STRIX GROUP PLC
Strix Group plc

Strix Group plc share price, company news, analysis and interviews

Strix Group plc (LON:KETL) is a global leader in the innovation, design, manufacture and supply of kettle safety controls, heating and temperature controls, steam management and water filtration technologies. They estimate their controls are used approximately 1.2 billion times per day, in more than 100 countries, by over 10% of the world’s population.

Strix offers an attractive investment case with its market leading kettle controls position as well as significant growth opportunities in the water and appliances categories, strongly underpinned by the Group’s focus on ESG and sustainability.

Strix Group plc

CONTROLS

Every day, over one billion people around the world use and trust Strix controls in their homes. Strix Technology means safety, quality, and peace of mind.

PURIFICATION

HaloPure technology represents a uniquely attractive proposition for industries that require a water purification and disinfection solution.

Strix Group
Strix Group plc

WATER FILTRATION

Strix’s advanced technology and scientific approach allow them to deliver water filtration products to partners and consumers that address water quality issues around the world.

HEALTH, WELLNESS, LIVING

Strix’s ‘Appliance’ category incorporates a number of sub-categories, including Hot Water on Demand, Beverage & Breakfast, Food Preparation, Health & Wellness, Everyday Living, and Baby Care.

Strix Group plc
Strix Group

Share this page

Twitter
LinkedIn
Facebook
Email
WhatsApp
STRIX GROUP PLC

Strix Group plc share price

Fundamentals

52 Week High / Low

News

Interviews

Strix Group strong results proves Billi acquisition a good fit (VIDEO)

Strix Group plc (LON:KETL) CEO Bark Bartlett joins DirectorsTalk Interviews to discuss its interim results for the six months ended 30 June 2023.

Mark talks us through the highlights for the period, the Group Strategic Business Objectives to be delivered by the end of FY 2026, what they are and what they mean for the Group, how the acquisition of Billi continues to be successfully integrated growth in the water and appliances categories, the main points and highlights from the Capital Markets Day and what we can expect from the company during the rest of the year.

https://vimeo.com/867068394

Strix Group is a global leader in the design, manufacture and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management and water filtration.

Read More »

Strix Group Green shoots and exciting expansion opportunities (VIDEO)

Strix Group Plc (LON:KETL) CEO Mark Bartlett joins DirectorsTalk Interviews to discuss preliminary results for the twelve months ended 31 December 2022.

https://vimeo.com/812829100

Mark takes us through the financial highlights, explains how the divisions have performed, elaborates on his comment of green shoots, what Billi does and how it will add to the group, the strategic initiatives adopted to minimise the impact of the continued headwinds and the Group’s priorities for 2023 .

Strix Group is a global leader in the design, manufacture and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management and water filtration.

Read More »

Question & Answers

Strix Group

Strix Group: An exceptional business with really significant opportunities (LON:KETL)

Strix Group plc (LON:KETL) Chief Executive Officer Mark Bartlett caught up with DirectorsTalk for an exclusive interview to discuss financial highlights, Strategic Business Objectives, how the Billi acquisition is operating, main points from the Capital Markets Day and what we can expect from the group over the next year.

Q1: Strix Group has released its interim results as well as hosting a Capital Markets Day in the city. First off Mark, could you just talk us through the financial highlights please?

A1: During the first half year, we’ve seen an increase in revenues of around 28.6%, that really is primarily as a result of the inclusion of our most recent acquisition which was Billi. This has fully offset the softness within our organic growth sales elsewhere in the business, and yet we have had some quite challenging times.

EBITDA saw a decrease of about 1.9% and the Profit after Tax saw a reduction of around 50% on the prior year, driven mainly by interest and finance costs which were related to that acquisition, along with a weakness in the kettle market particularly during Q1.

Net debt for us increased to £93 million, representing a net debt EBITDA of 2.66 times, well below our covenant, and we expect to drive this down to 2.1 times by the year end.

As a Board, we continue to take precautions to balance that capital allocation priority and have declared an interim dividend this morning of 0.9 pence.

Q2: You mentioned in the announced that the company has group Strategic Business Objectives to be delivered by the end of FY26, could you talk us through what these are and what they mean for the group?

A2: A lot has changed since we last set our strategic objectives back in 2020 which was our last Capital Markets Day. Over that time, we’ve built very strong foundations for growth with the recent acquisitions and therefore, we’ve decided to set out our commitments to grow revenue from £107 million tin 2022 to £206 million by 2026 for the gross profit of £80 million.

