A step-up in half-year revenues reflects the benefits of a focused sales strategy for Dialight (DIA). Receipts rose by nearly a fifth as the Cambridge-based LED lighting specialist targeted contracts in hazardous and heavy industrial markets.
This approach delivered a 53 per cent increase in sales at Dialight’s key lighting segment. Distribution and office costs rose in line with the rise in sales activity, so that group underlying profits grew 18 per cent to £6.5m - though restructuring costs sapped earnings growth at the statutory level.
Dialight, which was once part of the Dutch electronics giant Philips, now sells an increasing proportion of its LED lighting and signalling equipment for use in hazardous locations such as mines, power plants, and underground military installations. The strategic focus on niche heavy industrial markets has already delivered a substantial boost to performance, but management points out that “market penetration is still limited”.
A robust balance sheet puts the group in an ideal position to capitalise on this potential, either organically or through acquisition. Operating cashflow before working capital was £7.3m – up from £6.6m at the 2013 interim stage. In addition to net cash, the company also has a new £25m four-year committed bank facility at its disposal.
Investec expects adjusted 2014 EPS of 37.7p (2013: 31.6p), rising rapidly to 50.9p next financial year.
| DIALIGHT (DIA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 935p | MARKET VALUE: | £304m | |
| TOUCH: | 926-935p | 12-MONTH HIGH: | 1,419p | Low: 621p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 39 | |
| NET ASSET VALUE: | 202p* | NET CASH: | £2.8m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 59.9 | 4.9 | 10.6 | 4.9 |
| 2014 | 70.9 | 5.2 | 10.5 | 5.2 |
| % change | +18 | +6 | -1 | +6 |
Ex-div: 03 Sep Payment: 06 Oct *Includes intangible assets of £21.1, or 65p per share | ||||
