Dialight identifies major opportunities for growth
Shares in Dialight, the Huntingdon based leader in applied LED technology, headed north as the company posted a strong increase in profits on continuing business for the year ended December 31 – and the company’s success will bring spin-off benefits for its Newmarket manufacturing facility.Shares in Dialight, the Huntingdon based leader in applied LED technology, headed north as the company posted a strong increase in profits on continuing business for the year ended December 31 – and the company’s success will bring spin-off benefits for its Newmarket manufacturing facility.
Pre-tax profits were 4 per cent ahead at £4.5m on continuing business despite a dip in turnover.
Overall group turnover for the year was £95.2m – down from £118.9m – with Solartron contributing for only part of the year because of its disposal.
Group pre-tax profit was down to £8.7m from £12.5m. Sales of the continuing business were actually up to £56.1m from £55.3m.
Chairman Harry Tee said the results reflected the group’s decision to focus on the emerging solid state lighting market with a new name and fresh management. The disposal of Solartron for £72m and return of £46.5m to shareholders was the final step of the board’s strategy of repositioning the group into a market with high growth potential, Tee said.
New group chief executive, Roy Burton added: “Dialight is well positioned to grow as the application of solid state lighting technology expands. The acquisition of Lumidrives early in 2006 enhances our position in this emerging sector.”
Burton disclosed that late last year Dialight was awarded a contract to supply LED indicators in a wing mirror application for a major Japanese carmaker. It is expected that shipments will start in the middle of 2006. Dialight is pursuing opportunities with other niche automotive applications.
Dialight continues to do well for applications such as long lasting traffic lights, rail signals and similar devices.
This segment posted a 5 per cent sales growth in the year despite the US traffic market proving pretty flat. Half the US market for LED traffic lights is taken up but there is massive scope for growth in Europe and Asia.
In anticipation, Dialight is pushing for further penetration and to fulfil expected demand manufacturing is being concentrated in the group’s Newmarket and Mexico facilities.
In the rail signals market, significant contract wins were achieved with New York City Transit Authority, involving 50,000 signals, and with Danish rail authorities. Russia is close to coming on board and Dialight anticipates other opportunities in the European market.
Another growth area is expected to be red warning lights at airports and on tall buildings near airports to warn pilots.
Dialight has also developed a bespoke device for hazardous locations, such as areas where explosive vapours may be present. Dialight has developed the concept of inherent safety and combined with a five-year life this makes a compelling value proposition for operators of petrochemical plants, refineries and offshore platforms.
The potential for this type of device is in excess of £100m.