Within the Strategic Business Objectives (SBO), we’ve set very clear commitments for the various divisions within the business, these include very clear financial targets for kettles, for the recent acquisition of Billi and our consumer goods division. We’ve also set out our strategy for technology geographical expansion, and particularly for our people, all of which are very key drivers to the success of the business.

Q3: Now, you mentioned the acquisition of Billi, that it continues to be successfully integrated. Can you tell us more about that side of the business and how it’s operating?

A3: Billi really is a transformational acquisition for this business. It’s a highly profitable business with margins above 45%, it’s cash generative and has a history of double digit growth.

Since the acquisition was made, we really have made some very significant progress thanks to the dedication and the passion of the team in Billi. We’ve exited all of the TSA’s that we set up, we’ve set up a new Head Officer in the UK, opened a new showroom in London and even put in a brand new ERP system in just four months. So, great progress has been made.

The acquisition really does offer very significant growth opportunities with new product launches last month, and that will really allow us now to move further into the residential market segment.

Along with the group’s infrastructure, we can now also look to expand beyond their current core markets which were UK, Australia, and New Zealand, providing further opportunities for the medium term.

Q4: Just turning to the Capital Markets Day, could you talk us through the main points and the highlights from the event?

A4: As I said, a lot has changed since we last did the Capital Markets Day back in 2020, and we have built some very very strong foundations for growth within the business.

We’ve now split the business into two divisions, ensuring we really do have the right resources, processes, and particularly focus on the various categories within our business with very clear targets set for all of those.

The key elements of the Capital Markets Day really focus on innovation, sustainability, geographical expansion, all to secure that increase in revenue from £107 million in 2022 to the £206 million in 2026. The focus can really be split into three key areas:

You have the kettles, a continued focus on innovation to really set a new benchmark in technology and secure growth to £88 million worth of revenues and allow us to move into adjacent markets with some of that new technology.

Secondly, you have Billi, and really that’s a story about investing in growth, what is a transformational acquisition, and getting that to deliver £58 million of revenue with a margin in excess of 45% by 2026.

Finally, you have the consumer goods which is really to build on the success we’ve had so far and to grow that business to £60 million worth of revenues with a gross profit of 30% by 2026.

Q5: Just looking forward, what can we expect from Strix Group over the next year?

A5: The business has been through some challenging times over the past three years with the various headwinds and the macroeconomics, however, I think we’ve built some very good and strong foundations over the period and we are really clearly focussed to deliver on our revised commitments.

Over the next year, you will see a focus on our key strengths; innovation, technology, safety, sustainability and of course our people, to ensure we can deliver on those growth commitment.

For me, this is an exceptional business with some really significant opportunities and we are really committed to realise that full potential of the group.

Read More »
Strix Group

Strix Group very well positioned to maximise opportunities (LON:KETL)

Strix Group plc (LON:KETL) Chief Executive Officer Mark Bartlett caught up with DirectorsTalk for an exclusive interview to discuss interim results, growth in water & appliance categories, the kettle controls market, sustainability agenda and what we can expect from the Group for the rest of the year.

Q1: Strix Group has released its interim results this morning, can you just start by talking us through the highlights?

A1: This has clearly been another challenging macroeconomic and geopolitical environment, but I think the Group has delivered a very robust performance across its three categories. We’ve also made very solid progress towards our 2025 targets that we set out at our Capital Markets day back in 2020.

We made really good progress with our net zero commitments and remain on target to achieve net zero by 2023.

Our new factory is now fully operational and we continue to receive good improvement in efficiency as we manage our cost base, given these challenging times. We’ve now managed to achieve full automation on 77% of our production lines.

We have overcome the various obstacles we’ve reported of supply issues and Brexit within the water category, and we’re now producing and distributing products from both our own factory in China as well as our Italian facilities as well.

Finally, we have managed to secure several quite material contracts within both the water and appliance categories, really enhancing our online sales and network globally, and that really does give us confidence in our midterm targets.

Q2: As you say, the Group has seen growth in both the water and appliances categories and has also been recognised for the domestic appliances that it produces in those categories. Could you tell us more about this and what it actually means for the Group?

A2: These two categories are really important to us as they really are the key growth areas for us in the five year plan that we put out. We have seen very significant process in the global expansion with launches in North America and significantly increased presence across Europe as well in that digital platform.

