Interim Management Statement

RNS Number : 2659F

Dialight PLC

20 April 2011

 



Dialight plc

("Dialight" or "the Company")

Interim Management Statement

 20th April 2011

Continued strong performance for Energy Efficient Lighting

Dialight plc (LSE: DIA.L), the UK based leader in Applied Light Emitting Diode ("LED") Technology, today publishes its Interim Management Statement relating to the period from 1 January 2011 until 19 April 2011, in accordance with Disclosure and Transparency Rule 4.3.

Dialight plc is leading the change in the status quo for industrial lighting users across the world. Applying leading edge LED technology it produces lighting fixtures designed specifically for hazardous and industrial locations, obstruction lighting and traffic signals to deliver significant reductions in maintenance and energy consumption.

Signals/Illumination

The Board is pleased to report that the Signals/Illumination segment is performing very well and is in line with our expectations.  The major growth engines, European Traffic, Obstruction Lighting and White Industrial Lighting continue to drive strong growth in this segment. Whilst Lighting sales in Europe and Asia are still at modest levels, our investments in Sales channel and new products are beginning to show good returns. We continue to introduce new products and improve designs, and are benefitting from further price reductions in LED components, the result of which are supporting continued margin improvement.

LED Indication Components

We did not expect the first half of the current year to be as strong as 2010, when the indication market recorded an exceptionally strong recovery following the economic downturn of 2009. The performance of the segment is consistent with the run rate of the latter months of 2010 and in line with expectations.

Electromagnetic Components

In our Preliminary Results for 2010, we stated that prospects for 2011 were promising but that future business was difficult to predict and margins were tight. Shipments of electromagnetic components for smart metering applications have fallen somewhat short of our expectations and, we would reiterate that future business remains difficult to predict.  The impact on profit however, is expected to be minimal due to the low margins in this segment.

Continuity of supply

To date we have not suffered component supply shortfall due to the impact of the Japanese earthquake on the Japanese electronics market and onward component supply chain. In order to minimise any supply issues, we are building a buffer of critical components with as much as six months usage being pulled forward. The emphasis has been to protect the most strategic parts of our business and at this stage, we feel relatively comfortable that we have taken all reasonable steps to safeguard our business.

Commercial update

As reported with the Preliminary Results in February, we spent 6.0% of Signals/Illumination revenue on research and development in 2010 and filed 29 new patent applications. We have recently agreed to grant a lifetime licence to a third party for the use of a number of our patents. This will be treated as a one-off gain in the Interim Results.

It was also disclosed in the risks and uncertainties section of the Preliminary Results and the Annual Report and Accounts for 2010 that there was a potential claim from a customer in the Signals/ Illumination segment. This relates to an existing agreement from 2007 for the development of a new LED light for rail signalling to an end customer specified standard. As a result of changes in these requirements we are in dispute with our immediate customer and whilst no final agreement has been reached, we are able to take a view of the potential liability and will provide for this in the Interim Results as a one-off loss. Such an agreement is not part of the normal business model of Dialight and we believe this is an isolated incident.  Overall, there will be no change to the Company's outlook for 2011 as a result of these two events.

Financial position

The Group maintains a strong balance sheet and cash generation is in line with expectations.  As announced on 16^th March, we have successfully bought out the US Pension Scheme. The cost of securing these liabilities was £2.4 million and as reported there will be a one-off non-underlying financial expense of £0.7 million in the Interim Results for the half year to 30th June 2011. Despite this initiative, our cash balance at the end of the first quarter remained positive at £6.3 million.

Outlook

A major part of the Company's revenues and profits are generated in the United States and this statement is made in the context of the current levels of exchange between the US Dollar and the Pound Sterling.

Dialight continues to drive its strategy for generating strong growth through the provision of energy efficient and environmentally friendly lighting products that provide a strong and immediate value proposition to its customers. Based on the continued excellent progress of the Signals/Illumination business, the Board is confident in maintaining its positive outlook for significant growth in both sales and earnings for 2011.

For further information:

Dialight plc

Roy Burton - Group Chief Executive

Mark Fryer- Group Finance Director

 Tel: [phone]

Canaccord Genuity Limited

Simon Bridges

Tel: 0+44 (0) 20 7050 6500

Kreab Gavin Anderson

Robert Speed-

Tel: [phone]

 Email:  [e-mail]

About Dialight plc

The Group comprises the following business segments:

Signals/Illumination which addresses the increasing demands for Energy Efficient Lighting solutions through the use of high brightness LEDs and utilisation of a number of associated technologies.  Areas of business include Traffic and Obstruction Lights and Solid State Lighting products.

Indication whose sales are primarily to Electronics OEMs for status indication; and

Electromagnetic components which supplies smart meter disconnect switches which are used by utility companies to manage remotely electrical supply to residential and business premises.

The company is headquartered in the UK with operating locations in the UK, USA, Denmark, Germany and Mexico. More information is available at www.dialight.com.

Cautionary statement

This Interim Management Statement contains certain forward-looking statements which have been made by the Directors in good faith using information available up until the date they approved the statement. Forward-looking statements should be regarded with caution as by their nature such statements involve risk and uncertainties relating to events and circumstances that may occur in the future. Actual results may differ from those expressed in such statements, depending on

the outcome of these uncertain future events.

 

END

 

 

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