Strix Share Discussion Threads

[malcolmmm] 10/8/2017 10:01

lots of 135p buys, bodes well

[tanneg] 09/8/2017 20:56

Regarding patents - from the admission document,

"Strix has a portfolio of intellectual property protecting a variety of product features across its product range.The portfolio includes over 150 patents, and Strix actively defends these from infringement, taking legal action where appropriate. The strength of Strix’s intellectual property portfolio has been tested on numerous occasions and enforcement of its IP rights has resulted in payment of license fees or damages in various countries around the world, including cases won by Strix in China."

[malcolmmm] 09/8/2017 13:05

We shall see, they aint standing still

[adnatrob] 09/8/2017 12:43

Agreed, it was impressive then but it’s now that matters! Strix heyday was in the noughties, different world for them now.

[malcolmmm] 09/8/2017 12:21

- even now Strix supplies 39% of the market by volume (50% by value) and it has relationships with numerous domestic appliance brands and retailers including Rowenta, Tefal, Tesco, Kenwood and Morphy Richards.
In 1997, with its domestic manufacturing facilities straining to meet demand, Strix opened a factory in China, which also served as the base for its growth in the region, the biggest kettle market in the world.


I can see these at 175p in the shortish term, very good dividend as well

[adnatrob] 09/8/2017 11:41

Hussey left the company approx. 2 years ago and it appears that his R&D centric approach left with him. Apart from the control mentioned I can't see anything else that is new.

[phowdo] 09/8/2017 11:26

No doubt the Chinese copycats have already copied the new controls too.

[spob] 09/8/2017 11:23

So they win damages and then the Chinese copycats carry on regardless

[spob] 09/8/2017 11:18

Kettle control maker brews up a counterfeit beating product


30 December 2013

by: Tanya Powley, Manufacturing Correspondent


Financial Times


It’s not every day a company goes to court over a cup of tea, but for Paul Hussey, chief executive of privately owned Strix, it was more than a storm in a tea cup.

Strix, a thermostat specialist and the world’s leading maker of kettle controls, has fought more than 10 patent disputes in court over the past five years. Nearly half of these have been against Chinese companies, accused of copying its controls.

In 2010, the Beijing Intermediate People’s Court ordered Zhejiang Jiatai Electrical Appliance Manufacturing and Leqing Fada Electrical Appliance to pay Strix damages of Rmb7.1m ($1.2m) and Rmb2m respectively.

While all of the cases have been won or settled positively, the Isle of Man-based company knew it had to fight from another corner: by coming up with a new control that would be cheaper than the counterfeit products on offer.

“One of the problems we faced was that we would win in the courts and we would win some damages but it didn’t really stop them from doing what they were doing. They were still able to produce at a lower price than us,” said Mr Hussey.

Aware that its intellectual property around its current control was coming to an end in 2015, two years ago Mr Hussey challenged his research and development team to come up with a better and cheaper control that would enable it to compete on price with the copycats.

“To be honest it was a bit of a Christmas wish list from Santa Claus,” said Mr Hussey.

However, the first quarter of a million units containing these new controls appeared in stores worldwide, including Asda, last month – a year after the patent was registered.

Strix expects its business to grow by between 15 to 20 per cent next year on the back of the new technology. “We’re able to grow in markets, such as eastern Europe, Middle East, South America and China, that were previously inaccessible to us because we couldn’t compete on price,” said Mr Hussey.

Its emphasis on using intellectual property has been key to the growing success of Strix, which was founded in the mid-1980s. In 2009, 3 per cent of revenue came from products developed in the past five years; today it is 26 per cent. The target for 2014 is around 36 per cent. Turnover, which was £85m this year, is expected to rise to more than £100m next year.

While its kettle-related business still represents 85 per cent of the company’s revenues, Strix has been expanding its product range into other appliances, such as instant flow heaters which can go into water dispensers.

The company employs around 950 people worldwide, with around 75 based on the Isle of Man.

[eezymunny] 09/8/2017 10:24

Interesting float.

I guess a question of strength/duration of key patents and I find it impossible to get a feel for this.

Big market share/high margins but those can be eroded if patents expire etc. OTOH maybe they can innovate, produce more IP, more products etc.


"Aware that its intellectual property around its current control was coming to an end in 2015, two years ago Mr Hussey challenged his research and development team to come up with a better and cheaper control that would enable it to compete on price with the copycats.

“To be honest it was a bit of a Christmas wish list from Santa Claus,” said Mr Hussey.

However, the first quarter of a million units containing these new controls appeared in stores worldwide, including Asda, last month – a year after the patent was registered."

www.ft.com/content/cef1ec8e-6975-11e3-aba3-00144feabdc0

[adnatrob] 09/8/2017 10:23

Core patents have expired which puts them at the mercy of copyists and others, hence the drop in market share. R&D activity also appears to have slowed. Without patent protection, this is a tough market with constant price pressure and reduced margins.

AIM rewards growth, I can only see further decline from this position.

[martywidget] 09/8/2017 09:57

Worldwide [patents]:




Refine worldwide patent search here with keywords, etc:




[Intellectual property Patents]


[UK Patent number search]:

[martywidget] 09/8/2017 09:49

spob 9 Aug '17 - 08:04 - 16 of 20
Anyone know what patent protection strix own in relation to kettle controls.


European Patents (UK)

European patent register:

[martywidget] 09/8/2017 09:41

spob 9 Aug '17 - 08:04 - 16 of 19 0 0
Anyone know what patent protection strix own in relation to kettle controls.


