Strix Group PLC (LON:KETL), a global leader in kettle controls and water filtration technologies, is taking proactive steps to reshape its financial outlook and reinforce shareholder value. According to the latest research note from Equity Development, the company is addressing challenges head-on with decisive actions that signal a strategic shift in direction.
While the Controls division has experienced a slower-than-expected recovery, other segments of the business are progressing well. The Billi and Consumer Goods divisions are both performing to plan, with Billi in particular continuing its trajectory of double-digit growth thanks to new product launches and geographic expansion across Europe and the APAC region. This has been supported by the recent opening of a new 70% larger headquarters and manufacturing facility in Melbourne.
Research analyst David O’Brien notes, “The company’s response to the latest reduction in estimates is a significant one. A refocus on accelerating debt reduction by decreasing production volumes at its Chinese manufacturing facility, in turn should allow the Group to sell down its inventory and generate cash of c.£8m by March 2026.” He adds that a further £2m will come from debt factoring in Italy, combined with a comprehensive review of operational and capital expenditure, which could see the net debt/EBITDA ratio fall to 1.5x within 12–18 months.
These measures are part of a broader strategy to enhance shareholder value. Although full-year dividend payments have been suspended to prioritise debt reduction, Equity Development believes this disciplined approach positions Strix for longer-term gains. The fair value estimate has been revised to 89p per share – a meaningful premium to the current market price of 36p.
Equity Development’s analysis also points out encouraging signs from recent industry events, such as the Canton Fair in October, which led to an uptick in customer enquiries. Notably, Chinese OEMs are becoming more engaged post-tariff disruptions, suggesting potential recovery in Strix’s core markets.
Strix retains a dominant position in its largest market – kettle controls – and is actively defending its intellectual property from low-cost copyists. The Controls division remains strategically important, with new low-cost and next-generation products widening market access and potentially reclaiming lost share.
FY25 Operational Highlights:
- Revenue forecast: £163m for the 15 months to March 2026
- Adjusted PBT: £14.7m
- Adjusted EPS: 5.4p
- Dividend: Cancelled for FY24 and FY25
- Net debt reduction target: From £70.3m to c.£64m by March 2026
- Debt/EBITDA goal: Reduce to 1.5x within 12–18 months
- Billi: Continued strong growth with new facility and expanded product range
- Consumer Goods: Rebound with +5% revenue growth at actual exchange rates
On a Final Note
With a focused effort on financial discipline and a clear roadmap for strengthening its balance sheet, Strix Group is laying the groundwork for sustainable recovery. While challenges remain in the Controls division, the company’s diversified portfolio and commitment to operational efficiency provide reasons for cautious optimism. As David O’Brien remarks, “This suggests that no sensible options are being ruled out,” hinting at further strategic moves that could unlock value for shareholders in the near future.
