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Luceco proves resilient through second half

The LED manufacturer experienced mixed fortunes in 2020
Luceco proves resilient through second half

 

  • Management notes pent up lighting demand
  • Revenue growth comes up short of expectations

Luceco (LUCE), which manufactures LED lighting and industrial consumables, experienced a mixed year as the dampening effect of the initial lockdowns reversed with a reopened economy in the second half.

Management noted a “pent up” demand effect as homeowners spent their savings on improvements throughout the year. This helped to offset to some degree the fall of in orders from large commercial and institutional clients and the impact of lockdowns in other countries. Despite this positive news, revenue growth of 2.4 per cent was some way off the 5-10 per cent range that had been forecast for the year.

Broker Numis raised its forecasts by 1 per cent for 2021 to give EPS for the year of 15.9p.

Luceco has performed very steadily over the 12 months and the shares have kept within a tight range. The company looks well-positioned for recovery and we retain our recommendation. Buy.

Last IC View: Buy, 191p, 8 Sep 2020

LUCECO (LUCE)   
ORD PRICE:266pMARKET VALUE:£ 428m
TOUCH:265-267p12-MONTH HIGH:274pLOW: 258p
DIVIDEND YIELD:2.3%PE RATIO:15
NET ASSET VALUE:44pNET DEBT:26%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20161349.104.60.3
201716812.36.20.8
20181643.000.90.6
2019 *17217.18.32.3
202017633.618.06.2
% change+2+96+117+170
Ex-div:22 Apr   
Payment:28 May   
* Dividend restated to include a  1.7p a per share payment during 2020 in lieu of the 2019 final dividend that was suspended due to Covid-19