REG - Dialight PLC - Final Results
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RNS Number : 0532O Dialight PLC 24 June 2025
24 June 2025
Dialight plc
Results for the 12-month period ended 31 March 2025
Return to profitability, transformation plan delivery, optimistic in prospects
Dialight plc (LSE: DIA.L), a global leader in sustainable LED lighting for
industrial applications,
announces its audited preliminary results for the 12-month period ended 31
March 2025.
2025 Summary Results
Financial summary 12-month period ended 31 March 2025 12-month period ended 31 March 2024 (unaudited)(2) 15-month period ended 31 March 2024
($m unless otherwise stated)
Revenue 183.5 182.1 226.0
Underlying results(1)
Underlying gross margin 35.6% 31.5% 31.0%
Underlying EBITDA 10.7 9.1 8.9
Underlying profit/(loss) from operating activities 4.2 (1.9) (4.6)
Non-underlying items (21.6) (25.5) (25.6)
Underlying operating cash flow 19.5 - 18.9
Statutory results
Loss from operating activities (11.6) (27.4) (30.2)
Loss before tax (14.1) (31.1) (34.3)
Loss after tax (13.6) (29.5) (32.5)
Loss per share - diluted (34.4) cents (81.1) cents (91.1) cents
Net bank debt (17.8) (16.4) (16.4)
1. The definitions of the adjustments made and reconciliation to the reported
figures can be found in note 18.
2. As the prior period was for the 15-months ended 31 March 2024, comparative
data for the 12-months ended 31 March 2024 has been presented to enhance users
understanding.
Performance highlights
· Underlying gross margin increased significantly to 35.6% (31.0% in the
15-months ended 31 March 2024) driven by better financial discipline on
pricing, product cost down and component purchase savings.
· Underlying operating profit of $4.2m for the 12-month period to 31 March 2025
(15-months to 31 March 2024: $4.6m loss).
· Non-underlying costs of $21.6m compromise primarily costs relating to the
transformation plan of $4.1m and costs of $17.8m in relation to the settlement
with Sanmina.
· Net bank debt of $17.8m. Revolving credit facility of $28.8m extended to July
2027.
· Completed on the disposal of the Traffic business in July 2024 realising gross
cash proceeds of $5.2m and profit on sale of $5.8m.
Outlook
· Positive momentum within the business moving forward with alignment and
support to the strategy.
· Positive start to FY26, confident in our prospects.
Commenting on these results, Group Chief Executive Officer, Steve Blair said:
"We are driving what is within our control and are cautiously optimistic about
what we can achieve on behalf of customers, employees, shareholders and indeed
other stakeholders in the current financial year and beyond. Notwithstanding
current geopolitical uncertainties, in particular US tariffs impacts, the
Group's trading has started well in April and May. For the current financial
year, we remain confident in the Group making further progress and note that
the Group will also benefit from the one-off Covid-19 credit received from the
US IRS. We are excited about the Group's medium-term prospects."
Results information
Full year results presentation
The Annual Report & Accounts for the 12-month period ended 31 March 2025
results presentation can be found at: https://www.dialight.com/ir/reports-news
(https://www.dialight.com/ir/reports-news)
Contacts
Dialight plc
Tel: +44 (0)203 058 3542
Neil Johnson - Group Chair
Steve Blair - Group Chief Executive Officer
Mark Fryer - Group Chief Financial Officer
Legal Entity Identifier: 2138001AD31KKD29Z495
About Dialight
Dialight (LSE: DIA.L) is a global leader in sustainable LED lighting
for industrial applications. Dialight's LED products are providing the next
generation of lighting solutions that deliver reduced energy consumption and
create a safer working environment. Our products are specifically designed to
provide superior operational performance, reliability, and durability,
reducing energy consumption and ongoing maintenance, and achieving a rapid
return on investment.
The Company is headquartered in the UK, with operations in the US, UK, Mexico,
Malaysia, Singapore, Australia, Germany and Dubai. To find out more about
Dialight, visit www.dialight.com (http://www.dialight.com/) .
Notes
1. Net bank debt is defined as total Group borrowings (excluding lease
liabilities recognised under IFRS 16 and the Sanmina liability) less cash.
2. The commentary in both the Group Chief Executive Officer's and Group Chief
Financial Officer's reviews uses alternative performance measures, which are
described as "underlying". Definitions of these measures can be found in note
18. These measures provide additional information for users on the underlying
performance of the business, enabling consistent year-on-year comparisons.
3. The Group's interim results for the six months ending 30 September 2025 are
due to be released in late November 2025.
4. Cautionary Statement: This announcement contains certain statements,
statistics and projections that are or may be forward-looking. The accuracy
and completeness of all such statements, including, without limitation,
statements regarding the future financial position, strategy, projected costs,
plans and objectives for the management of future operations of Dialight plc
and its subsidiaries is not warranted or guaranteed. These statements
typically contain words such as 'intends', 'expects', 'anticipated',
'estimates' and words of similar import. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. Although Dialight plc
believes that the expectations will prove to be correct. There are a number of
factors, many of which are beyond the control of Dialight plc, which could
cause actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. This announcement
contains inside information on Dialight plc.
CHIEF EXECUTIVE OFFICER'S REVIEW
The financial year under review was one of continued improvement across
Dialight as we made good progress against the four pillars of our
transformation plan (outlined below). It was a case of strengthening the
business by doing what we said we would - and, ultimately, returning it to
underlying profitability.
While we're performing well when it comes to the things directly under our
control, the macroeconomic climate remains a challenging one. The tariffs
imposed by the United States Government at this point in time, only impacts
component procurement from Asia, are not significant, and we have successfully
offset this by modestly increasing prices. The import into the United States
of our Lighting and Signals & Components from Mexico are exempt from
tariffs under the USMCA ('United States, Canada, Mexico trade agreement').
This situation continues to evolve, and there remains a risk that it may
influence our customers' purchasing behaviour. We are monitoring this closely
and we continue to scenario plan and strategise to help manage this.
That said, the 12-month period to 31 March 2025 was positive - Group revenue
increased to $183.5m compared to $182.1m for the 12-month period to 31 March
2024. Dialight also made an underlying operating profit of $4.2m, compared
with an underlying operating loss of $1.9m in the previous 12 months, and our
underlying gross margin improved to 35.6% (versus 31.0% in the previous
15-month period).
PLANNING FOR THE LONG TERM
With the business starting to return to good health, we now have the
opportunity to look at Dialight's long-term future; to start to think and talk
positively about what comes next. To support this, we've launched a fifth
pillar "creating a platform for future growth", supported by our new Strategy
and Innovation Committee. With the Committee in place, it is our goal to get
back to what made Dialight successful originally.
Chaired by John Lincoln, who joined the Board this year as an independent
Non-Executive Director, the Committee will explore new technologies and
applications in lighting, signals and components, building a strategy that
protects and supports Dialight's future growth. Alongside our internal
expertise, the Committee will also bring together a range of external advisors
who can provide insights and capability that may not currently exist within
the Company.
A YEAR OF POSITIVE TRANSFORMATION
Our transformation plan, as detailed in last year's annual report, has begun
to deliver positive results as we hoped it would - indeed, the four key
pillars we have focused on are now embedded in everything we do.
On 31 March 2025, we settled our long-standing litigation with Sanmina for
$12.0m to be paid in instalments. This required payment of $4.0m on 31 March
2025 and eight quarterly payments of $1.0m per quarter with the final payment
due on 27 March 2027. This ends a period of uncertainty for the Group and
successfully concludes this matter.
The cost of the Sanmina litigation settlement and legal fees has resulted in
non-underlying costs of $21.6m, which has contributed to a loss before tax of
$14.1m.
WINNING HEARTS AND MINDS
Our day-to-day teamwork around the business is greatly improved versus this
time last year. There's renewed cooperation, enthusiasm and engagement. People
are no longer waiting to be told what to do, but stepping forward with ideas
pro‑actively solving problems.
SALES TRANSFORMATION
We have improved governance and control, especially around the sales team's
use of Salesforce - putting emphasis on training our people to use it more
effectively. We've also supported sales personnel to better understand our
products and where Dialight makes money - as well as, equally, where we don't
- empowering them to think differently, make the right decisions for the
business, and focus on generating higher margins.
We're also engaging with product management and engineering teams to ensure
sales can offer the right solution for a customer at a price that makes sense.
