2,558	-
Deferred tax on recognition of intangible assets on acquisition of LAICA		-	2,558
Reversal  of deferred tax on utilisation of temporary differences		(255)	-
Deferred tax liability as at 31 December		2,303	2,558

As the most significant subsidiary in the Group is based on the Isle of Man, this is considered to represent the most relevant standard rate for the Group. The tax assessed for the year is higher than the standard rate of income tax in the Isle of Man of 0% (2020: 0%). The differences are explained below:

	2021	2020
	£000s	£000s
Profit on ordinary activities before tax	21,507	25,454
Profit on ordinary activities multiplied by the rate of income tax in the Isle of Man of 0% (2020: 0%)	-	-
Impact of higher overseas tax rate	860	1,384
Total taxation charge	860	1,384

The Group is subject to Isle of Man income tax on profits at the rate of 0% (2020: 0%), Chinese income tax on profits at the rate of 25% (2020: 25%) and Italian income tax on profits at a rate of 27.9% (2020: 27.9%).

10.  EARNINGS PER SHARE

The calculation of basic and diluted earnings per share is based on the following data.

	2021	2020
Earnings (£000s)
Earnings for the purposes of basic and diluted earnings per share	20,599	24,049
Number of shares (000s)
Weighted average number of shares for the purposes of basic earnings per share	206,271	197,432
Weighted average dilutive effect of share awards	3,381	8,947
Weighted average number of shares for the purposes of diluted earnings per share	209,652	206,379
Earnings per ordinary share (pence)
Basic earnings per ordinary share	10.0	12.2
Diluted earnings per ordinary share	9.8	11.7
Adjusted earnings per ordinary share (pence) (1)
Basic adjusted earnings per ordinary share (1)	15.2	14.9
Diluted adjusted earnings per ordinary share (1)	14.9	14.3

The calculation of basic and diluted adjusted earnings per share is based on the following data:

	2021	2020
	£000s	£000s
Profit for the year	20,599	24,049
Add back:
Reorganisation costs/exit costs	183	334
Strategic project costs	8,988	3,253
Share based payment transactions	1,549	1,869
Adjusted earnings (1)	31,319	29,505

^{1. Adjusted earnings and adjusted earnings per share exclude exceptional items, which include share-based payment transactions, COVID-19-related costs reorganisation costs and other strategic project costs. Adjusted results are non-GAAP metrics used by management and are not an IFRS disclosure}

The denominators used to calculate both basic and adjusted earnings per share are the same as those shown above for both basic and diluted earnings per share.

11.  INTANGIBLE ASSETS

	2021
	Development costs	Software	Intellectual Property	Customer relationships	Brand name	Goodwill	Intangible assets under construction	Total
	£000s	£000s	£000s	£000s	£000s	£000s	£000s	£000s
At 1 January
Cost	12,346	3,286	834	2,406	6,643	9,906	-	35,421
Accumulated amortisation and impairment	(4,999)	(710)	(64)	-	-	-	-	(5,773)
Net book value	7,347	2,576	770	2,406	6,643	9,906	-	29,648
Period ended 31 December
Additions	3,609	950	299	-	-	-	238	5,096
Acquisition of LAICA S.p.A. (note 14)	-	-	-	-	-	(487)	-	(487)
Transfers	-	-	-	-	-	-	(172)	(172)
Disposals (cost)	(29)	(8)	(1)	-	-	-	-	(38)
Disposals (accumulated amortisation)	-	8	-	-	-	-	-	8
Amortisation charge	(1,563)	(495)	(47)	(205)	-	-	-	(2,310)
Exchange differences	42	2	(4)	(165)	(469)	(683)	-	(1,277)
Closing net book value	9,406	3,033	1,017	2,036	6,174	8,736	66	30,468
At 31 December
Cost	15,971	4,186	1,128	2,232	6,174	8,736	66	38,493
Accumulated amortisation and impairment	(6,565)	(1,153)	(111)	(196)	-	-	-	(8,025)
Net book value	9,406	3,033	1,017	2,036	6,174	8,736	66	30,468

Amortisation charges have been treated as an expense, and are allocated to cost of sales (£2,029,000), distribution costs £NIL and administrative expenses (£281,000) in the consolidated statement of comprehensive income.

During the current year, £172,000 (2020: £NIL) of intangible assets under construction have been reclassified to property plant and equipment, and £NIL (2020: £861,000) of assets from property plant and equipment (note 12) have been reclassified to intangible assets.

The Group's goodwill and brands predominantly relate to those arising on the acquisition of LAICA S.p.A. which was completed in 2020 (note 14) which represents a single cash generating unit (CGU). In the current year, the carrying values of goodwill and brands have been subject to an annual impairment test, and the recoverable amount of the CGU was determined on the basis of value-in-use calculations over a five-year forecast period. The key assumptions applied in the value-in-use calculations are a discount rate of 8.24%, variable trading margins, variable revenue growth rates as well as the terminal growth rate of 2%. Based on these calculations, there is sufficient headroom over the carrying values of goodwill and brands hence no impairment has been recognised in the current year and there were no reversals of prior year impairments during the year (2020: same).

The results of the Group impairment tests are dependent upon estimates and judgements, particularly in relation to the key assumptions described above. Sensitivity analysis to a reasonable and possible change in the most sensitive assumption, being the discount rate, was undertaken. An increase of 1% would decrease the headroom by £5.2m but still leave sufficient headroom over the carrying values of the goodwill and brands.

	2020
	Development costs	Software	Intellectual Property	Customer relationships	Brand name	Goodwill	Total
	£000s	£000s	£000s	£000s	£000s	£000s	£000s
At 1 January
Cost	9,837	922	488	-	-	384	11,631
Accumulated amortisation and impairment	(4,006)	(540)	(17)	-	-	-	(4,563)
Net book value	5,831	382	471	-	-	384	7,068
Period ended 31 December
Additions	2,808	2,363	140	-	-	-	5,311
Acquisition of LAICA S.p.A. (note 14)	-	-	214	2,406	6,643	9,522	18,785
Disposals (cost)	(300)	-	-	-	-	-	(300)
Disposals (accumulated depreciation)	267	-	-	-	-	-	267
Amortisation charge	(1,260)	(170)	(47)	-	-	-	(1,477)
Exchange differences	1	1	(8)	-	-	-	(6)
Closing net book value	7,347	2,576	770	2,406	6,643	9,906	29,648
At 31 December
Cost	12,346	3,286	834	2,406	6,643	9,906	35,421
Accumulated amortisation and impairment	(4,999)	(710)	(64)	-	-	-	(5,773)
Net book value	7,347	2,576	770	2,406	6,643	9,906	29,648

Amortisation charges in the prior year were treated as an expense, and were allocated to cost of sales (£1,410,000), distribution costs £NIL, and administrative expenses (£67,000) in the consolidated statement of comprehensive income.

