Strix Group PLC on Wednesday said its pretax profit fell by over 40% in its latest half year and reduced its interim dividend, but announced new and optimistic medium-term goals.
The stock tumbled 41% to 54.42 pence in London on Wednesday.
Strix, an Isle of Man-based provider of kettle safety controls, said its pretax profit for the first half of 2023 dropped 41% to £6.8 million from £11.6 million the year before.
Revenue however increased 29% to £65.2 million from £50.7 million, and gross profit increased 23% to £23.9 million from £19.5 million.
Strix noted its acquisition of Billi Australia Pty Ltd, Billi New Zealand Ltd and Billi UK Ltd in November last year as a key factor in its 2023 performance. It attributed the revenue increase to a £21.5 million first-time contribution from Billi.
However, Strix also said the acquisition caused its net debt to increase to £93.1 million at June 30, up 52% from £6.1 million at the same time last year.
Due to the increased net debt, Strix reduced its interim dividend by 67% for the period to 0.9p per share from 2.75p the year before. The firm thus intends to balance its capital allocation priorities as part of a ‘prudent’ approach to reduce its debt.
‘The continued macro headwinds have resulted in a reduction in demand in kettle controls in the key export regulated markets of UK and Germany during H1 and a slower than anticipated recovery,’ commented Chief Executive Officer Mark Bartlett.
He added: ‘Whilst recent order rates are tracking in a positive direction, we now anticipate the path to a return of normalised growth to take longer and for there to be a decrease in the short term revenues within this category.’
Despite the ‘short-term headwinds,’ however, Strix also on Wednesday unveiled a set of new ‘Strategic Business Objectives’ to be delivered by the end of 2026. These include revenue between £107 million and £206 million, and gross profit of £42 million to £80 million, including revenue of £58 million with gross profit in excess of 45% from Billi.
Bartlett said these new goals ‘[reflect] the attractiveness of the underlying markets that [Strix] operates within’.
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