Another good performance despite the macro backdrop

Since listing in Aug 2017, Strix has consistently highlighted the resilience of its business through its ability to hit forecasts despite the uncertainty of trade wars, Brexit and slower consumer confidence. Today’s pre-close states it will again meet consensus profit expectations which is in the range of ZC’s estimates of £31.1m operating profit and £29.7m PBT. The controls business maintained its leading market share globally and in all regions with the market growing at a solid c. 4.5%. The Water division had a slower year growing at 6% but, as expected, performance improved in H2. Net debt of £26.3m is better than forecast due to a combination lower capex and better working capital. The shares have not participated in the Q4 rally partly because of the strong performance during the year (c. 38%). However, the valuation still looks compelling at 12.5x current year forecasts for a such a resilient business. The yield of 4.1% remains attractive with the company confirming it will increase the FY19 dividend by 10% to 7.7p