Dialight plc
Post-close Trading Update
Dialight plc (“Dialight” or “the Group”), the leading LED lighting technology company, today issues a trading update for the year ended 31 December 2015.
Trading performance
Although Dialight’s revenue growth in the year has been impacted by weakness in the oil & gas sector and reduced levels of industrial capital expenditure, particularly in North America, the Board expects to report underlying operating profit1 in line with consensus market estimates for the year ended 31 December 2015.
Update on strategic progress
In the Group’s strategic review we outlined our plans to capture the market opportunity in LED lighting to deliver sustainable profit growth and strong cash generation. The initial focus is on rebuilding Dialight’s operating model, to enable scalable and cost efficient production. We are making good progress as we look to outsource manufacturing, streamline our product portfolio and develop common production platforms intended to decrease the number of individual component parts held in inventory.
As anticipated, this fundamental transition in our operating model has led to significant exceptional costs. In aggregate, we have incurred exceptional costs in the range of £10 million to £12 million during the year of which approximately £7 million were non-cash costs mainly as a result of inventory obsolescence and the write-off of previously capitalised development costs reflecting the progress we are making in outsourcing manufacturing, streamlining our product portfolio and developing common production platforms. There are likely to be further non-recurring costs in 2016, and we will provide further guidance on these and the benefit payback period at the final results.
Financial position
The Group’s financial position remains strong with net debt at 31 December 2015 of £3.8 million (30 June 2015: £8.0 million).
Final results
The Group will publish its audited final results for the year ended 31 December 2015 on Tuesday, 8 March 2016.
Michael Sutsko, Group Chief Executive of Dialight, said:
“As previously stated, 2015 was a challenging year for Dialight with the Group’s financial performance impacted by operating inefficiencies as well as its exposure to the oil & gas sector. However, we have a clear strategy to improve our business, and have made the first steps to secure sustainable, profitable growth and release the shareholder value inherent in this business.
“There remains a lot to do but we expect to make good progress in 2016 as we build on our differentiated and market-leading position in LED lighting to establish scalable and efficient manufacturing operations, develop a more effective sales model, and diversify into new sectors and geographies. Whilst the macro environment remains challenging, the structural growth drivers in the LED lighting market remain strong and we are confident in the company’s medium and long term outlook.”
Contacts:
Dialight PLC
Michael Sutsko – Group Chief Executive
Tel: +44 (0)1638 778641
Fariyal Khanbabi – Group Finance Director
Tel: +44 (0)7823 346586
Investor Relations
Clara Melia – Origin IR
Tel: +44(0)7748 171236
MHP Communications
Tim Rowntree / Jamie Ricketts / Tom Horsman
Tel: +44 (0)20 3128 8100
Notes
1. Underlying operating profit is defined as profit before interest, tax and non-recurring items. The Board considers that consensus market expectations of underlying operating profit for the Group are £5.5 million for the year ended 31 December 2015.
2. As previously announced, the Group’s Traffic and Vehicle businesses (currently reported within the Signals division) and its Components division are now being managed for value. As a result, the Group will change its segmental disclosure in the final results. A press release will be issued in advance of the final results to provide historical financial data in line with the new segmental disclosure.
3. Figures presented in this trading update are not audited. This announcement contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of Dialight. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Undue reliance should not be placed on forward-looking statements which speak only as of the date of this document. The Group accepts no obligation to revise publicly or update these forward-looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.
About Dialight
The Group comprises the following business segments:
· Lighting which addresses the increasing demands for Energy Efficient Lighting solutions for industrial / hazardous locations;
· Signals that covers Traffic, Transportation and Obstruction signals; and
· Components whose sales are primarily to Electronics OEMs for status indication.
The company is headquartered in the UK with operating locations in Australia, Brazil, Denmark, Germany, Malaysia, Mexico, Singapore, UAE, the UK and the USA. More information is available at dialightdev.wpenginepowered.com.