Lighting segment underpins Dialight

Dialight’s (DIA) first-half was a re-run of last year, with flat or lower sales in three of the group’s four operating divisions countered by another outstanding performance from the lighting business. And while overall group sales were higher, profits were dented by a number of one-off expenses and restructuring costs. Still, the bad news was already flagged and full-year results should meet forecasts.

Sales in the lighting division - which operates in the hazardous and industrial light market - jumped 70 per cent to £29.3m, boosting operating profits nearly three-fold to £4.4m, with demand driven by the significant energy costs savings that the group’s LED lights can bring and a new 10-year warranty. However, sales of obstruction lighting designed to help avoid aerial collisions with mobile phone masts slumped over 40 per cent following termination of the relationship with its main US distribution partner and hold-ups with a big contract. Sales in traffic signals were also weaker despite the fact that many LED based traffic signals in the US are due for replacement, although replacing one LED system for a new one offers less energy savings than the initial switch from non LED systems.

Analysts at N+1 Singer are forecasting full-year adjusted pre-tax profit of £23m, giving adjusted EPS of 48.2p (from £19.8m/40.9p in 2012).