Dialight operating profit up 53% in 1H; outlook ‘promising’
LED technology specialists Dialight plc, (DIA.L) today reported that revenue for the six months to 30 June grew by 16% to £30m while operating profit jumped 53% to £2.3m.
CEO Roy Burton (pictured) said both its business divisions - Components and Signals/Illumination – increased orders, sales and profits.
Orders in Components increased 30% for the half compared to 2005, including two sizeable one-off orders for electromagnetic disconnect products, most of which have been delivered in the first half.
Signals/Illumination saw a 18% boost in orders. This division is driven by the adoption rate of high brightness LEDs (light emitting diodes) in applications such as traffic lights, rail signals and aircraft obstruction lights, where coloured LEDs provide major energy savings; and by industrial white lighting where the long life and reliability of LEDs provide safety and maintenance cost benefits.
“Our traffic light business in the relatively mature North American market does not vary significantly from period to period,” Mr Burton said. “However, in this half there has been the introduction of a new Institute of Traffic Engineers standard for traffic lights in the US. Dialight introduced a preliminary version of this light early in 2005 and followed this with an upgraded more efficient signal in June.
“Whilst adoption of this new standard is not mandatory, it is expected that it will accelerate in the second half of 2006. Significantly, we are the first supplier to conform fully to the new standards.”
The Cambridge-headquartered company remains optimistic about the prospects of the European traffic business. It believes it is taking market share as well as seeing an enhanced adoption due to the introduction of the new German OCIT standard.
To date adoption of LED based traffic lights across all European territories has been relatively low, but Dialight’s customer base is expanding as it gains further customer specific approvals.
Mr Burton said: "The relocation of our European traffic light production to the UK and the developing relationship we have with key European traffic systems OEMs will enable us to build further our presence in the European solid state traffic signal market, as adoption rates accelerate."
The company said that Lumidrives, a supplier of solid state lighting fixtures and components that it acquired in January, had now been fully integrated into the Group.
Outlook
He said that demand for the Group's Components products continues in line with the encouraging levels achieved in the first half, although this business segment remains sensitive to overall world market levels of demand. “The Lumidrives acquisition and the recently announced license agreement position us well in the growing solid state lighting market,” Mr Burton said.
The prospects for the European traffic market are good, especially with its focus on developing relationships with key traffic systems OEMs, he said.
“Our other markets remain promising, driven by the adoption of LED technology based on strong value propositions.
“The weakness of the US dollar, in which two-thirds of our sales are denominated, will if maintained at current levels, have a modest adverse impact on our expected growth in sterling terms”.
The company’s share price was unchanged after the release of the results.
18th September 2006
