Last year was a one to forget for Dialight (DIA). The maker of high-specification lighting fixtures was in such a mess when chief Michael Sutsko joined last summer that he immediately outlined plans to overhaul the company. Issues linked to manufacturing inefficiencies and poorly-timed headcount expansion were blamed for underlying operating profit sinking two-thirds to £6.1m.
That figure, disappointing as it was, didn't factor in the costly process of restructuring, either. Around £9.5m was spent on reversing the rise in employee numbers and getting rid of dated stock; efforts that form part of Mr Sutsko's strategy to achieve revenue growth in excess of 25 per cent by 2019. With other measures including the UK plant closure expected to cost £12m in 2016, management opted to cull the dividend.
Trading conditions remain challenging, too. Underlying operating profit in the core lighting division fell 56 per cent as Dialight grappled with weakening demand from beleaguered oil and gas customers, and order delays from key automotive accounts. Management accepts that an uncertain economic outlook will continue to weigh on business, but is confident that strategic initiatives can deliver underlying profit growth in 2016.
Broker N+1 Singer forecasts adjusted pre-tax profit of £10.5m in 2016, giving EPS of 20.8p (from £5.6m and 13.3p in 2015).
| DIALIGHT (DIA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 495p | MARKET VALUE: | £161m | |
| TOUCH: | 491-495p | 12-MONTH HIGH: | 817p | LOW: 380p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 216p* | NET DEBT: | 5% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 103 | 14.8 | 30.3 | 10.0 |
| 2012 | 115 | 19.8 | 42.0 | 13.5 |
| 2013 | 131 | 11.2 | 26.2 | 14.4 |
| 2014 | 160 | 15.5 | 29.4 | 15.0 |
| 2015 | 161 | -3.9 | -6.4 | nil |
| % change | +1 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £20m, or 62p a share | ||||
