Strix Group plc (LON:KETL) have today provided interim results for the six months ended 30 June 2021.

Financial Summary

	Adjusted results1
	H1 2021	H1 2020	H1 2019	Change(21 – 20)	Change(21 – 19)
	£m	£m	£m	%4	%4
Revenue	54.7	34.7	43.9	57.6%	24.6%
Gross profit	20.5	13.8	16.7	48.6%	22.8%
EBITDA2	17.4	13.6	14.9	27.9%	16.8%
Operating profit	13.9	10.6	12.2	31.1%	13.9%
Profit before tax	13.2	10.1	11.5	30.7%	14.8%
Profit after tax	12.3	9.8	10.9	25.5%	12.8%
Net debt3	46.0	36.9	33.4	24.7%	37.7%
Net cash generated from operating activities	13.5	8.3	10.9	62.7%	23.9%
Basic earnings per share (pence)	6.0	4.9	5.7	22.4%	5.3%
Diluted earnings per share (pence)	5.9	4.9	5.4	2.0%	-7.4%
Total dividend per share (pence)	2.75	2.6	2.6	5.8%	5.8%

1.        Adjusted results exclude exceptional items, which include share based payment transactions, 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.        EBITDA, which is defined as earnings before finance costs, tax, depreciation (including IFRS 16 ROU depreciation) and amortisation, is a non-GAAP metric used by management and is not an IFRS disclosure.

3.        Net debt excludes the impact of IFRS 16 lease liabilities, pension liabilities, deferred tax liabilities and earn-out provisions on satisfaction of performance conditions. Net debt including earn-out provisions was £51.6m.

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

Financial Highlights

•	The Group reported revenue of £54.7m, a significant increase of 57.6%, versus the same period in prior year and an increase of 24.6% 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 as the Group bounced back to higher than pre-pandemic levels.
•	Adjusted EBITDA increased to £17.4m (2020: £13.6m), representing a 27.9% increase same period in prior year and an increase of 16.8% versus the same period in 2019. Adjusted EBITDA margin in H1 was 31.8% (H1 2020: 39.2%), as a result of LAICA’s inclusion alongside a number of factors including higher outward carriage and freight costs, advertising and promotional costs and payroll costs as the Group strengthened its management team in line with its strategic objectives.
•	Net debt (excluding the impact of IFRS 16 lease liabilities) has increased to £46.0m (H1 2020: £36.9m) to fund the LAICA acquisition, continued investment in compelling growth opportunities as well as the new manufacturing operations in China. This represents a net debt/adjusted EBITDA ratio (calculated on a trailing twelve month basis) of 1.1x.
•	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 82%.
•	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 6.0p (H1 2020: 4.9p) and 5.9p (H1 2020: 4.9p) respectively.
•	The Board declares an increase in the interim dividend to 2.75p per share (H1 2020: 2.6p).
•	Confident of delivering 2021 full year results in line with market expectations.

 Strategic Highlights

•	Remains on track to deliver medium-term targets to double the Group’s revenues over a five year period primarily through organic growth in its water and appliances categories.
•	Expanded global market share by a further 1% by value of the kettle controls market.
•	Acquisition 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 delivering greater than 20% revenue growth.
•	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.
•	The HaloPure technology is gaining wider recognition by the market and, in addition to securing two further contracts, the Group has reached an agreement with a leading global company of poultry feeding systems to mutually promote the product and the Group is confident it will secure 10 systems this financial year, which demonstrates the continued focus on commercialising this important product.
•	Continue to invest in strengthening its management team in line with its strategic objectives and has recruited a new Chief Technology Officer 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.

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 the end of 2023 demonstrates commitment to sustainability agenda.
•	Continued compliance with a range of international standards, solidifying the quality and safety of our products and internal processes (ISO9001, ISO14001, ISO45001, ISO50001, ISO17025, ISO13485).
•	Defence of intellectual property and regulatory enforcement remain core activities of our business and there have now been 66 in total since 2017.

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

“Strix has experienced positive trends and momentum in H1 2021 and achieved significant revenue growth compared to the COVID-affected prior year and remains confident that it will deliver revenue growth of circa 30% for the Group in 2021.

We are benefiting from being a world leading innovative and sustainable technology business and our continued focus on efficiency measures and strategic initiatives enables us to continue to prudently invest in compelling growth opportunities.

Today represents an important milestone for the Group, as we are launching our “Sustainable. Innovative. Dependable.” strategy. The next few years will see significant planning and project execution as we look to advance our KPIs and set ever ambitious goals but this is a critical aspect of Strix’s mission to innovate safety and design for a sustainable future.

Our strong balance sheet and low leverage provides financial flexibility for the medium term deploy capital consistent with allocation of capital priorities.

Strix remains confident of delivering 2021 full year results in line with market expectations and executing on the medium-term strategy to deliver against its five year targets.

The Group reaffirms its commitment to its increasing dividend, in line with its progressive dividend policy that is linked to underlying earnings, which reflects the Board’s confidence in the outlook for the Group.”