Dialight 07 revenue hit by dollar weakness but delivers expected profits; mulls divesting LED components unit
Dialight plc, specialists in applied LED technology, reported that sales grew 8% in constant currency terms in the year ended 31 December 2007 to £63.4m but the weakening US dollar saw revenue measured in sterling grow by only 2%.
Nonetheless the Cambridge-based group delivered a pre-tax profit of £4.5m, which was in line with market expectations. Two-thirds of the Group's sales are denominated in US dollars.
CEO Roy Burton (pictured) said "We are pleased to report our strategy of identifying and then servicing large niche markets for LED based products is progressing well. In 2007, sales in the Signals/Illumination segment of our business grew over 17%.
“With an excellent pipeline of new products complementing the Safesite and White Strobe products, we are confident of continued growth in our Signals/Illumination business."
Dialight has two business segments: Signals/Illumination which includes Traffic and Rail Signals, Obstruction Lights and the new product area of Solid State Lighting; and its Components comprising Light Emitting Diode (LED) Indication Components and Electromagnetic Disconnects ('smart' meter disconnect switches).
The company also said that a strategic review of its business had concluded it should explore divesting the LED Indication Components business (from the Components division) with a view to realising “appropriate shareholder value” and streamlining the profile of the Group to more accurately reflect Dialight as a focused Solid State Lighting business.
There was a big difference in the performance of the two business segments. The Signals/Illumination division grew 17% at constant currency, and 10% at actual exchange rates. Within this, the Traffic product line grew by 20%.
Revenue in the Components segment fell 6%, mainly due to the weaker dollar.
Outlook
The return of the Components segment to normal levels is expected to continue, given no major market downturns, with the added potential for good performance from the 'smart' meter disconnect products in 2008, Mr Barton said.
In 2007, the Signals/Illumination segment achieved strong growth and importantly, a number of key new products were introduced. The Dialight Lumidrives line was redesigned, SafeSite was launched and the newest version of the White Strobe is showing strong acceptance in the market, he said.
In addition there is a pipeline of other new white light based products for 2008.
The Board is therefore confident that in 2008 and beyond, “our strategy for growth in the Signals/Illumination market will show continued success following the double digit sales performance in 2007”.
The company’s share price was unchanged in early trading, but it has recovered well since mid February lows. Market capitalisation is around £46m.
3 March 2008
