Resilient results give kettle controls group confidence for the year ahead
AIM-listed Strix Group achieved a ‘resilient’ year, it said when it announced its annual results for the year to December 31, 2020 today.
The Isle of Man-based group specialises in temperature control systems for kettles, but has diversified into water purification and disinfection solutions in the livestock farming industry in China, where it already operates manufacturing facilities.
Revenues for the year fell by 1.6% to £95.3m, although pre-tax profits showed a 2.4% improvement to £30.9m.
Net debt for the period increased by 41.2% to £37.2m, reflecting acquisition costs, continued investment in compelling growth opportunities, as well as the new manufacturing operations in China.
The total dividend of 7.85p per share rose by two per cent, based on the group’s resilient performance in 2020 and confidence in the continued strength of its cash generation.
Strix said while revenues declined slightly, they were significantly ahead of COVID-19 scenario planning expectations, with a marked recovery in the second half, while the group has significant liquidity providing financial flexibility.
The group updated its medium-term targets to double its revenues over the next five years, primarily through organic growth in its water and appliances categories. Alongside this the company will continue to grow market share in kettle controls, having expanded its global market share by value.
New manufacturing operations in China remain on target to be on budget and fully operational by August 2021 as originally scheduled. The press machinery and test lab facilities are being installed and the transfer and commencement of some of the production lines has begun, said Strix.
Chief executive, Mark Bartlett, said: “We are pleased to report another resilient trading performance in what has been a challenging year for all.
“We are particularly proud of the way in which the company has responded to the pandemic and, as a result, the group has produced revenue that is significantly ahead of our COVID-19 scenario planning expectations with a marked recovery in H2.
“In addition, the combined impact of product mix and a range of efficiency measures, including continued automation and strategic initiatives, has enabled the group to report an increase in both gross profit margin and the absolute level of EBITDA generated.”
He said the much improved performance in the second half has continued into 2021: “The kettle controls category has a strong order book for Q2 giving management confidence in delivering a significantly stronger first half versus last year.
“In the water category, the group expects sales of the new products launched in 2020 to accelerate this year as the retailers introduce them to their in-store and online portfolios. 2021 will also see many of the appliances created in 2020 penetrate the consumer markets across the world with the most notable being the Aurora (Instant Flow Heater/Chiller) in the first half, and Dual Flo and the expansion of the Baby Care technology range in the second half.”
He added: “Given the group’s resilient performance in 2020 and confidence in the continued strength of its cash generation, the board confirms its intention to increase total dividend to 7.85p per share in respect of the 2020 financial year.
“The group’s commitment to its dividend reflects the board’s confidence in the outlook for the group going forward.”
