Strix Group PLC (LON:KETL), a global leader in kettle controls and water filtration technologies, is showing encouraging progress across its diversified operations despite facing headwinds in some divisions. The latest research note from Equity Development provides a detailed look at how the company is navigating the current environment, with new product launches and geographical expansion supporting growth, especially in its Billi and Consumer Goods segments.
Although overall revenues for the half year were down 8.5% to £60.5 million, this decline was largely due to temporary softness in the Controls division. The culprit? The indirect impact of US tariffs, which caused Chinese OEM customers to reduce orders and manage inventory levels more conservatively. Encouragingly, both Billi and Consumer Goods divisions bucked the trend, each posting 5% year-on-year revenue growth.
The report by analyst David O’Brien notes that “the production line of the next gen control is operational, with the launch expected in Q4 and several customers signed up.” This next-generation kettle control is not only more compact and efficient but also carries higher margins and environmental benefits due to reduced material use. Crucially, it expands the product application beyond kettles into other appliances like milk frothers and small blenders, opening new revenue streams.
The Billi division continues to be a standout performer. With new product launches such as OmniOne and the Multi-Function Tap, and further expansion in the UK and Southeast Asia, revenues rose 4.7% to £22.4 million. Its gross margin remains the highest within the group at 48.4%, underlining its strategic importance and potential for further scale.
Meanwhile, the Consumer Goods segment has successfully returned to growth after two years of decline. Following a strategic refocus and restructuring, the division delivered a 7% increase in revenue at constant exchange rates, buoyed by contract manufacturing wins and new white-label filtration products. Though margins dipped due to the shift in product mix, the volume growth provides a solid base for future profitability.
On the financial front, Strix ended H1 2025 with net debt of £76 million and a comfortable net debt/EBITDA ratio of 2.21x, well within revised banking covenants. Equity Development values the company at 95p per share, significantly above its current market price of 46p, reinforcing investor confidence in its medium-term prospects.
Key Highlights from H1 2025 Results:
- Group Revenue: £60.5m (down 8.5% YoY)
- Billi Revenue: £22.4m (up 5.0% YoY)
- Consumer Goods Revenue: £14.9m (up 5.0% YoY)
- Controls Revenue: £23.1m (down 24.2% YoY)
- Adjusted PBT: £6.1m (down 22.8% YoY)
- Net Debt: £76.0m
- Net debt/EBITDA: 2.21x
- Gross Margin: 36.3%
- No interim dividend declared
David O’Brien further states, “We think it is reasonable to assume that as demand returns and/or when OEM inventory levels need to be replenished, orders will return. The timing of this is, not surprisingly, uncertain.”
On a Final Note, Strix Group continues to evolve beyond its roots in kettle controls, with strategic investments in new product lines and geographies paying off. While near-term volatility in the Controls division may persist, the long-term outlook remains favourable. Investors and stakeholders will be watching closely for the November trading update, which could provide the next catalyst for share price recovery.
