Strix posts growth in full-year revenue and operating profit

Strix Group reported a 35.2% jump in revenue in its 2023 results on Wednesday, to £144.6m, accompanied by an increase in gross profit to £57.2m, up 37.7%.

The AIM-traded firm said that despite challenges, the gross margin expanded to 39.6%, marking an increase of 80 basis points.

However, the EBITDA margin decreased 270 basis points to 27.3%.

Operating profit rose 24.3% increase to £32.1m, with the operating margin at 22.2%, down by 200 basis points.

Profit before tax experienced a marginal decline to £21.9m, while profit after tax decreased by 12.7% to £20.1m.

Net debt narrowed by 4.3% to £83.7m.

Basic earnings per share stood at 9.2p, down 15.7%, and diluted earnings per share came in at 9.1p, a decline of 16.2%.

Despite the challenges encountered, Strix was optimistic about its core business and its position in the market, which remained stable with a dominant market share by value.

Looking ahead, Strix said it was undertaking a rebasing of its core business in 2024 to lay strong foundations for future growth opportunities as the market rebounded.

The company said it was focussed on maximising cash generation to support debt reduction, leading to a temporary pause in both final and interim dividend payments in 2024.

However, it said it planned to return to a sustainable dividend pay-out ratio of 30% of adjusted profit after tax in 2025.

Tht strategic move would accelerate Strix's deleveraging profile, the board said, strengthening its financial position and providing flexibility to selectively invest in new technologies for long-term growth initiatives.

The company had also made senior management changes, welcoming Clare Foster as chief financial officer and Rachel Pallett as chief commercial officer of kettle controls and Billi.

Additionally, Strix said it had worked with its banking syndicate to normalise the net debt leverage covenant to 2.75x for the duration of the facility.

“Strix is a resilient and highly cash generative business with the opportunity to expand its addressable market across all divisions,” said chief executive officer Mark Bartlett.

“The recent strategic acquisition of Billi has delivered double-digit revenue and profit growth on a constant currency basis over the period which is anticipated to continue, helped by a staged expansion into key European markets.

“The group plans to return to its sustainable dividend pay-out ratio policy in 2025 reflecting the board's confidence in the medium-term prospects.”

At 1216 GMT, shares in Strix Group were down 2.7% at 64.99p.

Reporting by Josh White for Sharecast.com.