This joined-up thinking is a fundamental shift in how our sales teams have
historically operated.
OPERATIONAL TRANSFORMATION
Driven by the efforts of our COO Rizwan Ahmad - a long-standing senior leader
within Dialight who was rightly promoted to this role in May 2024 - we have
streamlined and optimised operations throughout the Company, including
reducing sub-assembly SKUs to 10% of our original offering. By reducing
variability we're also able to improve productivity in the manufacturing
process as a whole.
In addition, we're investing in our factories - significantly improving the
canteen and toilet facilities at our site in Ensenada, Mexico, for example.
Even during a period where we've been focused predominantly on getting the
business back on track, we have still invested in making the environment much
better for our people.
MARGIN IMPROVEMENT AND CASH GENERATION
We're building a more commercial approach back into the business. That
includes introducing key performance indicators to ensure everyone understands
how they can contribute to Dialight's commercial success - leading to better
profitability and better cash generation as we have gained greater control of
margins and costs. As part of this, we've looked at costs throughout the Group
and made sure they're appropriate for what we're trying to achieve - as well
as carefully considering the structure of the business.
That's not to say we have cut all spending. Historically, employees may have
been told to keep their heads down and get on with what they're paid to do,
but I want people talking, meeting and collaborating. If that means spending
to ensure people can travel and get together then that's what we'll do - but
we expect a return on that investment.
We are continuing to make improvements and operational progress by focusing on
our four original pillars, while at the same time beginning to accelerate our
growth and build the Dialight of the future through our fifth pillar.
Despite the uncertainties in the wider political and economic background, we
have made considerable progress in a relatively short period of time, and
slightly ahead of our own expectations. We have resolved a large number of
historic issues and are now more focussed on better positioning the Group for
future progress.
We are driving what is within our control and are cautiously optimistic about
what we can achieve on behalf of customers, employees, shareholders and indeed
other stakeholders in the current financial year and beyond.
OUTLOOK
Notwithstanding current geopolitical uncertainties, in particular US tariffs
impacts, the Group's trading has started well in April and May. For the
current financial year, we remain confident in the Group making further
progress and note that the Group will also benefit from the one-off Covid-19
credit received from the US IRS. We are excited about the Group's medium-term
prospects.
Steve Blair
Group Chief Executive Officer
CHIEF FINANCIAL OFFICER'S REVIEW
I was previously Chief Financial Officer from 2010 to early 2014. This was a
period when there was a significant increase in revenue, operating profit,
cash from operations, and the Group was debt free. Significant share price
appreciation was achieved as the Group rapidly grew its market position in the
hazardous LED lighting market across the globe.
Over the past decade, the Group has not capitalised on the initial position
established in this market. Overall, sales have not increased, profitability
has significantly reduced, the Group has moved from being debt free to
indebted and the overall level of working capital employed in the business has
significantly increased.
Dialight has been through a true reset over the past two years, with an almost
completely new Board and new management in place. We are resetting and
rebuilding relationships with all our external stakeholders and seeking to
rebuild relationships with our shareholders. This started with Neil Johnson
and then Steve Blair joining the business and initiating the Transformation
Plan in 2023 and I rejoined Dialight in January 2025, motivated by Neil and
Steve's strategic plan to restore the Group to sustainable profitability.
Their disciplined approach - focused on operational streamlining, cost
reduction, margin enhancement, robust cash flow management, and accelerating
growth in industrial lighting - provided a clear roadmap to unlock long-term
shareholder value.
Dialight is a business with high ambitions. We made strong progress throughout
the year, particularly in the final quarter. During this period, we
restructured the finance team, enhanced our cash and net debt reporting, and
strengthened financial controls and discipline. We also gained a clearer
understanding of the drivers behind variability in our results, rebuilt key
relationships with our banking partners and shareholders, and delivered
performance ahead of our forecasts and expectations. The strong financial
performance in the final quarter was driven by the successful execution of our
Transformation Plan, underpinned by a renewed financial focus. This progress
led the Group to upgrade market expectations in March.
As a Board and a management team, we are committed to delivering further on
the Transformation Plan, reducing the cost base, reducing working capital and
reducing net debt. We will focus on the core lighting business with a
streamlined operation and sales structure, focus on reducing the number of
stock keeping units ('SKUs'), selling the most profitable products and return
the Group to earning historic double-digit return on sales margin.
We are rebuilding shareholder and market confidence and gradually getting the
business back to where it once was, in a healthy financial position.
FINANCIAL REVIEW
FINANCIAL PERFORMANCE
Group revenues of $183.5m for the 12-month period ended 31 March 2025
(15-month period ended 31 March 2024: $226.0m) generated a gross profit of
$66.5m (15-month period ended 31 March 2024: $67.1m), giving a gross margin of
36.2% (15-month period ended 31 March 2024: 29.7%) - a significant increase
driven by selling more profitable products, product cost down, purchase
savings on components and better financial discipline on pricing/margin.
Distribution costs of $29.0m, administrative expenses of $52.8m and impairment
losses of financial assets of $2.1m resulted in an operating loss of $11.6m
(15-month period ended 31 March 2024: loss of $30.2m) after a $5.8m gain on
disposal of a business (15-month period ended 31 March 2024: $nil). The
operating loss for the period of $11.6m (15-month period ended 31 March 2024:
operating loss $30.2m) was after $21.6m (15-month period ended 31 March 2024:
$25.6m) of non-underlying costs were recognised.
Underlying performance (unaudited)
The Group generated an underlying gross profit of $65.3m (15-month period
ended 31 March 2024: $70.1m), giving an underlying gross margin of 35.6%
(15-month period ended 31 March 2024: 31.0%) - for the reasons discussed
above. Distribution costs of $29.0m (15-month period ended 31 March 2024:
$36.8m) and underlying administrative costs of $32.1m (15-month period ended
31 March 2024: $37.9m) resulted in an underlying operating profit of $4.2m
(15-month period ended 31 March 2024: loss of $4.6m).
12-month comparison (unaudited)
Group revenues for the 12-month period ended 31 March 2025 were $183.5m, a
0.8% increase against $182.1m in the 12-month period ended 31 March 2024.
Underlying gross margin for the 12-month period increased significantly to
35.6% (2024: 31.5%), with improvements in material costs through cost
reduction projects and negotiation with suppliers as well as the results of
the Transformation Plan starting to feed into the gross margin. We expect
upward momentum to continue in 2025-26.
Distribution costs of $29.0m in the year to 31 March 2025 were marginally
lower (2024: $29.2m) and administration expenses of $32.1m (including credit
losses of $2.1m) increased (2024: $30.1m) due to inclusion of bonus and credit
loss provision for the year. Going forward we will be focusing on carefully
managed reductions in administration costs.
This combination of marginally higher revenue and higher gross margins
contributed to a significant increase in Group underlying operating profit
from operating activities to $4.2m (2024: $1.9m loss).
Lighting before central costs
The Lighting (Lighting and Obstruction) segment represents approximately 75%
of the Group's revenue and consists of two main revenue streams: large capex
projects; and ongoing Maintenance, Repair and Operations ('MRO') spend. For
the 12-month period to 31 March 2025, Lighting revenue was flat at $138.0m
compared to $137.9m in the 12-month period to 31 March 2024.
Lighting 12-month period ended 12-month period ended 15-month period ended
31 March 2025 31 March 2024 (unaudited) 31 March 2024
$m $m $m
Revenue 138.0 137.9 171.1
Underlying gross profit 54.1 46.9 57.6
Underlying gross profit margin 39.2% 34.0% 33.7%
Underlying overheads (41.2) (39.3) (50.8)
Underlying operating profit before central costs 12.9 7.6 6.8
Underlying gross margins significantly improved during the period, following
the launch of cost-reduction projects and improvements in procurement costs.
The Group has also concentrated on selling a reduced number of SKUs and
focusing on the sale of a better mix of more profitable products.
Signals & Components before central costs
Signals and Components is a high-volume business operating within highly
competitive markets. There are three main elements: traffic lights;
Opto-Electronic ('OE') components; and vehicle lights.
