Strix Group (KETL) H1 2024 earnings summary

Executive summary

• Revenue grew 3.5% to £67.2m (at CER), driven by strong Kettle Controls and a positive sales mix toward higher margin markets.

• Adjusted gross margin improved to 40%, up 320bps year-over-year, reflecting product mix and operational efficiencies.

• Net debt leverage reduced to 1.76x (FY23: 2.19x), ahead of FY24 target, supported by strong cash management and equity placing.

• Significant restructuring included partial relocation of manufacturing, planned disposal of Halopure, and streamlining of Consumer Goods.

• FY24 results expected in line with market expectations despite macro uncertainties and Q3 trading volatility.

Financial highlights

• Adjusted revenue: £67.2m (+3.5% CER); adjusted PBT up 15.9%; adjusted EBITDA rose 8.3% to £16.9m, margin 25.1%.

• Adjusted operating cash flow conversion ratio improved to 115%.

• Net debt reduced to £68.8m (down £14.9m from FY23); net debt leverage at 1.76x.

• Working capital as a percentage of sales decreased to 7.6% (FY23: 16.7%).

• GAAP loss before tax: £3.8m, driven by £10.9m in non-recurring adjusting items.

Outlook and guidance

• On track to achieve net debt leverage of 1.5x ahead of FY25.

• FY24 results expected in line with market expectations despite macro uncertainties and lower Q3 trading in regulated kettle controls.

• Billi division expected to deliver high single digit growth for FY24.

• Consumer Goods restructure positions the division for profitable medium-term growth.

• Continued investment in technology and innovation planned, supported by balance sheet strength.