6 March 2018
Luceco plc ("Luceco" or "the Group")
Update on Trading
Luceco, the manufacturer and distributor of high quality and innovative LED lighting products, wiring accessories and portable power products, is today issuing the following update.
Trading conditions since the Group's trading update on 15 December 2017 have remained difficult in our UK consumer facing business, which is approximately 25% of Group revenue, as a result of well publicised weak consumer confidence and a weaker dollar. These factors have caused us to revise our estimates for the outturn for the year to December 2018. We now anticipate reporting 2018 profit after tax in the range of £12.0-14.5m, on revenue growth on 2017 of 5-10% at current exchange rates.
Whilst UK retail sales remain subdued as retailers destock following a weaker than expected Christmas period, the Group is seeing continued strong growth among higher margin trade, projects and international customers. In addition, our previously outlined improvement actions remain on track to return margins to long term expectations during H2 2018.
As part of the ongoing audit for the year ended 31 December 2017 and the review by our newly appointed Chief Financial Officer, we now expect to report profit after tax of £11.0m compared to the estimate of £13.2m given in December 2017. The shortfall relates primarily to continued margin pressure and the treatment of certain costs which had been earmarked for capitalisation but are now being taken through the profit and loss account. Revenue is expected to be £168.6m and net debt at 31 December 2017 was £36.9m.
John Hornby, Chief Executive Officer of Luceco, said:
"I am extremely disappointed by these developments. However, most parts of the business continue to grow strongly, highlighting the benefits of our long-term diversification strategy. Our margin mitigating actions outlined in our December update are on track to deliver the expected margin improvement during H2 2018."
Giles Brand, Non-Executive Chairman of Luceco, said:
"Though a further update on trading is unwelcome, the Board is pleased that we have a new CFO and the prospects for 2018 have been clarified. The business remains well placed to capitalise on its market leading position and EPIC Investments LLP, the Group's largest shareholder, is fully supportive."
Further enquiries:
For further information, please contact
Luceco plc John Hornby, Chief Executive Officer Matt Webb, Chief Financial Officer |
via MHP Communications 020 3128 8100 |
MHP Communications Tim Rowntree James White Ollie Hoare |
020 3128 8100 |
Notes to Editors:
Luceco is a rapidly growing manufacturer and distributor of high quality and innovative LED lighting products and wiring accessories 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:
- Luceco: energy efficient LED lighting products and associated accessories;
- British General (BG): wiring accessories (including switches, sockets), circuit protection and cable management products;
- Masterplug: cable reels, extension leads, surge protection, timers and adaptor products; and
- Ross: television wall mounts, audio visual accessories and other items.
The Luceco LED lighting brand continues to benefit from the disruptive shift away from mature lighting technologies as a result of the material advancement in LED technology in recent years. The brand has continued to successfully leverage the Group's existing customer base and low cost Chinese manufacturing facility. Consequently, it remains well positioned to build on its impressive organic growth trajectory to date.
In the electrical wiring accessories market, Luceco's BG and Masterplug brands have continued to reinforce their market leading positions through further new product development initiatives, expanding into new product adjacencies and gaining market share.
