Isle of Man-based Strix (KETL), a maker and designer of kettle safety controls and components for water heating and filtration products, has transformed its balance sheet and is a much lower-risk equity proposition following the disposal (30 January 2026) of Australian subsidiary Billi.

The group acquired Melbourne-based brand Billi, a maker of premium filtered and temperature-controlled water systems, for £38.9mn – funded through a £13mn placing at 115p and borrowings – in a bargain purchase in November 2022. On a pro forma basis, Billi generated revenue of £38.8mn and net profit of £5.6mn in 2022, so the transaction was priced on a bargain basement seven times post-tax profit and only 3.8 times cash profit.

Strix was able to acquire the business for such an attractive price because the vendor was in effect a forced seller; the sale of the business was a regulatory condition of the merger of its owners, Cullen and Waterlogic. There were other bidders at significantly higher valuations – Strix had entered talks at a cash profit multiple of 11 times – but having entered an exclusivity agreement and made material progress with regulators in Australasia and the UK, Strix was in pole position to do a deal.

The fact that Strix was able to sell the business for £105mn also reflects the value added under its ownership. Billi is expected to report revenue of £47mn and cash profit of £10mn in 2025. It has been acquired by Crescent Capital Partners, a Sydney-based private equity and alternative asset management firm founded in 2000.

The bumper cash proceeds from the disposal were much-needed to pay down borrowings as the group’s finances had become overstretched. Net debt of £68mn represented a leverage ratio of 2.2 times and the progressive dividend policy adopted at the time of the IPO (the shares listed at 100p in April 2017) had been axed due to the need to service finance costs and reduce borrowings.

This was made more difficult by the challenging trading conditions the group has faced in recent years, including the Covid-19 shutdowns in China (which severely impacted two of the manufacturers that Strix supplies); the withdrawal from Russia of Strix’s key global brand; a cost of living crisis; and more recently political and economic uncertainty in key regulated markets (the UK and US) that tempered consumer spending and delayed orders in its controls business. Conversely, low-cost controls are gaining traction in less regulated markets, validating investment in this space while also broadening the group’s addressable market.

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Positive signs emerging

A trading update in late November 2025 suggests that the group may be tentatively turning a corner. Following discussions with key customers and partners at the Canton Fair, early indications of improvement started to emerge in the final quarter of 2025 despite activity levels in South Africa, Turkey and US markets remaining slower than expected. Management expects the positive trend to continue to build in the first quarter of 2026, albeit that guidance was before the US briefly threatened renewed tariffs on its EU trading partners, which adds macroeconomic risk.

That issue aside, Strix is making the right moves to build and protect its controls business, having recently launched next-generation controls at a lower price point. These solutions enable the group to expand into additional market segments, defend market share against copyist manufacturers and increase its overall addressable market.

Following the disposal, management will focus on expanding controls’ addressable market beyond kettles, as well as growing share in the consumer and original equipment manufacturer (OEM) markets for its filtration product range. Accelerating development of new heating and safety control technologies and applications for existing OEM and brand customers is another key objective.

It’s worth noting, too, that following a restructuring last year, the group’s consumer goods division has returned to growth. Product manufacture in China is being rolled out for its leading global baby brand customer, and additional products have been launched. Although the small domestic appliance market is experiencing high levels of volatility, operational and product innovation initiatives are strengthening the competitive position of this side of the business to support ongoing sustainable growth.

Equity materially undervalued

Importantly, with net cash proceeds of £105mn from the disposal of Billi wiping out group net debt of £71mn, Strix is no longer saddled with unmanageable debts. It means that management can focus on growing the retained operations, which analysts at Zeus Capital estimate are generating £20mn of Ebitda annually. In effect, these operations are in the price for only £67mn, given that £35.1mn (15.3p) of Strix’s current market capitalisation of £106mn (48.5p) is now backed by cash at the 31 March 2026 year-end. It implies the retained operations are being valued at 3.9 times earnings before interest, tax, depreciation and amortisation (Ebitda) estimates for 2026-27 financial year. That’s an incredibly low multiple for a group that no longer has a constrained balance sheet and has cash funding available to invest in its patented products.

