Strix Group sees decent growth as it maintains global market share

Kettle safety control manufacturer Strix Group reported a year of “solid performance” in its final results on Thursday, including 7.9% growth in sales volumes and a 2.7% improvement in revenue to £93.8m.

The AIM-traded firm said that growth rose to 4.5% on a constant currency basis to £95.3m, which was in line with expectations.

Its EBITDA was ahead 3.5% year-on-year at £36.4m, while its profit before tax was 3.2% higher at £29.2m

The board said its “careful cost management” allowed it to report a gross profit margin of 41.5%, up from 40.7% in 2017.

Net debt narrowed by 40.1% to £27.5m, with net cash generated from operating activities increasing 3.4% to £35m.

Basic earnings per share were 2.8% higher year-on-year, as the board proposed a 147.4% increase in the final dividend to 4.7p, taking total dividends to 7.0p for the full year.

Looking at its operations, Strix said a total of 2.7 million ‘U9’ series products had been sold to date, following a successful launch in 2017.

A further eight successful intellectual property protection initiatives were undertaken during the year, which was the highest number of cases concluded in any one year for the company.

It said further growth in its Aqua Optima line had led to a volume share of around 25% of the UK market, for own-brand and trade-brand combined.

The board said a continued focus on manufacturing and production quality led to an 11% improvement in its quality parts per million rate.

Strix also progressed on the strategic front, maintaining its market share of around 38% of the global kettle controls market despite “geo-political events”.

The board had appointed a chief commercial officer from 1 April, as well as further strengthening of its research and development and senior management teams.

Post-period end, Strix completed the acquisition of specified assets from HaloSource Corporation for consideration of $1.33m in March, expanding its water filtration division.

And investment agreement had also been signed with the local government for the relocation of the company’s manufacturing operation in China, to support future growth.

“We are pleased to report a solid year of trading for Strix in 2018,” said chief executive officer Mark Bartlett.

“We continued to make encouraging progress with our strategic priorities which enabled us to maintain our global market share of around 38% amidst a challenging geo-political climate.

“Aqua Optima has continued to show strong growth and we secured a market share within the UK of 25%.”

Bartlett also noted the launch of the ‘Aqua Optima Water Filter Recycling Initiative’, which allowed consumers of Aqua Optima filtration systems to recycle their products from home or at hundreds of TerraCycle collection locations across the UK.

“We saw positive progress on the U9 series of controls and since its launch in 2017 we have sold nearly three million units.

“With this in mind, we have entered 2019 with the most diversified product portfolio Strix has had to date, providing access to all global markets.”

Intellectual property protection remained a “key focus”, Bartlett added, in a bid ensure defence of the firm’s technology and products in order to maintain the value of its brand.

“We have continued to focus on manufacturing and production quality which has led to an 11% improvement in ppm, and we are continuing to invest in automation to further improve production efficiency and quality.

“The board are delighted to announce a proposed final dividend of 4.7p, equating to a total dividend of 7.0p per share for 2018.

“We look forward to the year ahead and remain confident about our full year outlook for 2019.”