List of US patents:



[click on the small image next to the 'ASSIGNMENT OF ASSIGNORS INTEREST (SEE DOCUMENT FOR DETAILS)' for the details of each separate patent in - loads as a pdf file.]

[malcolmmm] 09/8/2017 08:54

As the company’s prospectus notes, the market falls into three parts. There is the ”regulated market” where safety is critical so manufacturers want a western company responsible for supplying quality products but this has gone ex-growth. There is the “unregulated market,” where safety is generally less important than cost and then there is “China,” which is a dog-eat-dog world but fast growth. So to counter the Chinese copyist and attempt to grow in China, as the old patent has expired, Strix has come up with a cheaper control with the launch of its U11 technology. While its kettle-related business dominates, Strix has taken a holistic approach to boiling water and expanded its range into rice cookers, cordless steam irons and the Tommee Tippee perfect prep machine, which produces formula milk at the right temperature.

[spob] 09/8/2017 08:04

Anyone know what patent protection strix own in relation to kettle controls.

Given we have had electric kettles for many decades, i can't imagine them owning anything which would stop copy cats.

[jonwig] 09/8/2017 07:20

Despite its impressive steady growth I'm reluctant to invest in a company which depends so much (though not exclusively) on a single product with a small number of big customers. And it's fanciful to suppose that their technology can't be disrupted.

There are no big owner-shareholders here, and the company would benefit from being part of a larger group. I wonder if sometime that might happen.

EDIT: I see some Investors Chronicle enthusiasts will feel a bit shafted.

[spob] 09/8/2017 06:56

Strix — unglamorous but worthy


UK maker of kettle safety controls prices IPO before joining Aim next week


July 31, 2017

by: Andrew Ward

Financial Times


What invention could be more British than the thermostat that switches kettles off as soon as they have boiled? As well as its role in the national love affair with tea, the technology is a good example of the kind of unglamorous innovation in which the country often excels.

The £190m flotation of Strix, the world’s biggest maker of kettle safety controls, sounds, therefore, like just the sort of success story ministers would like to trumpet as they chart a course for post-Brexit Britain. The company, which priced its initial public offering on Monday before joining Aim next week, has its origins in temperature-controlled flying suits made for RAF pilots during the second world war. Today, its kettle parts are used an estimated 1bn times a day by 15 per cent of the world’s population.

There are just a couple of flaws in this image of no-nonsense British engineering prowess: Strix does much of its manufacturing in China and, more crushingly, its IP and headquarters are based in the Isle of Man. The 3 per cent effective tax rate that comes with its Manx domicile is part of the company’s investor appeal.

But it would be wrong to dismiss Strix as an elaborate tax management scheme. The company increased revenues by 11 per cent to £88.7m last year, generating earnings before interest, tax, depreciation and amortisation of £33.3m. Analysts expect a 7 per cent dividend yield.

The company has a 38 per cent share of the global kettle controls market by volume and just over half by value. Demand is growing by an average 6 per cent a year driven by China. Copycat competition exists but brand-name kettle makers are wary of risking expensive product recalls for what are fiddly components subject to increasingly stringent safety and energy efficiency regulations.

Strix’s under-the-bonnet technology lacks the consumer recognition of Dyson vacuum cleaners. But both have built powerful global market positions on the back of strong IP and high quality design and manufacturing. Who needs Apple and Google when Britain, or at least the Isle of Man, can stop the world’s kettles boiling dry?

[e-mail]



COMMENTS (6)

Henry
8 days ago

Raised net £190m to enable the exit of the previous owner (ABN Amro Private Equity). Strix was the final investment in a fund that is being wound up. The shares start on a P/E of 7.4x Dec 17E, divi of 2.9% for remainder of the year. 2018 - p/e of 6.7x and a 7.0% yield. Net debt of £60m, which, by the year end is expected to equate to 1.7x EBITDA. Even after funding the dividend, the high levels of cash generation should more than halve the net debt position by the end of FY19.
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Contrarian Investor
9 days ago

Maybe a bit more detail about the financials and valuation?
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Northfolker
8 days ago

@Contrarian Investor More important to get Brexit into the story.
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Andrew Ward FT FT
8 days ago

@Contrarian Investor Thanks for the comment. They're raising £190m from the issuance of 190m shares at 100p each (thus market cap £190m). Debt about £60m (1.6 x EBITDA), giving an enterprise value of around seven times EBITDA. Trading begins August 8. Hope that helps.
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ap007
8 days ago

Brexit was barely in the story.

[trident5] 08/8/2017 11:30

Adnatrob,

They sell into two markets: regulated and less regulated. The letter being where there are fewer or no safety /energy efficiency regulations, and where product is cheap.

Strix have been selling a higher quality product, but are looking to sell more in to the less regulated market where I expect they'll sacrifice some margin for volume.

Margins have fallen over the last 3 years - but they are still extraordinarily high for a manufacturer. Quality and reputation will be their moat.

[adnatrob] 08/8/2017 11:23

But what where they in recent years , similarly what was market share and why IPO and not a straight sale? Too many questions for me.

[trident5] 08/8/2017 11:09

Profit margins are 25% Adnatrob - what do you want?

[adnatrob] 08/8/2017 11:05

Price pressure and reduced margins; tough market sector.

[malcolmmm] 08/8/2017 10:57

Chinese copyists are not trusted in the West also they have diversified into other products

[adnatrob] 08/8/2017 10:44

At the mercy of copyists in China, market share could drop lower.