8th Sep 2021 11:33
(Alliance News) - ProPhotonix Ltd on Wednesday cheered rising interim profit and revenue, but warned of increased operating expenses and supply chain disruption for the second half.
Shares in ProPhotonix were trading up 15% at 6.98 pence each in London on Wednesday morning.
ProPhotonix designs and manufactures LED light systems and laser diode modules, with operations in the UK and Ireland.
Higher LED product sales drove a 14% increase in revenue which reached USD7.9 million in the six months ended June 30, from USD6.9 million the year prior.
In comparison, the company reported revenue of USD7.2 million in the first half of 2019, before the pandemic.
Interim pretax profit rose sharply to USD490,000, from USD266,000 a year ago and a USD206,000 loss two years earlier.
Profit rose even as the company's gross profit margin declined to 42% from 47% during the same period in 2020. ProPhotonix said the decline was caused by its product mix and increased material costs in the first half, along with the loss of the Covid-19 related government aid that the company benefited from in 2020.
The company's slightly lower gross profit margin was offset by lower operating expenses, which decreased by 10% to USD2.7 million in the first half, compared to USD3.0 million last year.
Operating expenses are expected to rise in the second half, the company said, given that it plans to invest in its products and services as the wider economic recovery continues.
"With a strong order book, the directors believe at this time that the second half trading will be in line with the first half trading subject to further disruptions by Covid-19 and/or supply chain and logistics challenges," ProPhotonix noted.
At the end of the first half, order bookings reached USD9.5 million, compared to USD6.8 million at the same point a year earlier.
However, the company cautioned that: "The risks in the supply chain are substantial and there will very likely be disruptions impacting the business."
By Scarlett Butler; [email protected]
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