£861,000 of assets from property plant and equipment (note 12) have been reclassified to intangible assets. These amounts are included within the additions of software and intellectual property.

 12. PROPERTY, PLANT AND EQUIPMENT

	2021
	Plant & machinery	Fixtures, fittings & equipment	Motor vehicles	Production tools	Land & Buildings	Right-of-use assets (note 26)	Assets under construction	Total
	£000s	£000s	£000s	£000s	£000s	£000s	£000s	£000s
At 1 January
Cost	22,750	4,367	137	14,013	3,737	6,533	16,751	68,288
Accumulated depreciation	(12,686)	(3,428)	(95)	(12,140)	(129)	(2,605)	-	(31,083)
Net book value	10,064	939	42	1,873	3,608	3,928	16,751	37,205
Period ended 31 December
Additions	86	2,474	20	1	-	1,474	10,086	14,141
Transfers	5,257	-	-	1,183	18,386	-	(24,654)	172
Disposals (cost)	(7,021)	(1,238)	(5)	(901)	(2,297)	(1,469)	-	(12,931)
Disposals (accumulated depreciation)	5,720	1,140	4	833	322	772	-	8,791
Depreciation charge	(1,776)	(568)	(27)	(724)	(78)	(1,396)	-	(4,569)
Exchange differences	(49)	2	(1)	-	71	(62)	(7)	(46)
Closing net book value	12,281	2,749	33	2,265	20,012	3,247	2,176	42,763
At 31 December
Cost	26,093	5,833	218	12,829	20,541	6,450	2,176	74,140
Accumulated depreciation	(13,812)	(3,084)	(185)	(10,564)	(529)	(3,203)	-	(31,377)
Net book value	12,281	2,749	33	2,265	20,012	3,247	2,176	42,763

Depreciation charges are allocated to cost of sales (£3,821,000), distribution costs (£90,000) and administrative expenses (£658,000) in the consolidated statement of comprehensive income. During the year £172,000 (2020: £NIL) of intangible assets under construction have been reclassified to property, plant and equipment. These amounts are included within the transfers in note 11. In addition, borrowing costs of £306,000 (2020: £190,000), calculated at prevailing rates of the revolving credit facility (note 19), have been capitalised to land and buildings in the year.

Included in disposals during the period were (i) assets with net book value of £1,679,000 that were scrapped for £NIL due to the move from the old to the new manufacturing plant in China, (ii) land and buildings with net book value of £1,794,000 in the Group's subsidiary LAICA International Corp. disposed of in a sale and leaseback arrangement in line with the acquisition agreement for £1,750,000, and other assets with net book values of £668,000 that were disposed of for £NIL in particular right of use assets that were terminated before lease expiry dates due to relocations and early terminations.

	2020
	Plant & machinery	Fixtures, fittings & equipment	Motor vehicles	Production tools	Land & Buildings	Right-of-use assets (note 26)	Assets under construction	Total
	£000s	£000s	£000s	£000s	£000s	£000s	£000s	£000s
At 1 January
Cost	21,924	4,126	130	13,298	1,996	5,386	8,569	55,429
Accumulated depreciation	(14,444)	(2,935)	(66)	(11,291)	(33)	(1,135)	-	(29,904)
Net book value	7,480	1,191	64	2,007	1,963	4,251	8,569	25,525
Period ended 31 December
Additions	-	413	-	-	-	-	13,094	13,507
Acquisition of LAICA S.p.A.	769	37	7	-	1,769	1,150	-	3,732
Transfers	3,239	-	-	715	7	-	(4,822)	(861)
Disposals (cost)	(3,136)	(209)	-	-	-	-	-	(3,345)
Disposals (accumulated depreciation)	3,125	208	-	-	-	-	-	3,333
Depreciation charge	(1,367)	(701)	(29)	(849)	(96)	(1,470)	-	(4,512)
Exchange differences	(46)	-	-	-	(35)	(3)	(90)	(174)
Closing net book value	10,064	939	42	1,873	3,608	3,928	16,751	37,205
At 31 December
Cost	22,750	4,367	137	14,013	3,737	6,533	16,751	68,288
Accumulated depreciation	(12,686)	(3,428)	(95)	(12,140)	(129)	(2,605)	-	(31,083)
Net book value	10,064	939	42	1,873	3,608	3,928	16,751	37,205

Depreciation charges in the prior year were allocated to cost of sales (£3,601,000), distribution costs (£137,000), and administrative expenses (£774,000) in the consolidated statement of comprehensive income.

During the prior year, £861,000 of assets under construction have been reclassified to intangible assets. These amounts are included within the additions in note 11. In addition, borrowing costs of £190,000 (2019: £54,000) have been capitalised to land and buildings in the year.

13.  PRINCIPAL SUBSIDIARY UNDERTAKINGS AND JOINT ARRANGEMENTS OF THE GROUP

A list of all subsidiary undertakings controlled by the Group, and existing joint arrangements the Group is currently part of, which are all included in the consolidated financial statements, is set out below.

