Dialight’s (DIA) clean-up mission won over investors on results day. Shares in the industrial LED lighting specialist climbed 8 per cent in early trading after management expressed its confidence that manufacturing setbacks should be rectified in time for the all-important fourth quarter ordering season.
Last year, Dialight hit rock bottom after its move to outsource manufacturing to US-listed Sanmina in Mexico went pear-shaped. Sanmina’s inability to handle extra workloads prompted long delays delivering customer orders, resulting in underlying pre-tax profit in lighting crashing 56 per cent to £3.3m in the first half of 2018.
That bad news was already disclosed before the publication of these results, leaving investors to focus on remedial actions. Dialight excelled in that department, confirming that its earlier decision to move the final assembly of products back to its own facilities improved the level of late orders by 60 per cent since the start of the year. Management added that there’s still plenty of capacity left to manufacture more of its goods in-house, if necessary.
Prior to these figures, Peel Hunt expected adjusted pre-tax profit of £14m and EPS of 32.6p for the year to December 2018, compared with £9.4m and 17.9p in 2017.
| DIALIGHT (DIA) | ||||
| ORD PRICE: | 502p | MARKET VALUE: | £163m | |
| TOUCH: | 496-502p | 12-MONTH HIGH: | 920p | LOW: 460p |
| DIVIDEND YIELD: | nil | PE RATIO: | 157 | |
| NET ASSET VALUE: | 244p* | NET CASH: | £7.3m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 92.7 | 4.0 | 8.0 | nil |
| 2018 | 80.1 | 2.8 | 6.4 | nil |
| % change | -14 | -30 | -20 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £14.6m, or 45p a share | ||||
