City round-up: Science in Sport; Flowtech Fluidpower; Strix Group
Sport nutrition firm, Science in Sport, which has a major supply chain site in Blackburn, said it expects its unaudited Adjusted EBITDA and net debt levels to be ahead of current market expectations for the year to December 31, 2024.
In a trading update this morning, it said Adjusted EBITDA for the year is expected to be £4.2m, up from £2m a year ago, and net debt has been reduced by £7m to £5.9m, on turnover of £51.9m, a 17.5% reduction on the previous year’s level of £62.8m.
Since the interim results were announced on September 16, 2024, the group has continued to see improvements in its operational and financial performance, gaining further traction on returning to profitable growth from a stronger operating platform, with a significantly reduced cost base as well as improving operating margins and cash generation dynamics.
Gross margins have continued to improve throughout FY24 to in excess of c.45% (FY23: c.43%).
As previously announced, the reset of the operating model undertaken by the new leadership team is now well under way and is underpinning the improved performance, particularly in FY24 H2 where the group returned to growth, which is anticipated to continue into FY25.
The group said trading for the current financial year has started well and it expects the return to growth seen in FY24 H2 to continue into FY25, together with the full effects of the cost savings made in FY24.
The strategic focus areas are driving profitable revenue growth through distribution agreements both domestically and internationally – controlled growth over the medium term supported by effective marketing with clear commercial execution, and, continued margin improvements from disciplined pricing and an ongoing focus on cost and operational change resulting in cash generation to deleverage and re-invest for growth.
Management’s confidence in targeting a 15% EBITDA business earlier than previously anticipated is increased, it said.
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Flowtech HQ in Skelmersdale
The acquisition of a Yorkshire business out of administration, last August, by Flowtech Fluidpower, the AIM-listed Skelmersdale-based hydraulics business, has led to a “significant one-off profit” it revealed today.
In a trading update ahead of publishing its annual results for the year to December 31, 2024, it said the excess, due to having purchased assets below fair market value, will be separately disclosed. They are not included in underlying EBITDA.
Overall, the company said underlying EBITDA for the year is expected to be broadly in line with market expectations, and that it has achieved a bigger slice of market share in difficult trading conditions.
It said the well-documented market headwinds persisted throughout the year, and as a result the group experienced a revenue decline of 4.3%. The £350,000 Thorite acquisition has been a great success, it said.
The business is operating profitably, with the initial capital cost already repaid, and integration has exceeded expectations providing strong confidence in the stability and growth of this channel into 2025. Like for like revenue decline was 8.6% as customers reduced volumes, destocked, and delayed project timelines.
The British Fluid Power Association (BFPA) has consistently cited market decline of around 10% in Hydraulics and Pneumatics. As a result, Flowtech said it is pleased with its relative performance and confident that it has gained market share in an otherwise difficult year.
It said its sales pipeline and order book have continued to strengthen throughout the year, growing with a number of new exciting orders secured for execution in 2025.
Net debt increased by £0.4m to £15.1m at year end (2023: £14.7m). The board said it remains very focused on the management of working capital and is comfortable with the current debt profile of the business.
Total group revenues of £107.3m are a 4.3% decline on the previous year’s level of £112.1m.
It said: “The team has worked tirelessly to improve the operational performance of the business, driving improved margins through commercial pricing and cost control, delivering enhanced service levels and on-time deliveries, strengthening the senior leadership team and optimising all aspects of the business.
“With the rebranding and restructuring now complete, and the new website launch expected in H1, we expect the improvements made across 2024 to bear fruit this year.
“We believe we have a strong, stable, and scalable platform for improved growth into 2025 and beyond.”
CEO, Mike England, said: “Underlying EBITDA is broadly in line with expectations in a year focused on controlling the controllables in a difficult market.
“Strong progress has been made implementing our strategic plan with further operational improvements delivering enhancements to gross margins, working capital optimisation, service levels, and operational efficiencies.
He added: “Group rebranding and restructuring are complete, and the successful integration of Thorite is well ahead of our expectations. With much of the business transformation concluded we have a firm, stable and scalable platform from which to deliver profitable growth into 2025 and beyond.
“We are well on track with the development of our new digital platform to be launched to market in H1 25 and there is confidence that the broader strategy and actions taken to improve operational efficiency within the business will drive strong returns and improved shareholder value.”
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Strix PLC
Isle of Man based Strix, a kettle safety control manufacturer said this morning that its profit before tax will be “comfortably within” the range of £18m to £19m expected.
In a trading update the company said the Kettle Controls division has maintained its dominant market position and stable market share, despite trading volatility last year in the UK and Germany.
Its Billi division has returned to double digit growth in the final quarter of 2024 due to product launches in Australia, which are expected to launch in the UK and Europe in the first half of 2025.
Strix has also begun manufacturing appliances for a leading global baby brand in its China factory which continues, with additional products to be introduced later in 2025.
