Shares in Isle of Man-based kettle safety controls company Strix (KETL:AIM) let off some steam, rising 8% to 185.6p after saying it sees no immediate concerns over its Chinese supply chains.
ONE WEEK DELAY
The manufacturing operations are based in Guangzhou, northwest of Hong Kong and some 976 kilometers from Wuhan, the centre of the coronavirus outbreak which is under lock-down.
There was a one-week delay to planned opening of operations in line with the government mandated extension of the New Year holidays. Two-thirds of the workforce have returned to work and is ‘sufficient to fulfill the customer commitments for February and the Company are now focused on securing March and April to minimize any disruption.’
Some 80% of the supply chain is based in the same area as the company’s manufacturing plants and were able to start production last week.
MARKET SHARE GAINS
Broker Shore Capital notes that 10 out of 32 operating lines are automated and therefore require fewer workers, enabling the company to produce components around three to four times the speed of competitors.
In addition some of its peers are based in areas more affected by the virus, which will enable the firm to gain market share.
Evidence of this is supported by some customers increasing their order size due to disruption faced in other parts of the supply chain.
The majority of Strix’s customers have restarted production or expect to do so in the immediate future.
