Trading Update

Light Science Tech. Holdings PLC

29 June 2023

 

Light Science Technologies Holdings plc

("LSTH", the "Company" or the "Group")

Trading Update

Light Science Technologies Holdings plc (AIM: LST), the controlled environment agriculture ("CEA") technology and contract electronics manufacturing ("CEM") group, is pleased to provide a trading update for the six months to 31 May 2023 (the "Period").

Financial Highlights

Trading during the Period was in line with the Board's expectations, with revenue for the Period expected to be c.£4.4m (H1 2022: £3.6m), up approximately 22%. The Group's performance reflected the benefits of operational improvements undertaken to improve gross margins, which grew to c.20.9%, compared to 17.7% in FY 2022. Improving market conditions and reduced supply chain constraints within the CEM division underpinned this increase while the Group also successfully reduced overheads by approximately 20%, as part of the previously announced cost base realignment.

Operational Highlights

The CEM division performed in line with expectations. During the Period its position as the Group's predominant revenue generator continued, building on the record sales achieved during FY 2022. Furthermore, as anticipated, gross margin is returning to normalised levels.  This division is now the manufacturing arm of sister company Light Science Technologies - with the first production batch of sensorGROW successfully running through the UK Circuits' facility during the Period.

Within the CEA division, the Group continued to develop its portfolio and potential market reach. Particular focus was on positioning this division for growth via product development and intellectual property protection - with the aim of targeting global opportunities and addressing year round growing needs at the same time as reducing the requirement for food imports.

Patent Applications

During the Period, the Group submitted International Patent Applications for its sensorGROW sensor arrangement and advanceGROW modular light arrangements in the US and EU - in addition to its UK applications.

The sensorGROW patent is for the Group's all-in-one wireless sensor which provides complete growing environment data remotely and can be tailored to clients' environments (image below left). By utilising big data to highlight trends and provide insights, it enables users to increase profitability and yields at the same time as reducing costs.

The advanceGROW modular light arrangement system (image below right) has been developed as part of the Group's long term contract with Zenith Nurseries Ltd, to develop a cloche lighting and sensor technology system. Initial field trials increased crop growth by 40% in December 2022 - particularly useful given the cold ground and the poor light in glasshouses at that time of year, further highlighting commercial opportunities and the Group's ability to help extend the growing season.

Outlook

As previously flagged, there is still material uncertainty over the level and timing of revenue in the CEA division. Therefore, the Group's broader strategy remains on creating partnerships globally within this division, enabling it to develop a portfolio of clients to include markets that have been less impacted by the energy crisis. The CEM division continues to benefit from its relationship with long standing blue-chip customers, providing good levels of visibility. With a view to building on opportunities within both divisions, management is also evaluating acquisition opportunities that are cash flow generative.

The Board currently anticipates meeting full year expectations as the Group benefits from further cost savings during H2 FY2023 at the same time as continuing to develop and convert opportunities. As of today's date, the sales pipeline of quoted work is over £45m, of which there are forward orders and contracts worth £18.8m*.

*  Subject, inter alia, to certain milestones and conditions as more fully described in the Company's announcement on 15 October 2021 and mentioned in the Company's AIM Admission Document, as updated in the Company's announcement on 16 September 2022.

For additional information please contact:

Light Science Technologies Holdings plc	www.lightsciencetechnologiesholdings.com
Simon Deacon, Chief Executive Officer Jim Snooks, Chief Financial Officer Andrew Hempsall, Chief Operating Officer	via Walbrook PR
Strand Hanson Limited (Nominated & Financial Adviser)	Tel: [phone]
Ritchie Balmer / James Harris / Rob Patrick
Oberon Capital (Broker)
Mike Seabrook / Nick Lovering	Tel: [phone]
Walbrook PR Ltd (Media & Investor Relations)	Tel: [phone] or [e-mail]
Nick Rome / Paul McManus

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended).

About Light Science Technologies Holdings plc (www.lightsciencetechnologiesholdings.com)

Light Science Technologies Holdings plc is the holding company of the Group's controlled environment agriculture ("CEA") division, Light Science Technologies Ltd ("Light Science Technologies"), and its contract electronics manufacturing ("CEM") division, UK Circuits and Electronics Solutions Limited ("UK Circuits").

Controlled Environment Agriculture

Light Science Technologies was founded in 2019 and is the Company's grow lights and sensor technology business, providing bespoke recipes and technologies tailored to customers' needs - with key targets including indoor, vertical, glasshouses, polytunnels and medicinal farming markets. The all-in-one CEA solution will include analysing customers' crop growing requirements to provide bespoke, low-energy and sustainable equipment.

Market drivers include food and water shortages in many parts of the world; growing global population; UK and other government policy encouraging sustainable and efficient growth methods; increased scrutiny of the effect of food production on climate change and the continuing transition away from processed foods. 

sensorGROW

sensorGROW was launched in June 2022 and its technology will enable farmers to monitor the following key air zone growing factors in real-time: carbon dioxide levels, humidity, light, oxygen - and in the future: air speed, plant disease, soil, temperature and water pH levels. By monitoring these key growing factors, farmers can save money through better management of resources: water, nutrients, fertilisers and energy - while increasing yields and producing healthier crops.

nurturGROW

nurturGROW is a sustainable grow lighting product range, offering an innovative, high-performance and cost-effective solution for indoor farming, covering greenhouses, vertical farming, polytunnels and medicinal plants.

Created with four core component parts, the nurturGROW range is made of high quality, durable materials to give growers the ideal balance between strength and optimal performance, minimising the amount of materials needed to drastically cut down on waste and reduce carbon footprint.

Contract Electronics Manufacturing

UK Circuits is the Company's CEM focussed division, profit making with strong revenues. The Group designs, procures, and manufactures high-quality CEM products, specialising in Printed Circuit Boards, which are used in a range of sectors including audio, automotive, electronics, gas detection, lighting, pest control, telecommunications and, more recently, the CEA market.

 

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