The board acknowledges that the shares are too lowly rated and has earmarked £10mn of the cash proceeds from the disposal to make earnings-per-share-accretive buybacks. The directors are also in active discussions with shareholders regarding ways to efficiently return further capital and will update the market at the time of the group’s next annual results.

Please note that Strix is changing its year-end from 31 December to 31 March, so the next results will be for the 15-month period to 31 March 2026. Forecasts in our table are based on ongoing operations, so they exclude the contribution from Billi for both the 2026 financial year and in future years. 

It’s worth noting, too, that chief executive Mark Bartlett will step down by mutual agreement from 29 May 2026. He joined Strix in 2006 and has served as chief executive since 2015. The board has initiated the process to recruit a new chief executive, which is being led by chair Gary Lamb.

So, with the shares trading 12 per cent below book value (adjusted for the Billi disposal), cash returns likely and the shares trading on a bargain basement rating, there is scope for a decent re-rating. There is also potential for Strix to become a bid target. Buy.

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Aim-traded Venture Life (VLG), a developer of self-care products in the consumer healthcare market, sold off its lower-margin, capital-intensive operations last summer and is transitioning into a pure-play consumer healthcare platform focused on products that support proactive, healthy living.

The divested businesses generated cash profit of £4.9mn and pre-tax profit of £0.3mn from revenue of £20.5mn in the 2024 financial year, so the €62mn (£53mn) cash consideration received equated to a reasonable cash profit multiple of 11 times.

The cash proceeds wiped out all borrowings and are enabling Venture Life to direct cash flow into the commercialisation, growth and development of its higher-margin core ‘power brands’ (Balance Activ, Health & Her/Him, Lift, Earol, Pomi-T and Gelclair) as well as providing firepower to make more bolt-on acquisitions to scale the business.

At the end of 2025, the group also completed the disposal of its oral care brands Ultradex and Dentyl, which sat outside its strategic focus and diluted overall margins. Venture Life received cash proceeds of £3.75mn on completion and could receive a further payment of £0.75mn, dependent on the performance of the brands in the first year under new ownership. If the full £4.5mn is received, the exit price will represent 13 times the two brands’ annual cash profit in the 2024 financial year.

After accounting for £2mn spent on an ongoing share buyback programme, the group now holds net cash of £34.4mn, representing 41 per cent of its market capitalisation. Moreover, free cash flow is set to improve as profits rise – a factor that investors have yet to acknowledge in their valuation. Indeed, the group’s enterprise value equates to only nine times operating profit estimates for the 2026-27 financial year.

Moreover, house broker Cavendish anticipates that the group will be able to deliver double-digit growth in revenue, cash profit and operating profit in the following year as well as boosting net cash to more than £50mn (excluding acquisitions). On this basis, the group’s enterprise value could fall to 5.6 times operating profit estimates by 31 May 2028. There is a good chance that the recently beefed-up senior management team will hit the house broker’s estimates, too.

Complementary acquisitions and organic growth

Having acquired women’s health brand Balance Activ in 2021, Venture Life increased its presence in this area by making the complementary acquisition of Cardiff-based Health & Her/Him (H&H) in November 2024. The H&H brand provides supplements and support for the female hormonal health journey. While menopause and perimenopause products constitute most of its revenue, H&H has extended its offering by launching new products in both female and male hormonal health. The H&H app is the world’s second-largest menopause app, highlighting how data-driven insights and integrated data capabilities can be used to drive growth in the group’s existing brands.

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H&H sells a range of food supplements through retailers, pharmacies and online channels in six countries (UK, US, China and parts of the EU). The business was acquired for a maximum consideration of £10mn and has turned profitable under the group’s ownership. Leveraging H&H’s products across Venture Life’s extensive distribution network should enhance sales and deliver a significant increase in revenue and profitability. Management is also using H&H’s presence in Holland & Barrett (UK) and CVS (a key US retailer) to launch existing brands across their store networks.