Signals & Components 12-month period ended 12-month period ended 15-month period ended
31 March 2025 31 March 2024 (unaudited) 31 March 2024
$m $m $m
Revenue 45.5 44.3 54.9
Underlying gross profit 11.2 10.9 12.5
Underlying gross profit margin 24.6% 24.6% 22.8%
Underlying overheads (7.9) (10.7) (12.3)
Underlying operating profit before central costs 3.3 0.2 0.2
Overall, Signals and Components revenue increased from $44.3m in the 12-month
period to 31 March 2024 to $45.5m. While the overall gross margin in Signals
and Components has increased marginally, the overall impact of the traffic
light sale to Leotek on July 2024 has been to reduce the level of gross margin
percentage generated by OE and vehicle. Traffic light contract manufacturing
to Leotek is currently loss making and this activity will cease at the end of
quarter three 2025-26 when gross margins will improve for this segment.
Central costs
Central overheads comprise costs not directly attributable to a segment and
are shown separately. In the 12-month period to 31 March 2025 unallocated
costs were $33.6m representing $12.0m of central costs and $21.6m of
non-underlying cost. This compares to the 15-month period ending 31 March
2024, which reported $37.2m in total costs - comprising $11.6m of central
costs and an additional $25.6m in non-underlying costs. Underlying costs
primarily relate to head office costs and professional fees with
non-underlying costs relating to the Sanmina settlement, legal fees and
transformation project. In the prior 15-month period these costs primarily
related to transformation, goodwill impairment, development cost impairment,
Sanmina legal cost and business disposal cost.
Non-underlying costs
12-month period ended 12-month period ended 15-month period ended
31 March 2025 31 March 2024 (unaudited) 31 March 2024
$m $m $m
Transformation Plan 4.1 4.5 4.5
Goodwill impairment - 11.2 11.2
Development cost impairment - 4.1 4.1
Sanmina settlement and litigation costs 17.8 2.2 2.3
Business disposal (income)/costs (0.9) 3.5 3.5
Other 0.6 - -
Total 21.6 25.5 25.6
To give a full understanding of the Group's performance and aid comparability
between periods, the Group reports certain items as non-underlying to normal
trading.
The Group has incurred $4.1m of non-underlying costs relating to the
Transformation Plan. This is a significant multi-year change programme for the
Group which is designed to address legacy issues associated with excess cost
and complexity within the organisation, while at the same time focusing more
resources on the most attractive growth opportunities within its core
industrial LED lighting market. Implementation of the Transformation Plan is
expected to be complete by 31 March 2026. The multi-year Transformation Plan
is a material, infrequent programme and is not considered to be part of the
underlying performance of the business. Of these costs, $2.9m relates to
general management reduction and consulting, $0.9m to operational
transformation and $0.3m to finance transformation.
During the 12-month period to 31 March 2025, costs of $17.8m have been
expensed in relation to the settlement with Sanmina (legal costs in the
15-month period to 31 March 2024: $2.3m). Please refer to note 19 for further
details of this settlement. The total settlement of $12.0m includes an initial
payment of $4.0m made on 31 March 2025, with the remaining balance to be paid
through eight deferred quarterly instalments of $1.0m, concluding on 31 March
2027. The amount of any outstanding deferred instalments will be automatically
increased from $1.0m to $1.5m if Dialight's market capitalisation exceeds
£100m for 30 consecutive days, subject to total cumulative instalment
payments not exceeding $8.0m. The Group is confident that the deferred
instalments totalling $8.0m will be met from the operational cash flow of the
business and that the Group has sufficient headroom to meet its ongoing
business needs. In the highly unlikely event of payment default under the
settlement agreement following the initial payment, Sanmina will be entitled
to enforce the full judgement (less payments already made) in the ordinary
course following a 90-day cure period. The discounted cash flows of the future
settlement with Sanmina is $11.3m, with an escrow account of $5.2m no longer
considered to be collectible so written off, legal costs of $5.6m in year and
write off of unpaid invoices of $4.3m giving a total settlement cost of
$17.8m.
Business disposal income/costs relate to the disposal of the Traffic business
and onerous contract with Leotek and other cost relates to value added tax
written off on aged inventory.
INVENTORY
Inventory of $46.6m decreased by $2.5m from $49.1m in March 2024, which itself
had reduced from $64.8m in December 2022. The Group is targeting further
reductions in inventory in 2025-26.
31 March 2025 31 March 2024
$m $m
Raw materials 20.0 18.8
Sub-assemblies 10.7 13.4
Finished goods 15.7 16.7
Spare parts 0.2 0.2
Total 46.6 49.1
The aged inventory provision has increased to $5.1m in March 2025 compared
with $3.6m in March 2024.
An additional provision of $3.0m was recognised in 2024 for specific inventory
relating to the traffic business that was not expected to be sold. Of that
provision, $2.2m was released in 2025 to leave a provision of $0.8m. This
results in a total inventory provision of $5.9m (2024: $6.6m).
CASH AND BORROWINGS
The Group ended March 2025 with net bank debt of $17.8m, an increase of $1.4m
from the March 2024 balance of $16.4m. Net bank debt excludes right-of-use
asset liabilities of $10.0m (2024: $10.1m) and the Sanmina liability, which
are excluded for covenant testing purposes. The roll-forward of net bank debt
was as follows:
Net bank debt $m $m
Opening balance 1 April 2024 (16.4)
Inflows
Decrease in inventories 2.6
Increase in trade and other payables 2.2
Decrease in trade and other receivables 1.9
Proceeds on disposal of business 5.2
Operating cash flows before movements in working capital 14.6 26.5
Outflows
Sanmina and legal costs (8.5)
Capital expenditure including intangible assets (8.0)
Interest and tax paid (4.5)
Transformation costs (3.9)
Repayment of lease liabilities (2.3)
Pension contributions (0.7) (27.9)
Closing balance at 31 March 2025 (17.8)
Gross bank debt of $25.7m was offset by cash in hand of $7.9m - see note 13
for further details on bank borrowings. The interest expense of $2.5m is
analysed in note 4.
BANKING AND COVENANTS
The Group's funding includes a revolving credit facility ('RCF') of $28.8m
from HSBC, which was extended on 5 June 2025 to 21 July 2027 on the same terms
as the original agreement. Aligned with the Group's robust commitment to
environmental, social, and governance ('ESG') principles, the RCF facility
operates as a sustainability-linked loan.
The RCF facility is subject to quarterly covenants encompassing maximum
leverage and minimum interest cover. The covenants require a leverage ratio
maximum target of less than 3x EBITDA, and an interest cover minimum target of
4x EBITDA. The interest cover for the quarter to 31 December 2024 was amended
to minimum 2.5x and then reset to 3x for all future periods. Covenants were
met for all four quarters of the year and at 31 March 2025 there was $2.4m of
headroom on the interest cover covenant and $4.6m on the leverage covenant.
See note 1(c) for details of how this has been considered as part of the going
concern assessment.
TAX
Based on a loss before tax of $14.1m for the 12-month period, the Group had an
effective tax rate of 3.5% (2024: 5.2%) resulting in a tax credit of $0.5m
(2024: $1.8m).
In the period the Group made a net cash tax payment of $1.7m.
PENSION COSTS
The Group has two defined benefit schemes that are closed to new entrants. The
aggregate surplus on both schemes is $2.2m, a decrease of $3.2m from 31 March
2024. The income statement income of $0.1m is made up of $0.2m of current
service costs expense offset by $0.3m of interest income. Actuarial losses of
$4.0m recognised in other comprehensive income, were offset by cash
contributions of $0.7m. The last actuarial valuations were completed as at
April 2022, with future cash contributions agreed at the current levels
through to December 2028 and July 2029 for each scheme.
The main scheme, (which is the larger of the two), purchased a bulk annuity
policy covering the majority of its liabilities on 4 July 2024 with an
insurer. This "buy-in" is the primary reason for the actuarial loss in the
year. The trustees of the scheme and their advisors are working on various
steps to cleanse the scheme membership data, and complete calculations in
respect of the impact of Guaranteed Minimum Pension ('GMP') equalisation.
These steps are not expected to be completed for around 18 months. Until this
work has been completed, the Trustee of the scheme will not be in a position
to move from a buy-in to a buy-out (where the bulk annuity policy is converted
into a series of individual policies, which are then assigned to members). In
light of this, the buy-in should be viewed as an investment transaction, with
the impact recognised through other comprehensive income ('OCI').
