KETL Strix Group Plc

27 November 2024

Strix Group Plc

("Strix", the "Group" or the "Company")

Trading Update

Strix Group Plc (AIM: KETL), the global provider of innovative sustainable water technologies, controls and complementary small domestic appliances, provides an update on trading for the financial year ending 31 December 2024 ("FY24").

As highlighted in the Group's interim results, the Kettle Controls division experienced relatively lower trading for parts of Q3 2024, and this has continued into Q4 2024, particularly in regulated markets. Following the recent Canton Fair where the Group had the opportunity to engage with its key customers and partners, it has become apparent that the improvement in sales trends experienced in the Kettle Controls markets in the first six months of the year was due to a pipeline refill. The peak season has not shown an underlying improvement in consumer demand. Whilst Strix has maintained its dominant market position with stable market share, the macroeconomic and geopolitical environment has remained challenging. This has been particularly the case in the UK, Germany and the US, being some of the Group's highest margin markets. The impact of cost price inflation has been compounded by uncertainty leading to more cautious discretionary spending around the UK Autumn Budget.

Elsewhere in the Kettle Controls division though, the launch of the new low-cost control has been well received by the Group's customers in less regulated markets and sales commenced in China in the second half of the year. Following planned capital investments in the second half of FY24, the production of the next generation of innovative controls is making good progress, with OEMs qualifying their use in new appliances, which will be ready for launch in 2025, further protecting Strix's market leading position and supporting barriers to entry.

In terms of the wider Group, Billi is performing well with a positive increase in sales in Europe following successful progress on the division's geographical roll-out strategy. As expected, the division is anticipated to return to double-digit growth for Q4 2024. New products are gaining traction in Australia, which will be launched in the UK in H1 2025, and 6 distributors are expected to be signed up in Europe by year end. The Consumer Goods division is expected to deliver revenue in the second half of the year broadly in line with the same period last year following the previously announced restructuring initiatives. Some key incremental retail contracts have been secured for 2025 and during Q4 2024 the Group  began manufacturing appliances for a leading baby brand in its China factory with further products scheduled to be introduced in H2 2025.

As a result of the above, Strix now expects to report adjusted profit before tax for FY24 in the range of £18m to £19m (on a constant currency basis).

Significant progress has been made on the balance sheet in the first half of the year, providing the Group with additional resilience and flexibility to weather the current macro headwinds. This has also been aided by the restructuring efforts carried out during the year at pace. The Group continues to evaluate medium-term opportunities for profitable growth.

In addition to the structural improvements made across the Group, Strix has further strengthened its senior leadership enhancing the treasury function, Billi  leadership as well as the commercial and business development teams to support its long-term growth ambitions.

Strix's debt position has remained a priority for the management team, with latest reported net debt leverage at c. 2x. Reflecting management's confidence in the underlying business, it remains the intention to reinstate the FY24 final dividend for payment in 2025.

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Information on Strix

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 admitted to trading on the AIM Market of the London Stock Exchange (AIM: KETL).