Another key driver of revenue and profits is the strategic investment being made in marketing activities to raise awareness of the group’s other higher-margin power brands:

• Balance Activ, the leading UK brand for the treatment of bacterial vaginosis

• Lift, a range of glucose gels, shots and chewable tablets

• Gelclair, a Murco-adhesive oral rinse gel used for painful symptoms of oral mucositis (a side-effect of some cancer therapies)

• Pomi-T, a polyphenol mix of whole foods used for the management of prostate-specific antigen (PSA) levels in prostate cancer

• Earol, an ear, nose and throat brand

This investment, combined with new product listings, a strong order book and the contribution from H&H, delivered 11 per cent pro forma revenue growth in 2025. Please note that the next results will be for the 17-month period to 31 May 2026 due to a change of year-end that should reduce the revenue seasonality.

New appointments strengthen management team

Importantly, the board has strengthened the senior management team to drive the operational performance as well as adding experience to support the merger and acquisition (M&A) strategy.

Matt Jeffs has been appointed as head of M&A strategy. Jeffs has had a career in corporate finance with a regional boutique M&A adviser, where he advised on over £350mn of transactions, after which he was headhunted as an investment manager for the family office of an organic foods business.

Sensibly, Venture Life is tapping into the management experience of H&H’s team, having appointed co-founders Kate Bache and Gervase Fernandes as chief marketing and innovation officer and strategic growth director, respectively. In addition, Sarah Arthur has been appointed as interim commercial director. Arthur had a distinguished career with Johnson & Johnson before leaving to set up her own consultancy in health and beauty. She has been working with Venture Life since the start of 2025 to develop its strategic customer growth strategy.

The appointment of a chief digital and technology officer, Peter Jackson, is a sensible move as aligning IT strategy with business objectives and making full use of integrated digital and AI capabilities are key areas of the group’s growth plans.

Low valuation

Of course there is execution risk as the board will have to approach dealmaking wisely. However, any earnings-accretive bolt-on acquisitions should reduce earnings risk by diversifying revenue streams as well as providing upgrades to analysts’ earnings forecasts. That’s because current forecasts are based solely on the group’s existing operations and reflect the potential to enhance operating margins as the business scales. Acquisitions could materially enhance that process.

So, with the shares rated on modest forward price/earnings (PE) multiples of 13 (2027) and 10.2 (2028), and the group reporting robust revenue growth from its continuing operations, there should be decent upside to analysts’ fair valuations of 100p. Buy.

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Aim-traded Goldplat (GDP) is a mining services company specialising in the recovery of gold and other precious metals, from byproducts, contaminated soil and precious metal-bearing material from mining and other industries. The business plays a pivotal role in the circular economy that extends from the extraction of minerals to re‑processing of what would typically be dumped as waste materials. It also extends to responsible mining and business practices that underpin Goldplat as a sustainability partner for large miners. In fact, the entirety of its operating profit is derived from the processing of discards or waste materials from historic or current mining activities.

Goldplat has two operations in South Africa and Ghana focused on providing an economic method for mines to dispose of waste materials while at the same time adhering to their environmental obligations.

• Goldplat Recovery (Pty) Limited SA is the South Africa business. It’s a profitable, mature gold recovery business with a strong blue-chip client base. The business processes byproducts of the mining process, including mill liners and wood chips to produce bullion.

• Gold Recovery Ghana Limited is the Ghanaian arm. Goldplat’s junior gold recovery operation in Ghana benefits from its prime location in the West African gold belt. The facility there is looking to replicate the successful South African operation by building contracts with major producers in west Africa.

Goldplat has been providing these services for more than 20 years, mainly to the mining industry in Africa, but more recently in South America with supply from that region processed in Ghana. Supply remains strong, although most of the volume in South America remains linked to one client, so the focus has been on increasing the customer base and to offer local processing solutions. During the 2023-24 financial year, Goldplat acquired land in South America and has invested in initial operational plant capacity to provide solutions for lower-grade material that can’t be processed at its other plants due to the cost of transport. The first phase of the project completed in December 2025, although certain licences need to be put in place before operations can begin.