CAPITAL MANAGEMENT AND DIVIDEND
The Board's policy is to have a strong capital base to maintain customer,
investor, and creditor confidence and to sustain future development of the
business. The Board considers Group consolidated total equity as capital,
which as at 31 March 2025 equated to $47.3m (31 March 2024: $63.9m). The Board
is not declaring a dividend payment for the period ended March 2025 (2024:
nil).
The Group has a clear capital allocation discipline and is committed to
returning excess funds to shareholders via future dividend or share
repurchase.
POST BALANCE SHEET EVENTS
The Group's multicurrency revolving credit facility of $28.8m with HSBC was
extended on 5 June 2025 to 21 July 2027 on the same terms as the original
revolving credit facility agreement.
In May 2025, the Group received an Employee Retention Credit ('ERC') of $1.4m.
An ERC is a US refundable tax credit for certain eligible businesses that had
employees and were affected during the COVID-19 pandemic. This government
grant income has not been included in this annual report and accounts since as
at the balance sheet date it was not known that the credit was reasonably
certain to be received. The claim was filed in 2023.
Mark Fryer
Chief Financial Officer
PRINCIPAL AND EMERGING RISKS AND UNCERTAINTIES
The Board has conducted a robust assessment of the Company's principal and
emerging risks. The risks outlined in this section are the principal risks
that we have identified as material to the Group. They represent a
"point-in-time" assessment, as the environment in which the Group operates is
constantly changing and new risks may always arise.
Risks are considered in terms of probability and impact, and are based on
residual risk rating of: high, medium and low. Mapping risks in this way
helps, not only to prioritise the risks and required actions, but also to
direct the required resource to maintain the effectiveness of controls already
in place and mitigate further where required.
The risks outlined in this section are not set out in any order of priority,
and do not include all risks associated with the Group's activities.
Additional risks not presently known to management, or currently deemed less
material, may also have an adverse effect on the business.
· Intellectual property - Intellectual property infringement risk - by Dialight
or against Dialight. Security of protectable intellectual property.
· Market: Sales and Growth - Risk having regard to Group concentration on North
American markets for growth, particularly having regard to US Government
imposition of tariffs. Risk impact: possible sales downturn and/or delayed
sales.
· Funding - The Group has a net debt position and there is a risk related to
liquidity. The Group has not paid a dividend since 2015. Capital and debt
funding adequacy and servicing, including covenant compliance and relationship
with the bank.
· Cyber and data integrity - Disruption to business systems would have an
adverse impact on the Group if our systems suffered a cyber attack (including
ransomware, phishing, DDOS attack). Upgrade needed to IT systems at some Group
facilities.
· People: Core capability and knowledge - Group performance is dependent on
attracting and retaining high-quality staff across all functions. There is
also a reliance on a key nucleus of staff. Succession planning is a key
delivery for the Group HR function. Consideration of rewards structure.
· Geo-political and macroeconomic impacts - Risk attaching to macroeconomic
uncertainty. Global economic/political uncertainty has sharply increased due
to the on/off imposition of US Government tariffs. This could impact the
Group's business given its manufacturing presence in Mexico and Malaysia, and
primary downstream market in the US. Geo-political risk has increased across
Europe and Asia, specifically having regard to uncertainty around the
Ukraine/Russia conflict.
· Litigation - Dialight and Sanmina have entered into a settlement agreement,
under which Dialight will pay Sanmina $12m in full and final settlement of all
claims between the parties on a deferred basis. Risk attaches to "trigger
events" and/or a failure to meet the settlement cash liability as it falls
due. Failure to meet liability would lead to the full $22m award falling due.
· Transfer pricing and financial compliance - Risk attaches to existing transfer
pricing policy around the world. Risk of tax liability due to challenge by tax
authorities.
· Inbound/outbound supply chain and manufacturing - Extended supply chain risk
including China impact on raw materials. Logistics risk due to imposition of
cross border US Government tariffs which will impact the Group due to location
of key manufacturing locations in Mexico and Malaysia.
· Product: competition and product development - Risk attached to translating
market requirements into: (a) product specifications; and (b) profitable
product. Challenge to drive innovation of new competitive products. Managing
post-sales risk.
The identification of risks and opportunities, the development of action plans
to manage the risks and maximise the opportunities, and the continual
monitoring of progress against agreed key performance indicators (KPIs) are
integral parts of the business process and core activities throughout the
Group.
These will continue to be evaluated, monitored, and managed through the
remainder of 2025 and beyond.
DIRECTORS' RESPONSIBILITY STATEMENT
Directors are responsible for preparing the annual report (including the
Directors' report, the Strategic report, the Directors' Remuneration report
and the Corporate Governance statement) and the financial statements of the
Group, in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group financial statements for
each financial year. Under the law they are required to prepare the Group
financial statements in accordance with UK-adopted international accounting
standards and applicable law. Directors must be satisfied that the financial
statements give a true and fair view of the state of affairs of the Group and
of the Group's profit or loss for that period.
CONSOLIDATED INCOME STATEMENT
for the 12-month period ended 31 March 2025
12-month period ended 15-month period ended
31 March 2025 31 March 2024
(audited) (audited)
Notes $m $m
Revenue 2 183.5 226.0
Cost of sales (117.0) (158.9)
Gross profit 66.5 67.1
Distribution costs (29.0) (36.8)
Administrative expenses (52.8) (60.5)
Impairment losses of financial assets (2.1) -
Gain on disposal of business 5.8 -
Loss from operating activities (11.6) (30.2)
Adjusted profit/(loss) from operating activities, before impairment losses of 6.3 (4.6)
financial assets
Impairment losses of financial assets (2.1) -
Underlying profit/(loss) from operating activities 2 4.2 (4.6)
Non-underlying items 3 (21.6) (25.6)
Gain on disposal of business 5.8 -
Loss from operating activities (11.6) (30.2)
Financial expense 4 (2.5) (4.1)
Loss before tax (14.1) (34.3)
Taxation 5 0.5 1.8
Loss for the period (13.6) (32.5)
Loss for the period attributable to:
Equity owners of the Company (13.8) (32.5)
Non-controlling Interests 0.2 -
Loss for the period (13.6) (32.5)
Loss per share
Basic 6 (34.4) cents (91.1) cents
Diluted 6 (34.4) cents (91.1) cents
The accompanying notes are extracted from the financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 12-month period ended 31 March 2025
12-month period ended 15-month period ended
31 March 2025 31 March 2024
(audited) (audited)
$m $m
Other comprehensive (expense)/income
Items that may be reclassified subsequently to profit and loss
Exchange differences on translation of foreign operations (0.1) 0.4
Income tax on exchange difference on translation of foreign operations - -
(0.1) 0.4
Items that will not be reclassified subsequently to profit and loss
Remeasurement of defined benefit pension liability (4.0) (0.5)
Income tax on remeasurement of defined benefit pension liability 1.0 0.1
(3.0) (0.4)
Other comprehensive expense for the period, net of tax (3.1) -
Loss for the period (13.6) (32.5)
Total comprehensive expense for the period (16.7) (32.5)
Attributable to:
- Owners of the parent (16.9) (32.5)
- Non-controlling interests 0.2 -
Total comprehensive expense for the period (16.7) (32.5)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the 12-month period ended 31 March 2025 (audited)
Share capital Merger Translation Capital redemption Share premium Own Shares Retained Total Non-controlling interests Total
reserve reserve reserve earnings equity
$m $m $m $m $m $m $m $m $m $m
Balance at 1 April 2024 1.2 1.0 12.6 4.3 13.0 (1.2) 32.8 63.7 0.2 63.9
Loss for the period - - - - - - (13.8) (13.8) 0.2 (13.6)
Other comprehensive income:
Foreign exchange translation differences, net of taxes - - (0.1) - - - - (0.1) - (0.1)
