Global leader in the design and manufacture of kettle safety controls Strix (KETL:AIM)  reported half-year revenues to 30 June down 21% to £34.7 million and operating profits down 12.5% to £10.6 million.

The company also announced it has entered into an agreement to acquire LAICA, an Italian water purification and small household appliance company for an initial €19.6 million. The shares dropped 3% to 230.5p.


The initial consideration represents 6.8 times LAICA’s 2019 earnings before interest, taxes, depreciation and amortisation (EBITDA) while the total consideration could represent up to 10.9 times if certain profitability targets are met.

The purchase increases net debt to EBITDA to 1.4 times, although management expects the ratio to fall to 1.2 times by December 2021.

The company is laying out €11.6 million in cash and €8 million in Strix shares with a potential earn-out of a further €12 million in cash.

Management believe the acquisition will broaden its water category and enhance the group’s presence in the health and wellness, enabling it to capitalise on double-digit growth of global sales for both the small domestic appliance and water markets.

The company believes there are ‘significant synergies available’ from the combination in terms of the complementary geographical presence and products, while also alluding to cost saving benefits.

LAICA’s product range includes pitcher water filters, filter replacements, water dispensers, bottle filters and filters for coffee machines.


The company has reduced costs and made efficiency gains which boosted gross margins to 39.7% from 37.9%. Continued investment in automation resulted in a further three production lines becoming fully automated in the first half, on budget and ahead of schedule.

The supply chain issues in the first quarter and global lockdowns led to falling demand for the safety controls which impact the first-half results.

However, this was followed by a record third quarter driven by replenishment of stocks and seasonal demand, which gave management confidence to forecast unchanged full-year pre-tax profits of £28.9 million, which is probably conservative given current trading.

The board proposed an unchanged 2.6p interim dividend and remains committed to delivering a 7.7p dividend for the full year, also in line with 2019.

The new factory in China is progressing as planned and is due for completion in August 2021.


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Issue Date: 23 Sep 2020