Kettle controls company reports half year progress and new product launch

Strix, the Isle of Man kettle safety controls manufacturer and supplier, reported improved interim results and the launch of a new product today.

Revenues for the six months to June 30, rose from £42.9m to £43.9m, while pre-tax profits of £11.5m compared with £11m last year.

The interim dividend has increased by 13% to 2.6p per share.

AIM-listed Strix said average selling prices are expected to fall by 2% for the full year, compared with 0% last year, partly due to a slowing of the Chinese economy where the market for electric kettles has contracted by around 5%.

However, it added that its global market share has been maintained within each segment, despite macro-economic headwinds.

A 50-year land use rights agreement was secured for £1.7m in the Zengcheng district of Guangzhou, China, in order to build a new manufacturing facility, which will be fully operational by August 2021.

And a new single serve coffee system was launched in the US market in collaboration with Mr Coffee, a major household name in the US, opening further opportunities within the US beverage sector.

Chief executive Mark Bartlett said: “Strix has achieved another solid performance despite continued challenges presented by the macro-economic environment.

“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 and resilience of our core business model.

“We have maintained our margins due to continued focus on operational enhancements and cost improvements in our core products whilst remaining on track with key strategic projects.

“These include the construction of the new facility in China and the integration of the assets acquired from HaloSource in March 2019. We have made further progress toward our strategic objectives and continue to invest in the growth of our business, funded by our existing resources.”

He added: “With the acquisition of HaloSource, we have strengthened the water category which includes Aqua Optima, Astrea, and HaloPure.

“This provides us with the right blend of products to deliver success in this growing category and, together with our investment in R&D capabilities, we have the right ingredients to create and commercialise exciting new innovative products within the water category.

“These include working closely with AquaShield to develop a Philips co-branded Astrea one filtration bottle; the launch of the Zwilling Water Dispenser in April 2019 into the hot water appliance market; discussions with a major Asian mother and baby brand to bring new and innovative products to the market; and a collaboration with Mr Coffee to launch a new single serve coffee appliance in the North American market during September 2019 using our patented Hot Cup Technology.

“The board is confident with the future outlook and profitability remains in line with full year market expectations.

“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.”

The business also announced a product launch today with AquaShield Health Technology Company, the global exclusive Philips brand licensee for water purifiers and dispensers.

The collaboration will launch a new co-branded water bottle with in-built filter, supported by Strix’s water filtration expertise.

Mark Bartlett said: “We are delighted to have secured this international collaboration with the Philips brand and we look forward to continuing to work with the AquaShield team on our new project.

“With the support of Philips brand, this move into a new segment opens up important opportunities for Strix.”

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