Strix Group Plc ORD 1P (LON:KETL) CEO Mark Bartlett talks to DirectorsTalk about it £190m IPO. Mark talks us through what the company does, why they have chosen to join AIM, how the proceeds will be used and also outlines the company’s growth strategy.
Company Overview
Strix Group Plc ORD 1p 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.
The company’s core product range comprises a variety of safety controls for small domestic appliances, primarily kettles. Kettle safety controls are responsible for disconnecting the power to the heating element when either water has boiled, operated with no water present, or in some products when the kettle is lifted off its base. The kettle control is also designed to act as a safety device, disconnecting the power during abnormal operations such as when there is no water in the appliance, to prevent the element from overheating.
Kettle safety controls require precision engineering and intricate knowledge of material properties in order to repeatedly function correctly. Strix has built up market leading capability and know-how in this field since being founded in 1982.
Main direct customers for safety controls are original equipment manufacturers (“OEMs”) involved in the manufacture of kettles and other small domestic appliances. Strix also has indirect customers in the form of appliance brands and retailers, who often work with Strix to select the best OEM for a product and specify the product to meet their quality and price point requirements. Strix has relationships with over 400 brands and retailers globally, who often rely on them to ensure consistency of compliance with applicable regulations and with their own standards, which are often higher, as well as to troubleshoot any manufacturing issues at an appliance level.
Globally, Strix estimates that 174 million kettles were sold in 2016, giving Strix a 38% global market share (2015: 32%.).
There are six operational sites globally, of which two are in the Isle of Man (where the Group’s head office is located), one is in the UK, two in Hong Kong and one is in China. Strix has manufacturing operations in two locations: Ramsey, Isle of Man and Guangzhou, China.
It is an established, highly cash generative business that has seen revenue increase from £79.9 million in 2015 to £88.7 million in 2016. In the year ended 31 December 2016, Strix recorded an adjusted EBITDA of £33.3 million.
Strix is seeking Admission in order to enhance the profile of the business and to provide permanent capital, enabling the Directors to take long term investment decisions and strengthen its new product development capabilities, for the long term benefit of the business and its customers. The entire net proceeds of the Placing, in combination with new debt facilities, will provide an exit for the Group’s current investor group, led by AAC Capital Partners, which has held a stake in the business since 2005.