Name of entity	Nature of business	Country of incorporation	% of ordinary shares held by the Group	Nature of shareholding
			%
Sula Limited	Holding company	IOM	100	Subsidiary
Strix Limited	Manufacture and sale of products	IOM	100	Subsidiary
Strix Guangzhou Limited	Manufacture and sale of products	China	100	Subsidiary
Strix (U.K.) Limited	Group's sale and distribution centre	UK	100	Subsidiary
Strix Hong Kong Limited	Sale and distribution of products	Hong Kong	100	Subsidiary
Strix (China) Limited	Manufacture and sale of products	China	100	Subsidiary
HaloSource Water Purification Technology (Shanghai) Co. Limited	Manufacture and sales of products	China	100	Subsidiary
Strix (USA), Inc.	Research and development, sales, and distribution of products	USA	100	Subsidiary
Strix Italy S.R.L. (merged with LAICA S.p.A)	Holding company (merged with LAICA S.p.A)	Italy	100	Subsidiary
LAICA S.p.A.	Manufacture and sales of products	Italy	100	Subsidiary
LAICA Iberia Distribution S.L.	Sale and distribution of products	Spain	100	Subsidiary
LAICA International Corp.	Sale and distribution of products	Taiwan	67	Subsidiary
Taiwan LAICA Corp.	Sale and distribution of products	Taiwan	67	Subsidiary
Foshan Yilai Life Electric Appliances Co. Limited.	Sale and distribution of products	China	45	Joint venture
LAICA Brand House Limited	Holding and licensing of trademarks	Hong Kong	45	Joint venture

Downstream merger of Strix Italy S.R.L. and LAICA S.p.A.

As part of a Group restructuring that occurred during April 2021, Strix Italy S.R.L was merged into LAICA S.p.A. in a downstream merger transaction effective 1 January 2021, resulting in Strix (U.K.) Limited owning 100% of the merged entity's share capital. All assets and liabilities of the merged entity were recognised at net book values on the effective date of the downstream merger, however there was no resulting impact on the fair values of the assets and liabilities acquired as part of the acquisition of LAICA S.p.A, including its subsidiaries and interests in joint ventures.

Group restrictions

Cash and cash equivalents held in China are subject to local exchange control regulations. These regulations provide for restrictions on exporting capital from those countries, other than through normal dividends. The carrying amount of the assets included within the consolidated financial statements to which these restrictions apply is £3,681,000 (2020: £4,618,000).

There are no other restrictions on the Group's ability to access or use the assets and settle the liabilities of the Group's subsidiaries.

14.  ACQUISITIONS

Acquisitions made in the year ended 31 December 2021:

During the current year, there were no acquisitions of new subsidiaries or interests in joint ventures or associates.

Acquisitions made in the year ended 31 December 2020:

Acquisition of LAICA S.p.A:

On 26 October 2020 (during the prior year), the Group completed the acquisition of 100% of the issued share capital of LAICA S.p.A. ("LAICA") through its newly incorporated subsidiary, Strix Italy S.R.L. ("Strix Italy"), which has since been fully merged with LAICA S.p.A in a downstream merger in the current year. LAICA is an Italian company focussed on water purification and the sale of small household appliances for personal health and wellness. The Group entered into a share purchase agreement with vendor shareholders of LAICA, pursuant to which it acquired control of LAICA, including its subsidiaries and interests in joint ventures. The total consideration transferred for the acquisition was €26.9m (£24.4m), made up of €13.0m (£11.7m) paid in cash, the issue of 3,192,236 Strix Group plc ordinary shares of £0.01 each with a total fair value of €8.0m (£7.3m), and a further contingent consideration with a fair value of €5.9m (£5.4m) representing an amount payable in cash subject to certain conditions being met, including threshold financial targets for the financial years ending 31 December 2021 and 2022. The present value of the contingent consideration as at 31 December 2021 was €6.9m (£5.8m) .

In addition, a supplemental consulting arrangement was entered into with the vendor shareholders of LAICA under which total costs amounting to €4.9m (£4.4m) are payable in the financial years ending 31 December 2021 and 2022, relating to compensation for post-combination services. These costs are being accrued as the services are rendered to LAICA. As at 31 December 2021, €2.0m (£1.7m) was accrued for services rendered to date.

In the prior year financial statements, the accounting for the acquisition of LAICA included preliminary amounts of fair values of assets and liabilities acquired. Initially, these were measured on a provisional basis to allow for any potential adjustments resulting from any new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition. As at the end of the current financial year ended 31 December 2021, one year had passed after the acquisition, and it was confirmed that new information came to light that prompted a revision to the fair value amounts recognised for inventory at acquisition date. Consequently, the amounts recognised at acquisition date have been updated to reflect the an increase in the fair value of inventory in the amount of £487,000 which has resulted in a decrease in the amount of goodwill recognised of £487,000.

The final fair values at acquisition date of the assets and liabilities acquired were as follows:

	Book values	Fair value adjustments	Fair values
	£000s	£000s	£000s
Non-current assets
Intangible assets	437	8,826	9,263
Property, plant and equipment	3,732	-	3,732
Investment in joint ventures	20	-	20
Total non-current assets	4,189	8,826	13,015
Current assets
Inventories	5,543	487	6,030
Trade and other receivables	7,869	-	7,869
Cash and cash equivalents	3,371	-	3,371
Total current assets	16,783	487	17,270
Total assets	20,972	9,313	30,285
Non-current liabilities
Long-term borrowings	1,182	-	1,182
Post-employment benefits	1,322	-	1,322
Lease liabilities	895	-	895
Deferred tax liability	-	2,558	2,558
Total non-current liabilities	3,399	2,558	5,957
Current liabilities
Current borrowings	2,513	-	2,513
Lease liabilities	255	-	255
Trade and other payables	5,403	-	5,403
Total current liabilities	8,171	-	8,171
Total liabilities	11,570	2,558	14,128
Net assets acquired	9,402	6,755	16,157

The fair value of the intangible assets was calculated based on a discounted cash flow model, based on the expected future income they will generate. The discount rate applied was the Group's Weighted Average Cost of Capital, and a growth rate of 2% was assumed in perpetuity, based on the target inflation rate of the European Central Bank. A deferred tax liability has arisen on the fair value adjustments to intangible assets at the Italian corporate tax rate. As at 31 December 2021, the deferred tax liability was €2.7m, being £2.3m translated into Pound Sterling.

Inventory fair values were revised to reflect new information that arose from commercial data obtained during the measurement period and updated inventory provision policies aligned with the wider Group.

The fair value of acquired receivables shown in the table above and gross contractual amounts differed by a loss allowance of €105,000 (£95,000).

Acquisition costs included within 'Administration expenses - exceptional items' in the consolidated statement of comprehensive income for the year ended 31 December 2020 amounted to £2.6m. These have been designated as a 'separate transaction' per IFRS 3 and therefore were not included as part of the purchase consideration.

