24th Feb 2014 09:28
LONDON (Alliance News) - Dialight PLC said Monday it expects to return to earnings growth in 2014, as pretax profit declined in the financial year 2013 despite rising revenues, due to lower margins and higher sales and distribution costs.
Dialight maintained its final dividend at 9.5 pence per share, bringing its total dividend to 14.4 pence, up 7% from 13.5 pence in the previous year.
Revenue rose to GBP131.2 million, up from GBP115.1 million. However the company's contribution margin from continuing operations declined to 44.7% from 46.1% as it saw a downturn in its Obstruction business, which provide warning beacons.
The company said it had also seen delays in orders at its Lighting segment, as well as investment decisions from certain customers being put off until 2014. This, combined with higher sales and distribution costs, led to a pretax profit of GBP11.2 million, down from GBP19.8 million in the previous year.
Dialight said that, as it has delivered profit below expectations for the year, its board's Audit Committee has undertaken an assessment of its processes. The company said that this assessment has identified a number of improvements to be made, which it has already begun to implement.
Dialight's Finance Director Mark Fryer stepped down in January, just a week after the company warned that its full-year profit would be hit by delayed by orders at its Lighting division. Kevin Higginson has been appointed interim chief financial officer. The company is still searching for Fryer's permanent successor.
Revenue from Dialight's Lighting segment rose to GBP68.5 million, up from GBP45.5 million in the previous year, boosted by new products, customer wins and an increased sales force.
In the company's Signals division, which includes its Obstruction, Traffic and Transportation businesses, revenue declined to GBP41.8 million from GBP48.1 million. This was primarily caused by the downturn in the Obstruction business, which was hit by a former reseller becoming a competitor.
In Dialight's Components segment, revenue declined to GBP20.9 million from GBP21.5 million, which the company said was due to a flat Professional Electronics market.
The company said that the stabilisation of its Signal business and expected growth in its Lighting division for 2014 leads it to expect to return to earnings growth in 2014.
Shares in Dialight were trading down 5.6% at 721.88 pence Monday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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