I think perhaps the most rewarding has been the feedback on our appliances, particularly the Aurora range. Sales for this product have exceeded our expectations and the range has won numerous awards, including the Quiet Mark and also the ‘Sustainable Product of the Year’, which we we’re very pleased to receive.

Q3: Now, you’ve maintained the market leading share position of 56% for the global kettle controls market by value, how is this side of the business performing?

A3: The kettle market has been quite challenging this year and the global market has seen some softening due to the conflict in Ukraine and also some of the recessionary fears in the regulated market.

However, we managed to maintain our market share throughout this period and the market itself has proven very resilient. Historically when you look at this market in such challenging times, we’ve always experienced a drop in demand as we go into these periods, and then we always see a sharp recovery as we exit. Typically, that’s normally one to three quarters, and we’ve already seen two quarters of weakness so far this year so really, it’s just a question of when we start to see the recovery.

We absolutely remain very confident that recovery will come and then our midterm targets will be unaffected and we are very well positioned to maximise the opportunities as that recovery starts to occur.

Q4: You did touch on this earlier, but I know the Group’s sustainability agenda remains a high priority for the company. Are you able to tell us more about it and how it’s developing?

A4: We’re making really good progress here and sustainability really is at the heart of our culture, whether it’s in the new product development, whether it’s in operations or in continuous improvement initiatives that we’ve got across the company. It’s really encouraging just to see how our employees have embraced that culture.

As I say, we are well on track to deliver our net zero and we’re working really hard now with our customers and suppliers on Scope 3.

We have put out an updated report this morning on our website and one thing you will note that in 2021, we actually were running for a period of time, at least two factories as we brought out the new factory. Now, we’ve just got the one custom built factory so we’re really going to start to see some very, very positive improvements as we look forward now with all the features and benefits that have been built into the new factory.

That will include things like improved efficiencies, we’ve now got 70% of our production lines, I mentioned, automated, but also reduction in energy consumption and significantly improved facilities for our staff.

Q5: Just looking forward, what else can we expect to see from Strix Group for the rest of the year?

A5: Still a lot for us to do. So far this year, we’ve launched 89 SKU’s into the market and we’re looking to deliver on 150 by the end of the year, so there’s still plenty to do, and all of those remain on target.

We’re going to see increased cross-selling between the LAICA and the Aqua Optima brands. If you go on Amazon today, you can see those in both the UK and Italy so very good progress being made on the integration of LAICA, which will continue as we go forward .

We continue to drive sales within that water and appliance category, by adding additional sales channels to really maximise that opportunity through the rest of the year.

Read More »

Analyst Notes & Comments

Strix Group

Strix Group “material operational progress made in the year” says Zeus Capital

Strix Group plc (LON:KETL) FY21 results released this morning show a strong Group revenue performance of 25.3% growth yoy to £119.4m (FY20: £95.3m). On a constant currency basis revenue increased 28.8%, in line with the 30% guidance provided at the start of the year. All divisions were ahead of FY20 and, importantly for profitability, Kettle Controls recovered to pre-pandemic levels. The LAICA acquisition added £22.7m of revenue with organic growth of £5.5m equating to a 6.0% increase against the pandemic-impacted performance in the previous year. Excluding LAICA, Group revenue was in line with that achieved in FY19. Gross profit was 20.3% ahead yoy at £47.4m (FY20: £39.4m) despite gross margin declining 160bps as headwinds of commodity price inflation, adverse foreign currency movements and an increase in headcount impacted. Strix offset the full impact through price increases in the kettle division, continued operational improvements, growth in the kettle division and a good performance from LAICA. The rating of 15.2x FY22 earnings does not reflect the ambitious growth aspirations of the business. The dividend of 8.35p is expected to grow in line with earnings, equating to a yield of c. 3.7%. Underlying operating profit and PBT forecasts are unchanged on today’s statement. Underlying operating profit and PBT forecasts are unchanged on today’s statement. Underlying operating profit and PBT forecasts are unchanged on today’s statement.

Material operational progress made in the year
¨ The acquisition of LAICA in October 2020 has been a game changer in terms of diversifying the business. The scale it has brought to the Appliance and Water divisions can be seen in the improvement in the margin dynamics of both.

¨ Reiteration of the medium-term growth target of doubling revenue by FY25 is testament to the resilience of the business and the confidence management has in the medium-term outlook. Current forecast projections suggest the FY25 gross profit target of c. £67.0m is well within in reach.

