Coronavirus Update

Strix Group PLC - Final Results

Financial summary


Adjusted results1













Revenue - constant currency basis2








Gross profit




Operating profit




Profit before tax




Profit after tax




Net debt




Net cash generated from operating activities




Basic earnings per share




Final dividend per share





2018 in summary

Financial highlights


Solid performance during 2018 including a 7.9% growth in sales volumes and 2.7% in net sales, rising to 4.5% on a constant currency basis, in line with expectations.


Careful cost management has allowed us to report a gross profit margin of 41.5% (2017: 40.7%).


Net debt reduced to £27.5m, a 40.1% reduction since December 2017 (£45.9m).


OCF / EBITDA cash conversion ratio of 89.4% (2017: 88.0%).


Proposed final dividend of 4.7p, with total dividends of 7.0p for the full year.



Operational highlights


2.7m U9 series products sold to date following the successful launch in 2017.


A further eight successful Intellectual Property protection initiatives undertaken, the highest number of cases concluded in any one year.


Further growth in Aqua Optima has led to a volume share of c.25% of the UK market for own-brand and trade-brand combined.


Continued focus on manufacturing and production quality led to an 11% improvement in ppm.


Strategic highlights


Maintained market share of c.38% of the global kettle controls market despite geo-political events.


Appointment of a Chief Commercial Officer from 1 April 2019 and further strengthening of the R&D and senior management teams.


After the period end, completed acquisition of specified assets from HaloSource Corporation for consideration of US$1.33m in March 2019 to expand the water filtration division.


Investment agreement signed with the local government for the relocation of our manufacturing operation in China to support future growth.


Chairman's statement


It is my pleasure to report another year of solid performance, particularly in light of challenging global market conditions. The Group has continued to innovate, as well as continuing to develop and manufacture safe, reliable and high quality products for which it is renowned across the world.


The Group has delivered another year of growth and profitability as a result of its global presence and stable business model, despite the effects of Brexit, US/China trade tensions and other geo-political factors. In addition, net debt since IPO has decreased to £27.5m (2017: £45.9m) due to strong cash generation. We also took business and Intellectual Property actions in 2018 to maintain our position as the global leader in our core markets, whilst positioning Strix for continued growth into the future.


In September 2018, we sadly experienced the death of Edwin (Eddie) Davies CBE, who joined Strix in 1984 and later became the majority owner and Chairman of Strix. Much of what the Group has achieved today was built upon the contributions made by Eddie during his time at Strix and many of our colleagues have fond memories of working with Eddie during his time here.


Market performance

The Group has once again demonstrated growth in our key metrics despite a very turbulent year in the global economic market. Although the impact of currency rates caused by Brexit and other global challenges has softened our reported growth in net sales, underlying volume growth has been consistent with our expectations.


Our share of the global kettle safety control market has been maintained at c.38%. This is the effect of growth in the Less Regulated market and no change in the regulated market, offset by a slight softening of share in China.


Financial performance

Revenue for the year reached £93.8m, a 2.7% growth on 2017 (4.5% growth on a constant currency basis) and I am pleased to report a growth in reported gross profit to £38.9m (2017: £37.2m). Our gross profit margin increased 0.8% to 41.5%, as a result of the continued focus on efficiency, process improvement, and cost management. Adjusted EBITDA was £36.4m, an increase of 3.5% on 2017. Cash generation remains strong, with £35.0m net cash generated from operating activities, compared with £33.8m in 2017.


Dividend policy

The Board is proposing a final dividend of 4.7p per share following the 2.3p interim dividend paid in October 2018. This will bring the full year dividend to 7.0p, as projected at the time of admission to trading on AIM. The final dividend will be paid on 3 June 2019 to shareholders on the register at 10 May 2019 and the shares will trade ex-dividend from 9 May 2019. The Board has previously communicated its dividend policy, which is to increase the dividend in line with future underlying earnings, from a base of 7.7p for the 2019 financial year.


Annual General Meeting

The Group will host its Annual General Meeting on 23 May 2019 at 09:00 at our registered office at Forrest House on the Isle of Man, to which I welcome all of our shareholders.



Gary Lamb


Trading and Outlook

The Board continues to work with the executive and management teams to deliver on our strategy to create value for our shareholders. The Group's performance in 2018, in spite of turbulent economic events, demonstrates the strength of the core business model which underpins Strix.


In 2019 we will continue to focus on our strategic objectives. A number of key strategic projects are being undertaken in 2019, including the relocation of our manufacturing facilities in China and the recent acquisition of HaloSource's HaloPure division and its Astrea product. We believe that these key strategic projects will position us for longer-term growth and will be funded from existing resources. The HaloSource acquisition which was completed on 7 March 2019 will provide us with key technology and research and development skills in the water filtration market. We will use this to support growth in Aqua Optima and this also provides us with an important foothold in the key USA market, where we see significant potential for future growth both in kettle safety controls and water filtration. 


The supply of key commodities have been secured into 2019 through the continuation of our forward-buying policies or by negotiation of fixed price contracts. This reduces our exposure to commodity price fluctuations and provides us with certainty on the price of key commodities.


As the majority of transactions are conducted between our corporate office in the Isle of Man and our OEM customers in China, any potential impact from Brexit initiatives is limited. In addition, our consumer base is geographically diverse and we remain confident that our position in the global market limits any dependency on a specific territory. We also trade in a number of different currencies and as a result our exposure in any one single currency is monitored and managed. Whilst there are a number of headwinds which could make 2019 challenging including continued US/China trade tensions and the impact of Brexit, the Board believe they have taken appropriate preparatory steps to mitigate the risk presented by these challenges and as such, we remain confident about the Group's future outlook.


We will continue to maintain our market-leading share of kettle safety controls, and to grow our revenue streams in Aqua Optima and Other Technologies to diversify our revenue base. Whilst this will require continued investment in automation, infrastructure, people and facilities, we believe that the benefits of these investments will drive the creation of increased value for our shareholders. As a consequence, we remain confident about our full year outlook for 2019.