27th Jul 2015 08:41
LONDON (Alliance News) - Dialight PLC on Monday posted a fall in pretax profit in the first half of 2015, despite a rise in revenue, as the group was hit by higher costs across the board, prompting it to scrap its interim dividend payout.
Dialight's produced no pretax profit in the half, compared to GBP5.2 million a year earlier, as a rise in revenue to GBP80.6 million from GBP70.9 million was completely wiped out by higher cost of sales, distribution costs and administrative costs. Dialight said its profit was hit hard by operational inefficiencies, which caused the higher costs, along with a reduction in lighting revenue in the oil and gas sector and a deferred GBP2 million order.
The weaker profit performance caused the company to scrap its interim dividend payout, having paid out 5.2 pence per share a year earlier.
The LED technology business said its lighting revenue in the half was up by 24% to GBP53.4 million, with strong growth in the first quarter but a slowdown in sales in May and June, as it was hit by reduced spending by oil and gas companies grappling with the effects of the low oil price. Signals revenue for the company was down to GBP17.9 million from GBP18.3 million, primarily thanks to pricing pressure and lower municipal budgets in the US traffic market.
Those issues also look set to drag on Dialight in the second half of 2015, with the company saying there remains uncertainty on the timing of projects and that it does not anticipate any recovery from the oil and gas market.
"I am pleased to have joined Dialight and believe that we have a huge opportunity ahead and are well positioned to capture significant value in our markets. We are clearly disappointed by the half year results for the group, which reflect the adverse impact of operational inefficiencies and the impact of the oil and gas sector on lighting revenue growth in the second quarter of 2015," said Michael Sutsko, Dialight's chief executive.
Sutsko joined Dialight on June 1 from Laird PLC, where he was president of its Performance Materials Division
Dialight revenue was down 5.1% to 520.00 pence on Monday morning, one of the worst performers in the FTSE All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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