£4.4m loss for Telford lighting maker
LED lighting products maker Luceco has branded the first half of the year as "challenging" after it slipped to a loss of nearly £5 million.
The Telford-based listed manufacturer has reported a pre-tax loss of £4.4 million for the six months to June 30, compared to a profit of £6.5 million during the same period in 2017.
In an update to the London Stock Exchange, the company also confirmed that its revenue remained broadly flat at £75.1 million after it achieved a half-year total of £75.3 million last year.
The business said overall progress during the period was limited by the slowdown of UK customer-facing retail sales which it attributed to de-stocking and "lacklustre" consumer confidence.
Luceco has also now stopped its US operations which it said enables "greater focus on more compelling international growth opportunities". The closure cost £2 million and 19 jobs.
Chief executive John Hornby said: "Whilst the first six months have been challenging, the group is entering the second half with an outlook unchanged from the July 2018 trading update.
"The decline in revenue from UK consumer-facing retail and the adverse impact on gross margins of commodity inflation and exchange rates has generated a disappointing financial performance in the first half year.
"However, we have already put into place a number of actions that will deliver an improvement in the group's financial performance in the second half of the year with a return to profitability expected.
"Although UK consumer confidence remains fragile the group has moved into the third quarter with: a 30 per cent increase in the UK retail order book, lower commodity prices, better selling prices and a more favourable currency position as a result of the hedging actions taken at the beginning of the year and improving currency markets.
"Consequently, the group is well positioned to deliver year-on-year adjusted operating profit growth in the second half of the year.
"The board and the wider management team are focused and determined to improve the group's earnings potential and we remain confident about Luceco's long-term growth prospects."
Luceco floated in October 2016, which valued the company at £209 million, and it had a good first year on the London Stock Exchange.
But difficult trading conditions have been reflected in a declining share price – Friday’s close of 50p was 80 per cent below its value in September 2017 – and its market value is now around £80 million.
