Last checked at 15 Dec 2017 07:00
15 December 2017
Luceco plc
("the Group")
Trading Update
Luceco plc, the manufacturer and distributor of high quality and innovative LED lighting products, wiring accessories and portable power products, is today issuing the following trading update for the year to 31 December 2017.
The Group has seen gross margins weaken during the second half of the year and will now deliver gross margin of approximately 33%, leading to a £3.5m reduction in profit after tax to £13.2m, versus current market expectations of £16.7m.
Regrettably, the gross margin weakness was not identified sooner due to an incorrect assessment of the value of the Group's stock. The Group's Financial Controller has resigned as a result of this error. System improvements are being put in place to make sure this issue does not recur.
The principal reasons for the gross margin weakness have been the strengthening of the Chinese RMB versus the US Dollar, alongside the ongoing weakness in GBP and increased commodity costs.
The Group will be able to mitigate some of these headwinds through internal efficiency savings and overhead reductions, with margins expected to recover to long term expectations in H2 2018 as a result of these actions. The Group also intends to increase its foreign exchange and commodity price hedging activities with particular focus on the Chinese RMB versus the US Dollar.
Luceco's revenue forecasts for 2017 and 2018 remain in line with market expectations. We continue to expand the Group's product ranges and our geographic reach. Luceco's balance sheet remains strong and the Board continues to assess opportunities to invest in the future growth of the business.
-ENDS-
Further enquiries:
For further information, please contact
Luceco plc John Hornby, Chief Executive Officer David Main, 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.