The company was listed in August 2017, at 100 pence per share, compared to the current share price of 135 pence.
Strix is a highly specialised company and has a dominant position in a niche market. The company was established in 1982 in the Isle of Man and the particular market in which the company operates is estimated, by management, to have had total sales of 174 million sets in 2016, with Strix having a 38% market share by volume. The Company’s products are seen to be at the high end of the technology involved and in this segment it has only one major competitor.
To date, Strix has sold over 1.9 billion units and management estimate that Strix safety controls are used over 1 billion times per day in more than a 100 countries and by over 10% of the world’s population.
Its core product is responsible for disconnecting power to the heating element when either water has boiled, operated with no water present, or where the kettle is lifted off its base. Strix mainly supplies original equipment manufacturers (OEM’s), the majority of whom (90%, based on sales volume) are based in China, where the company has a manufacturing plant, with another based in the Isle of Man. Strix maintains relationships with over 400 brands and retailers, amongst whom are Tefal, Siemens, Philips and Walmart. Due to the technical superiority of its products, client relationships tend to be very stable. It also benefits from having over a 150 patents to protect its intellectual property.
Future strategy: while the UK has a very high density of kettle ownership per household of 1.2, in many other countries this tends to be below 30%. The US, one of the biggest potential markets, has only 12% of households that own a kettle.
Opportunities in countries like China and India have generally similar ownership levels as the US, but the level of the technology involved in their kettle safety controls are generally seen as lower quality. Management believes that opportunities in these markets are very positive since their technologically advanced products will attract increasing demand as a result of increasing living standards. Consumers in these countries are expected to become increasingly safety conscious, which plays to the strength of the Strix product offering.
For this reason, we are confident that Strix will be able to continue to grow sales for a number of years, based on these favourable market developments.