TIDMLUCE
RNS Number : 4349F
Luceco PLC
16 July 2021
16 July 2021
Luceco plc
First half trading update
Full year guidance ahead of market expectations
Luceco plc ("the Group" or "Luceco"), the manufacturer and
distributor of wiring accessories, LED lighting and portable power
products, is pleased to provide the following update on trading for
the six months ended 30 June 2021 ('H1 2021') and to offer full
year guidance that is ahead of current market expectations.
Our trading performance has continued to improve throughout the
second quarter. Demand has been stronger and broader than expected.
We continue to be successful in protecting our margins from the
impact of increasing inflationary pressure on raw material and
freight prices.
We now expect to report H1 2021 revenue of GBP108m and Adjusted
Operating Profit of GBP19m, versus previous guidance of GBP105m and
GBP18m respectively.
As a result of a strong order book and the fact that seasonality
normally results in second half revenue being ahead of the first
half, we now expect full year 2021 revenue of at least GBP220m and
Adjusted Operating Profit of at least GBP39m, ahead of current
market expectations.
H1 2021 performance
-- Revenue of GBP108m, 51% higher than H1 2020 and 31% higher than H1 2019:
o Strong growth versus 2019 underlines the extent of our ongoing
market share gains, particularly during COVID
o Residential demand continues to be strong, with revenue
boosted by new business wins, superior channel access and
continuing high levels of home improvement activity
o Commercial and institutional demand continues to improve, with
confidence returning to the LED project market
o Superior and improving product availability in a tight market,
as a result of our vertically integrated manufacturing model, has
accelerated our market share gains toward the end of the half
o Revenue performance by sales channel:
% of Group % growth % growth /
Sales channel revenue H1 2021 versus H1 2020 (decline)
versus H1 2019
----------------------------- ---------------------------- --------------------------- ----------------------------
Retail 32% 44% 27%
Hybrid 26% 64% 70%
Professional
Wholesale 29% 60% 34%
Professional
Projects 13% 22% (8)%
Total 100% 51% 31%
-- Gross Margin of 38.5%, 0.1 percentage points higher than H1 2020:
o Gross margin successfully protected from significant
industry-wide cost inflation to date
o Inflationary pressures have increased since our last update.
Our estimate of the annualised cost impact has increased from
GBP15m to GBP20m. Inflationary headwinds will increase in the
second half, however we expect our mitigating actions to broadly
maintain current margin levels
-- Adjusted Operating Profit of GBP19m and Adjusted Operating Margin of 17.6%:
o High sales growth, protected gross margin and controlled
overheads resulted in Adjusted Operating Profit more than doubling
against H1 2020
-- Net debt to LTM Adjusted EBITDA at 30 June 2021 of 0.5x
Full year 2021 outlook
-- Revenue of at least GBP220m, 25% higher than 2020 and 28% higher than 2019
-- Adjusted Operating Profit of at least GBP39m, 30% higher than
2020 and more than double 2019
-- Adjusted Operating Margin of 18%, 1 percentage point higher
than 2020 despite inflationary pressures
-- Net debt is expected to be approximately 0.25x LTM Adjusted
EBITDA at year-end (before any M&A activity)
-- Cash conversion is expected to improve in H2, as extra
inventory held in H1 to compensate for supply chain disruption is
progressively released
John Hornby, Chief Executive Officer, said:
"I am pleased to report that Luceco continued to trade strongly
throughout the second quarter. New business wins, superior channel
access and record levels of product availability from our agile
in-house manufacturing allowed us to capitalise on healthy
construction RMI markets, which we overwhelmingly serve. It is
pleasing to see demand return to our commercial LED project
businesses, further diversifying our sources of growth. Buoyant
markets have created inflationary pressures and freight capacity
issues across our industry, but I am confident we can continue to
navigate these transitory issues satisfactorily. I expect us to
continue to make the most of healthy market conditions throughout
the second half, yielding another year of record results for
Luceco."
- ENDS-
For further information, please contact:
Luceco plc Contact
============================= ======================================
John Hornby, Chief Executive 020 3128 8572 (Via MHP Communications)
Officer
Matt Webb, Chief Financial 020 3128 8572 (Via MHP Communications)
Officer
MHP Communications Contact
============================= ======================================
Tim Rowntree 020 3128 8572
James Bavister 020 3128 8572
Florence Mayo 020 3128 8572
This announcement is released by Luceco plc and contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 (MAR). It is disclosed in accordance with
the Group's obligations under Article 17 of MAR. Upon the
publication of this announcement, this information is considered to
be in the public domain.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of Luceco plc by Matt Webb, Chief Financial Officer.
Business summary
Luceco is a manufacturer and distributor of high quality and
innovative wiring accessories, LED lighting and portable power
products for a global customer base.
The Group supplies trade distributors, retailers, wholesalers
and project developers with a wide range of products which broadly
fall into the following market recognised brands:
-- British General ("BG"): wiring accessories including switches
and sockets, circuit protection and cable management products;
-- Luceco and Kingfisher Lighting: energy efficient LED lighting
products and associated accessories; and
-- Masterplug: cable reels, extension leads, EV chargers, surge
protection, timers and adaptor products.
Luceco's long-established BG brand commands a loyal following
amongst professional electrical contractors in both the UK and
overseas. It is synonymous with quality, safety, innovation and
value for money. The production of BG wiring accessories is the
main focus of the Group's Chinese manufacturing facility, allowing
it to control product quality, cost and availability.
The Luceco and Kingfisher LED lighting brands combine to present
a comprehensive range of indoor and outdoor LED lighting solutions.
The range focuses largely on professionally installed products with
an emphasis on performance and quality. The Group is able to
support these products by offering customers access to its in-house
installation design team.
Masterplug is the market leading brand in the UK Portable Power
category. It is sold largely to consumers through retail
distribution and online. Its products are offered in a wide range
of global electrical standards and they are sold in every territory
in which the Group operates.
Forward-looking statements
This announcement contains forward-looking statements that are
subject to risk factors associated with,
among other things, the economic and business circumstances
occurring from time to time in the countries,
sectors and markets in which the Group operates. It is believed
that the expectations reflected in these
statements are reasonable, but they may be affected by a wide
range of variables which could cause actual
results to differ materially from those currently anticipated.
No assurances can be given that the
forward-looking statements in this announcement will be
realised.
The forward-looking statements reflect the knowledge and
information available at the date of preparation of
this announcement and the Group has no obligation to update
these forward-looking statements. Nothing in this announcement
should be construed as a profit forecast.
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END
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