In September 2018, LED lighting specialist Dialight (DIA) packed its bags and ended a disastrous foray into the world of manufacturing outsourcing. When the Sanmina deal was agreed in March 2016, management had expected to benefit from its partner’s buying power and labour efficiencies. In the end, it believes that in some cases, its costs actually went up.
Production delays dragged US revenues down 5 per cent on the prior year, although the transition of production of High Bay (the largest product line) to its own facility resulted in a significant reduction in late orders. On average, the group was delivering orders with a three- to four-week lead time, compared with Sanmina’s average lead time of 12-18 weeks.
House broker Investec expects adjusted pre-tax profits and earnings per share of £14.8m and 32.8p this year, up from £7.8m and 17p in 2018.
| DIALIGHT (DIA) | ||||
| ORD PRICE: | 360p | MARKET VALUE: | £117m | |
| TOUCH: | 360-364p | 12-MONTH HIGH: | 600p | LOW: 290p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 22 | |
| NET ASSET VALUE: | 261p* | NET DEBT: | 3% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 160 | 15.5 | 29.4 | 15.0 |
| 2015 | 161 | -3.9 | -6.4 | nil |
| 2016 | 182 | -3.8 | -8.4 | nil |
| 2017 | 181 | 3.0 | 4.8 | nil |
| 2018 | 170 | 7.4 | 16.4 | nil |
| % change | -6 | +147 | +242 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £16.5m, or 51p a share | ||||
