Strix Share Discussion Threads

[mr hangman] 02/3/2021 12:47

New high, exciting times

[thorpematt] 28/1/2021 02:15

Just read the posts here. I am going to make a quick comment (not got time to go into all of the points in detail). Paul does a REMARKABLE job of analysing numerous companies on a daily basis. Some of the points he makes here though are driven by a lack of intimate understanding of the company IMO (which is understandable). If we look for example at the cashflow, he highlights significant recent capital spending. Clearly if R&D is persistent and repeated it is NOT a capital exceptional expense but more an operating one. However KETL has a new factory and acquisitions which are key to its expansion and growth plans and these are one off significant costs (and the reason for it lowered cashflow during the period). It's confidence in past and present cashflow are why its divi is retain. Its operating cashflow has paid the divi. The debt is to pay for the one off cap-ex. With regard to the reason behind the halo pure acquisition: What will make this profitable is that KETL intends to levarge its significant global distributon and market presence to exploit the well-known, growth area in purer water for humans and animals and the goal to challenge the market leader for market share. "How come KETL can make so much profit"? The principle that kettle controls aren't particularly high tech and that the basic concept doesn't make sense rather highlights KETLs ability to leverage - since it has outstanding ROE and ROCE production it must be very capable in this regard. As long term holders will know the IP issue is something that KETL has been extremly succesful in protecting (and in fact developing). The point that in China everything is copied (faked) is in fact the very reason that it has been able to fight this so succesfully (from within). KETL is one of China's own when it comes to manufacturering. As such the authorities have actually assisted KETL to erradicate fakes. Where KETL really impresses me moving forward is that there is a growing rise in demand for its IP. There is modest growth predicted for kettle controls globally but KETL has identified much larger growth opportunities and market places for its bolt on acquisition's products and that is the very reason that these intangibles are on the balance sheet and not without value. So in summary, I absolute respect Paul's opinion and he is more than entitled to express it without critcism or heckling from others. My thoughts are that in this instance whilst I do understand why he would flag those points, I believe that it is a lack of intimate knowledge of the company, its strategy and history which gives rise to a lack of context for the present set of results. Again for anyone viewing this stock I would say it imprtant to understand where the company is evolving and to do tht the recent presentation does a great job of explaining that. Here: - hTtps://webcasting.brrmedia.co.uk/broadcast/5fa3af0f4351411bdbe69865

[alter ego] 27/1/2021 23:38

Yes the parts can be copied but they are patented and Strix has a strong record of pursuing copycats. Major global brands will not want to be using knockoff copies.

[dr biotech] 27/1/2021 17:56

Obviously he's entitled to his opinion but 1) Halosource was bought for about £1m - fairly negligible in the scheme of things. My understanding is that they ran out of money before the products ever saw the light of day so revenues were minimal (if anyone knows better I'm more than willing to be persuaded). Whether it will become a big success I'm not sure, but hopefully the LAICA acquisition will help. But at the moment its a side show. 2) I'm not really qualified about the accounts - will have to leave that. They did pay a sizeable amount for Laica though and assuming their factory in China completes on time that should reduce CapEx going forward? 3) There is probably more tech to the kettles than meets the eye. Yes its almost a commodity product but the bit that needs to be good (heating element/control) isn't that simple and given there is a plethora of kettle makers I doubt any of them make enough to warrant making this part rather than buying it as an OEM part. They must be confident enough in their own IP and when the new factory is ready it should make them more efficient. So hopefully next year, margins will improve through efficiency and capex will be down & hopefully new products will lead an expansion in revenues. Will look out for debt next time the results are released though

