Recovery slow, new strategy in place
After early signs of green shoots during Q2, what is clear is that customers are mindful of conserving cash – ordering frequently but in lower volumes. As such and notwithstanding a very positive maiden H1 contribution from Billi, profitability has declined. The Board’s response includes a fine-tuning of strategy, focusing on the most promising new products, cross-selling between brands, distribution agreements in new territories, online product launches and adjustments to the Group’s capital allocation policy. We have reduced FY23 and FY24 estimates, including the dividend. However, the medium-term objectives suggest strong upside in revenue and profitability to FY26.We have reduced our fair value / share to 180p (vs 216p) to reflect the slower recovery in FY23. While investors will be disappointed in the short-term outcome, the guidance out to FY26 is encouraging. At the current share price, this values the business on a FY26 EV/EBITDA of c.4.9x and PER of 6.0x. Our revised fair value is a premium to the current share price of 97%.
Strix Group is a holding company. Through its subsidiaries, Co. is engaged in the designing, manufacturing and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management and water filtration. Co.'s core products are kettle safety controls, which are responsible for disconnecting the power to the heating element when either water has boiled, operated with no water present, or in some products when the kettle is lifted off its base.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.