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Strix Group Plc Solid year of trading and encouraging progress in strategic priorities

Strix Group Plc (NEX: KETL), the global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components, today announced its audited results for the year ended 31 December 2018.

Mark Bartlett, CEO of Strix Group Plc, commented:

“We are pleased to report a solid year of trading for Strix in 2018. We continued to make encouraging progress with our strategic priorities which enabled us to maintain our global market share of around 38% amidst a challenging geo-political climate.

Aqua Optima has continued to show strong growth and we secured a market share within the UK of 25%. We also launched the Aqua Optima Water Filter Recycling Initiative, which allows consumers of Aqua Optima filtration systems to recycle their products from home or at hundreds of TerraCycle collecting locations across the UK.

We saw positive progress on the U9 series of controls and since its launch in 2017 we have sold nearly 3 million units. With this in mind, we have entered 2019 with the most diversified product portfolio Strix has had to date, providing access to all global markets.

Intellectual property protection remains a key focus of the business to ensure defence of our technology and products in order to maintain the value of our brand. In 2018, we concluded the highest number of cases in any one year and we continue to monitor the market for copyists and ensure that consumers, our customers and our brand are protected.

We have continued to focus on manufacturing and production quality which has led to an 11% improvement in ppm, and we are continuing to invest in automation to further improve production efficiency and quality.

The Board are delighted to announce a proposed final dividend of 4.7p, equating to a total dividend of 7.0p per share for 2018. We look forward to the year ahead and remain confident about our full year outlook for 2019.”

Financial summary

 Adjusted results1
Revenue – constant currency basis295.391.3+4.5%
Gross profit38.937.2+4.6%
Operating profit30.929.1+6.2%
Profit before tax29.228.3+3.2%
Profit after tax28.327.5+2.7%
Net debt27.545.9+40.1%
Net cash generated from operating activities35.033.8+3.4%
Basic earnings per share14.9p14.5p+2.8% 
Final dividend per share4.7p1.9p+147.4% 
  1. Adjusted results exclude exceptional items, which include share based payment transactions. Adjusted results are non-GAAP metrics used by management and are not an IFRS disclosure. A table which shows both Adjusted and Reported results is included in the Chief Financial Officer’s review.
  2. Revenue – constant currency basis, which is defined as 2018 revenue restated at the exchange rates prevailing in 2017, is a non-GAAP metric used by management and is not an IFRS disclosure.
  3. EBITDA, which is defined as earnings before finance costs, tax, depreciation and amortisation, is a non-GAAP metric used by management and is not an IFRS disclosure.
  4. Figures are calculated from the full numbers as presented in the consolidated financial statements.

2018 in summary

Financial highlights

· Solid performance during 2018 including a 7.9% growth in sales volumes and 2.7% in net sales, rising to 4.5% on a constant currency basis, in line with expectations.

· Careful cost management has allowed us to report a gross profit margin of 41.5% (2017: 40.7%).

· Net debt reduced to £27.5m, a 40.1% reduction since December 2017 (£45.9m).

· OCF / EBITDA cash conversion ratio of 89.4% (2017: 88.0%).

· Proposed final dividend of 4.7p, with total dividends of 7.0p for the full year.

Operational highlights

· 2.7m U9 series products sold to date following the successful launch in 2017.

· A further eight successful Intellectual Property protection initiatives undertaken, the highest number of cases concluded in any one year.

· Further growth in Aqua Optima has led to a volume share of c.25% of the UK market for own-brand and trade-brand combined.

· Continued focus on manufacturing and production quality led to an 11% improvement in ppm.

Strategic highlights

· Maintained market share of c.38% of the global kettle controls market despite geo-political events.

· Appointment of a Chief Commercial Officer from 1 April 2019 and further strengthening of the R&D and senior management teams.

· After the period end, completed acquisition of specified assets from HaloSource Corporation for consideration of US$1.33m in March 2019 to expand the water filtration division.

· Investment agreement signed with the local government for the relocation of our manufacturing operation in China to support future growth.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.