TIDMLUCE
RNS Number : 5396C
Luceco PLC
20 October 2020
20 October 2020
Luceco plc
Q3 2020 Trading Update
Luceco plc ("the Group" or "Luceco"), the manufacturer and
distributor of high quality and innovative wiring accessories, LED
lighting and portable power products, is pleased to provide the
following update on trading for the quarter ended 30 September 2020
("Q3 2020").
Both Q3 2020 performance and current trading are ahead of
previous expectations and as a result we increase our guidance for
full year 2020 Adjusted Operating Profit from at least GBP23m to
between GBP28m and GBP30m.
The background to this increase in expectations is as
follows:
Q3 performance
Revenue
-- Q3 revenue growth of 7.5% was better than the low single digit growth previously forecast:
o We experienced better than expected demand from online /
multi-channel customers and DIY markets . Aggregate quarterly sales
to UK pure-play online, hybrid and DIY customers were 25% higher
than last year.
o The UK professional channel continued to recover , returning
to low single digit growth in the quarter. This was led by strong
demand for wiring accessories from wholesalers and market share
gains in the circuit protection category. The project LED channel
has been slower to recover, with organisations continuing to spend
their capex cautiously.
o European revenue grew rapidly in Q3, boosted by demand
deferred by the Q2 COVID lockdown. Sales remained encouragingly
strong throughout the quarter despite the recent reintroduction of
tighter social distancing measures in some markets.
-- With revenue growth in early Q4 stronger than Q3, we now
expect full year 2020 revenue to at least equal last year's
GBP172.1m , with ground lost to COVID in H1 fully recovered in
H2.
Gross margin
-- Q3 gross margin was better than expected, with higher sales
volumes driving more efficient utilisation of manufacturing
overheads.
-- We now forecast H2 2020 gross margin of 41% .
Overheads
-- Overheads increased as expected between Q2 and Q3 as
employees returned to work to create and service increased demand.
However, tight control of discretionary expenditure should leave H2
2020 Adjusted Overheads no higher than last year's GBP22.6m despite
growth in activity levels.
Profit
-- Renewed growth, expanded gross margins and tight control of
overheads allowed the Group to deliver Q3 2020 Adjusted Operating
Profit 60% higher than last year .
Full year 2020 outlook
-- Assuming no major COVID-related disruption to our
distribution operations, strong momentum throughout Q3 and a
healthy order book for Q4 covering approximately half of the
Group's expected revenue for the quarter allow us to increase
guidance for full year 2020 as follows:
o Revenue of between GBP172m and GBP176m
o Adjusted Operating Profit of between GBP28m and GBP30m
o Adjusted Operating Margin of between 16% and 17%
o Adjusted Earnings Per Share of between 13.5p and 15.0p
John Hornby, Chief Executive Officer, said:
"Ongoing improvement in gross margin, tight control of overheads
and a relatively buoyant UK home improvement market combined to
deliver record profits in the third quarter.
Although we start the final quarter with a degree of uncertainty
from the impact of a second wave of COVID and recently reintroduced
social distancing measures in our key markets, strong trading
momentum and a healthy order book mean that we now expect
significant additional progress to be made in full year Adjusted
Operating Profit and Adjusted Operating Margin, as reflected in our
latest guidance."
- ENDS-
For further information, please contact:
Luceco plc Contact
============================= ======================================
John Hornby, Chief Executive 020 3128 8572 (Via MHP Communications)
Officer
Matt Webb, Chief Financial 020 3128 8572 (Via MHP Communications)
Officer
MHP Communications Contact
============================= ======================================
Tim Rowntree 020 3128 8572
James Bavister 020 3128 8572
This announcement is released by Luceco plc and contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 (MAR). It is disclosed in accordance with
the Group's obligations under Article 17 of MAR. Upon the
publication of this announcement, this information is considered to
be in the public domain.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of Luceco plc by Matt Webb, Chief Financial Officer.
Business summary
Luceco is a manufacturer and distributor of high quality and
innovative wiring accessories, LED lighting and portable power
products 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:
-- British General ("BG"): wiring accessories (including
switches, sockets), circuit protection and cable management
products;
-- Luceco and Kingfisher Lighting: energy efficient LED lighting
products and associated accessories;
-- Masterplug: cable reels, extension leads, surge protection, timers and adaptor products; and
-- Ross: television wall mounts, audio visual accessories and other items.
Luceco's long-established BG brand commands a loyal following
amongst professional electrical contractors in both the UK and
overseas. It is synonymous with quality, safety, innovation and
value for money. The production of BG wiring accessories is the
main focus of the Group's Chinese manufacturing facility, allowing
it to control product quality, cost and availability.
The Luceco and Kingfisher LED lighting brands combine to present
a comprehensive range of indoor and outdoor LED lighting solutions.
The range focuses largely on professionally installed products with
an emphasis on performance and quality. The Group is able to
support these products by offering customers access to its in-house
installation design team.
Masterplug is the market leading brand in the UK Portable Power
category. It is sold largely to consumers through retail
distribution and online. Its products are offered in a wide range
of global electrical standards and they are sold in every territory
in which the Group operates.
Forward-looking statements
This announcement contains forward-looking statements that are
subject to risk factors associated with,
among other things, the economic and business circumstances
occurring from time to time in the countries,
sectors and markets in which the Group operates. It is believed
that the expectations reflected in these
statements are reasonable, but they may be affected by a wide
range of variables which could cause actual
results to differ materially from those currently anticipated.
No assurances can be given that the
forward-looking statements in this announcement will be
realised.
The forward-looking statements reflect the knowledge and
information available at the date of preparation of
this announcement and the Group has no obligation to update
these forward-looking statements. Nothing in this announcement
should be construed as a profit forecast.
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END
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