Strix reports promising signs of kettle control market recovery

20th Jun 2024 12:44

(Sharecast News) - Kettle safety and water technology specialist Strix issued an optimistic update on Thursday, reporting promising signs of recovery in the kettle controls market as the peak season approached.

The AIM-traded firm, which was holding its annual general meeting, said that while it was early to discern whether the uptick ws due to stock refill or increased consumer demand, initial indicators were encouraging.

For the full 2024 year, Strix expected profit before tax to align with current market expectations.

The company said its cash conservation efforts in the first half had resulted in cash generation slightly exceeding expectations, supporting an anticipated net debt leverage position of less than 2.0x.

It said its recent 5% equity placing had led to a reduction in net debt leverage four to six months earlier than planned, leading to interest savings due to the margin ratchet mechanism within the current facilities.

That acceleration would aid upcoming discussions and refinancing plans with the group's banking syndicate.

"It remains the company's intention to finalise a full refinance of its banking facilities in 2025 to advance the group's growth aspirations," said chief executive officer Mark Bartlett.

"Accelerated deleveraging will enable the Group to expedite its investment in new technologies, to support longer term growth opportunities while still delivering on its stated target to reduce net debt leverage to 1.5x by the end of the 2025 financial year."

Bartlett said once that debt leverage target was achieved, the board remained committed to maintaining a leverage range of between 1.0x and 2.0x for the medium term.

"Restructuring initiatives continue to be implemented across the group to drive profitable growth, support improved efficiency, sustainability and cost control, whilst securing a suitable platform and resources for our mid-term growth objectives."

Strix said it would release a pre-close trading Update for the six months ended 30 June on 25 July.

At 1548 BST, shares in Strix Group were up 1.31% at 85.3p.

Reporting by Josh White for Sharecast.com.