Dialight shares hit by 74 per cent profit fall
Shares in Cambridge-based LED technology specialist Dialight fell heavily on early trading after a huge drop in operating profits in the six months to June 30.
At one stage the UK stock was down 35.25p – or 6.43 per cent – to 512.75p before starting to stabilise.
While interim group revenue was 14 per cent ahead to £80.6 million, the group underlying operating profit fell 74 per cent to £1.7m. Operating profit in the Lighting division was 51 per cent lower at £3.5m despite lighting revenues being 24 per cent ahead to £53.4m.
Dialight said it continued to have significant headroom on banking covenants, maintaining financial flexibility for the group. It is not declaring an interim dividend; this time last year it announced a 5.2p dividend.
New chief executive, Michael Sutsko, said recently that he intended to trigger a fresh review of operations and he has confirmed that this is now underway.
Sutsko said: “I have commenced a strategic review to identify the best opportunities in current and potential markets, products and geographies. We will report back with the findings of this review in October.”
He remained optimistic about future prospects for the business. “I am pleased to have joined Dialight and believe that we have a huge opportunity ahead and are well positioned to capture significant value in our markets.
“We are clearly disappointed by the half year results for the group, which reflect the adverse impact of operational inefficiencies and the impact of the oil and gas sector on lighting revenue growth in Q2 2015.”