2021 AGM Trading Update

RNS Number : 4483Y

Luceco PLC

13 May 2021

 

13 May 2021

Luceco plc

2021 AGM Trading Update

Strong momentum continues in 2021

Luceco plc ("the Group" or "Luceco"), the manufacturer and distributor of wiring accessories, LED lighting and portable power products, is pleased to provide the following update on trading for the four months ended 30 April 2021, ahead of its AGM to be held later today.

Our strong trading momentum has continued in 2021.  We have seen robust demand in all major sales channels, with revenue growth accelerating as expected against a comparative period weakened by the first wave of COVID lockdowns.  We have taken swift action to protect our margins from rapid, industry-wide inflation in raw material and freight prices and kept overheads under tight control. 

In light of the above, for the first half of 2021 ("H1 2021") we now expect revenue of approximately £105m and Adjusted Operating Profit of approximately £18m.

Our order book indicates that we should carry healthy sales momentum into the start of H2 2021, albeit that our rate of revenue growth will inevitably slow against an unusually buoyant post-lockdown comparative in H2 2020.

Performance for the four months ended 30 April 2021

• Revenue growth of 43% versus 2020 and 22% versus 2019

• Strong growth versus 2019 underlines the extent of our ongoing market share gains, particularly during COVID

• Residential demand continues to be strong, with revenue boosted by new business wins, superior channel access and heightened home improvement activity

• Commercial and institutional demand has improved, with confidence gradually returning to the LED project market

• Revenue performance by sales channel:

Sales channel	% of Group revenue	% growth versus 2020	% growth / (decline) versus 2019
Retail	31%	29%	11%
Hybrid	30%	107%	93%
Professional Wholesale	26%	31%	16%
Professional Projects	13%	15%	(14%)
Total	100%	43%	22%

• Robust action taken to offset industry-wide cost inflation left our Adjusted Gross Margin % slightly ahead of the comparative period​
   
• High sales growth, protected gross margin and controlled overheads resulted in Adjusted Operating Profit more than double the comparative period

H1 2021 outlook

• Revenue of approximately £105m (H1 2020: £71.6m; H1 2019: £82.7m):
   
  • Revenue growth of 47% versus H1 2020 and 27% versus H1 2019
     
• Adjusted Gross Margin % to be similar to H1 2020’s level of 38.4%, with further benefit expected in H2 from actions taken to mitigate cost inflation
   
• Adjusted Operating Profit of approximately £18m, double the comparative period (H1 2020: £9.0m; H1 2019: £7.2m)
   
• Adjusted Operating Margin % of approximately 17%, in line with full year 2020
   
• Working capital investment required to support continued high sales growth is expected to shift some cash conversion from H1 to H2 2021
   
• Net debt to Adjusted LTM EBITDA at 30 June 2021 is expected to be similar to 31 December 2020, leaving ample capacity to support the Group’s acquisition strategy which is progressing well

John Hornby, Chief Executive Officer, said:

"The factors that drove our strong trading at the end of last year continue to sustain our progress in 2021.  New business wins, superior channel access and the agility of our vertically integrated manufacturing model have allowed us to gain share in an improving market.  Greater business confidence is driving a gradual increase in commercial project activity and broadening our sources of growth beyond continued strong residential demand.  We have been successful in protecting our margins from unprecedented industry-wide inflation and remain alert to further cost increases in a recovering global economy.  Strong sales momentum and sustained profitability mean that we expect to double our profits for the first half against last year and retain this healthy combination as we enter the second half."

- ENDS-

For further information, please contact:

Luceco plc	Contact
John Hornby, Chief Executive Officer	020 3128 8572 (Via MHP Communications)
Matt Webb, Chief Financial Officer	020 3128 8572 (Via MHP Communications)
MHP Communications	Contact
Tim Rowntree	020 3128 8572
James Bavister	020 3128 8572
Florence Mayo	020 3128 8572

This announcement is released by Luceco plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR).  It is disclosed in accordance with the Group's obligations under Article 17 of MAR.  Upon the publication of this announcement, this information is considered to be in the public domain.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Luceco plc by Matt Webb, Chief Financial Officer.

Business summary

Luceco is a manufacturer and distributor of high quality and innovative wiring accessories, LED lighting and portable power products for a global customer base.

The Group supplies trade distributors, retailers, wholesalers and project developers with a wide range of products which broadly fall into the following market recognised brands:

· British General ("BG"): wiring accessories including switches and sockets, circuit protection and cable management products;

· Luceco and Kingfisher Lighting: energy efficient LED lighting products and associated accessories; and

· Masterplug: cable reels, extension leads, EV chargers, surge protection, timers and adaptor products.

Luceco's long-established BG brand commands a loyal following amongst professional electrical contractors in both the UK and overseas.  It is synonymous with quality, safety, innovation and value for money.  The production of BG wiring accessories is the main focus of the Group's Chinese manufacturing facility, allowing it to control product quality, cost and availability.

The Luceco and Kingfisher LED lighting brands combine to present a comprehensive range of indoor and outdoor LED lighting solutions.  The range focuses largely on professionally installed products with an emphasis on performance and quality.  The Group is able to support these products by offering customers access to its in-house installation design team.

Masterplug is the market leading brand in the UK Portable Power category.  It is sold largely to consumers through retail distribution and online.  Its products are offered in a wide range of global electrical standards and they are sold in every territory in which the Group operates.

Forward-looking statements

This announcement contains forward-looking statements that are subject to risk factors associated with,

among other things, the economic and business circumstances occurring from time to time in the countries,

sectors and markets in which the Group operates.  It is believed that the expectations reflected in these

statements are reasonable, but they may be affected by a wide range of variables which could cause actual

results to differ materially from those currently anticipated.  No assurances can be given that the

forward-looking statements in this announcement will be realised.

The forward-looking statements reflect the knowledge and information available at the date of preparation of

this announcement and the Group has no obligation to update these forward-looking statements.  Nothing in this announcement should be construed as a profit forecast.

 

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