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(Alliance News) - Strix Group PLC on Wednesday said its pretax profit fell by over 40% in its latest half year and reduced its interim dividend, but announced new and optimistic medium-term goals.
The stock tumbled 41% to 54.42 pence in London on Wednesday.
Strix, an Isle of Man-based provider of kettle safety controls, said its pretax profit for the first half of 2023 dropped 41% to GBP6.8 million from GBP11.6 million the year before.
Revenue however increased 29% to GBP65.2 million from GBP50.7 million, and gross profit increased 23% to GBP23.9 million from GBP19.5 million.
Strix noted its acquisition of Billi Australia Pty Ltd, Billi New Zealand Ltd and Billi UK Ltd in November last year as a key factor in its 2023 performance. It attributed the revenue increase to a GBP21.5 million first-time contribution from Billi.
However, Strix also said the acquisition caused its net debt to increase to GBP93.1 million at June 30, up 52% from GBP6.1 million at the same time last year.
Due to the increased net debt, Strix reduced its interim dividend by 67% for the period to 0.9p per share from 2.75p the year before. The firm thus intends to balance its capital allocation priorities as part of a "prudent" approach to reduce its debt.
"The continued macro headwinds have resulted in a reduction in demand in kettle controls in the key export regulated markets of UK and Germany during H1 and a slower than anticipated recovery," commented Chief Executive Officer Mark Bartlett.
He added: "Whilst recent order rates are tracking in a positive direction, we now anticipate the path to a return of normalised growth to take longer and for there to be a decrease in the short term revenues within this category."
Despite the "short-term headwinds," however, Strix also on Wednesday unveiled a set of new "Strategic Business Objectives" to be delivered by the end of 2026. These include revenue between GBP107 million and GBP206 million, and gross profit of GBP42 million to GBP80 million, including revenue of GBP58 million with gross profit in excess of 45% from Billi.
Bartlett said these new goals "[reflect] the attractiveness of the underlying markets that [Strix] operates within".
By Emma Curzon, Alliance News reporter
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