Industrial lighting manufacturer Dialight swung to a profit in the year ended 31 December, as lower costs and flat revenues helped offset blows to its order book coming in the form of manufacturing issues.
The LED lighting group posted a pre-tax profit of £3m, up from the loss of £3.8m it reported a year earlier, even though revenue fell a touch to £181m from £182.2m the year before.
Profits were boosted by Dialight halving its non-underlying administrative expenses to £6.4m from £12.7m as a result of significant restructuring costs during the period.
On an underlying basis, pre-tax profit fell to £9.4m from the £12.6m posted twelve months prior.
Marty Rapp, Dialight's chief executive, said, "2017 was a disappointing year, in which operational issues hampered our ability to deliver orders to our customers. We are taking corrective action and in the near term are wholly focused on the manufacturing challenges which will continue to impact our results in H1. As a consequence, our results for 2018 will be heavily weighted to H2 reflecting the successful resolution of these issues."
"Our market proposition remains compelling with the sustainability benefits of reduced energy usage, lower carbon emissions, reduced maintenance and improved safety offering real value to our customers. We remain excited by the group's prospects over the medium to long-term and are confident of delivering future growth," he concluded.
Earnings per share came in at 4.8p, as opposed to a loss per share of 8.4p posted in the previous fiscal year.
As of 1120 GMT, shares
had dropped 3.38% to 514.00p.
Jamie Constable at broker N+1Singer said the numbers are in-line with previously downgraded expectations.
"The key to the share price looking forward is have they resolved the issues with their contract manufacturer. Sanmina. Management comment in the statement that action continues to resolve the issues but that H1 will continue to be impacted by them."
As a result, he sees further downgrades today ahead of a meeting with the company's new CEO on Wednesday.
"US growth should be a strong driver for the company especially if infrastructure investment picks up too. They have a significant order backlog at present. US tax cuts will help too," Constable added.