Strix Group Plc (LON:KETL) has announced a pre-close trading update for the year ended 31 December 2022.
Despite the challenging macroeconomic and geopolitical environment, Strix has achieved adjusted profit after tax for the full year of approximately £23m, which is in line with previous guidance given at the trading update on 30 November 2022.
Whilst the uncertainty across a number of Strix’s key export markets in Q4 remains, the disruptive effects of ongoing lockdowns being enforced in China are now beginning to show signs of abating following the recent changes in government policies and it is now anticipated that the Chinese economy will see an improvement in Q2 2023.
Strix is continuing to implement a range of strategic initiatives in order to minimise the impact of the headwinds it is facing. These include a new internal restructuring programme and a focus on the reduction of inventory in order to maximise cash generation for the Group.
Following the completion of the acquisition of Billi on 30 November 2022, the integration remains on track and the Company is confident in the financial performance of the business and delivering synergies in line with expectations. Billi has a strong pipeline of orders, distributors appointed in Asia that are already starting to deliver results and further new product launches planned for Q2. Billi has a successful history of growth, with double digit CAGR over the past five years and is highly cash generative.
Strix is focused and committed to returning to its core operating model of being highly cash generative with no further M&A activity or investment into new factory builds, significantly reduced capex and working capital over the medium term.
The Group’s net debt(1) was £87m as at 31 December 2022. Capital allocation decisions will prioritise debt reduction with a clear plan to get net debt / EBITDA to below 2.0x during 2023 and the Board is currently reviewing the level of the final dividend and further details will be provided at the Preliminary Results.
During the period, the Group also delivered against its scope 1 & 2 net zero targets ahead of its original target.
Notice of Results
The Group will announce its Preliminary Results for the twelve month period ended 31 December 2022 on 29 March 2023.
(1) Net debt excludes the impact of IFRS 16 lease liabilities, pension liabilities, deferred tax liabilities and earn-out provisions on satisfaction of performance conditions.