Strix results lift shares

Shares in AIM-listed kettle company Strix Group (LON:KETL) climbed by 10.83% to 131p (as of 15:20 GMT) after the firm reported results for the year ended 31st December. Adjusted pre-tax profits rose by 9.9% and gross margins also improved when excluding the effects of the HaloSource acquisition.

CEO Mark Bartlett commented: “Following on from our successful results in 2018, we are pleased to report another year of solid trading performance in 2019. We continue to focus on our strategic priorities which has enabled us to retain our c.54% global market value share amidst a challenging geo-political climate.

“During the year, we have continued to execute on our organic and inorganic strategy for growth through the acquisition of HaloSource in March 2019 and the construction of a new factory in China, where we have signed a £13.9m construction contract and commenced construction.

“We remain committed to consumer safety where we continue to initiate regulatory enforcement actions to remove unsafe and poor quality products from the market. Defence of intellectual property remains a core function of our business which is important in achieving the Group’s growth potential.

“We have maintained our focus on manufacturing and production quality which has led to a 29% improvement in customer quality parts per million. The Group continues to invest in automation and lean initiatives which will further enhance production efficiency and quality.

“The Group’s high ROCE and high proportion of cash in advance payment terms limit the risk of non-payment and working capital fluctuations. This along with a robust balance sheet provide the Board with continued confidence in the Group’s future growth prospects.

“The Board are delighted to announce a proposed final dividend of 5.1p, resulting in a total dividend of 7.7p per share for 2019.

“We have been extremely proud of the response of our leaders to the unprecedented situation as a result of COVID-19, with minimal impact to date. The Group’s manufacturing operations in China have recovered with a c.100% production capacity and operational supply chain which is sufficient to meet customer demand. The Group will continue to focus on a prudent allocation of capital and be vigilant about the broader implications of COVID-19 which will include daily monitoring of consumer and brand demand. As a result, the Group is working on several strategic initiatives, including new products and efficiency measures, to minimise the impact to full year forecasts”.