Remeasurement of defined benefit pension liability, net of taxes - - - - - - (3.0) (3.0) - (3.0)
Total other comprehensive income - - (0.1) - - - (3.0) (3.1) - (3.1)
Total comprehensive income for the period - - (0.1) - - - (16.8) (16.9) 0.2 (16.7)
Transactions with owners, recorded directly in equity:
Issue of share capital - - - - - - - - - -
Transaction costs - - - - - - - - - -
Share-based payments - - - - - - 0.3 0.3 - 0.3
Re-purchase of own shares - - - - - (0.2) - (0.2) - (0.2)
Total transactions with owners - - - - - (0.2) 0.3 0.1 - 0.1
Balance at 31 March 2025 1.2 1.0 12.5 4.3 13.0 (1.4) 16.3 46.9 0.4 47.3
Share capital Merger Translation Capital redemption Share premium Own Shares Retained Total Non-controlling interests Total
reserve reserve reserve earnings equity
$m $m $m $m $m $m $m $m $m $m
Balance at 1 January 2023 1.0 1.0 12.2 4.3 1.2 (1.1) 64.2 82.8 0.2 83.0
Loss for the period - - - - - - (32.5) (32.5) - (32.5)
Other comprehensive income:
Foreign exchange translation differences, net of taxes - - 0.4 - - - - 0.4 - 0.4
Remeasurement of defined benefit pension liability, net of taxes - - - - - - (0.4) (0.4) - (0.4)
Total other comprehensive income - - 0.4 - - - (0.4) - - -
Total comprehensive income for the period - - 0.4 - - - (32.9) (32.5) - (32.5)
Transactions with owners, recorded directly in equity:
Issue of share capital 0.2 - - - 12.7 - - 12.9 - 12.9
Transaction costs - - - - (0.9) - - (0.9) - (0.9)
Share-based payments - - - - - - 1.5 1.5 - 1.5
Re-purchase of own shares - - - - - (0.1) - (0.1) - (0.1)
Total transactions with owners 0.2 - - - 11.8 (0.1) 1.5 13.4 - 13.4
Balance at 31 March 2024 1.2 1.0 12.6 4.3 13.0 (1.2) 32.8 63.7 0.2 63.9
The accompanying notes are extracted from the financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 March 2025
31 March 2025 31 March 2024
(audited) (audited)
Notes $m $m
Assets
Property, plant and equipment 7 13.5 12.7
Right-of-use assets 9.0 8.8
Intangible assets 8 9.0 8.1
Deferred tax assets 8.5 5.8
Employee benefits 2.2 5.4
Other receivables 0.5 5.9
Total non-current assets 42.7 46.7
Inventories 10 46.6 49.1
Trade and other receivables 34.3 32.3
Income tax recoverable 0.4 0.8
Cash and cash equivalents 12 7.9 11.5
Total current assets 89.2 93.7
Total assets 131.9 140.4
Liabilities
Trade and other payables (40.1) (34.3)
Provisions 9 (2.4) (1.2)
Current tax liabilities (0.5) (1.4)
Lease liabilities (2.5) (2.0)
Borrowings 13 - (27.9)
Total current liabilities (45.5) (66.8)
Trade and other payables (3.8) -
Provisions 9 (2.1) (1.6)
Borrowings 13 (25.7) -
Lease liabilities (7.5) (8.1)
Total non-current liabilities (39.1) (9.7)
Total liabilities (84.6) (76.5)
Net assets 47.3 63.9
Equity
Issued share capital 14 1.2 1.2
Merger reserve 1.0 1.0
Share premium 15 13.0 13.0
Other reserves 15.4 15.7
Retained earnings 16.3 32.8
46.9 63.7
Non-controlling interests 0.4 0.2
Total equity 47.3 63.9
The accompanying notes are extracted from the financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the 12-month period ended 31 March 2025
12-month period ended 15-month period ended
31 March 2025 31 March 2024
(audited) (audited)
Notes $m $m
Operating activities
Loss for the period (13.6) (32.5)
Adjustments for:
Financial expense 4 2.5 4.1
Income tax credit 5 (0.5) (1.8)
Sanmina liability 11.3 -
Gain on disposal of business (5.8) -
Share-based payments 0.3 1.5
Defined benefit pension scheme service cost 0.2 -
Depreciation of property, plant and equipment 7 3.2 4.3
Impairment losses on property, plant and equipment - 1.1
Loss on disposal 0.3 -
Depreciation of right of use assets 2.5 3.0
Gain on lease modification - (0.2)
Amortisation of intangible assets 8 2.6 7.7
Impairment losses on financial assets 2.1 -
Impairment losses on intangible assets 8 0.2 15.8
Operating cash flow before movements in working capital 5.3 3.0
Decrease in inventories 2.6 15.7
Decrease in trade and other receivables 1.9 5.2
Increase/(decrease) in trade and other payables 2.2 (10.9)
Increase in provisions 9 1.1 0.2
Pension contributions (more than)/less than income statement charge (0.7) 0.1
Cash generated by operations 12.4 13.3
Income taxes paid (1.7) (2.6)
Interest paid(2) 4 (2.8) (4.1)
Net cash generated by operations 7.9 6.6
Investing activities
Proceeds on disposal of business 5.2 -
Purchase of property, plant and equipment 7 (4.3) (1.4)
Purchase of intangible assets 8 (3.7) (5.4)
Net cash used in investing activities (2.8) (6.8)
Financing activities
Proceeds on issue of shares - net of issue costs 14 - 12.0
Drawdown of bank facility 3.0 6.2
Repayment of bank facility 13 (5.2) (5.9)
Repayment of Sanmina liability (4.0) -
Re-purchase of own shares (0.2) (0.1)
Repayment of lease liabilities(1) (2.3) (2.9)
Net cash inflow from financing activities (8.7) 9.3
Net (decrease)/increase in cash and cash equivalents (3.6) 9.1
Cash and cash equivalents at beginning of the period 12 11.5 2.0
Effect of exchange rates - 0.4
Cash and cash equivalents at end of the period 12 7.9 11.5
The Group has classified:
1. Cash payments for the principal portion of lease payments as financing
activities.
2. Cash payments for the interest portion of lease payments as operating
activities consistent with the presentation of interest payments chosen by the
Group.
The accompanying notes are extracted from the financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the 12-month period ended 31 March 2025 (audited)
1. Basis of preparation and principal accounting policies
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with
UK-adopted International Accounting Standards. The consolidated financial
statements are presented in US dollars and all values are rounded to the
nearest tenth of a million dollars ($ 0.1 million), except where otherwise
indicated.
The financial information set out in this document does not constitute the
Group's statutory accounts for the 12-month period ended 31 March 2025 or the
15-month period ended 31 March 2024 but is derived from those accounts.
Statutory accounts for the 15-month period ended 31 March 2024 have been
delivered to the registrar of companies. The auditors have reported on those
accounts. Their report was: (a) unqualified; (b) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006; and (c) did contain an
emphasis of matter in relation to the fact that a material uncertainty existed
that may cast doubt on the Group's ability to continue as a going concern.
Statutory accounts for the 12-month period ended 31 March 2025 will be
delivered to the registrar of companies in due course. The auditors have
reported on those accounts. Their report was (a) unqualified; and (b) did not
contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The Auditor's report on these accounts did contain an emphasis of matter in
relation to the fact that a material uncertainty existed that may cast doubt
on the Group's ability to continue as a going concern.
As set out in note 1(c) the directors have identified a material uncertainty
which may cast significant doubt on the entity's ability to continue as a
going concern, meaning it may be unable to realise it assets and discharge its
liabilities in the normal course of business. Not withstanding this material
uncertainty, the Directors consider it remains appropriate to continue to
adopt the going concern basis in the preparation of the financial statements.
The financial statements for the 12-month period ended 31 March 2025
(including the comparatives for the 15-month period ended 31 March 2024) were
approved and authorised for issue by the Board of Directors on 23 June 2025.
This results announcement for the 12-month period ended 31 March 2025 was also
approved by the Board on 23 June 2025.
Whilst the financial information included in this statement has been compiled
in accordance with the recognition and measurement principles of UK-adopted
International Accounting Standards, this statement does not itself contain
sufficient information to comply with UK-adopted International Accounting
Standards. Full Financial Statements that comply with IFRS are included in the
2025 Annual Report.
(b) Changes in significant accounting policies
None.
(c) Consolidated basis of preparation
Going concern
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are discussed in the Chief Financial Officer's review
above.
The Group's bank facility comprises a revolving credit facility ('RCF') of
$28.8m from HSBC. A balance of $5.2m was repaid in August 2024 using the
proceeds received from the disposal of the Traffic business after which the
facility was reduced by a corresponding amount from $34.0m to $28.8m. The
facility was extended to 21 July 2027 on the same terms as the original
agreement on 5 June 2025.
