Dialight shares tumble after 74% profit drop

27th Jul 2015 10:23

(ShareCast News) - Shares in LED firm Dialight were down more than 5% after the company posted weaker than expected half-year results.At 0921 BST shares were own 5.51% to 517.80p.Revenue for the six months ended 30 June was £80.6m, up 14% from the same period last year of £70.9mGroup underlying operating profit decreased 74% to £1.7m from £6.5m for the same period last year, worse than analysts expected.The UK company's lighting operating profit fell 51% from £7.1m to £3.5m.Underlying earnings per share of 5.4p were worse than 14.2p for the first half of 2014, and the board said it would not declare a dividend.Dialight group chief executive Michael Sutsko instigated an operational review of markets, products and geographies, saying he would report back in October."We are clearly disappointed by the half year results for the Group, which reflect the adverse impact of operational inefficiencies and the impact of the oil and gas sector on lighting revenue growth in Q2 2015."N + 1 Singer put its rating under review from 'buy' and said the results were weaker than expected.Analysts expectedthey would have to reduce their estimates again given there was no clear timetable for reduction in operating costs.Investec also said it would review its rating, and said the results were better than expected for revenue, but poorer for earnings."We are already expecting a big improvement in the second half due to recovering productivity in the Mexican Lighting plant, but we believe that there should be downward pressure on consensus estimates, not least due to less helpful exchange rates," analyst Michael Blogg said in a note.Blogg said the important issue would be how quickly the new Mexican plant gets back on track.