Strong recovery gathering steam
Record interim results were driven by a combination of increased demand, as Strix’s key markets emerged from the pandemic-led recession, and the acquisition of LAICA in October 2020. The new manufacturing facility opened in Guangzhou Province, with the level of production automation rising to 73% and significant capacity remaining to facilitate a further expansion in activity levels.Several new products were launched, not least Aurora in June in the UK, with an encouraging pipeline for H2 and into FY22. Although gross profits improved 48.6% y-o-y, margins declined, which predominantly reflected the lower returns at LAICA. The record H1 profitability and an encouraging H2 pipeline of product launches allowed Strix to increase the dividend by 5.8% to 2.75p.
Our key valuation model suggests that Strix is currently trading on a discount of between 5% and 28% relative to the peer group averages. We have increased our Fair Value to 400p/share.
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.
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