Strix Group PLC (LON:KETL) Chief Executive Officer Mark Bartlett caught up with DirectorsTalk for an exclusive interview to discuss their latest results, launch of their U9 products, maintaining market share and the company strategy for near and long-term.
Q1: Congratulations on a good set of results, can you talk us through the highlights?
A1: Since listing a year ago, we have seen quite a transformation in the business. The focus now is much more on investing in the future, to add shareholder value and we are very confident of meeting our full year market expectations.
Some of the highlights this year would include significant growth in our Aqua Optima segment which has actually grown by around 88% after making some strengthening to the team. Also, on our U9 series of controls, completely new range of controls that we launched, gained some very good traction, we’ve now produced over 1.1 million units in the first half of the year with very positive reactions from the marketplace.
On the operations side, we’ve captured a lot of efficiencies from improvements and investments in our automated lines, actually adding 2 further automated lines during the first half of the year, bringing the total now to 6. Really improving our quality and efficiency in their operations.
From a cash generative point of view, in the past we’ve always very strong cash generation, first half of the year has been no exception with a cash ratio of 97%, giving us great confidence to announce an interim dividend of 2.3p which is inline with the market expectations.
Q2: You has had a successful launch of the U9 products with over 1.1 million controls produced, can you tell me more about this?
A2: The U9 control has been quite a significant development within our control portfolio. It is the first control we have designed to be fully automated in production which gives us a very strong improvement in our cost base but also improves our efficiency and quality. It gives us now a best in class control in terms of specification at a very competitive cost. The design of the control is very much a modular design which allows us to configure it to compete effectively in all of the market segments and also will help us obviously to capture share and continue the growth going forward.
Q3: How do you think Strix have managed to maintain their market share of around 38%?
A3: With the addition of the U9 series, we have a really comprehensive range of products in our portfolio that allows us now to compete across all markets with a best in class control and in all segments.
In addition, we have continued to take both the safety and IP actions to product our global share and also to protect consumers to ensure that infringing products or low-quality products are withdrawn from the market. In the first 6 months, we’ve had some quite good cases, we actually managed to get 19 infringing kettles removed in China which were electric kettles that infringed our IP and we’ve also seen 8 products removed from internet sales across Europe. So, certainly, that’s an activity we continue to take.
Q4: Moving forward Mark, how would you describe Strix Group strategy in the near and long term?
A4: Strategy going forward really can be split into three segments for our business and it’s quite clear.
Firstly, in the core markets, the kettle control business, we continue to evolve our products and really trying to raise the bar in the marketplace providing best in class products at competitive prices, so we can make sure we can continue to grow our market share.
In the Aqua Optima part of our business, we continue to increase the distribution across Europe following the success we’ve had in the first half of this year in the UK. We’re also going to launch our portfolio of products into China later this year with our partner OEM.
Finally, on the third segment, our new product segment, really continuing to leverage on our existing patented technologies following some quite detailed consumer research which is going to focus on what we call the ‘hot water on demand’ category. That will include things like water dispensers, further baby products and also a move into the coffee segment, leveraging on some of the relationships with brands and OEMs we’ve built over the years.
So, plenty to do and plenty of opportunities.