A June trading update from Dialight (DIA) warned of operational issues and fewer orders, but the full scale of the LED lighting specialist's challenges was only revealed in its first-half results. Investors sent its shares down 7 per cent after underlying operating profits slumped 74 per cent to £1.7m in the six months to June, and management put the interim dividend on hold.
The bright spot was a 17 per cent rise in constant-currency sales at Dialight's principal lighting division. That reflected new product launches and robust demand for energy-efficient lighting in industrial and hazardous locations. But oil and gas revenues were £3m lower and a £2m automotive order slipped into the second half, contributing to a slump in the division's operating profit of more than half to £3.5m.
Strong US demand for anti-collision lighting buoyed Dialight's smaller signals business. But that was offset by weaker sales of traffic signals and fewer orders from European wind turbine customers for obstruction lighting. Moreover, its components division's operating loss widened due to product design issues and production problems at the main Mexico plant.
Broker N+1 Singer has placed its forecasts under review. It previously expected pre-tax profit of £15m in the year to December, giving EPS of 29.8p (from £17.8m and 36.6p in FY2014).
| DIALIGHT (DIA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 517p | MARKET VALUE: | £168m | |
| TOUCH: | 517-518p | 12-MONTH HIGH: | 976p | LOW: 463p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 210p* | NET DEBT: | 12% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 70.9 | 5.2 | 10.5 | 5.20 |
| 2015 | 80.6 | nil | -0.1 | nil |
| % change | +14 | - | - | - |
*Includes intangible assets of £20.4m, or 63p a share | ||||