Net debt increased to $17.8m at 31 March 2025 (31 March 2024: $16.4m) and
comprised $25.7m borrowings with $7.9m cash in hand.
The covenants are tested quarterly and are as follows:
Ratio Calculation Threshold
Leverage ratio Net bank debt : proforma unaudited EBITDA <3.0x
Interest cover Proforma unaudited EBITDA : interest expense >4.0x
The interest cover was temporarily reset from 4.0x to 2.5x for the quarter
period ending 31 December 2024 only and was reset to 4.0x thereafter.
Covenants were met in all four quarters.
In assessing the going concern assumptions, the Directors have prepared three
main scenarios over the going concern period which the Directors have assessed
as a 15-month period to 30 June 2026, being:
· the base case;
· a plausible downside case in relation to revenue and margin; and
· a reverse stress test (break-even assessment).
Various upside scenarios also exist, but those result in positive outcomes and
have not been included here given the focus of the Directors, and its
auditors, is on the risk to the going concern basis of preparation to the
financial statements. Nonetheless, the Directors consider these upside
scenarios as realistic outcomes and continue to drive the Group's performance
and other activities to seek to achieve those positive results.
The downside scenarios reflect the risk of lower than expected organic revenue
growth in core Lighting markets, lower gross margins than forecast and cost
savings not being realised to the full extent forecasted.
Further details, including the relevant covenant tests, are included in note
13.
Base case
The base case is derived from the Board approved year to 31 March 2026 Budget,
which assumes that the margin will improve over the going concern period
through various Group initiatives. The base case is driven by material cost
reduction projects and tight control over the cost-base. In this scenario, the
Directors consider that the Group will continue to operate within its
available committed facilities of $28.8m with sufficient headroom and covenant
compliance throughout the forecast period.
The key assumptions in the base case include:
· Decline in net revenue in the year to 31 March 2026 mainly due to the expected
disposal of Traffic and Rail in October 2025 (end of MSA).
· No growth in Lighting net revenue in the year to 31 March 2026 due to the
current macroeconomic climate and the uncertainty surrounding global tariffs.
· Net revenue for the quarter to 30 June 2026 is forecast to increase by 2.4%
compared to the same quarter in 2025. This is driven by a combination of
factors including increasing, benefits from strategic relationships, price
increases, and increased source and sell product range sales.
· Gross margin improvement as component price premiums continue to reduce and
supply becomes more readily available; freight costs normalise, and the
benefits from cost reduction and automation programmes are delivered resulting
in a gross profit margin improvement of 1.9% in the year to 31 March 2026 and
a further 4.2% in the quarter to 30 June 2026 respectively.
· Operating costs are expected to be 33.2% of revenue in the year to 31 March
2026 and the quarter to 30 June 2026.
Plausible downside case
The Directors have assumed:
· Year to 31 March 2026: reduction of Budget revenue by 5% across Lighting,
Obstruction, OE and Vehicle.
· Quarter to 30 June 2026: no growth in core revenue and a 75% reduction of the
forecast product cost savings and discounting decrease.
· No mitigating actions are assumed apart from the removal of a bonus provision
for the year to 31 March 2026 and the quarter to 30 June 2026.
Reverse stress test (break-even assessment)
The Directors have assumed:
· Year to 31 March 2026: reduction of Budget revenue by 9% across Lighting,
Obstruction, OE and Vehicle.
· Quarter to 30 June 2026: no growth in core revenue and a 85% reduction of the
forecast product cost savings and discounting decrease.
· No mitigating actions are assumed apart from the removal of a bonus provision
for the year to 31 March 2026 and the quarter to 30 June 2026.
As indicated above, the downside and reverse stress testing scenarios do not
consider any mitigating actions apart from the removal of a bonus provision.
In all these scenarios, the Group has a series of controllable mitigating
actions that can be taken swiftly, including various temporary and permanent
cost and cash saving measures.
All scenarios include the settlement payments to be made to Sanmina. An
initial $4.0m has been paid in March 2025 with a further $1.0m to be made per
quarter until March 2027, rising to $1.5m if Dialight's market capitalisation
rises above £100m for 30 consecutive days. Cumulative total payments to
Sanmina under this scenario will not exceed $12.0m. The Directors are
confident the payments will be funded out of operating cash flows, with
sufficient headroom to meet business needs.
In the base case and downside scenarios, the Group is forecast to have
sufficient liquidity and not breach any covenants in the going concern period.
In the reverse stress test, the leverage covenant ratio is forecast to breach
in the quarter to 31 March 2026 and the quarter to 30 June 2026. The interest
cover is expected to breach in the quarter to 30 June 2026.
Whilst the Directors believe the Group will deliver on its plan, the Directors
recognise that the results in recent years have fluctuated from the forecast.
In the reverse stress test, whilst core revenue is forecast to decrease from
the year to 31 March 2025 to the quarter to 30 June 2026, gross profit margin
is forecast to increase by 1.3% in the same period. As a result, the Group
will require a gross profit margin increase more than this to avoid breaching
covenants. The Directors have therefore concluded that while the scenario
itself is unlikely given the mitigating actions that can be implemented, there
is a plausible risk of a covenant breach.
Accordingly, the Directors have identified circumstances which give rise to a
material uncertainty which may cast significant doubt on the entity's ability
to continue as a going concern, meaning it may be unable to realise it assets
and discharge its liabilities in the normal course of business.
Notwithstanding this material uncertainty, the Directors consider it remains
appropriate to continue to adopt the going concern basis in the preparation of
the financial statements. The HSBC facility was extended on 5 June through to
21 July 2027, which covers the going concern period.
(d) Use of estimates, judgements and assumptions
The preparation of the consolidated financial statements requires management
to make judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities, income and expenses.
These estimates, judgements and assumptions are based on historical experience
and other factors that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates. The areas which require the
most use of management estimation and judgement are set out below.
Significant judgements
Going concern
The determination by the Directors of the entity's ability to continue as a
going concern involves areas of judgement including preparation and assessment
of budgets, forecasts and various scenarios. Refer to note 1(c) for a fuller
discussion.
Development and patent costs
The Group capitalises development costs and patent costs provided they meet
all criteria in the respective accounting policy. Costs are only capitalised
when management applies judgement that is satisfied as to the ultimate
commercial viability of the projects based on review of the relevant business
case. The capitalised costs are amortised over the expected useful economic
life, which is determined based on the reasonable commercial prospects of the
product and a comparison to similar products being sold by the Group.
The Group has $8.6m (2024: $7.4m) of development and patent costs that relate
to the current product portfolio and new products expected to launch over the
next one to two years. An impairment review of the total balance was performed
resulting in impairment of $0.1m recorded in underlying EBIT (2024: $4.6m
recorded as a non-recurring expenses (note 3)).
All of the development projects are within the Lighting CGU and are tested for
impairment at the CGU level. However, management also performs a review of
each individual project to see if there are any indications of specific
impairment by comparing the carrying amount of the asset with the net present
value derived from the Board approved strategic plan.
Directors recognise that the results in recent years have fluctuated from the
forecast. Consideration was therefore given to the reversal of impairments
recognised in prior periods. Given the sensitivity of the tests to the growth
assumptions utilised in the forecasts, it was deemed to be appropriate to not
recognise any such reversal at this time.
Deferred tax assets
The Group must determine the extent to which deferred tax assets can be
recognised and this determination is based on an assessment of the probability
that future taxable income will be available against which the deductible
temporary differences and tax loss carry-forwards can be utilised. In
addition, significant judgement is required in assessing the impact of any
legal or economic limits or uncertainties in various tax jurisdictions.
The Group has recognised a net deferred tax asset of $8.5m (2024: $5.8m). Of
this balance, $6.4m (2024: $5.4m) arises in the US with $4.4m (2024: $3.2m)
relating to short-term timing differences that typically unwind on a yearly
basis, $0.4m (2024: $0.7m) arising on intangible assets, $0.3m (2024: nil)
arising on other items, $1.9m (2024: $1.5m) arising on losses and restricted
interest deductions which have no expiry dates. This is offset by a US
deferred tax liability of $0.7m (2024: $0.7m) arising on property, plant and
equipment.
The Group considers it highly probably that sufficient future taxable profits
will arise in the US based on both the earning history and the future
forecasted profits. In addition, the Group is satisfied that the losses will
unwind in the same period as the forecasted taxable profits.
