Sales at Dialight's core signals and illuminations unit leapt by a quarter in the period, and full-year results are aimed squarely at the top end of City forecasts. Still, valuation remains an issue for us - the shares looked pricey even before a results-led rally, leaving them up with events.
Replacing LED-based, or solid-state, lighting for heavy industrial and hazardous sites generated sales growth of 65 per cent, and so-called obstruction lighting grew 40 per cent, mostly due to strong demand for white strobe lights for mobile phone masts in the US. Converting broadcast towers to new high-intensity strobe lighting chipped in, too. There are more than 1,800 of these in the US and, at $100,000 apiece, should generate rich pickings over the next few years. Dialight currently makes most of its money in North America, but that could change if expansion goes to plan. Its salesforce has already doubled in a year and further expansion is needed. Brazil's oil and gas sector is a "clear target" for them in the second half, too, and a new plant in Malaysia opens up Australasia. Selling the lossmaking electromagnetic components division looks a sensible decision.
Broker N+1 Brewin expects adjusted full-year EPS of 39.5p (29.6p for 2011), but thinks earnings growth will average 29 per cent over the next three years compared with 50 per cent for the previous three.
DIALIGHT (DIA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,054p | MARKET VALUE: | £339.4m | |
| TOUCH: | 1,053-1,054p | 12-MONTH HIGH: | 1,134p | Low: 631p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 178p* | NET CASH: | £8.1m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 46.8 | 6.18 | 11.2 | 3.3 |
| 2012 | 53.1 | 8.30 | 16.9 | 4.0 |
| % change | +14 | +34 | +51 | +21 |
Ex-div: 8 Aug Payment: 7 Sep *Includes intangible assets of £17.5m, or 54p a share | ||||