¨ Kettle control revenue increased 6.6% to £85.1m and is in line with the £85.8m achieved in FY19. Gross margin has been impacted by cost input pressures but at 41.9% remains healthy and with further price increases on legacy products should recover lost ground.

¨ The Appliance division saw a material change with revenue increasing to £12.9m on the back of the LAICA acquisition and product launches in the latter part of the year that have gone well. Gross margin of 37.7% is a strong performance.

¨ The Water division doubled revenue to £21.4m and materially improved gross margin (FY21: 32.3% Vs FY20: 20.5%) due to the contribution of LAICA. With new retail sites signed in the UK and Ireland further progress should be expected in FY22.

¨ Strix Group shares have been de-rated in line with the sector over the last six months. The current year rating of 15.2x is not challenging, particularly against the ambitious growth plans the management team have. The yield of 3.7% is an additional attraction.

Summary financials

Price 240p
Market Cap £496.0m
Shares in issue 206.7m
12m Trading Range 210.5p–390 p
Free float 100%
Next Event AGM – 26 May

Financial forecasts

Yr end Dec (£’m) 2021A 2022E 2023E 2024E
Revenue 119.4 132.1 144.9 160.3
yoy growth (%) 25.3 10.7 9.7 10.6
EBITDA 40.6 41.6 44.2 47.3
EBIT 33.7 35.4 38 41.1
Adj. PBT 32.2 34.2 36.7 39.9
Adj. PAT 31.4 33 34.1 37
EPS (p) basic adj. 15.2 16 16.5 17.9
EPS (p) ful dil. Adj. 14.9 15.7 16.3 17.6

Read More »
Strix Group

Strix Group PLC’s FY21 results provide a strong foundation for the group’s progress say Edison Group

Following the release of Strix Group PLC (LON:KETL) results, David Larkam, Analyst at leading investment research and consultancy firm Edison Group told DirectorsTalk Interviews:

“Strix Group PLC performed well in the year ended December 2021, reporting a revenue increase of 28.8% to £119.4m. This was partly driven by the recently acquired LAICA S.p.A, which generated revenues of £22.7m. £5.5m of revenue came from organic growth, a 6.0% increase from FY20. The board has proposed an increased final dividend of 5.60p per share, up from 5.25p in 2020.

Adjusted profit before tax was £32.2m, a rise of 4.2%. The group’s core segments all saw revenue growth, with the appliance category increasing by a significant 244.4% and water revenues by 82.3%. The kettle control category was up 6.6% to £85.1m.

The group made a number of strategic developments throughout the year, including the completion of new manufacturing operations in Guangzhou. The new factory is anticipated to double the Group’s manufacturing capacity.

Looking ahead, the group faces a number of widespread external and macroeconomic challenges, including increased commodity prices and freight chain cost inflation. However, management emphasised that the group has a resilient structure and is on track to meet its medium-term target to double its revenue. These results provide a strong foundation for the group’s progress, and investors will keep a close eye on whether momentum can be sustained.”

Strix Group is a global leader in the design, manufacture and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management and water filtration.

Read More »
Strix Group

Strix Group “performed so strongly over the last three years” says Zeus Capital (LON:KETL)

Strix Group plc (LON:KETL) has confirmed that FY21 results are in line with market expectations. ZC estimates were top end of consensus, as a result we take the opportunity to revise forecasts. In FY21 PBT reduces by 5.7% to £32.6m due to the impact of on-going cost headwinds, with the impact on profit after tax reduced to 2.8% due to a reduction in the tax rate. Conservatively, we run the lower base into FY22 and FY23 and reduce profit before tax expectations by c. 6%. Despite the small revision to estimates, Strix has performed well during the year, in part, attributable to the acquisition of LAICA in late 2020. LAICA’s operations have been integrated into the Water and Appliances divisions bringing scale and additional momentum to both. These areas of the business will underpin the ambitious growth aspirations, reiterated today, set out by management of doubling revenue by FY25. The Controls business has had a strong year and we expect it to have returned FY19 levels of revenue and profitability. The Strix share price has been caught up in the recent market weakness along with the more cyclical industrials. It remains at a material discount to peers trading on 16.1x FY22 earnings and offering 3.5% FY22 yield. 