The remaining $2.1m of the recognised net deferred tax asset arises in respect
of deferred tax assets on right-of-use assets and lease liabilities ($0.4m),
provisions ($1.0m), losses ($1.0m), offset by deferred tax liabilities arising
on employee benefits ($0.2m) and individually immaterial net DTAs recognised
by the Group's subsidiary entities in various geographical locations.
Non-underlying items
The Group incurs costs and earns income that is non-underlying in nature or
that, in the Directors' judgement, needs to be disclosed separately by virtue
of its size and incidence in order for users of the consolidated financial
statements to obtain a proper understanding of the financial information and
the underlying performance of the business. Judgement is required in
determining whether an item should be classified as non-underlying or included
within the underlying results. Refer to note 3 for further information.
Estimates
Inventory reserve
The total value of the inventory provision for all categories of inventory
over which judgement has been exercised was $5.9m (2024: $6.6m) and this
represents 11.2% (2024: 11.8%) of the gross inventory value.
Details of the inventory reserve are set out in note 10.
Inventory reserve - Raw materials and sub-assemblies
The Group's policy is that all raw material and sub-assembly inventory that is
over 24-months old at the balance sheet date is provided for. This basis for
estimate reduces estimation subjectivity, while allowing for the adverse
impact from component shortages that have led to high inventory levels and
some components being held for longer than expected. Two years has been
assessed to be appropriate as the components have a long shelf life, continue
to be used in production and the product demand mix between project and MRO.
The inventory ageing continues to be skewed as a result of post COVID-19
supply chain disruption leading to inventory which is now two years old.
The value of the inventory provision for raw materials and sub-assemblies as
at 31 March 2025 was $4.4m (2024: $5.9m).
If all raw material and sub-assembly inventory over 18-months old at the
balance sheet date was to be provided for, the inventory provision would be
$4.9m. Alternatively, if all raw material and sub-assembly inventory over
36-months old at the balance sheet date was to be provided for, the inventory
provision in that scenario would be $1.7m.
Inventory reserve - finished goods
The review of finished goods inventory was based on all inventory over 365
days old. Inventory on hand was compared to historical sales, current orders,
sales pipeline and whether the product had been recently launched.
Management judgement was then applied to determine whether there was a
reasonable probability that the inventory would be sold, with a provision
being required for any inventory that failed this assessment.
Management believes that any reasonably possible change in the assumption
would not cause any significant change in the provision estimate for finished
goods.
Inventory reserve and onerous contract provision - disposal of traffic
business
Following the disposal of the traffic business, an estimate was made of the
provision for excess or obsolete inventory and to provide for inventory
expected to be sold at below cost. The provision, which is included in the
inventory provisions noted above, is $0.8m as at 31 March 2025 (2024: $3.0m);
during the 12-month period ended 31 March 2025, $2.2m of the inventory
provision was released as it was deemed to be in excess of current
requirements. Inventory is being utilised or sold to Leotek and as at the
balance sheet date future inventory utilisation/sales are inherently an
estimate.
Additionally, during the current financial period, an onerous contract
provision relating to the Leotek contract of $0.9m (2024: nil) was made. The
provision is for estimated expected losses until the end of the Leotek
contract in October 2025.
These are recognised within cost of goods sold and are disclosed as a
non-underlying item within note 3.
Inventory - absorbed overhead costs
The valuation of inventory, detailed in note 10, requires the use of estimates
in the amount of costs to be absorbed into inventory valuation.
The costs of purchase of inventories comprise the purchase price, import
duties/other taxes and freight, handling and other costs directly attributable
to the acquisition of inventory.
The costs of conversion of inventories include costs directly related to the
units of production and also include a systematic allocation of fixed and
variable production overheads that are incurred in converting materials into
finished goods. Costs related to production comprise labour and direct
overheads attributable to the production process. They are assessed to ensure
that costs unrelated to production are excluded. Unallocated overheads are
recognised as an expense in the period in which they are incurred.
Consistent with prior year, the Group absorbs costs using weighted average
inventory turns. The value of directly attributable costs over which judgement
was exercised was $6.9m (2024: $7.6m) and this represents 15% (2024: 15%) of
the inventory value. For every day that the estimate of the days used for the
overheads absorbed changes, it changes the calculation by $78.0k (2024:
$96.9k). In relation to the amount of freight costs that are included in the
inventory valuation, the value of freight costs over which judgement was
exercised was $3.2m (2024: $2.8m) and this represents 7% (2024: 6%) of the
inventory value. For every day that the estimate of the days used for the
freight costs absorbed changes, it changes the calculation by $16.6k (2024:
$17.1k).
Management believes that any reasonably possible change in the assumptions
would not cause any significant change in the amount of costs absorbed into
inventory.
Pension plans
The key actuarial assumptions used to value the pension plan liabilities and
could have a significant impact on the valuation of the liabilities. The
Group's assumptions are disclosed in note 16 of the consolidated financial
statements with associated sensitivity analysis. The key assumptions are
mortality rates, inflation and market yields. These assumptions are set with
close reference to market conditions.
Impairment losses of financial assets
Expected credit losses of financial assets contain a number of measurement
uncertainties relating to management's view of the expected future cash flows
receivable from financial assets due from customers and the inherent
creditworthiness of those customers. Judgement is based on the Group's past
experience as well as taking into consideration current market and economic
conditions, and any factors relating to a specific customer or sale. Changes
in judgements and assumptions could result in a material adjustment to those
estimates in future reporting periods.
(e) Adoption of new and revised standard/interpretations and amendments
The following accounting standards, interpretations, improvements and
amendments have become applicable for the current period and although the
Group has adopted them, they have had no material impact on the Group. These
comprise:
· Non-current Liabilities with Covenants and classification of Liabilities as
Current or Non-current (Amendments to IAS 1);
· Lease liability in a Sale and Leaseback (Amendments to IFRS 16); and
· Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7).
The following amendments to standards and interpretations have also been
issued, but are not yet effective and have not been early adopted for the
period ended 31 March 2025:
· Lack of Exchangeability (Amendments to IAS 21);
· Presentation and Disclosures in Financial Statements (IFRS 18);
· Subsidiaries without Public Accountability: Disclosures (IFRS 19);
· Amendments to the Classification and Measurement of Financial Instruments
(amendments to IFRS 9 and IFRS 7);
· Contracts Referencing Nature-dependent Electricity (amendments to IFRS 9 and
IFRS 7); and
· Annual Improvements to IFRS Accounting Standards (amendments to IFRS 10, IFRS
9, IFRS 1, IAS 7 and IFRS 7).
The adoption of these amendments is not expected to have a material impact on
the financial results of the Group but could impact the presentation of the
financial statements.
2. Operating segments
The Group has two reportable operating segments.
These segments have been identified based on the internal information that is
supplied regularly to the Group's chief operating decision maker for the
purposes of assessing performance and allocating resources. The chief
operating decision maker is considered to be the Group Chief Executive
Officer.
The two reportable operating segments are:
· Lighting, which develops, manufactures and supplies highly efficient LED
lighting solutions for hazardous and industrial applications in which lighting
performance is critical and includes anti-collision obstruction lighting; and
· Signals & Components, which develops, manufactures and supplies status
indication components for electronics OEMs, together with niche industrial and
automotive electronic components and highly efficient LED signalling solutions
for the traffic and signals markets.
There is no inter-segment revenue and there are no individual customers that
represent more than 10% of revenue.
All revenue relates to the sale of goods. Segment gross profit is revenue less
the costs of materials, labour, production and freight that are directly
attributable to a segment. Central and unallocated overheads comprise
operations management plus corporate costs, which include share-based
payments.
Segmental assets and liabilities are not reported internally and are,
therefore, not presented below.
