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STRIX GROUP PLC

Strix Group Q&A: Interim results & new product development (LON:KETL)

Strix Group PLC (LON:KETL) Chief Executive Officer Mark Bartlett caught up with DirectorsTalk for an exclusive interview to discuss their interim results, Brexit & the US/China tensions, new product development and the integration of HaloSource.

Q1: You published interim results for the six months ended 30th June, can you talk us through the highlights?

A1: It’s been a very busy first half of the year, financials are very positive year to date.

We’ve seen a 13% increase in the dividend payment and very confident of our full year profitability and committing to the 10% dividend for the full year.

We’ve invested in the new factory, we’ve actually got the new land agreement signed, we’ve already signed up the contractor for the building work and that is due to be completed in January 2021 so the factory is operational for August 2021 so all good there and on plan.

We also made an acquisition, in March of this year, a company called HaloSource so we’ve been working on the integration of that and it’s going very smoothly at the moment.

We’ve also introduced a new role of Chief Commercial Officer to really try and push the commercialisation of the new products as we continue to drive growth in some of those other segments.

On our standard products, we maintain share in all of three segments and the U9 in particular, which we launched at the back end of 2017, has been very very positive having filled more than 7 million controls so far.

Q2: With the geopolitical backdrop continuing to be turbulent, how are you finding the current market specifically in reference to Brexit and the China/US tensions?

A2: Our company is quite unique, most of our sales are between the Ilse of Man and China so the direct impact is quite limited for both Brexit and because of the trade tensions between US and China.

However, you do get some consumer confidence issues so we do see some dips in territories such as the UK but actually our products get fitted, clearly, into kettles that then go to over 100 countries worldwide.

So, we have quite a lot of diversification on the markets that does limit that impact so not too much of an issue for us as this point.

Q3: Just talking about products, what can you tell us about your new product development roadmap?

A3: We’ve been very busy on the product development side, we’ve had some very good collaborations with a number of brands.

So far this year, we’ve had a launch of Mr Coffee machines which is a single-serve coffee system and that actually launches in September in the USA, a very good household brand. We’ve also had our instant flow heating technology launched into China with the Zwilling brand, that is a true boil instant water dispense.

Just recently, we also launched the Philips branded water bottle from Astrea, part of the acquisition we made with HaloSource so that’s very exciting being introduced to consumers in Q1 of next year.

Q4: As you’ve just mentioned, HaloSource, you acquired their assets earlier this year. How has the integration gone and how is the water category as a whole progressing?

A4: The integration has gone very well, we had some very good resources when we acquired HaloSource. Strix Group have actually set up now an innovation centre in Seattle and that’s helping us to work with the rest of the products in the category to really try and differentiate those, particularly the branded products.

We also then had the two technologies of HaloSource, Astrea I’ve just mentioned, it’s certainly been very well accepted and the launch with Philips is obviously very positive and also, had some very positive links in the US with some of the shopping networks as well.

In terms of the overall category, the Aqua Optima was slightly slow in the first half of the year, primarily down to the consumer confidence and the focus in the UK. Certainly, for the second half, we’re very confident, we’ve got some very good launches going into China in the second half of the year and we’ve got some additional trade contracts for the European markets as well.

So, we’re quite confident about the second half of the year.