The revised goodwill at acquisition of €9.9m (£9.0m) was calculated as the purchase consideration of €26.9m (£24.4m), less the fair value of the net assets acquired of €17.9m (£16.2m) plus non-controlling interests of €0.9m (£0.8m). Goodwill amount as at 31 December 2021 is £8.4m, which decreased in Pound Sterling value due to exchange rate movements. Goodwill arising on the acquisition of LAICA, its subsidiaries and interests in joint ventures, is treated as LAICA's asset and is expressed in the Euro. For purposes of initial recognition, it is calculated using the exchange rate on the acquisition date. Subsequently, the goodwill is translated into the Group's presentation currency, Pound Sterling, for consolidation purposes, at the closing rate each period. The goodwill was attributable to intangible assets that do not qualify for separate recognition, such as the cumulative skills and knowledge of the members of staff who became employees of the Group at the date of acquisition, together with the synergies expected to be generated by the Group following the acquisition, particularly within the Water and Small Appliances category. None of the goodwill is expected to be deductible for tax purposes.

15.  INVENTORIES

	2021	2020
	£000s	£000s
Raw materials and consumables	12,139	9,154
Finished goods and goods in transit	7,883	6,070
	20,022	15,224

The cost of inventories recognised as an expense and included in cost of sales amounted to £52,396,000 (2020: £39,052,000). The provision for impaired inventories is £2,063,000 (2020: £2,513,000).

16.  TRADE AND OTHER RECEIVABLES

		2021	2020
		£000s	£000s
Amounts falling due within one year:
Trade receivables - current		10,958	11,565
Trade receivables - past due		2,493	1,790
Trade receivables - gross		13,451	13,355
Loss allowance		(104)	(159)
Trade receivables - net		13,347	13,196
Prepayments		496	1,108
Advance purchase of commodities		5,389	2,788
VAT receivables		5,261	2,577
Other receivables		1,018	1,003
		25,511	20,672

Trade and other receivables carrying values are considered to be equivalent to their fair values.

The amount of trade receivables impaired at 31 December 2021 is equal to the loss allowance provision (2020: same).

The advance purchase of commodities relates to a payment in advance to secure the purchase of key commodities at an agreed price to mitigate the commodity price risk.

Other receivables include government grants due of £300,000 (2020: £433,000). There were no unfulfilled conditions in relation to these grants at the year end, although if the Group ceases to operate or leaves the Isle of Man within 10 years from the date of the last grant payment, funds may be reclaimed.

The Group's trade and other receivables are denominated in the following currencies:

		2021	2020
		£000s	£000s
Pound Sterling		5,471	5,110
Chinese Yuan		9,465	4,356
US Dollar		1,478	1,863
Euro		8,668	8,210
Hong Kong Dollar		118	114
Taiwan Dollar		-	1,019
Other		311	-
		25,511	20,672

Movements on the Group's provision for impairment of trade receivables and the inputs and estimation technique used to calculate expected credit losses have not been disclosed on the basis the amounts are not material. The provision at 31 December 2021 was £104,000 (2020: £159,000).

17.  CASH AND CASH EQUIVALENTS

The carrying amounts of the cash and cash equivalents are denominated in the following currencies:

	2021	2020
	£000s	£000s
Pound Sterling	4,424	4,594
Chinese Yuan	3,622	3,851
US Dollar	8,183	3,228
Euro	2,584	2,058
Hong Kong Dollar	207	108
Taiwan Dollar	650	1,607
	19,670	15,446

Cash and cash equivalents include £NIL (2020: £401,000) of cash deposits held as a guarantee to China SuiDong Customs office. Refer to note 13 for details of cash and cash equivalents held in China are subject to local exchange control regulations.

18.  TRADE AND OTHER PAYABLES

	2021	2020
	£000s	£000s
Trade payables	11,060	10,499
Current income tax liabilities	1,631	3,048
Social security and other taxes	352	316
Customer rebates provisions	2,152	3,187
Capital creditors	2,256	1,635
VAT liabilities	130	199
Other liabilities	3,204	3,221
Payments in advance from customers	1,936	2,955
Accrued expenses	4,796	3,620
Consideration payable (note 14)	-	1,519
	27,517	30,199

The fair value of financial liabilities approximates their carrying value due to short maturities.

Other liabilities include deferred government grants of £583,000 (2020: £709,000) There were no unfulfilled conditions in relation to these grants at the year end.

Movement in payments in advance from customers were all driven by normal trading, with the full amounts due at beginning of the year released to revenues in the current year.

As at the end of the prior financial year ended 31 December 2020, consideration payable was an amount due in relation to the acquisition of LAICA S.p.A (note 14). This amount was settled on the 8 March 2021.

The carrying amounts of the Group's trade and other payables are denominated in the following currencies:

	2021	2020
	£000s	£000s
Pound Sterling	13,604	8,414
Chinese Yuan	7,249	12,493
US Dollar	1,951	1,800
Euro	4,030	383
Hong Kong Dollar	253	6,460
Taiwan Dollar	430	649
	27,517	30,199

19.  BORROWINGS

	2021	2020
	£000s	£000s
Total current borrowings	1,064	2,220
Total non-current borrowings	69,782	50,426

All of the current bank loans comprise of small individual short-term arrangements for financing purchases and optimising cash flows within the Italian subsidiary and were entered into by LAICA S.p.A. prior to acquisition by the Group.

Current and non-current borrowings are shown net of loan arrangement fees of £181,000 (2020: £175,000) and £513,000 (2020: £700,000), respectively.

