Kettle controls designer continues to look like an impressive income-backed growth story


Gain to date: 5.9%

Original entry point: Buy at 140p, 26 April 2018

There’s a few nuggets of information from kettle controls manufacturer Strix’s (KETL:AIM) latest update (22 Jan) worth noting, not least on the net debt front, where the best part of £10m has been shaved off since the end of June 2018 to £28m now.

That should mean more cash available to pay dividends in future, underlining the 7p per share payout for 2018 and a 10% increase anticipated by analyst in 2019, implying a 5.2% income yield.

The update is a little light on financial detail but investors are told that the underlying kettles market continues to grow at around the 7% mark (as expected) in spite of trade tensions.

We also know that Strix has maintained its market leading 38% share. One question that will need answering when full year results are published is to what extent robust volumes, and new lower cost U-9 series, may have had on profit margins.

In the meantime, the company continues to make excellent progress on its Aqua Optima water filter lines, where it now has a 25% market share in the UK.

SHARES SAYS: Analysts continue to see the shares hitting 210p over the coming months despite the modest progress so far, and we have little reason to disagree. Still a buy.

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