[nick_dunton] 27/1/2021 17:21

I'm sure the formatting of this will come out horribly, but here is Paul Scott from Stockopedias take on today's update.. not what I was expecting!Strix (LON:KETL)Market cap £503m at 244pTrading UpdateStrix Group Plc (AIM: KETL), the global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components, is pleased to announce the following trading update for the year ended 31 December 2020.Key points -"Marked recovery in H2 as anticipated"Adjusted profit after tax of c.£29.5m, up 2% on LYStrong order book visibility for Q1 2021Positive commentary on both the core kettle controls division, and water filtration (LAICA acquisition). New products, and geographic expansion planned for 2021.HaloPure - I'm not so sure about this acquisition. Looking back at its time as a standalone listed company, its performance was dismal - tiny revenues, and loss-making. So why would it suddenly become good?Admin costs - looking at the 2020 H1 results, the P&L looks unusual, in that most of the gross profit flows through to the bottom line. There seems to be very low administration costs, only £1.4m in H1. Although considerably more (£2.5m) are classed as exceptional in H1 2020, and £4.0m exceptional admin costs in H1 2019.The company says that it's highly cash generative, and has a robust balance sheet (which it actually doesn't, as if often the case when companies make such a claim).Balance sheet - as at 30 June 2020, KETL had NAV slightly negative, at £(1.2)mIf we deduct £9.4m intangible assets, then NTAV was negative £(10.6)mThere was £49.0m borrowings in long-term creditors, a hefty chunk of debt.This is quite obviously not a strong balance sheet. Whether that matters though? Probably not, if it can keep generating strong cashflows.Cashflows are they really that good? The big divi last time seems to have been paid for through increased borrowings, not from profits. I see from the interims that in H1 2020 and H1 2019, more than half of the cashflows ended up going into capex, capitalised R&D, and purchase of intangibles. An amber flag here, it needs more work to get comfort on cashflows..WlukOEsuOI9NKU3eZdZXv2DuhNPe-O4DxRNpI1aIjliqZCj_lqWONY-85zqzRBaESsfL5J2v2j4FyMj9diikuz_utU9MX_bmQBbCHYN_ccrDApPMEhcPKZtVUonn8PuafEXZcgZ7.My opinion - I don't like this one. Some accounting questions above, too much debt, a weak balance sheet, and a dubious acquisition of HaloSource.In addition to that, the basic concept doesn't make sense to me. Kettles are cheap, almost disposable, very simple items. There's nothing high tech in a kettle. How come KETL can make so much profit, selling parts for kettles then? They seem to be made in China, so no respect for IP there. Hence surely the product would be ripped off & undercut by competitors? That's what happens with everything else, so why would kettle controls be any different? It doesn't make sense to me.I'm sure the same question was asked by all the big name institutions who bought into the IPO, so there must be a persuasive answer to my question, which they will all have asked too, I'm sure.Overall then, it doesn't work for me, so I won't be investing.

[dr biotech] 27/1/2021 07:35

Decent, confident statement this morning. Hope this time next year the forward looking growth prediction comes to pass. Div retained, yield here not insignificant. What’s not to like?

[dr biotech] 18/1/2021 14:51

Thanks AE, I’ll take a look. Going to be a slow burner this one but if they double their size in 5 years as management hope that would be a decent result.

[alter ego] 18/1/2021 14:45

Dr.B, there's some useful info on this in the Capital Markets Day presentation in November. Here's the link from the Strix investor relations website hxxps://www.strixplc.com/investor-relations/media The section on Halopure begins around 39minutes into the presentation. It's clearly early days for this new technology and they as the team are based in China and see early opportunities there to build the product rollout. It sounds like they are being very cautious in putting out forecasts for revenue but the potential is clearly very large.

[dr biotech] 18/1/2021 13:59

Not easy to find a great deal of info about the halo pure tech. The first hit from halosource and is quite old, whilst I’d love to see it take off I’m wondering why they aren’t pushing it more.

[thorpematt] 18/1/2021 12:08

geri, Good observation on the R&D I concur that this is a huge opportunity here. Strix has that advantage of its China based operations being accepted / integrated. --------------- The recent presentation I posted a link to above is great for any new investors here. ----------- RNS today for the lazy (we've all been there) is : - Update on the HaloPure Technology Strix Group Plc (AIM:KETL), the AIM quoted global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components, is pleased to announce that it has signed a contract with Chia Tai Group, one of most specialised and well-known livestock company's operating in China, to adopt its HaloPure technology at one of its pig farms in the People's Republic of China ("PRC") which can farm 2800 sow pigs. The HaloPure technology has a unique ability to not only treat raw incoming water, but also maintain an ongoing sanitised environment throughout the water line. This application is designed for industries reliant on long distance water lines with significant bacteria contamination such as livestock farming. Strix's HaloPure technology was selected for its water purification and disinfection solution technologies to prevent the spread of African swine fever virus ("ASFV"). HaloPure technology is increasingly well recognized by the market and is likely to result in significant further business opportunities in the future. Tests on ASFV were conducted by a national government certified P3 laboratory proving that HaloPure can effectively kill the ASFV virus for raw water and waterline. Strix will install the full system by end of January 2021. Additionally, this technology has also been identified for use in numerous other healthcare and dentistry applications. 35 hospitals in China have indicated they are adopting this technology for dental services and 28 hospitals for rinse water, with sales expected within 2021. The HaloPure technology is well positioned to respond to the anticipated policy change in the PRC which will require regulated water for use in all livestock farms, hospitals and clinics. The HaloPure technology is being developed in a number of Strix's new applications. Strix were able to use this technology during the COVID-19 pandemic to create a disinfection facility at the Guangzhou factory, eliminating potential viruses or bacteria on the clothes of employees entering its factories, creating a safe and healthy working environment during the pandemic. Mark Bartlett, CEO of Strix Group Plc, commented: "In line with the strategy set-out at the Capital Markets Day in November, Strix continues to invest in compelling growth opportunities within the water category and remains focussed on capturing the medium-term benefit by entering into commercial agreements which will drive future profitability. The Strix HaloPure technology represents a highly attractive proposition for industries that require a water purification and disinfection solution and we are delighted with the continued progress being made following the successful implementation into the pig and chicken farming industry and the dental market in China. We look forward to updating the market on further developments of the success of this technology in due course." For further enquiries, please contact: Strix Group Plc [phone] Mark Bartlett, CEO Raudres Wong, CFO

