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RNS Number : 7334S
Luceco PLC
13 July 2020
13 July 2020
Luceco plc
First Half Trading Update
Luceco plc ("the Group"), the manufacturer and distributor of
high quality and innovative wiring accessories, LED lighting and
portable power products, is pleased to provide an update on trading
for the six months ended 30 June 2020 and reinstate guidance which
has been suspended since the emergence of COVID-19.
Our performance has continued to improve since we last updated
the market ahead of our Annual General Meeting on 4 June 2020, as
detailed below.
H1 2020 performance
-- Revenue 14% lower than H1 2019 with demand steadily improving
as lockdown conditions have eased. Outperforming the UK market
thanks to our disproportionate share of online / multi-channel
capable customers and consumer/DIY markets, where demand has been
more resilient. Sales stabilising at circa 90% of prior year levels
by period end.
-- Adjusted Gross Margin 3.5% better than H1 2019 at circa
38.5%. Increased margins arising from better sourcing, improved
manufacturing efficiency and more favourable currency rates.
Further modest margin enhancement targeted for H2 2020.
-- Adjusted Overheads 15% lower than H1 2019, matching the
reduction in revenue and reflecting the COVID mitigating actions
set out in our 2019 Full Year results.
-- Adjusted Operating Profit of circa GBP9.0m, GBP1.8m better
than H1 2019 with gross margin improvement and stringent control of
overheads sufficient to more than offset COVID-related disruption.
Adjusted Operating Margin of circa 12.5%, in the middle of the
Group's targeted range of 10-15%.
-- Adjusted Free Cash Flow doubled to circa GBP10.0m, sufficient
to reduce net debt and off-balance sheet debt factoring by GBP4.7m
and GBP3.5m respectively. Closing net debt of GBP22.7m equal to
circa 0.8x LTM Adjusted EBITDA. The Group is not making use of any
government lending or tax deferral schemes.
-- Given the Group's strong profitability and healthy liquidity,
the Board considers it likely that dividends will be reinstated at
interim stage. A final decision will be announced in the 2020
Interim Results.
Full Year 2020 outlook
-- Assuming no widespread COVID-driven lockdown in the UK or
supply-side disruption in China in H2, we expect full year 2020
Adjusted Operating Profit to be materially ahead of current analyst
expectations and to at least equal our 2019 performance of
GBP18.0m.
-- Our experience in H1 suggests that a further COVID-driven UK
lockdown in H2 of similar scale would reduce full year Adjusted
Operating Profit by circa GBP0.75m per month of lockdown.
John Hornby, Chief Executive Officer, said:
"Growing our profit, improving our margin and doubling our free
cash flow amidst the unprecedented challenges of COVID are, I
believe, a fitting testament to the Group's forward planning,
resilience and agility whilst further underlining our long-term
potential.
We look forward to making further progress in the second half
whilst remaining vigilant to the ongoing macroeconomic risks.
I would like to extend my sincere thanks to the entire Luceco
team for their invaluable contribution to this strong
performance."
- ENDS-
Further enquiries:
For further information, please contact:
Luceco plc via MHP Communications
John Hornby, Chief Executive Officer 020 3128 8572
Matt Webb, Chief Financial Officer
MHP Communications
Tim Rowntree
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 Company'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 Company has no obligation to update
these forward-looking statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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