TIDMDIA
RNS Number : 1180E
Dialight PLC
02 July 2019
This announcement contains inside information (in relation to
director/CEO changes) for the purposes of article 7 of EU
Regulation 596/2014
Dialight plc
("Dialight" or "the Group")
Trading update and Directorate changes
Dialight plc (LSE: DIA.L), the global leader in LED lighting for
heavy industrial applications today publishes a trading update for
the year ending 31 December 2019, ahead of its half year results to
be published on 5 August 2019.
Key points
-- FY19 underlying operating profit expected to be within the range of GBP10-GBP13m.
-- Increased costs incurred to expedite exit from former
outsource partner. This will result in a non-underlying charge in
FY19.
-- Good progress continues to be made in addressing operational performance.
-- Increasing our development of new products to continue to expand our addressable market.
-- Marty Rapp to step down as CEO after the interim results roadshow to resume his retirement.
-- Fariyal Khanbabi, CFO, stepping in as interim CEO.
Current trading and outlook
We have seen a weakening in order intake in the second quarter.
These trends may continue for the remainder of the year.
After a very strong year in 2018, our Signals & Components
business has weakened due to market uncertainty and high levels of
inventory in the distribution channel.
Given the potential impact on order intake, referred to above,
we now expect our underlying operating profit for the year ending
31 December 2019 to be within the range of GBP10-GBP13m. This is
before incurring cGBP4m of non-underlying costs.
The Board believes the Group is increasingly well positioned for
FY20, with a stronger operational base, expanded product offering
and a wider addressable market.
Operational performance
Since the Group's full year 2018 results announcement on 25
February 2019, Dialight has continued to focus on addressing its
operational issues and has achieved significant progress. The
operational performance of Ensenada is back to acceptable levels of
service. Lighting production in our new Penang facility is still in
ramp up phase but production volumes continue to increase each
week. We have removed all of our equipment from Sanmina. The CNC
machines are now installed and we are in the process of installing
our paint line in our facility in Tijuana.
To facilitate our exit from Sanmina we have taken more inventory
than we had previously anticipated which has impacted the group in
three ways. Firstly, our current inventory levels are higher than
expected. Secondly, we have incurred cGBP4m of additional costs
relating to these items in the form of markup, freight and handling
charges. These costs will be treated as non-underlying. Thirdly, we
expect to have a small net debt position at year end to reflect
these additional inventory and non-underlying costs.
We have initiated settlement discussions with Sanmina to address
the costs related to the inventory transferred to us and
compensation for additional costs incurred during the relocation
period.
New product development
We continue to execute on our strategy to address an expanded
industrial LED market by increasing our capacity to develop new
products. In May we launched the first of our new platform level
products; this product is our Reliant highbay which is designed to
specifically meet the requirements of EMEA and APAC markets and
sales are expected to build over the following quarters. The next
significant new product line launch is due shortly and a third new
platform-level product launch in the forthcoming months.
CEO to step down
Martin (Marty) Rapp, who had been a Non-Executive Director since
April 2016, came out of retirement to become CEO of Dialight in
January 2018 to lead the company through the difficult transition
away from Sanmina, which is largely completed. He has also worked
with the Board to reset the strategy of the Group, with an
increased focus on new product development and expansion of the
markets for Dialight products which is well underway.
As part of succession planning, Marty and the Board have agreed
that now is the time for the Group to recruit a new CEO for the
longer term. The Board has commenced a search process and Marty
will step down as CEO and leave the Board with effect from 9 August
2019 (following the interim results roadshow). Marty will remain as
an adviser to the Group for a period of 6 months to ensure a smooth
transition.
Fariyal Khanbabi, currently CFO of the Group, will assume the
additional role of Deputy-CEO immediately and become Interim CEO
from 9 August 2019. The Board believes Fariyal is well placed to
continue to progress the Group's recovery plans.
The Board wishes to thank Marty for his leadership of the Group
during this critical period and wishes him all the very best as he
resumes his retirement.
Contacts:
Dialight Plc
Tel: +44 (0)203 058 3542
Marty Rapp - Group Chief Executive
Tel: +44 (0)203 058 3542
Fariyal Khanbabi - Deputy CEO and CFO
MHP Communications
Tel: +44 (0)20 3128 8570
Tim Rowntree, Guy Featherstone
Person responsible:
The person responsible for arranging the release of this
announcement on behalf of Dialight is Fariyal Khanbabi.
About Dialight:
Dialight (LSE: DIA.L) is a global leader in sustainable LED
lighting for industrial applications. Dialight's LED products are
providing the next generation of lighting solutions that deliver
reduced energy consumption and create a safer working environment.
Our products are specifically designed to provide superior
operational performance, reliability and durability, reducing
energy consumption and ongoing maintenance and achieving a rapid
return on investment.
The company is headquartered in the UK with operations in the
USA, UK, Denmark, Germany, Malaysia, Singapore, Australia, Mexico,
Dubai and Brazil. www.dialight.com.
Notes:
Cautionary Statement: This announcement contains certain
statements, statistics and projections that are or may be
forward-looking. The accuracy and completeness of all such
statements, including, without limitation, statements regarding the
future financial position, strategy, projected costs, plans and
objectives for the management of future operations of Dialight Plc
and its subsidiaries is not warranted or guaranteed. These
statements typically contain words such as 'intends', 'expects',
'anticipated', 'estimates' and words of similar import. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. Although Dialight Plc believes that the
expectations will prove to be correct. There are a number of
factors, many of which are beyond the control of Dialight Plc,
which could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking
statements. This announcement contains inside information on
Dialight Plc.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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contact rns@lseg.com or visit www.rns.com.
END
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