Strix Group Plc (LON:KETL), the global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components, has announced a trading update for the six month period ended 30 June 2021.
Trading Update
The Group has experienced positive trends and momentum in H1 2021 and will deliver revenue growth of circa 50%, including the impact of LAICA, compared to the COVID-affected prior year and remains confident that it will deliver revenue growth of circa 30% for the Group in 2021.
The kettle controls category continues to perform strongly, particularly within the regulated segment and a positive order book gives management confidence for the second half of 2021 and beyond.
Strix has also successfully implemented price increases on some of its legacy products in both kettle controls and water categories, alongside a range of other efficiency measures which will help to minimise the impact of any cost inflation. Gross profit margin for H1 2021 remains in line with management’s expectations and the Company will provide additional financial guidance for H2 2021 in its interim results in September.
In the water category, the sales of its new products are accelerating with additional product launches from LAICA that have already been implemented during the period.
The Group also continues to see many of the new appliances starting to penetrate the consumer markets across the world. The Aurora appliance launched on Amazon under the Aqua Optima brand in June and a version incorporating Strix’s technology has recently launched, initially in Asia, with a leading global brand.
The HaloPure technology is gaining wider recognition by the market and, in addition to securing two contracts at a regional government owned livestock company in China, the Group has reached an agreement with a leading global company of poultry feeding systems to mutually promote the HaloPure product and any relevant technical support in the Chinese market. This provides further confidence that the Group will secure 10 installations this financial year, which demonstrates the continued focus on commercialising this important product.
Corporate and Operational Review
The new manufacturing operations in China continue to make excellent progress and remain on target and budget to be fully operational by August as originally scheduled. 90% of the assembly lines have now been moved and the commencement of the production lines have begun successfully. The Company is particularly proud of this achievement to date given the backdrop and impact of the global pandemic.
Strix’s experienced management team continues to ensure that the integration of LAICA is executed effectively to capture identified synergies in line with its strategic plan. The LAICA trading performance in the first half of 2021 has also been strong delivering greater than 20% revenue growth. The Company will provide additional financial guidance at its interim results.
The Group continues to invest in strengthening its management team in line with its strategic objectives and has recruited a new Chief Technology Officer (“CTO”) with significant expertise in project planning and the successful implementation of commercialisation strategies to bring high quality and innovative new products to market in a timely and cost effective manner. This appointment will be an invaluable addition to support Strix’s new product development initiatives which is an important part of the Group’s medium-term growth ambition. The new CTO will be joining in November.
Strix has committed to implementing a sustainability strategy in 2021 and establishing baselines within identified key sustainable development goals that will enable the Group to track improvements year on year. Strix will publish these short-term key performance targets, incorporating the benefits of the new factory in China, in its interim results in September.
Financial Position
Strix remains in a strong position 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. In addition, the Company continues to seek acquisition opportunities of niche technologies that will add value across the Group.
Net debt (excluding the impact of IFRS 16 lease liabilities) as at 30 June 2021 is £51.6m.
Notice of Results
The Group will be announcing its interim results for the six month period ended 30 June 2021 on 22 September 2021.
Mark Bartlett, Strix Group Chief Executive Officer, said:
“Overall, I am confident that the positive trends in current trading and momentum so far in H1 2021 mean that we anticipate delivering revenue growth of circa 30% for the Group in 2021 which also underpins our confidence in achieving our medium-term target to double the Group’s revenues over the next five years.”
