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Strix Group reports 'solid' performance despite market volatility

By Duncan Ferris

Date: Thursday 18 Jul 2019

Strix Group reports 'solid' performance despite market volatility

(Sharecast News) - Strix Group on Thursday reported a "solid" first half performance and said it expects to report growth in adjusted profit after tax and a good net debt position despite continued market volatility.
The kettle controls specialist expects an improvement on the post-tax profit of £28.3m achieved in the six month period ended 30 June 2018, while its good net debt position takes into account the cash committed to a new manufacturing facility, the acquisition of assets from HaloSource in March 2019 and an increased dividend to shareholders.

The board has committed to increasing its full-year dividend by 10% to 7.7p per share.

Trade tensions and Brexit both contributed to market volatility, though the company said it has yet to feel any material impact from the swapping of tariffs between the US and China.

Meanwhile, planning for a new facility in China remains on track, with the AIM traded company having signed a land usage agreement granting a right to use the land for fifty years, significantly longer than expected, while construction is set to begin in the second half and completion is slated for the first quarter of 2021.

Mark Bartlett, chief executive of Strix, said: "Strix has achieved another solid performance despite continued challenges presented by the macro-economic conditions in which the group operates. 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 of our core business model."

Analysts from Canaccord said they were encouraged by the solid update, achieved in challenging markets, and news that the China relocation project remains on schedule.

"As the global leader within a niche market that offers structural growth, Strix is well placed to make long-term strategic decisions to create shareholder value. Its dominance of high margin, regulated kettle markets provides strong and sustainable cash flows, creating an attractive opportunity to reinvest in core product alongside complementary technologies to drive future growth," said analysts.

Strix Group's shares were down 0.63% at 159.00p at 1240 BST.

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