Strong H2 cash flow

There are several encouraging messages which jump out from Strix’s trading update released today, led crucially by the strong cash generation during H2. This has enabled the Group to come in below the year end banking covenant test, thereby removing significant risk from the rating. In addition, the strong performance of Billi and LAICA has largely offset the slower than expected recovery within the regulated kettle controls market, resulting in FY23 numbers modestly below expectations at the adj. EPS level.

With significant scope for recovery in its key market and the focus switching to the most profitable areas, we expect a marked uplift in profitability and its share rating over the medium term.