Strix Group PLC Trading Update and Notice of Results (9063F)
18 July 2019 - 4:00PM
UK Regulatory
TIDMKETL
RNS Number : 9063F
Strix Group PLC
18 July 2019
18 July 2019
Strix Group Plc
("Strix" or the "Group")
Pre-Close Trading Update and Notice of Results
Maintained market share across all segments despite
macro-economic headwinds
Strix Group Plc (AIM: KETL), the global leader in the design,
manufacture and supply of kettle safety controls and other
complementary water temperature management components, is pleased
to announce the following trading update for the six month period
ended 30 June 2019.
The Group has delivered a solid performance for the period and
the Board confirms that it expects to report results in line with
market expectations for the financial year. The Group expects to
report growth in Adjusted Profit after Tax and a good net debt
position given the cash committed to the new manufacturing
facility, the acquisition in March 2019 and the increased dividend
to shareholders.
Kettle Safety Controls
The market volatility experienced through 2018 as a consequence
of geo-political events has intensified in 2019, including Brexit
and USA/China trade tensions. The Group has not experienced any
material impact as a result of USA/China tariffs as the flow of
goods is principally between the Isle of Man and China. Despite
these headwinds, the global kettle safety controls market posted
growth of c.2% with stronger growth in the United States and the
Far East offsetting weaker performance in China and the CIS.
Strix has maintained its global market leading share of the
kettle controls market, achieving a stable market share in the
Regulated and Less Regulated markets, together with modest share
growth in China as a result of actions taken during H2 2018 and H1
2019.
Water Filtration
Aqua Optima branded products have achieved a stable share in its
key United Kingdom market despite challenging market conditions,
which have driven an overall market decline of c.7% as a result of
consumer confidence issues due to Brexit and price rises. Aqua
Optima remains well placed to capture future growth when market
sentiment improves as a result of its share of the tradebrand
segment.
Performance of the assets acquired from HaloSource in the period
since March 2019 has been in line with the Group's expectations.
The Astrea product (which is now part of Strix) has received
significant interest from a number of parties with discussions
ongoing with a leading global brand and a leading North American
home shopping network. Strix continues to seek further
opportunities to enter into agreements which management believe
will drive future profitability.
Operational and New Product Progress
The appointment of an experienced Chief Commercial Officer in
the period has further increased the focus on the commercialisation
of new products, together with the execution of a 'category
management' approach to drive sustainable future growth. The Group
continues to actively work with selected partners in the 'Small
Domestic Appliance' and 'Baby Product' markets to launch a number
of innovative new appliances during 2020.
The project to relocate Strix's existing manufacturing
operations in China has advanced in line with the project schedule
and the Group is pleased to report that a land usage agreement was
signed during the period. This agreement grants the right to use
the land for fifty years, a significantly longer period than
originally expected, which provides security and stability for the
site for the duration of its operational life. Design work is
underway, with construction expected to start during H2 2019 and
the project is expected to complete in Q1 2021.
Outlook and Notice of Interim Results
The Group has delivered a solid performance for the period and
the Board confirms that it expects to report results in line with
market expectations for the financial year. Given the Group's
performance in H1 2019 and the Board's confidence in the continued
strength of its cash generation, the Board re-confirms its
intention to pay total dividends of 7.7p per share in respect of
the 2019 financial year, an increase of 10% on the previous
year.
The Group will be announcing its interim results for the six
month period ended 30 June 2019 on Wednesday 18 September 2019. An
analyst briefing will be held on the day in the City of London.
Analysts interested in attending should contact
heather.armstrong@investor-focus.co.uk or +44 (0)20 3934 6630.
Mark Bartlett, Chief Executive Officer, said:
"Strix has achieved another solid performance despite continued
challenges presented by the macro-economic conditions in which the
Group operates. In particular, maintenance of the Group's market
share in the Regulated and Less Regulated markets, combined with
modest growth in China, demonstrates the strength of our core
business model.
We have maintained our margins due to our continued focus on
operational enhancements and cost improvements of our core products
whilst remaining on track with key projects, including the
construction of the new facility in China and the integration of
the assets acquired in March. The appointment of Harry Kyriacou as
Chief Commercial Officer on 1 April 2019 has also enabled us to
increase our focus on the commercialisation of innovative new
product ideas.
As a Board, we have committed to increase the full year dividend
by 10% to 7.7p per share, an indication of our confidence in
achieving the Group's business objectives for 2019."
Enquiries:
Strix Group Plc +44 (0) 1624 829 829
Mark Bartlett, CEO
Raudres Wong, CFO
Zeus Capital Limited (Nominated Advisor
and Joint Broker) +44 (0) 20 3829 5000
Nick Cowles / Jamie Peel / Jordan Warburton (Corporate Finance)
Canaccord Genuity Limited (Joint
Broker) +44 (0) 20 7523 8000
Chris Connors / Bobbie Hilliam
IFC Advisory Limited (Financial PR
and IR) +44 (0) 20 3934 6630
Graham Herring / Tim Metcalfe / Heather
Armstrong
ABOUT STRIX GROUP PLC
Isle of Man based Strix, is a global leader in the design,
manufacture and supply of kettle safety controls and other
components and devices involving water heating and temperature
control, steam management and water filtration.
Strix's core product range comprises a variety of safety
controls for small domestic appliances, primarily kettles. Kettle
safety controls require precision engineering and intricate
knowledge of material properties in order to repeatedly function
correctly. Strix has built up market leading capability and
know-how in this field since being founded in 1982.
Strix is listed on the Alternative Investment Market of the
London Stock Exchange (AIM: KETL).
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END
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