  • Good performance during the year: Confirmation that trading during H2 ’21 remained strong despite cost input pressures, supply chain issues and freight cost inflation is testament to the resilience of the business. Revenue growth is indicated at c. 30% on constant currency basis, ZC estimate 25.4% reported growth, and this is in line with management’s target of doubling revenue by FY25. Cost input pressures relating to the supply chain, freight and commodity costs have, to a degree, been offset by price increases on legacy products as well as on-going strategic initiatives. The new factory being fully operational is a major positive for the business moving forward.     

  • Changes to forecasts: Today’s statement indicates trading is in line with this. We take the opportunity to reduce our PAT estimate from £32.3m to £31.4m, a c.2.8% reduction. We flow this through into FY22 and FY23, with PBT estimates reducing by 5-6%. Net debt at c. £51.0m is higher than our £40.3m estimate as Strix Group has invested in inventory to manage commodity price inflation but remains low at less than 1.5x EBITDA. Full details of changes to forecasts can be seen on page 2.

  • Controls: Positive volume growth is welcome, and we expect the division to have traded at least in line with FY19 levels post the 7% decline in FY20.

  • Water: LAICA will have made a material difference to the scale of the business, but progress has been made in other areas. The HaloPure technology continues to advance, and 14 contracts have been secured, ahead of the ten targeted. In-sourcing of production moving forward will improve margin.

  • Appliances: Moving forward, a great deal is expected from this division as new products come on stream. The Aurora, released late last year, is beginning to show commercial success and is ahead of budget.

  • Valuation: Strix Group current valuation of 16.1x FY22 earnings undervalues a business that has performed so strongly over the last three years. The FY22 yield of 3.5% offers support at these levels.

Read More »
Strix Group

Strix Group “Valuation underpinned by longer term aspirations” says Zeus Capital

Yesterday’s Strix Group plc (LON:KETL) Capital Markets Day confirmed good trading has continued during Q3 meaning FY20 profit estimates are ahead of ZC expectations, leading to increases in FY20 and FY21 earnings estimates of 1% – 3%. The presentation also outlined the strategy of the business over the next five years and the potential for growth in the Water and Appliances divisions, post the LAICA acquisition. The mix will change materially, non-Control derived profit will exceed 40% of Group by 2025, from the c.10% in FY20 based on revenue doubling. 

Strix has maintained guidance throughout the year and continually confirmed its intention to pay both the final FY19 and interim HY20 dividends. Guidance that profits would be at least in line with FY19A was best in class and confirmation that underlying, excluding the acquisition, Group profitability has improved yoy is impressive. The shares have reflected the resilient profit performance outperforming the market by c. 40%. The current rating of 15x FY21 earnings has material scope to increase as the business continues to deliver resilient and growing earnings over the next few years.  

  • Targeting a doubling in revenue in the next 5 years: The two acquisitions undertaken since Strix floated are different but fulfil the same aim of laying the foundations for sustained growth. They broaden the product portfolio and geographic footprint and with the additional scale it provides the opportunity to materially grow both the Appliance and Water divisions. At yesterday’s Capital Market Day, management outlined its target to double revenue over the next five years whilst seeing gross profit increase by over 70%. This will reduce the reliance on the Controls division with its contribution to profitability falling to c. 55% from the 90% in FY20.

  • The resilient performance during FY20 warrants the re-rating the shares have experienced: Maintaining guidance during the year, growing profit yoy and committing to paying the final dividend for FY19, the interim for HY20 and the final for FY20 needs to be put in the context of the exceptional circumstances experienced and the actions of peers. On this basis, Strix Group has materially outperformed and the re-rating the shares have seen from c. 10x-14x earnings to 15x-19x is warranted. The growth strategy outlined yesterday at the CMD suggests that as the business becomes less reliant on the lower growth Controls business a further re-rating can be sustained    

  • Valuation underpinned by longer term aspirations: The c. 15x FY21 earnings the shares currently trade on does not look expensive when factoring in the potential growth from the business as it diversifies. It is also supported by a yield of over 3% which has not come under threat during the year, unlike many other companies.

Read More »

More Information

Latest Strix Group plc News

Interviews

Questions & Answers

Broker Notes & Comments

Strix Group plc share price

Fundamentals

Share this page

Twitter
LinkedIn
Facebook
Email
WhatsApp

Data policy – All information should be used for indicative purposes only. You should independently check data before making any investment decision and or seek professional advice. DirectorsTalk cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used.