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LONDON (Alliance News) - LED lighting firm Luceco PLC on Tuesday reported a sharp fall in annual profit, but said the second half of 2018 saw a significant improvement on the first.
For 2018, the company's pretax profit declined 76% to GBP3.0 million from GBP12.3 million, while revenue fell to GBP163.9 million from GBP167.6 million.
On an adjusted basis, Luceco's pretax profit fell 51% to GBP6.3 million, as its operating margin slumped on a reported basis to 3.0% from 8.5% and adjusted to 5.2% from 8.8%.
Luceco in September swung to an interim loss, with revenue hurt by a sharp fall in orders in the UK.
Luceco said it returned to profit in the second half of its year, shifting towards higher margin sales and controlling overheads, while it has also exited its loss-marking US operations.
Luceco ended its interim dividend due to its struggles, but it is paying a 0.6 pence per share final dividend after the improvement. This means its 2018 total is 25% lower year-on-year.
"We have made considerable progress addressing the issues we faced at the start of the year and ended 2018 in a much stronger position, both operationally and financially," said Chief Executive John Hornby.
"We have successfully improved our competitive position, bolstered our systems and processes, and expect to make further progress reducing leverage in the year ahead. This gives us a sound platform for future profitable growth."
Looking ahead, Luceco said its order book is "strong", and revenue growth is meeting expectations so far in 2019. It expects to be able to beat market expectations for adjusted operating profit in 2019.
"We currently have a strong order book and revenue growth is running in line with expectations. Our strategic shift towards the professional channel is yielding improved margins, which should, in time, return to historic peak levels," added Hornby.
"With most of our business focused on the UK market, we are mindful of the macroeconomic uncertainty, including Brexit."
Shares were 5.7% higher on Tuesday morning at a price of 80.46p each.
