UPDATE: Dialight Confident On 2010 Following Profit Rise

26th Jul 2010 10:09

(Adds executive comment and detail.) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--LED light manufacturer Dialight PLC (DIA.LN) Monday reported a near-tenfold increase in first-half pretax profit, driven by bumper sales of products like obstruction lights for mobile phone masts and customers restocking bare inventories. Chief Executive Roy Burton told Dow Jones Newswires Huntingdon, England-based Dialight is confident about its prospects for 2010. Demand for Dialight's products, which are hardier and more energy-efficient than traditional lighting, is underpinned by companies' desire to save money, he said. The company also expects to win more business in two potentially large U.S. markets--obstruction lights for mobile phone masts and disconnect switches for "smart" electricity meters, said Burton. Despite shipping as many strobe lights for masts in the first half of 2010 as it did in the whole of 2009 and winning a new contract for smart meter switches, announced Monday, Dialight is still only addressing a fraction of each market, Burton said. Dialight, which makes lights for electronic devices and factories, reported a pretax profit of GBP5.24 million for the six months ended June 30, compared with a profit of GBP529,000 a year earlier. Revenue increased by a third to GBP46.2 million, driven by rising sales of its obstruction lights, LED traffic lights and restocking by customers like Nokia Corp. (NOK1V.HE) and Cisco Systems Inc. (CSCO). Restocking accounted for between 5% and 10% of first-half revenue, Burton said. Earnings were also aided by better margins. Dialight tweaked its existing products and rolled out new versions which cost it less to make, said Burton. The company declared a dividend of 2.8 pence a share, up from 2.3 pence a year earlier. Burton added Dialight is keeping an eye open for potential acquisition opportunities. In May, it bought BTI Light Systems A/S, a supplier of obstruction lights for the offshore energy industry. Burton said the company has considerable potential to book sales and profit in future years from selling obstruction lights to the makers of wind turbines. The U.K., for example, plans to expand its capacity to generate electricity from offshore wind farms significantly over the next decade. Up to GBP100 billion is expected to be invested in projects off the U.K. coast. Brokerage Ambrian estimates Dialight will report a full-year net profit of GBP5.6 million on revenue of GBP89.5 million. It rates the stock "buy". At 0857 GMT, shares in Dialight were up 9.5 pence or 2.8% at 345 pence, outperforming a 0.4% higher FTSE All-Share index. The shares have gained 58% since the start of the year. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [email protected] Order free Annual Report for Dialight PLC Visit http://djnweurope.ar.wilink.com/?ticker=GB0033057794 or call +44 (0)208 391 6028 (END) Dow Jones Newswires July 26, 2010 05:09 ET (09:09 GMT)