Today’s interim results to June demonstrated strong progress, particularly in improving margins. The company's decision to exit price-sensitive kettle control markets and focus on higher-margin products in the Consumer Goods division has driven a rise in gross margins. Revenue in the kettle controls market increased by 5.9%, with strong growth in regulated markets like the US, UK, and Netherlands. Strix aims to enhance its market share through product launches and improved distribution, especially in Europe.
Strix's indebtedness has decreased significantly, with net debt falling to £68.8m from £83.7m, putting the company on track to achieve its goal of a net debt/EBITDA ratio of 1.5x by FY25.
While H1 results were positive, Q3 volatility in some markets, particularly in China, poses challenges. The forecast for FY24 and FY25 has been adjusted, with a slight decrease in expected revenues and profits due to these challenges. Nevertheless, the group's long-term outlook remains optimistic. Strix remains focused on innovation and margin growth, with upcoming product launches expected to positively impact future performance.
All things considered, the share price still looks to be trading at 50% - 60% of intrinsic value.
Today’s interim results to June demonstrated strong progress, particularly in improving margins. The company's decision to exit price-sensitive kettle control markets and focus on higher-margin products in the Consumer Goods division has driven a rise in gross margins. Revenue in the kettle controls market increased by 5.9%, with strong growth in regulated markets like the US, UK, and Netherlands. Strix aims to enhance its market share through product launches and improved distribution, especially in Europe.
Strix's indebtedness has decreased significantly, with net debt falling to £68.8m from £83.7m, putting the company on track to achieve its goal of a net debt/EBITDA ratio of 1.5x by FY25.
While H1 results were positive, Q3 volatility in some markets, particularly in China, poses challenges. The forecast for FY24 and FY25 has been adjusted, with a slight decrease in expected revenues and profits due to these challenges. Nevertheless, the group's long-term outlook remains optimistic. Strix remains focused on innovation and margin growth, with upcoming product launches expected to positively impact future performance.
All things considered, the share price still looks to be trading at 50% - 60% of intrinsic value.