Dialight at end of the tunnel

Following the post-warning autopsy, however, management is now being more prudent with its predictions of the timing of orders. "We don't want to disappoint the market again," chief executive Roy Burton told us. As previously flagged, underlying operating profit fell by over a quarter in 2013 to £14.5m, giving underlying EPS of 30.8p (from 41.7p). Doubling the sales force increased costs, but at least the new staff will generate a full year's revenue in 2014.

Broker N+1 Singer believes earnings should grow 19 per cent this year to 36.6p, driven entirely by the lighting business. Those forecasts look realistic: a number of lighting orders deferred late last year have now come in. Even without them, sales of energy-efficient lighting rose by half in 2013 and profit by 34 per cent to £11.5m. The problem was in the signals division, where profits halved following a bad year for the US traffic lights business. A second-half pick-up in demand for warning lights on mobile phone masts only softened the blow.