Dialight aims for swift turnaround after profit slump

24th Feb 2014 10:50

Shares in lighting specialist Dialight suffered after it revealed a hefty fall in full-year profits, with the company blaming contract delays. Still, the company has hiked its dividend and expects a return to earnings growth in 2014. Pre-tax profits for the year though December 2013 fell 43% to £11.2m on revenue ahead 14% to £131.2m, with sales by the key lighting arm alone up 51% to £68.5m. Basic earnings per share fell to 26.2p from 42p last time. Despite the disappointing profit performance the company has pegged its final dividend at 9.5p, giving a total payout for the year of 14.4p, up 7% on last year, underlining management confidence on outlook. The group's net cash position at year end December 2013 stood at £7.1m, down from £15m. The company, a supplier of light emitting diode units, said performance over the year suffered from the late receipt of orders by its lighting business, as well as investment decisions by certain end customers, primarily in the US, being deferred until 2014. The US makes up more than two thirds of group revenue. The group admits that during the year under review it delivered profit at a level lower than its own internal expectations. It is now undertaking an assessment, assisted by an independent consultant, of the group's forecasting and performance process. This assessment has already highlighted a number of process improvements, the implementation of which have begun. Following completion of these improvements, the group believes it will have a much more "robust and focused" system of internal control that will support Dialight's growth in the coming years.In late morning trade Dialight shares were down 17.5p or 2.3% to 747.5p, valuing the company at £241.9m. That amounts to a recovery from earlier in the session when the shares were off as much as 11% to 682p. KK