Term and debt repayment schedule for long term borrowings

	Currency	Interest rate	Maturity date	31 December 2021 Carrying value (£000s)	31 December 2020 Carrying value (£000s)
Revolving credit facility, net of loan arrangement fees	GBP	LIBOR +1.50% to +2.85%	27-May-25	69,306	49,126
UniCredit facility	EUR	EURIBOR +1.10% to +3.60%	28-Jun-24	210	317
Banco BPM	EUR	EURIBOR +1.10% to +3.60%	30-Nov-23	329	536
BNP Paribas	EUR	0.3115%	30-Sep-21	-	632
Banca Intesa Sanpaolo	EUR	0.2%	29-Oct-21	-	170
Banca Intesa Sanpaolo	EUR	EURIBOR 3M +1,10%	27-Oct-21	-	142
Banca Monte dei Paschi di Siena	EUR	0.9%	01-Feb-21	-	659
BANK SINOPAC CO.LTD.	TWD	LIBOR 1Y + Spread 0,755%	29-May-27	-	275
BANK SINOPAC CO.LTD.	TWD	LIBOR 3M + Spread 0.750%	23-Jun-21	-	789
BNP Paribas	EUR	0.18%	30-Apr-22	172	-
Banca Monte dei Paschi di Siena	EUR	0.18%	31-Jan-22	425	-
Banco BPM	EUR	0.18%	31-Mar-22	404	-
				70,846	52,646

On 27 July 2017, the Company entered into an agreement with The Royal Bank of Scotland Plc (as agent), and the Royal Bank of Scotland International Limited and HSBC Bank Plc (as original lenders) in respect of a revolving credit facility of £70,000,000. During 2020, the Company refinanced this by entering into an agreement with The Royal Bank of Scotland Plc (as agent), along with the Bank of China (UK) Limited and the Bank of Ireland in respect of a revolving credit facility of £80,000,000, with materially the same terms and covenants as the existing facility. As at 31 December 2021, the total facilities available are £80,000,000 (2020: £80,000,000).

Under the amended agreement, the initial drawdowns of totalling £50,000,000 in the prior 2020 year allowed for the refinancing of the original revolving credit facility as well as to fund the acquisition of LAICA (note 14). Further drawdowns were made during the current 2021 year for financing working capital and for construction of the new factory.

All amounts become immediately repayable and undrawn amounts cease to be available for drawdown in the event of a third-party gaining control of the Company. The Company and its material subsidiaries have entered into the agreement as guarantors, guaranteeing the obligations of the borrowers under the agreement (2020: same).

Transactions costs amounting to £875,000 incurred as part of the new debt financing facility were capitalised in 2020 and are being amortised over the period of the 5-year facility.

The various agreements contain representations and warranties which are usual for an agreement of this nature. The agreement also provides for the payment of a commitment fee, agency fee and arrangement fee, contains certain undertakings, guarantees and covenants (including financial covenants) and provides for certain events of default. During 2021, the Group has not breached any of the financial covenants contained within the agreements - see note 22(d) for further details. (2020: same)

Interest applied to the revolving credit facility is calculated as the sum of the margin and LIBOR, and after 31 December 2021 LIBOR will be replaced by SONIA. An amendment to the facility agreement was signed during the current 2021 year for the transition from LIBOR to SONIA. The margin is a calculated based on the Group's leverage as follows:

Leverage	Annualised margin
Greater than or equal to 2.5x	2.85%
Less than 2.5x but greater than or equal to 2.0x	2.50%
Less than 2.0x but greater than or equal to 1.5x	2.20%
Less than 1.5x but greater than or equal to 1.0x	2.00%
Less than 1.0x	1.50%

At 31 December 2021, the margin applied was 2.00% (2020: 2.00%).

The fair values of the borrowings are not materially different from their carrying amounts, since the interest payable on those borrowings is either close to current market rates and the borrowings are of a short-term nature.

20.  CAPITAL COMMITMENTS  

	2021	2020
	£000s	£000s
Contracted for but not provided in the consolidated financial statements - Property, plant and equipment	2,001	4,307

The above commitments include capital expenditure of £1,639,000 (2020: £2,810,000) relating to the new factory in Zengcheng district, China.

21.  CONTINGENT ASSETS AND CONTINGENT LIABILITIES

There continues a number of ongoing intellectual property infringement cases initiated by the Group, as well as patent validation challenges brought by the defendants. All of these cases are still subject to due legal process in the countries in which the matters have been raised. As a result, no contingent assets have been recognised as receivable at 31 December 2021 (2020: same), as any receipts are dependent on the final outcome of each case. There are also no corresponding contingent liabilities at 31 December 2021 (2020: same).

22 .  FINANCIAL RISK MANAGEMENT

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and commodity price risk), credit risk, liquidity risk and capital management risk.

Risk management is carried out by the Directors. The Group uses financial instruments where required to provide flexibility regarding its working capital requirements and to enable it to manage specific financial risks to which it is exposed. Transactions are only undertaken if they relate to actual underlying exposures and hence cannot be viewed as speculative.

(a) Market risk

(i) Foreign exchange risk

The Group operates predominantly in the IOM, UK, EU, US and China and is therefore exposed to foreign exchange risk. Foreign exchange risk arises on sales and purchases made in foreign currencies and on recognised assets and liabilities and net investments in foreign operations.

The Group monitors its exposure to currency fluctuations on an ongoing basis. The Group uses foreign currency bank accounts to reduce its exposure to foreign currency translation risk, and the Group is naturally hedged against foreign exchange risk as it both generates revenues and incurs costs in the major currencies with which it deals. The major currencies the Group transacts in are:

·	British Pounds (GBP)
·	United States Dollar (USD)
·	Chinese Yuan (CNY)
·	Euro (EUR)
·	Hong Kong Dollar (HKD)
·	Taiwan Dollar (TWD)

In December 2021, the Group entered into USD/GBP and USD/EUR forward exchange rate contracts to sell the notional amount of US$12m and hence mitigate the risk and impact of volatile exchange rate movements seen during the year on group profits. The value of these contracts at year-end is considered not material. 

Exposure by currency is analysed in notes 16, 17 and 18.

  (ii) Interest rate risk

The Group is exposed to interest rate risk on its long-term borrowings, being the revolving credit facility and other borrowings disclosed in note 19. The interest rates on the revolving credit facility are variable, based on SONIA and certain other conditions dependent on the financial condition of the Group, which exposes the Group to cash flow interest rate risk which is partially offset by cash held at variable rates. Other borrowings are made up of both fixed rate loans and variable loans based on EURIBOR. This exposure is not considered by the Directors to be significant.

 (iii) Price risk

The Group is exposed to price risk, principally in relation to commodity prices of raw materials. The Group enters into forward commodity contracts or makes payments in advance in order to mitigate the impact of price movements on its gross margin. The Group has not designated any of these contracts as hedging instruments in either 2021 or 2020 as they relate to physical commodities being purchased for the Group own use. At 31 December 2021 and 2020, payments were made in advance to buy certain commodities at fixed prices, as disclosed in note 16.

