STRIX GROUP (KETL) – Consumer
| Price: 46.25p +14% | P/E: 13.7x |
| Market Cap: £105m | Yield: n/a |
There was big news today from AIM-listed safety control firm Strix with the agreement to sell its Australian filtered water business Billi for an enterprise value of £110 million or around 48p per share.
Strix bought Billi in November 2022 for £38 million, and although it hadn’t planned to sell, the deal represents a return of around three times its initial investment.
Most of the cash will be used to pay off the company’s £68 million debt and £10 million will be set aside for a share buyback.
Our View
Strix has been facing tough macro headwinds all year, especially in its controls division, due in part to Trump’s tariffs and in part to the weak US dollar, which also appears to be a Trump policy.
Therefore, trading has been weaker than anticipated and the firm’s debt position has risen, and although measures are in place to right the ship the decision was taken to cancel the final dividend for FY24, which was due this month, to conserve cash.
Whether this deal proves as transformational as some of the brokers are saying we will see, but for now shareholders can bask in the positive glow.
Read the press release here:
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