The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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CEO buying £50k worth of shares suggests he has confidence in Kettle Controls returning to pre-Covid sales. If that happens and Billi continues on its current path, we should expect faster deleveraging which should benefit the shares.
Nice to see a director buy, and happy that the market also thinks the board has done the right thing by cancelling the div.
Mark Bartlett, CEO, and Clare Foster, CFO, of Strix Group plc (AIM: KETL) held an Investor Presentation covering their Full Year results. Management discussed the pace of recovery within Kettle Controls, the rationalisation that is ongoing within Consumer Goods, and the strong growth at Billi and Laica. They also examined their progress in paying down debt and the temporary pause in the dividend. Questions from investors were answered at the end.
Link to video:
https://www.equitydevelopment.co.uk/research/investor-presentation-qa-video-with-management-team-fy23-results
ED, thanks for posting. The new CFO seems to be very competent. This company I do feel is one that in a few years time you’ll be kicking yourself for not investing more (hopefully).
Mark Bartlett, CEO, and Clare Foster, CFO, of Strix Group plc answered a series of questions following publication of FY23 results for the 12 months ended 31st December 2023. Subjects ranged from growth in kettle controls to the dividend and Billi, as well as the outlook for the company. The interview is available to see below.
In a separate video, the team conducted an Investor Presentation where they discussed highlights of the period, provided a Financial review, and went into detail on performance and prospects for each of the Group's business categories.
Both videos have been divided into chapters for ease of viewing: https://www.equitydevelopment.co.uk/research/investor-presentation-video-/-qa-with-management-team-fy23-results
Https://www.manxradio.com/news/isle-of-man-news/strix-to-partially-close-ramsey-factory/
Haven’t read through the results yet but this was reported today.
Totally agree unhooked, why the hell they paid a div, who knows, but a different CFO now, so lets see. It's not often I say this but a rights issue should be discussed by the board (all funds to pay down debt).
Well, that's the divi gone. Classic! Poor management & capital allocation from the previous lot has reduced what was a highly profitable cash-generative business to one that got itself into so much debt that it has had to stop paying divis for a year. Not terribly happy. Long road back.
To me it looks like management have done the right thing. Loan covenant pushed to 2.75x from 2.25x which removes the right of a rights issue. In return they have cancelled the dividend for 2024. I think this is the right business decision. I’m happy to be patient as I do think Strix has tremendous potential once Kettle controls starts firing on all cylinders. Happy to stay on board.
Positives emerged, particularly in H2, as the recovery commenced within the kettle controls market.
Billi was the architect of the revenue improvement, with LAICA also delivering a double-digit increase in the top line. Margins improved, notwithstanding a change in the mix.
Encouragingly, investor concerns on debt were allayed with the careful management of cash, and latterly as bankers raised the net debt/EBITDA covenant to 2.75x. With further emphasis on costs and cash conservation and a likelihood that its markets will begin to deliver more meaningful recovery in H2, none of this good news looks factored into the current valuation.
The focus is shifting from survival to recovery and as such, we increase our fair value / share to 173p (149p).
Link to research report: https://www.equitydevelopment.co.uk/research/billi-drives-top-line-growth
Well, not too assured, HY results webcast the company while answering a question about why pay a Div, why not use it for debt, said our II expects a Div so we can afford to give a small one. Now final has been cancelled. Personally they shouldn’t have pay the HY one as well. Apart from that, looks like the corner has been turn. Will spend time later going through the results.
Where is this going? Just over a week before results. Can’t believe back to low 60’s will we see 50’s again? Not selling, happy to wait and see hopefully we will see some green shoots (bamboo ones).
We are pleased to host the senior management of Strix Group plc, the global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components, for an Investor Presentation covering the company's Preliminary Results for the twelve month period ended 31 December 2023.
The online presentation will be hosted by Mark Bartlett, CEO, and Clare Foster, CFO.
This event will take place at 2.00pm on Tuesday 2nd April. The webinar is open to all existing and potential shareholders, and you may register below.
Questions can be submitted during the presentation to be addressed at the end.
Link to sign up: https://www.equitydevelopment.co.uk/news-and-events/strix-investorpresentation-2april2024
A good sign now would be the new CFO investing her money in a decent amount of shares.
Research note here: https://www.equitydevelopment.co.uk/research/strong-h2-cash-flow
There are several encouraging messages which jump out from Strix’s trading update released today, led crucially by the strong cash generation during H2. This has enabled the Group to come in below the year end banking covenant test, thereby removing significant risk from the rating. In addition, the strong performance of Billi and LAICA has largely offset the slower than expected recovery within the regulated kettle controls market, resulting in FY23 numbers modestly below expectations at the adj. EPS level.
With significant scope for recovery in its key market and the focus switching to the most profitable areas, we expect a marked uplift in profitability and its share rating over the medium term.
Nothing bad, but still headwinds. Happy to carry on holding.
I think it maybe next week, going on the last two years. Some reason I had w/c 15th Jan, but can’t find where I got that from.
Got to say I'm a bit nervous about it. China still very weak, but staying with it and may add on any drop.
On a bit of a roll the last few weeks up to 67/68p but on diminishing volume. Nevertheless always good to raise the base level from which to rise again on better news. Holding and hoping.
Yep, something is not quite right, but I’m sticking with it for now. I’ve got the next update week commencing 15th Jan. I still think we will see headwinds in that one but hoping for a 2024 recovery back to above 100 would be a start.
I agree with Morbox, a CFO does not retire with immediate effect. Personal or family reasons would be in the statement if that was the case. Something's not quite right here.
My hunch is it'll be good for the business overall and reassuring to have an experienced non-exec temporarily takeover before a permanent replacement is found. Though I wonder if financial insects are about to crawl out of the woodwork.
The covenant dropping to a 2.25x ceiling at the end of December instead of September makes me question how much others already knew. Mr Thompson’s IC article was either incorrect at the time or he already knew more than other investors had been told.
I am unsure whether to be optimistic or pessimistic following this RNS. The next update will be interesting.
Lenders to Strix Group have agreed to temporarily ease its key banking covenant, and CFO announces retirement. Our forecasts are unchanged, but fair value adjusts to 167p per share.
Read / hear summary of new note below:
https://www.equitydevelopment.co.uk/research/temporary-relaxation-of-covenants
Didn't like the CFO myself but does have a large amount of shares.....
However they’ve dressed this up, imo it looks like a falling out to me. No CFO retires with immediate effect. The good news is that “ Strix also announces that it has proactively engaged and agreed with its banking syndicate a leverage ratio covenant relaxation to 2.5x in September 2023 and will then revert to 2.25x as at December 2023.” I did have concerns it would be breached and shows some flexibility.
Or is it Farringdon Capital Management, dutch-based, in fact. Their Factsheets don't indicate the greatest investment performance. Still, good to have buyers.