Dialight interims

Supplier of light emitting diode (LED) solutions for industrial users. Applying leading edge LED technology, it produces retro-fittable lighting fixtures designed specifically for hazardous locations, obstruction signals and traffic signalling.  I have a holding in my growth portfolio (epic code: DIA). 

Dialight announced their interim results today, highlighting (pardon the pun) that Group revenue had increased 18% and 25% at constant currency to £70.9m.

 

This was due to the continuing high level of growth in their lighting division, increasing sales by 46.8% to £43m and now represent 61% of the Group.  Signals sales fell 9.4% to £18.3m and Components sales declined 7.7% to £9.6m. 

 

Group underlying operating profit increased 18% and 26% at constant currency to £6.5m.  Lighting contributed £7.1m (£4.4m last year), Signals £1.4m (£1.6m LY) and Components -£0.4m (£1.0m LY), with unallocated overheads -£1.6m (-£1.5m LY).   

 

Underlying EPS increased 22% to 14.2p and an interim dividend of 5.2p was proposed, an increase of 6.1%.  The non-underlying operating costs relating to employee severance and restructuring were £1.1m. 

 

Free cash flow was -£1.1m compared to -£0.8m last year, so after dividend payments of £3.1m net cash was down £4.3m to £2.8m.

 

This is a good result from Dialight, although it is disappointing that the Signals division had not flattened out and shows both a decline compared to last year's interims and the second half of last year (-15.3%).  They look on track to achieve market consensus of 38.8p and management have said "...the Board expects to drive strong Lighting growth for 2014 and the years to come. This, combined with a stabilisation of the Signals business leads the Board to expect a return to earnings growth in 2014..."