The trading update ahead of the AGM was positive, highlighting the ongoing recovery in Kettle Controls and several significant product launches within the Water and Appliance categories. A strong performance at recent purchase LAICA with revenue well ahead of the previous year and further synergy/efficiency benefits augurs well for the remainder of the year. A 30% increase in Group revenue is envisaged for the year, leading us to upgrade forecasts.
Against this backdrop, current valuation continues at a marked discount to its peer group. This is unwarranted in view of the improving outlook for earnings, dividends and high returns.
The strong order book within Kettle Controls, the accelerating momentum of new products, and the acquisition/strong performance of LAICA, all contribute to an upgrade of EPS expectations. Despite recent strong performance, Strix shares’ PER is at a discount of 34% to peers. Simply placing them at parity with those peers’ ratings indicates a fair value of 350p.
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Return to Strix Group
