Strix shares drop despite revenue boost from Billi acquisition

Kettle controls firm sees revenue jump but cuts dividend to focus on debt reduction.

Strix shares drop despite revenue boost from Billi acquisition
Strix Group KETL

Shares in Strix Group (LSE: KETL) fell over 6% on Wednesday morning, despite the kettle safety controls firm reporting a 35% jump in annual revenue to £144.6 million, largely driven by the acquisition of Billi Australia Pty in 2022.

The group said the full-year inclusion of Billi revenues stood at £41.3 million, with the Australia-based supplier of premium filtered and non-filtered instant boiling, chilled and sparkling water systems "continuing to be highly profitable and strongly cash generative."

Pretax profit rose by 9.9% to £17.7 million as a result of the Billi acquisition. However, Strix declared a total dividend for 2023 of 0.9 pence per share, down 85% from 6.0p the year before, as it "remains focused on maximising cash generation to support debt reduction."

The firm will temporarily pause its final and interim dividend payments in 2024, but plans a return to a sustainable dividend pay-out ratio of 30% of adjusted profit after tax in 2025.

Strix stated it is undertaking a "rebasing" of its core business in 2024 to "build strong foundations for medium-term growth opportunities as the market continues to recover." It expects Billi's double-digit revenue and profit growth to continue, aided by expansion into key European markets.

The company remains focused on deleveraging and continues strategic investment into new products to accelerate growth in the medium-term.

Mark Bartlett, Strix Chief Executive Officer, said the group is "a resilient and highly cash generative business with the opportunity to expand its addressable market across all divisions." He expressed confidence in the medium-term prospects.

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