Up­date: Strix

The Daily Telegraph - Business - - Business - Russ Mould is in­vest­ment di­rec­tor at AJ Bell, the stock­bro­ker

Last week’s first-half trad­ing up­date from Strix, the ket­tle con­trols and safety de­vices spe­cial­ist, showed the in­evitable dis­rup­tion to trad­ing: a 21pc fall in sales.

How­ever, the or­der book has started to show suf­fi­cient mo­men­tum for man­age­ment to tar­get a flat full-year ad­justed net profit fig­ure of £28.9m, as­sum­ing no ma­jor se­cond wave of the pan­demic or wide­spread re­turn to lock­down, helped by a range of ef­fi­ciency and cost-con­trol mea­sures.

That looks very cred­itable un­der the cir­cum­stances, es­pe­cially as the firm con­tin­ues to in­vest both in new prod­ucts and in ad­di­tional man­u­fac­tur­ing ca­pac­ity in China, which is due to be­come op­er­a­tional as planned in sum­mer 2021.

Net debt looks per­fectly man­age­able at a lower-than-ex­pected £36.9m and, as a re­sult, an­a­lysts ex­pect Strix to keep pay­ing div­i­dends.

A fore­cast 4pc yield for 2020 could ap­peal to those in­come seek­ers who are not fright­ened of a lit­tle of the risk that in­evitably comes with in­vest­ing in smaller firms.

We have a 34pc pa­per gain on Strix, with div­i­dends on top, and there could be more to come. Hold.

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