Strix bubbles upward after slashing net debt

The kettle safety controls maker said it expects to report a net debt position of approximately £28m, down from £45.9m at the same point last year, after its Aqua Optima brand experienced a "strong" year of growth following a re-positioning of the brand in the UK market, an increased presence at multiple retailers and multiple new collaborations.

Mark Bartlett, chief executive of Strix, said: "Strix has achieved another strong performance in line with market expectations. In particular, cashflow generation has been strong which has helped achieve an improved net debt figure, ahead of market expectations."

The AIM traded company said it maintained its global market leading share of the kettle controls market at approximately 38% by volume, with the overall market posting growth of approximately 7% with progress in North America, Russia and South East Asia offsetting softening in Europe, the UK and Turkey.

"We have maintained our strong global market position in the face of a competitive market environment, and have been largely unaffected by the uncertainty caused by Brexit and US trade tariffs as a result of our diverse global presence. We have also taken appropriate actions to mitigate future supply risks," said Bartlett.

Meanwhile, the company has progressed with plans to relocate its manufacturing in China, with construction of a second factory in the country set to get underway in the second half of the year and last approximately two years.

Strix confirmed its intention to pay total dividends of 7.0p per share in respect of the 2018 financial year, inclusive of a 2.3p per share paid as an interim dividend.

A note from Canaccord analysts said: "The pre-close trading update supports our view that Strix can deliver sustainable, long-term profit growth alongside strong levels of cash generation. Its best-in-class product offering, deep industry relationships and technology leadership has led the group to consistently dominate the high margin regulated markets which contribute approximately 2/3 of group revenue."

Strix Group's shares were up 3.55% at 149.11p at 1240 GMT.