Dialight PLC Trading Statement (8206T)
November 19 2019 - 1:01AM
UK Regulatory
TIDMDIA
RNS Number : 8206T
Dialight PLC
19 November 2019
Dialight Plc
("Dialight" or "the Group")
Trading update
Dialight Plc (LSE: DIA.L), the global leader in LED lighting for
heavy industrial applications today publishes a trading update for
the year ending 31 December 2019, ahead of its full year results to
be published on 16 March 2020.
Current trading and outlook
We remain in recovery mode with a strong focus on rebuilding
customer and distributor confidence and continued investment in
distinctive and competitive products. We have seen early signs of
recovery but this has been hampered by the slowdown in the global
markets. With our exposure to US markets, the uncertainty of the
trading relationship with China continues to be a significant
headwind as we enter our traditionally busiest period. As a result,
the timing of orders is difficult to predict and after very weak
results in October, we now expect our full year EBIT to be in the
range of GBP5m to GBP8m after adjustment for non-underlying costs
of c.GBP6m in addition to those reported in August.
The Signals and Components business has had a difficult year,
with market conditions remaining weak. We expected some recovery in
the second half of the year, however market conditions remain weak
and recovery is not anticipated until the second half of 2020.
Our operational recovery and delivery to our end customers
continues to improve. Our current lead times are better than they
were prior to outsourcing to Sanmina, with both of our factories
performing strongly. As we go into 2020, we have overcome the
operational challenges of the past few years and we have a leaner
organisation that is focused on protecting our core markets.
Operational performance
Whilst adoption of a hybrid manufacturing model was key in
ensuring a rapid and controlled exit from Sanmina, this has come at
a significant cost to the business. The costs of using external
vendors during the exit from Sanmina have been treated as
non-underlying costs. We have now moved to a more vertically
integrated supply chain which gives us the flexibility to respond
to our customers' needs and enables us to drive costs down. This
will enable gross margins for the lighting business to return to
historic levels.
During our recovery we have continued to increase finished goods
inventory to demonstrate our operational recovery to our customers.
These are high running lines that are able to be shipped in a
matter of days. Accordingly, our inventory unwind is likely to take
longer than originally anticipated resulting in a higher net debt
than current market forecasts, however well within covenant levels.
We have undertaken a detailed review of our inventory and we are
satisfied that the obsolescence risk is low and that current
inventory levels are an investment in our recovery.
To date, we have been unable to reach a compensation settlement
with Sanmina and we are now exploring all options to recover costs
related to the performance of, and exit from, Sanmina.
Contacts:
Dialight plc
Tel: +44 (0)203 058 3542
Fariyal Khanbabi - Group Chief Executive (interim)
Tel: +44 (0)203 058 3542
Ronan Sheehy - Group Finance Director (interim)
MHP Communications
Tel: +44 (0)20 3128 8570
Tim Rowntree, Guy Featherstone, Pete Lambie
Person responsible:
The person responsible for arranging the release of this
announcement on behalf of Dialight is Fariyal Khanbabi.
About Dialight:
Dialight (LSE: DIA.L) is a global leader in sustainable LED
lighting for industrial applications. Dialight's LED products are
providing the next generation of lighting solutions that deliver
reduced energy consumption and create a safer working environment.
Our products are specifically designed to provide superior
operational performance, reliability and durability, reducing
energy consumption and ongoing maintenance and achieving a rapid
return on investment.
The company is headquartered in the UK with operations in the
USA, UK, Germany, Malaysia, Singapore, Australia, Mexico, Dubai and
Brazil. www.dialight.com.
Notes:
Cautionary Statement: This announcement contains certain
statements, statistics and projections that are or may be
forward-looking. The accuracy and completeness of all such
statements, including, without limitation, statements regarding the
future financial position, strategy, projected costs, plans and
objectives for the management of future operations of Dialight Plc
and its subsidiaries is not warranted or guaranteed. These
statements typically contain words such as 'intends', 'expects',
'anticipated', 'estimates' and words of similar import. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. Although Dialight Plc believes that the
expectations will prove to be correct. There are a number of
factors, many of which are beyond the control of Dialight Plc,
which could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking
statements. This announcement contains inside information on
Dialight Plc.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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