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The company’s recovery operations recover around 2,000 ounces (oz) of gold and other metals a month, through various circuits and under different contracts. Extraction processes include roasting in a rotary kiln, crushing, milling, flotation, gravity concentration and the leaching and smelting of bullion. The number of ounces recovered is dependent on the type and volume of material supplied and the grade, recovery rates, margins and contract terms. At least 70 per cent of material produced is exposed to the fluctuation in the gold price, with the remainder being offset by corresponding changes in raw materials costs. As a result, margins tend to fluctuate month to month.

Goldplat has a JORC-defined resource (dated 29 January 2016) of 1.43mn tonnes at 1.78g grammes per tonne (g/t) for 81,959 oz of gold over part of its active tailings storage facility (TSF) at its operation in South Africa. Since the resource estimate was completed, more than 0.8mn tonnes of material have been deposited on the TSF, at grades of circa 1.45g/t. Having constructed a new TSF adjacent to its existing facility, Goldplat has sufficient capacity to store tailings it will produce at its current operations for a further four years.

Profits set to rebound strongly

The recovery operations continue to deliver profitable results, albeit operating profit fell sharply from £9.8mn to £3.8mn on 22 per cent lower revenue of £56.7mn in the 12 months to 30 June 2025. This was due to lower gold sales as a result of a business model change in Ghana and a decrease in high-grade low-margin batches processed in that country. During the financial year, the Ghanaian operation went through a change in business model, to address Ghanaian authorities’ preference for the beneficiation of concentrate to be done locally. This has necessitated recovering gold in concentrates locally in the form of dore bars, which can then be sold to international refiners.

Increasing capacity and processing the gold-bearing material on site, as well as making changes to its existing plant, required an investment of £0.76mn. In total, Goldplat invested £1.25mn in its Ghana business in the 2024-25 financial year.

Although annual pre-tax profit from the Ghana operation fell from £5.2mn to £2.2mn, it has now started to rebound, increasing by 25 per cent to £1.12mn in the first quarter of the 2025-26 financial year. Moreover, the gold price has surged 20 per cent to $4,690 an oz since the end of its first quarter (30 September 2025), which underpins the ongoing recovery of earnings.

In addition, first-quarter pre-tax profit from Goldplat’s South African operations more than doubled to £1.25mn. The performance was buoyed by an increase in supply from South America, a one-off transaction with a local supplier, improved cost management and the rising gold price.

House broker Zeus Capital is pencilling in 120 per cent growth in pre-tax profit to £4.4mn and a trebling of earnings per share (EPS) to 1.8p in the 12 months to 30 June 2026. However, the company is trading materially ahead of forecasts as the two operations generated combined pre-tax profit of £2.4mn (excluding head office and listing costs) in the first quarter alone. Before imminent earnings upgrades, the shares trade on a forward price/earnings (PE) ratio of 6.5.

Moreover, Goldplat’s net cash of £6.1mn (30 June 2025) is forecast to increase to £8.4mn by the same point this year, buoyed by the improved operating performance and cash generation. That sum equates to 42 per cent of the company’s market capitalisation of £20.1mn. On this basis, Goldplat’s enterprise valuation of £11.7mn equates to twice operating profit estimates of £5.9mn.

The bargain basement earnings multiple aside, the shares trade on a deep 16 per cent discount to net asset value (14p) even though Goldplat has a rock solid balance sheet with high levels of liquidity, as highlighted by a current ratio (current assets/current liabilities) of 1.7 times at its 2025 financial year-end.

The shares offer a decent income, too. The board has started paying dividends and declared an interim payout of 0.117p per share in December 2025. Based on Zeus’ full-year dividend per share estimate of 0.2p, the shares offer a prospective dividend yield of 1.7 per cent.

Sum-of-the-parts valuation

If you value Goldplat’s recovery operations on a more sensible multiple of five times operating profit estimates of £5.9mn for the current financial year, this implies a standalone valuation of £29.5mn (17.25p). Then there is the net cash, which is forecast to rise to £8.4mn (4.9p) by mid-year, or possibly even higher if the company exceeds analysts’ earnings expectations.

On this basis, a fair valuation of 22p for the equity – or almost double the share price – is a reasonable target. Zeus’ conservative fair valuation of 15.1p (pre-upgrades) still offers material upside to the current share price. Buy.

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