Dialight still sees flat full year profits

7th Nov 2013 09:10

Dialight said it continued to expect full year underlying profits to be "broadly in line" with last year's results although it warned that the timing of industrial lighting orders was difficult to predict. Investors are likely to take heed of the caution given that the LED light specialist was forced to warn on profits in September due to the delay in the award of certain contracts.The group said its industrial light business had enjoyed sales growth of just under 60% for the 10 months to the end of October. It is bolstering sales staff numbers in the division and they are expected to reach 100 in December up from 59 sales people at the end of 2013. It is also investing in setting up new operations in Brazil and Russia, adding a new manufacturing facility in Malaysia and a second facility in Mexico. These measure are expected to increase this division's productive capacity by at least 50%. Dialight said the performance of its obstruction business had been hit by the shift in its business model but orders had been in line with its previous guidance of flat revenues for the second half. Its cash pile has shrunk to £1m from £6.3m a year ago which Dialight blamed on an additional inventory holding which it said was expected to reduce by the year end. Shares in Dialight, which have had a turbulent ride after two profit warning this year, were up 0.19% at 1033p. Michael Blogg, analyst at Investec, sees the weak share price as a buy signal.He said: "We consider that the stalled share price offers an opportunity to investors who had missed the strong rise between 2009 and 2012. We initiate cover with a buy recommendation."TB