(iv) Sensitivity analysis

·	Foreign exchange risk: The Group is primarily exposed to exchange rate fluctuations between GBP and USD, CNY , HKD, EUR and TWD. Assuming a reasonably possible change in FX rates of +10% (2020: +10%), the impact on profit would be a decrease of £751,000 (2020: a decrease of £805,000), and the impact on equity would be an increase of £1,877,000 (2020: an increase of £1,232,000). A -10% change (2020: -10%) in FX rates would cause an increase in profit of £918,000 (2020: an increase in profit of £1,832,000) and a £1,603,000 decrease in equity (2020: £1,505,000 decrease in equity). This has been calculated by taking the profit generated by each currency and recalculating a comparable figure on a constant currency basis, and by retranslating the amounts in the consolidated statement of financial position to calculate the effect on equity.
·	Interest rate risk: The Group is exposed to interest rate fluctuations on its non-current borrowings, as disclosed in note 19. Assuming a reasonably possible change in the SONIA/EURIBOR rate of ±0.5% (2020: ±0.5%), the impact on profit would be an increase/decrease of £313,000 (2020: £234,000), and the impact on equity would be an increase/decrease of £138,000 (2020: £37,000). This has been calculated by recalculating the loan interest using the revised rate to calculate the impact on profit, and recalculating the year end loan interest balance payable using the same rate.
·	Commodity price risk: The Group is exposed to commodity price fluctuations, primarily in relation to copper and silver. Assuming a reasonably possible change in commodity prices of ±14% for silver (2020: ±39%) and ±14% for copper (2020: ±23%) based on volatility analysis for the past year, the impact on profit would be an increase/decrease of £3,766,000 (2020: £3,353,000). The Group does not hold significant quantities of copper and silver inventory, therefore the impact on equity would be the same as the profit or loss impact disclosed (2020: same). This has been calculated by taking the average purchase price of these commodities during the year in purchase currency and recalculating the cost of the purchases with the price sensitivity applied.

(b) Credit risk

The Group has policies in place to ensure that sales of goods are made to clients with an appropriate credit history. The Group uses letters of credit and advance payments to minimise credit risk. Management believe there is no further credit risk provision required in excess of normal provision for doubtful receivables, as disclosed in note 16. The amount of trade and other receivables written off during the year amounted to less than 0.08% of revenue (2020: less than 0.04% of revenue).

Cash and cash equivalents are held with reputable institutions. All material cash amounts are deposited with financial institutions whose credit rating is at least B based on credit ratings according to Standard & Poor's. The following table shows the external credit ratings of the institutions with whom the Group has cash deposits:

	2021	2020
	£000s	£000s
A	3,989	5,497
BBB	15,633	9,909
B	11	14
n/a	37	26
	19,670	15,446

As a result of the measures described above, the Group has no external concentrations of credit risk.

(c) Liquidity risk

The Group maintained significant cash balances throughout the period and hence suffers minimal liquidity risk. Cash flow forecasting is performed for the Group by the finance function, which monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs and so that the Group minimises the risk of breaching borrowing limits or covenants on any of its borrowing facilities. The Group has put into place revolving credit facilities to provide access to cash for various purposes, and headroom of £10,000,000 (2020: £30,000,000) remains available on this facility at 31 December 2021.

The table below analyses the group's financial liabilities as at 31 December 2021 into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. There are no derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

	Less than 6 months	6 - 12 months	Between 1 and 2 years	Between 2 and 5 years	Over 5 years	Total contractual cash flows	Carrying amount (assets) / liabilities
	£000s	£000s	£000s	£000s	£000s	£000s	£000s
Trade and other payables	27,517	-	-	-	-	27,517	27,517
Borrowings	2,540	1,551	1,666	70,635	-	76,392	70,846
Lease liabilities	548	533	963	2,427	293	4,764	3,371
Contingent consideration payable	6,081	-	3,994	-	-	10,075	7,464
Total financial liabilities	36,686	2,084	6,623	73,062	293	118,748	109,198

In the prior year, the Group's non-derivative financial liabilities included trade and other payables (less payment received in advance); substantially all had a contractual maturity date of less than three months. The Group's borrowings were represented by several credit facilities detailed in note 19, including current borrowings that were repaid in 2021 of £2,392,000, and the remainder fell due between two and seven years. The contingent consideration payable in relation to the acquisition of LAICA S.p.A. as disclosed in note 14, will only become payable in 2022 after 2021 performance criteria have been assessed.

(d) Capital risk management

The Group manages its capital to ensure its ability to continue as a going concern and to maintain an optimal capital structure to reduce the cost of capital. The aim of the Group is to maintain sufficient funds to enable it to make suitable capital investments whilst minimising recourse to bankers and/or shareholders. In order to maintain or adjust capital, the Group may adjust the amount of cash distributed to shareholders, return capital to shareholders, issue new shares or raise debt through its access to the AIM market.

Capital is monitored by the Group on a monthly basis by the finance function. This includes the monitoring of the Group's gearing ratios and monitoring the terms of the financial covenants related to the revolving credit facilities as disclosed in note 19. These ratios are formally reported on a quarterly basis. The financial covenants were complied with throughout the period. At 31 December 2021 these ratios were as follows:

·	Interest cover ratio: 27.3x (2020: 33.4x) - minimum per facility terms is 4.0x; and
·	Leverage ratio: 1.31x (2020: 1.1x) - maximum per facility terms is 2.5x

(e) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level is as follows:

Level 1:	The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2:	The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3:	If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

The resulting fair value estimate for contingent consideration payable in relation to the acquisition of LAICA (note 14), where the fair values have been determined based on probability estimates of meeting threshold financial targets for the financial years ending 31 December 2021 and 2022 and discounted using a rate of 12.7%, has been classified as a level 3. There have been no other movements into or out of any levels during the year.

	2021 £000s	2020 £000s	Unobservable inputs	Probability weighted inputs		Relationship of unobservable inputs to fair value
Description				2021	2020
Contingent consideration (on performance conditions only)	5,785	5,380	Risk-adjusted discount rate	12.7%	12.7%	A change in the discount rate by 100 bps would increase/decrease the FV by £12,000
			Probability weighted cash flows	£5,961,000	Minimum £NIL - Maximum £6,425,000	If actual EBITDA increased to the highest probability level, fair value would increase by £137,000. If actual EBITDA decreased to the lowest probability level, fair value would decrease by £151,000

23.  SHARE BASED PAYMENTS

Long term incentive plan terms

The Group granted a number of share options to employees of the Group. All of the shares granted are subject to service conditions, being continued employment with the Group until the end of the vesting period. The shares granted to the executive Directors and senior staff also include certain performance conditions which must be met, based on predetermined earnings per share, dividend pay-out, and share price targets for the three financial years from grant date.

