Lighting specialist Dialight has lost more than a third of its value after an unexpected profit warning.
The company said this year’s underlying operating profit would be significantly below expectations, and blamed a delay in orders from oil and gas customers since April. It also said results for the first half would be below last year’s level.
It said new chief executive Michael Sutsko would conduct a strategic review of the business, with the results due in the autumn. The news sent its shares tumbling 256.5p or 34% t0 488.5p. Canaccord Genuity cut its full year profit forecast by 27% to £15.5m. Northland Capital Partners said:
A substantial and rapid reversal in the Lighting division given that management in April’s AGM statement was reporting strong demand, first quarter revenue ahead of expectations and that the full year was on track. At that time, management flagged a need to improve operational efficiency but today’s announcement suggests a sudden softening in its markets. The appointment of the new chief executive and the strategic review suggests a substantial restructuring is likely and associated charges for 2015.
N+1 Singer said:
An unscheduled trading update leads us to place our forecasts and recommendation under review with negative implications. A slowdown in orders since April in the key lighting division is clearly unnerving, given that the benefits of their lighting products haven’t changed and the highlighted connection with the oil and gas sector slowdown is hardly new. A strategic review by the new chief executive will address all areas of targeted markets, operations, supply chain and product development.
