Strix Group Plc (LON:KETL), the global leader in the design, manufacture and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management and water filtration, has announced a trading update, cost optimisation programme and CEO update.
Review of the Last Six Months & Trading Update
Back in September 2025, in the face of the macroeconomic challenges, a marked slowdown in the Controls division in Q225, a backdrop of increasing commodity prices and to support a future refinance, the Board announced decisions at the time to implement an accelerated debt reduction programme. Subsequently in Q425, the Board received an unsolicited offer for the Billi division, and concluded that it was a sufficiently attractive offer and the optimal time to dispose of this division, bringing the Group back into a strong net cash position and removing the reliance on future debt funding.
As part of the accelerated debt reduction programme, the Group set a target to reduce inventory on hand in the Controls division by c.£8 million in the last six months of the financial period. This resulted in a significant restructuring of production volumes in the Group’s Chinese manufacturing facility which, coupled with the ongoing trading improvements, has enabled this reduction to be achieved ahead of schedule by 31 December 2025.
As has been widely reported, copper and silver commodity prices have increased significantly (c.50% and c.300% respectively) since the start of 2025, with heightened volatility especially in the price of silver in Q126. Due to the focus on debt reduction, the Company had reduced capacity to take actions to manage the impact of this via forward funding. However separately, and consistent with its Chinese competitors in the market, the Group has initiated a product price increase process ahead of Chinese New Year, with the expectation that these will be executed for most Controls customers ahead of the financial period end.
Whilst market conditions remain challenging, Strix is encouraged to report that the early indications of post-tariff improvement in the Controls division that it experienced in Q425 have continued to build in early 2026. With trading volumes, most notably in the lower margin, less regulated markets to date, and order books for March, now holding at consistently higher levels than the Group saw in Q125.
However, what the Group has not experienced to date, is any anticipated catch-up of volumes lost over the course of 2025, particularly in the regulated markets, which it had previously anticipated to come through in the run-up to the busier April to June production period. Alongside this, the Board has made the commercial decision to reduce seasonal promotional activity in the final quarter.
The Group will continue to monitor production volumes and inventory levels closely, to ensure that ongoing balance sheet efficiency is appropriately balanced against further trading levels increases.
As a result of the above, the Group now expects to generate revenue of c.£150 million and adjusted profit before tax in the range of £9.8 million to 10.2 million for the financial period ending 31 March 2026 (“FY26”).
Following its restructuring last year, the Consumer Goods division has returned to growth. Whilst the small domestic appliance market continues to experience high levels of volatility, a number of important operational and product innovation initiatives were delivered that have strengthened the division’s competitive position and broadened its product offering, which are expected to support ongoing sustainable growth.
Cost Optimisation Programme
The recent completion of the disposal of Billi provides the opportunity to optimise how the Group operates, rightsizing the business to match demand and streamlining spending to invest in growth.
The Group has commenced a cost optimisation programme based on defined initiatives, which initially aims to deliver gross annualised savings, before investments of c.£2 million over the next 18 months. The Company will provide further details of its progress in this regard as part of the 31 March 2026 results announcement, but tangible results are already starting to be delivered.
Disposal
The successful completion of the disposal of Billi was announced on 30 January 2026, generating net proceeds (after estimated closing adjustments) of c.£105 million. This transaction provides an immediate return to balance sheet strength, leaving the Group with a strong net cash position on completion of c.£35 million. In the immediate term, the Group has used the net proceeds of the disposal to repay its existing multi-bank debt facilities, retaining a smaller undrawn one-bank revolving credit facility of £25 million.
The Group continues to be highly cash generative at the operating level, due to beneficial trading structures with its Chinese OEM customer base. With net interest costs now significantly reduced (<£1 million per annum; CY25: c.£7.5 million), Strix will retain more of this cash within the business to meet strategic investment growth opportunities.
The initial £10 million share buyback programme commenced on 4 February 2026. So far as part of the share buyback programme, 2,993,329 million shares (c.£1.5 million) have been purchased at an average price of c.48.7p. In the short-term, the Board continues to review ways of efficiently returning additional capital to shareholders. A full Capital Allocation Framework will be announced later in the year as part of a wider strategic update.
In connection with the disposal, the Company has agreed heads of terms for a manufacturing and development agreement, to provide engineering, research and development support to Billi going forward. This has the potential to result in a longer-term manufacturing partnership and therefore allow Strix to benefit financially from Billi’s growth under its new ownership. The Company will be working with Rachel Pallett in her new capacity as the CEO of Billi.
CEO update
Strix Group’s process to recruit a new CEO, which is being led by Gary Lamb, Chairman is ongoing and a further announcement will be made prior to Mark Bartlett stepping down at the end of May 2026.