During 2020, the Group amended the terms of the Isle of Man share options to conditional share awards.

Participation in the plan is at the discretion of the Board and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. Where the employee is entitled to share options, these remain exercisable until the ten-year anniversary of the award date. Where the employee is entitled to conditional share awards, these are exercised on the vesting date.

The dividends that would be paid on a share in the period between grant and vesting reduce the fair value of the award if, in not owning the underlying shares, a participant does not receive the dividend income on these shares during the vesting period. All of the options and conditional share awards are granted under the plan for NIL consideration and carry no voting rights. A summary of the options and conditional share awards is shown in the table below:

		2021	2020
		Number of Shares	Number of Shares
At 1 January		3,590,383	11,173,522
Granted during the year		1,115,098	1,230,358
Exercised during the year		(925,651)	(8,754,059)
Forfeited during the year		(725,669)	(59,438)
As at 31 December		3,054,161	3,590,383
Vested and exercisable at 31 December		-	124,793

The Group has recognised a total expense of £1,549,000 (2020: £1,869,000) in respect of equity-settled share-based payment transactions in the year ended 31 December 2021.

For each of the tranches, the first day of the exercise period is the vesting date and the last day of the exercise period is the expiry date, as listed in the valuation model input table below. The weighted average contractual life of options and conditional share awards outstanding at 31 December 2021 was 8.4 years (2020: 8.5 years).

Valuation model inputs

The key inputs to the model for the purposes of estimating the fair values of the share options outstanding at the end of the year are as follows:

Grant date	Share price on grant date (p)	Expiry date	Weighted average probability of meeting performance criteria	Share options outstanding at 31 December 2021	Share options outstanding at 31 December 2020
15 August 2017	133.38	15 August 2027	100.00%	-	124,793
12 February 2018	138.00	12 February 2028	100.00%	-	19,500
01 November 2018	148.00	01 November 2028	51.16%	-	748,853
26 November 2018	136.00	26 November 2028	100.00%	-	10,760
04 March 2019	155.00	04 March 2029	100.00%	-	200,215
20 May 2019	157.80	20 May 2029	41.0%	525,602	525,602
06 April 2020	170.00	06 April 2030	100.0%	310,867	7,288
01 May 2020	183.40	01 May 2030	34.0%	502,495	339,567
06 May 2020	181.00	06 May 2030	100.0%	36,364	502,495
21 April 2021	290.00	21 April 2031	66.0%	820,285	36,364
Total Share Options				2,195,613	2,515,437

The key inputs to the model for the purposes of estimating the fair values of the conditional share awards outstanding at the end of the year are as follows:

Grant date	Share price on grant date (p)	Vesting date	Weighted average probability of meeting performance criteria	Conditional share awards outstanding at 31 December 2021	Conditional share awards outstanding at 31 December 2020
12 February 2018	138.00	01 January 2021	100.0%	-	14,000
12 February 2018	138.00	22 April 2021	100.0%	-	60,500
01 November 2018	148.00	05 April 2021	100.0%	-	348,233
20 May 2019	157.80	01 April 2022	41.0%	304,254	304,254
19 August 2019	158.00	01 April 2022	100.0%	4,250	4,250
24 February 2020	179.80	24 April 2022	100.0%	10,772	15,500
06 April 2020	170.00	06 April 2022	100.0%	90,104	101,381
01 May 2020	183.40	31 December 2022	34.0%	165,759	198,347
06 May 2020	181.00	31 December 2022	100.0%	28,481	28,481
21 April 2021	290.00	31 December 2023	60.4%	229,515	-
06 December 2021	296.50	31 December 2023	59.0%	16,090	-
06 December 2021	296.50	31 December 2024	59.0%	9,323	-
Total conditional share awards				858,548	1,074,946
Total share options and conditional share awards				3,054,161	3,590,383

The reduction in the fair value of the awards as a consequence of not being entitled to dividends reduced the charge for the options granted during the year by £NIL (2020: £47,000) and the expected charge over the life of the options by a total of £NIL (2020: £420,000).

Other factors in determining the fair values of the share options and conditional awards do not affect the calculation and have not been disclosed, as the share options were issued for NIL consideration and do not have an exercise price. The weighted average fair value of the options outstanding at the period end was £2.1217 (2020: £1.4120).

The movement within the share-based payment reserve during the period is as follows:

	2021	2020
	£000s	£000s
Share-based payments reserve at beginning of the year	1,913	13,063
Share based payments transactions note 5(a)	1,549	1,869
Other share-based payments	(174)	-
Share based payments transferred to other reserves upon exercise/vesting	(1,249)	(13,019)
Share-based payments reserve at year-end	2,039	1,913

Share based payments transferred to other reserves upon exercise/vesting in the prior year included the settlement of dividend entitlements previously accrued as part of the LTIP programme, amounts released from forfeited LTIP shares, and a warrant exercised on 27 November 2020 by Zeus Capital Limited for 3,800,000 ordinary shares at an exercise price of £1.00.

24.  SHARE CAPITAL AND SHARE PREMIUM

	Number of shares	Par value	Total
	(000s)	£000s	£000s
Allotted and fully paid: ordinary shares of 1p each
Balance at 1 January 2021	205,746	2,057	2,057
Shares issues during the year	926	9	9
Balance at 31 December 2021	206,672	2,066	2,066

Under the Isle of Man Companies Act 2006, the Company is not required to have an authorised share capital.

In the current year, all share issues related to the exercise of vested share options (refer to note 23).

In the prior year, the Company issued shares for a total value of £11,230,000 which included 3,192,236 shares at nominal value of £31,992 issued as part of total consideration paid for the acquisition of LAICA S.p.A. on 27 October 2020, (note 14), 3,800,000 shares at a nominal value of £38,000 issued to Zeus Capital Limited on exercising their warrant (note 23), and the remainder relate to employee share-based payments (note 23). Accordingly, £11,073,000 was recognised as share premium .

