Strategic Review and Trading Update

RNS Number : 4834D

Dialight PLC

27 October 2015

 

27 October 2015

Dialight plc

("Dialight" or the "Group")

Strategic Review and Trading Update

Dialight (LSE: DIA.L), the UK-based market leader in LED lighting, today announces the results of its strategic review and provides an update on trading.

Strategy Review

Dialight will today host a presentation in London at which Michael Sutsko, Group Chief Executive, will outline the results of the strategic review he has led following his appointment in June 2015. The presentation will cover Dialight's addressable markets, operational efficiency, the development of its sales channels and product portfolio, and how the new strategy will provide a platform for profitable growth.

The key elements of the new strategy are:

•              Leadership in LED lighting technology

•              Growth in new sectors and geographies

•              A sales model based on strategic global accounts

•              A three-year product development roadmap

•              Scalable and efficient manufacturing operations

By the end of 2018, Dialight is targeting to achieve:

•              Over 25% annual revenue growth

•              Over 40% gross margin

•              Over 15% EBIT margin

•              Over 80% cash conversion

These targets reflect the Group's focus on the growth opportunities within its Lighting and Obstruction businesses. Going forward, the Group's Traffic and Vehicle businesses (currently within Signals) and Components division will be managed for value, and will be reported separately in Dialight's financial results for the year ended 31 December 2015 and thereafter.

The Group's strategic focus is on the delivery of profitable growth and therefore the Board does not intend to declare a dividend for the current year. The Board will re-evaluate its dividend policy in due course but at this stage does not expect to declare a dividend before 2017.

Trading Update

Trading in the three month period to 30 September 2015 was characterised by continued weakness in the oil and gas sector and reduced levels of industrial capital expenditure, particularly in North America. As a result, reported lighting revenue growth for this period was 5%.  The cost reduction actions announced on 7 August are on track to deliver their targeted reduction in operating costs and we are encouraged by the strength of our order book.  However, with market conditions having become more challenging during the third quarter, and Dialight's financial performance weighted as usual to the seasonally-strong fourth quarter, the Group faces an increased level of uncertainty in the remainder of the current financial year.

Michael Sutsko, Group Chief Executive, said:

"Our strategic review has confirmed the potential for Dialight to capture significant value in LED lighting. The Group has a differentiated position in a market that benefits from long-term structural growth and our focus now is to build on Dialight's expertise in LED lighting technology to diversify into new sectors and geographies, develop a more effective sales model and ensure that our manufacturing operations are scalable and efficient. The Board is confident that the strategy set out today will provide the platform for the Group to deliver sustainable profitable growth."

Slides from today's presentation and an audiocast of the event will be available after today on the Group's website: http://www.dialight.com/PLCHome/Index

Contacts:  

Dialight PLC

Michael Sutsko - Group Chief Executive

Fariyal Khanbabi - Group Finance Director

Tel: [phone]

Canaccord Genuity Limited

Simon Bridges / Guy Marks

Tel: [phone]

FTI Consulting

Nick Hasell

[phone]

 

END

 

 

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