[undervaluedassets] 18/1/2021 09:57

Totally new information for me. Excellent.

[gerihatrick] 18/1/2021 08:37

They bought Halosource for $1.5m after over $100m had been spent on R&D. Today's announcement reflects on just how good that decision was. I feel this could be rolled out all over China as Asian Flu is the scourge of pig farms and is an ongoing epidemic issue.

[essentialinvestor] 10/1/2021 16:54

Hi Matt, appreciate the view and post, thanks.

[thorpematt] 10/1/2021 12:15

EI, Yes I agree. Both in that this is a little under-apreciated and in that the market has lurched towards buying some rather questionable, indebted companies with lacklustre growth prospects and potential headwinds. Where does KETL fit in? Well, the recent presentation which is 1 hour 22 mins. can be viewed here:- hTtps://webcasting.brrmedia.co.uk/broadcast/5fa3af0f4351411bdbe69865 and is well put together and well-presented by the BoD It explains how the company intends to grow EPS by x2 over the next 5 years. I think 2020 sees a fair bit of investment and the benefits of that and the growth profile really is 2021 to 2025. The CFO explains this very well and the other board memebrs demonstrate that they are entirely in tune with this also. My belief is that KETL is a very high quality company with very decent growth prospects. Such companies in today's low interest rate environment warrant high PERs. Currently that is not the case. I have a few stocks in the portfolio which are truly buy and hold and never sell (a la Buffet). But only a few. KETL is one of those. For me we are at a consolidation point as far as the stock- price is concerned. The chart shows a slowing down of trades (a dis-interest of sorts). I suspect it will break from that pennant to the upside in the short to mid-term. free stock charts from uk.advfn.com '>

[essentialinvestor] 08/1/2021 16:20

Any updated views here folks?. Strix perhaps a little overlooked of late with the dash to lower quality.

[farnesbarnes] 19/11/2020 13:00

Yes, a very well run company, but only projected to grow earnings at 7% in the next 12 months. And on a PE of 15, it seems to be priced in. Reasonable growth at a price you might say.

[undervaluedassets] 19/11/2020 12:22

Electrical kettles - no reinventing the wheel here. Solid and pays a divi

[dr biotech] 12/11/2020 09:39

Double digit growth will be in their new areas - new products and their water treatment. I think it will be struggle to hit the figures that they have suggested, but the kettle controls should be a stable market anyway to limit any downside. I'll continue to hold - looking at 2-3 years on this one.

[egrid1] 12/11/2020 09:18

Andy Harrison, Research Director, Zeus Capital, interviewed on the prospects of Strix. hTTps://www.directorstalkinterviews.com/strix-group-new-strategy-could-bring-double-digit-growth-analyst-interview/412936572 "I would argue that if they are successful in executing as planned we should see quicker earnings growth and a rerating in the P/E multiple"

[igbertsponk] 05/11/2020 17:45

Fair enough though, they've done well for the company: "first sale of any shares in the Company prior to and since Strix Group Plc was admitted to AIM in 2017 and the purpose of the sale is to provide liquidity in order to fund a property purchase on the Isle of Man, where the Company is headquartered."

[texas_caddy] 05/11/2020 17:38

Timing of that director sale unfortunate, shall we say.

[trident5] 05/11/2020 17:29

Big director sale hard on the heels of their capital markets puff.

[alter ego] 03/11/2020 14:25

Encouraging trading update today for virtual capital markets presentation.

[b dazzler] 04/10/2020 20:26

Update from mail's midas team: https://www.thisismoney.co.uk/money/investing/article-8801779/MIDAS-SHARE-TIPS-UPDATE-Kettle-firm-Strix-boiling-nicely.html