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank pari passu in all respects including voting rights and dividend entitlement.

See note 23 for further information regarding share-based payments which may impact the share capital in future periods.

25.  DIVIDENDS

The following amounts were recognised as distributions in the year:

		2021	2020
		£000s	£000s
Interim 2021 dividend of 2.75p per share (2020: 2.6p)		5,679	5,167
Final 2020 dividend of 5.25p per share (2019: 5.1p)		10,831	10,143
Total dividends recognised in the year		16,510	15,310

In addition to the above dividends, since year end the Directors have proposed the payment of a final dividend of 5.6p per share (2020: 5.25p). The aggregate amount of the proposed final dividend expected to be paid on 2 June 2022 out of retained earnings at 31 December 2021, but not recognised as a liability at year end, is shown in the table below. The payment of this dividend will not have any tax consequences for the Group.

		2021	2020
		£000s	£000s
Final 2021 dividend of 5.6p per share (2020: 5.25p)		11,574	10,802
Total dividends proposed but not recognised in the year, and estimated to be recognised in the following year.		11,574	10,802

26.  LEASES

a) Amounts recognised in the consolidated statement of financial position

The consolidated statement of financial position shows the following amounts relating to leases:

		2021	2020
		£000s	£000s
Right-of-use assets
Land and buildings		3,247	3,928
Total right-of-use assets		3,247	3,928
Current future lease liabilities (due within 12 months)		773	1,254
Non-current future lease liabilities (due in more than 12 months)		2,598	2,846
Total future lease liabilities		3,371	4,100

Additions to the right-of-use liabilities during the 2021 financial year were £1,474,000 (2020: £1,150,000). Disposals of right-of-use liabilities during the current year were £735,000 (2020: £NIL)

Short-term leases and leases of low values were recognised directly in the statement of comprehensive income, amounting to £209,000 (2020: £280,000).

Total cash outflows relating to all lease payments, including short-term leases and leases of low values were £1,771,000 (2020: £1,735,000).

b) Amounts recognised in the consolidated statement of comprehensive income (continued)

The movement in lease liabilities is as follows:

		2021	2020
		£000s	£000s
Balance as at 1 January		4,100	4,468
Additions		1,474	1,150
Disposals		(735)	-
Adjustments due to lease modifications		35	-
Repayments		(1,562)	(1,455)
Interest expense (included in finance cost)		105	103
Sub-lease income		(40)	(160)
Foreign exchange gains		(6)	(6)
Balance as at 31 December		3,371	4,100

b) Amounts recognised in the consolidated statement of comprehensive income

The statement of consolidated comprehensive income shows the following amounts relating to leases:

		2021	2020
		£000s	£000s
Depreciation of right-of-use assets		(1,396)	(1,470)
Interest expense (included in finance cost)		(105)	(103)
Foreign exchange gains		6	6
Total cost relating to leases		(1,495)	(1,567)

27.  STATEMENT OF CASH FLOWS NOTES

a) Cash generated from operations

		2021	2020
	Note	£000s	£000s
Cash flows from operating activities
Operating profit		23,720	26,635
Adjustments for:
Depreciation of property, plant and equipment	12	3,173	3,042
Depreciation of right-of-use assets	12	1,396	1,470
Amortisation of intangible assets	11	2,310	1,477
Share of losses / (profits) from joint ventures		50	(61)
Loss on disposal of property, plant and equipment	12	1,679	12
Other non-cash flow items		1,703	-
Share based payment transactions	23	1,400	687
Net exchange differences	6(a)	186	505
		35,617	33,767
Changes in working capital:
(Increase)/decrease in inventories		(5,320)	(138)
Increase in trade and other receivables		(6,649)	(4,294)
Increase in trade and other payables		558	2,785
Cash generated from operations		24,206	32,120

Other non-cash flow items include accrual of amounts relating to compensation for post-combination services, which were accrued part of the acquisition of LAICA as the services were rendered (see note 14).

Share-based payment transactions include other transactions recognised directly in equity included in the statement of changes of equity.

b) Movement in net debt

			Non-cash movements
	At 01 January 2021	Cash flows	Currency movements	Other movements	At 31 December 2021
	000s	000s	000s	000s	000s
Borrowings, net of loan arrangement fees	(52,646)	(18,180)	206	(226)	(70,846)
Lease liabilities	(4,100)	1,562	6	(839)	(3,371)
Total liabilities from financing activities	(56,746)	(16,618)	212	(1,065)	(74,217)
Cash and cash equivalents	15,446	3,987	237	-	19,670
Net debt	(41,300)	(12,631)	449	(1,065)	(54,547)

28.  ULTIMATE BENEFICIAL OWNER

There is not considered to be any ultimate beneficial owner, as the Company is listed on AIM. No single shareholder beneficially owns more than 25% of the Company's share capital.

29.  RELATED PARTY TRANSACTIONS

(a) Identity of related parties

Related parties include all of the companies within the Group, however, these transactions and balances are eliminated on consolidation within the consolidated financial statements and are not disclosed, except for related party balances held with Joint Ventures which are not eliminated.

The Group also operates a defined contribution pension scheme which is considered a related party.

(b) Related party balances

  Trading balances

	Balance due from			Balance due to
	2021	2020		2021	2020
	£000s	£000s		£000s	£000s
Related party
The Strix Limited Retirement Fund	-	-		-	-
Foshan Yilai Life Electric Appliances Co. Limited	165	94		-
LAICA Brand House Limited	25	-		-

(c) Related party transactions

The following transactions with related parties occurred during the year:

	2021	2020
Name of related party	£000s	£000s
Transactions with other related parties
Revenue earned from Foshan Yilai Life Electric Appliances Co. Limited	298	72
Revenue earned from LAICA Brand House Limited	3	-
Contributions paid to The Strix Limited Retirement Fund (note 5(c)(i))	(684)	(611)

Further information is given on the related party balances and transactions below:

·	Key management compensation is disclosed in note 5(b).
·	Information about the pension schemes operated by the Group is disclosed in note 5(c), and transactions with the pension schemes operated by the Group relate to contributions made to those schemes on behalf of Group employees.
·	Information on dividends paid to shareholders is given in note 25.

30.  POST BALANCE SHEET EVENTS

The Group does not have any material events after the reporting

 

END

 

 

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