Dialight shares boosted by strategy payback
LED lighting technology business Dialight plc saw its UK share price rise almost 15p (2.6 per cent) to 578.55p despite posting a £7.1 million first-half loss compared to break-even this time last year.
Shareholders were encouraged by a change of strategy by the Cambridge cluster company as well as a bullish forecast for the second half from CEO Michael Sutsko.
Revenue was slightly down to £79.8m from £80.6m year-on-year but gross profit nudged ahead to £28.8m from £27.1m.
Dialight management have worked hard to improve the company’s operating model to support scalable and cost efficient production. It has moved its first two product lines to outsourced manufacturing partner, Sanmina.
Other operational switches are said to be in train while two automation partnerships are in progress to broaden Dialight’s channels to market and value proposition.
Order intake is reportedly 10 per cent ahead and Sutsko said that initiatives were underway to drive long term, sustainable growth.
Dialight says it has invested significantly in its product roadmap to maintain a technological lead; 34 new products were introduced in the first half.
Sutsko said revenues had been diversified both by sector and geography and Dialight was winning more strategic global accounts; 34 per cent of sales are now direct to corporate clients compared to 23 per cent in the first half of 2015.
Sutsko said: “Dialight made encouraging progress in the first half of 2016. We grew profit and free cashflow in spite of soft industrial market conditions.
“This shows the early benefits of our improvements to Dialight's operating model. It is particularly pleasing to see greater visibility on second half revenues, with orders up 10 per cent compared to the prior year.
“We are making progress with our plan to drive long-term profit growth and cash generation. Dialight maintains its strong customer relationships and distribution channels, global footprint, differentiated technical capability and highly engaged leadership team.
“The board remains confident of making progress this year and beyond; our expectations for the second half of 2016 remain unchanged, before any potential currency tailwinds.”