Lighting manufacturers have benefited from regulatory change in recent years. If you're one of the more than 190 nations that signed up to the Paris Agreement, and exploring how to meaningfully cut emissions, then one of the more achievable public policy measures is to compel industry to switch from wasteful incandescent bulbs to affordable LED lighting.
It's this dynamic that’s providing a structural boost for the likes of Luceco (LUCE), a manufacturer of LED lights, wiring and home entertainment accessories, which floated in London last October. However, chief executive John Hornby identified cost savings linked to "maintenance services and energy efficiency" as the new prime drivers of demand.
The integrated lighting group delivered strong revenue growth in its maiden full-year figures, helped along by currency benefits as 55 per cent of sales are booked in US dollars. A favourable product mix and improved efficiencies bolstered gross margins and fed into a 30 per cent increase in operating profits to £15m.
Numis expects adjusted pre-tax profits of £19.9m and EPS of 9.9p for the December 2017 year-end, against £14.8m and 8.5p in 2016.
| LUCECO (LUCE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 207p | MARKET VALUE: | £333m | |
| TOUCH: | 205-207p | 12-MONTH HIGH: | 211p | LOW: 140p |
| DIVIDEND YIELD: | 0.1% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 24p* | NET DEBT: | 77% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 65.6 | 2.2 | 0.9 | nil |
| 2014 | 82.3 | 5.5 | 3.2 | nil |
| 2015 | 103 | 8.3 | 4.2 | nil |
| 2016 | 134 | 12.2 | 6.7 | 0.3 |
| % change | +30 | +48 | +60 | - |
Ex-div: 4 May Payment: 2 Jun *Includes intangible assets of £12.9m, or 8p a share. | ||||
