**Summary of Strix Group PLC Interim Results for H1 2025**
**Financial Performance**
**Revenue Decline** Adjusted revenue decreased by 6.4% at Constant Exchange Rate (CER) to £61.9 million (Actual Exchange Rate: -8.5% to £60.5 million) compared to H1 2024. This decline was primarily due to significant challenges in the Controls division, which saw a 24.2% revenue drop at CER due to geopolitical and macroeconomic uncertainties, particularly indirect tariff impacts.
**Gross Profit and Margins** Adjusted gross profit decreased by 14.8% at CER to £22.5 million, with gross margins down 360 basis points to 36.3%. This was mainly attributed to lower Controls sales and the rollout of appliance manufacturing for a Consumer Goods customer.
**Profitability** Adjusted Profit Before Tax (PBT) fell by 20.5% at CER to £6.2 million (AER: -21.8% to £6.1 million) due to the challenging trading conditions in Controls.
**Cash Flow and Debt** Operating cash conversion was 51.8%, <mark style="background-color:yellow">below</mark> the target of 75-85%, due to increased inventory levels in Controls. Net debt rose to £68.8 million, with a net debt leverage ratio of 2.21x, comfortably within covenants.
**Divisional Performance**
**Billi** Delivered strong revenue growth of 10.4% at CER, driven by geographical expansion and new product launches. The division successfully relocated its HQ in Australia, expanding production capacity.
**Consumer Goods** Returned to growth with a 7.0% increase at CER, following restructuring in FY24. Notable achievements include new product introductions and a patent-pending filter series addressing PFAS contamination.
**Controls** Faced significant headwinds, with revenues down 24.2% at CER due to geopolitical and macro uncertainties. However, operational progress was made, including the launch of a new Next Generation control production line in China.
**Operational Highlights**
**Billi** Continued its geographical rollout strategy and expanded production capacity with the new HQ site in Australia.
**Consumer Goods** Launched a patent-pending filter series and introduced the LAICA brand in the UK.
**Controls** Successfully implemented a new production line in China and focused on new product development to expand market segments and defend against copyists.
**Outlook and Strategy**
**Macro Challenges** The Group continues to navigate volatile macroeconomic and geopolitical conditions, particularly in the Controls division.
**Growth Initiatives** Focus on driving growth in Billi through geographic expansion and new products, and maintaining momentum in Consumer Goods.
**Debt Reduction** An accelerated debt reduction program is underway to enhance future refinancing options.
**Change of Year End** The financial year end will change to 31 March 2026 to better align with industry cycles and key events.
**Medium-Term Outlook** Despite short-term challenges, the Board remains confident in the Groups medium-term prospects, expecting trading for the 15 months to 31 March 2026 to be in line with management expectations.
**CEO Commentary**
Mark Bartlett, CEO, highlighted progress in strategic initiatives across divisions, particularly the strong performance of Billi and the return to growth in Consumer Goods. He acknowledged the challenges in Controls due to macroeconomic and geopolitical issues but emphasized the Groups resilience and commitment to reducing debt and managing global volatility.
**Financial Metrics (H1 2025 vs H1 2024)**
**Revenue** £61.9 million (CER: -6.4%), £60.5 million (AER: -8.5%) vs £66.1 million.
**Gross Profit** £22.5 million (CER: -14.8%) vs £26.4 million.
**EBITDA** £13.9 million (CER: -16.8%) vs £16.7 million.
**Operating Profit** £9.8 million (CER: -23.4%) vs £12.8 million.
**Profit Before Tax** £6.2 million (CER: -20.5%) vs £7.8 million.
**Net Debt** £68.8 million vs £63.7 million.
**Diluted Earnings per Share** 1.7p vs 2.9p.
**Key Initiatives**
**Sustainability** Continued progress on the "Planet, People, Purpose" framework, with all primary operations carbon-neutral.
**Refinancing** The refinancing process is on hold due to macro trading volatility, with constructive discussions ongoing with existing lenders.
**Debt Reduction** An accelerated debt reduction program is being developed to support future refinancing.
**Conclusion**
Strix Group PLC faced a challenging H1 2025, particularly in the Controls division, but demonstrated resilience through strong performances in Billi and Consumer Goods. The Group remains focused on strategic initiatives, debt reduction, and navigating macroeconomic uncertainties to achieve medium-term growth.