Reportable segments
12-month period ended 31 March 2025 (audited) Lighting Signals & Components Central & Unallocated Total
$m $m $m $m
Revenue 138.0 45.5 _ 183.5
Underlying gross profit 54.1 11.2 - 65.3
Underlying overheads (41.2) (7.9) (12.0) (61.1)
Underlying profit/(loss) from operating activities 12.9 3.3 (12.0) 4.2
Non-underlying items (note 3) (18.6) 0.9 (3.9) (21.6)
Gain on disposal of business - 5.8 - 5.8
(Loss)/profit from operating activities (5.7) 10.0 (15.9) (11.6)
Financial expense - - (2.5) (2.5)
(Loss)/profit before tax (5.7) 10.0 (18.4) (14.1)
Taxation - - 0.5 0.5
(Loss)/profit after tax (5.7) 10.0 (17.9) (13.6)
15-month period ended 31 March 2024 (audited) Lighting Signals & Components Central & Unallocated Total
$m $m $m $m
Revenue 171.1 54.9 _ 226.0
Underlying gross profit 57.6 12.5 - 70.1
Underlying overheads (50.8) (12.3) (11.6) (74.7)
Underlying profit/(loss) from operating activities 6.8 0.2 (11.6) (4.6)
Non-underlying items (note 3) (20.6) (3.6) (1.4) (25.6)
Loss from operating activities (13.8) (3.4) (13.0) (30.2)
Financial expense - - (4.1) (4.1)
Loss before tax (13.8) (3.4) (17.1) (34.3)
Taxation - - 1.8 1.8
Loss after tax (13.8) (3.4) (15.3) (32.5)
Other segmental data
12-month period ended 31 March 2025 (audited)
Lighting Signal & components Central & Unallocated Total
$m $m $m $m
Cost of inventories recognised as expense 47.9 19.3 _ 67.2
Total personnel expenses 35.6 10.8 3.3 49.7
Depreciation of property, plant and equipment 2.4 0.8 _ 3.2
Depreciation of right-of-use assets 1.9 0.6 _ 2.5
Amortisation of intangible assets 2.6 _ _ 2.6
Impairment of property, plant and equipment _ _ _ _
Impairment of goodwill - - _ -
Impairment of intangible assets 0.1 0.1 _ 0.2
15-month period ended 31 March 2024 (audited)
Lighting Signals & components Central & Unallocated Total
$m $m $m $m
Cost of inventories recognised as expense 65.8 25.0 _ 90.8
Total personnel expenses 46.6 13.9 4.0 64.5
Depreciation of property, plant and equipment 3.3 1.0 _ 4.3
Depreciation of right-of-use assets 2.3 0.7 _ 3.0
Amortisation of intangible assets 7.7 _ _ 7.7
Impairment of property, plant and equipment 1.1 _ _ 1.1
Impairment of goodwill 11.2 - _ 11.2
Impairment of intangible assets 4.1 0.5 _ 4.6
Geographical segments
Lighting and Signals & Components segments are managed on a worldwide
basis, but operate in three principal geographic areas: North America, EMEA
and Rest of the World. The following table provides an analysis of the Group's
sales by geographical market, irrespective of the origin of the goods. All
revenue relates to the sale of goods.
Sales revenue by geographical market
12-month period ended 15-month period ended
31 March 2025 31 March 2024
$m $m
(audited) (audited)
North America 155.3 183.7
EMEA 10.7 18.3
Rest of World 17.5 24.0
Total sales revenue 183.5 226.0
3. Non-underlying items
The Group incurs cost and earns income that is non-recurring in nature or
that, in the Director's judgement, need to be separately disclosed for users
of the consolidated financial statements to obtain a full understanding of the
financial information and the best indication of the underlying performance of
the Group.
The table below presents the components of non-underlying items recognised in
the income statement. All costs are recognised within administrative expenses
unless otherwise stated.
12-month period ended 15-month period ended
31 March 2025 31 March 2025
$m $m
(audited) (audited)
Transformation Plan 4.1 4.5
Impairment of goodwill _ 11.2
Impairment of other intangible assets (excluding business disposal impairment) _ 4.1
Litigation costs 17.8 2.3
Other non-underlying costs 0.6 _
Business disposal (income)/costs (0.9) 3.5
Non-underlying items recorded in administrative expenses 21.6 25.6
The Group has incurred $4.1m (15-months ended 31 March 2024: $4.5m) of
non-underlying costs relating to the Transformation Plan. This is a
significant multi-year change programme for the Group, which is designed to
address legacy issues associated with excess cost and complexity within the
organisation, while at the same time focusing more resources on the most
attractive growth opportunities within its core industrial LED lighting
market. Implementation of the Transformation Plan is expected to be complete
by 31 March 2026. The multi-year Transformation Plan is a material, infrequent
programme and is not considered to be part of the underlying performance of
the business. The costs incurred in the 12-month period to 31 March 2025
relate to resetting and realigning the Group's cost base including severance
costs, and legal and professional fees. In the prior period, an impairment
charge of $1.1m for property, plant, and equipment and dilapidation costs of
$0.4m were recognised in relation to the vacation of the Malaysian facility
that occurred during the year.
During the 12-month period ended 31 March 2025 costs of $17.8m have been
expensed (2024: $1.9m) relating to the legal settlement with Sanmina. On 31
March 2025 the Group settled its long-standing litigation with Sanmina for
$12.0m to be paid by instalments. This required payment of $4.0m on 31 March
2025 and eight quarterly payments of $1.0m per quarter with the final payment
due on 27 March 2027. The discounted expense of these future payments is
$11.3m, with additional legal expenses of $5.6m in the period and other
irrecoverable amounts expensed of $0.9m. Please refer to note 19 for further
details of this claim. In the prior period, other litigation costs of $0.4m
relate to a contractual litigation case relating to the use of intellectual
property which was concluded in 2023.
Other non-underlying costs of $0.6m are one-off costs relating to previous
financial periods, as such have been recognised through non-underlying to
enable full comparability of the Group's financial performance with previous
periods.
Business disposal (income)/costs relate to the disposal of the Traffic
business in July 2024. The (income)/costs relate to a $0.1m impairment of
development costs (2024: $0.5m) for projects that will no longer be pursued,
net income of $2.0m being a release of inventory excess and obsolescence
provision, which has been recognised within costs of goods sold (2024: expense
of $3.0m), $0.1m of staff retention costs (2024: nil) and an onerous contract
provision of $0.9m in relation to the Leotek contract (2024: nil).
4. Financial expenses
12-month period ended 15-month period ended
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Net interest income on defined benefit liability (0.3) (0.3)
Interest expense on financial liabilities, excluding lease liabilities 2.2 3.3
Facility arrangement fee expense _ 0.4
Interest expense on lease liabilities 0.6 0.7
Net financing expense recognised in the consolidated income statement 2.5 4.1
5. Taxation
12-month period ended 15-month period ended
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Current tax expense
Current period 1.2 1.2
Adjustment for prior years _ (0.1)
Total current tax expense 1.2 1.1
Deferred tax expense
Origination and reversal of temporary differences (1.1) (4.0)
Adjustment for prior years (0.3) 0.7
Impact of change in tax laws and rates (0.3) 0.4
Total deferred tax credit (1.7) (2.9)
Total tax credit (0.5) (1.8)
Reconciliation of effective tax rate
12-month period ended 12-month period ended 15-month period ended 15-month period ended
31 March 2025 31 March 2025 31 March 2024 31 March 2024
% $m % $m
(audited) (audited) (audited) (audited)
Loss for the period after tax (13.6) (32.5)
Total tax charge 0.5 1.8
Loss for the period before tax (14.1) (34.3)
Income tax using the UK corporation tax rate of 25.0% (2024: 23.8%) 25.0 (3.5) 23.8 (8.2)
Effect of higher taxes on overseas earnings (7.8) 1.1 (1.5) 0.5
Change in tax laws and rates 2.1 (0.3) (1.2) 0.4
Expenses not deductible for tax purposes _ _ (8.5) 2.9
Current year losses for which no deferred tax is recognised (17.7) 2.5 (2.9) 1.0
Adjustment for prior years 2.1 (0.3) (1.5) 0.5
Other (0.7) 0.1 _ _
Research and development credits 0.7 (0.1) 0.3 (0.1)
Foreign taxes incurred _ _ (3.5) 1.2
3.5 (0.5) 5.2 (1.8)
The effective tax rate for the period is 3.5% compared with 5.2% in the prior
year and the standard rate of 25.0% (2024: 23.8%) in the UK. During the
period, the Group made a loss before tax of $14.1m (2024: loss of $34.3m),
which resulted in a tax credit in the period of $0.5m (2024: tax credit of
$1.8m).
The normalised tax rate for the Group in the period is 25.0% (tax rate before
adjustments) and based on a pre-tax loss of $14.1m this would generate a tax
credit of $3.5m. The Group's overall tax rate was 3.5% which is significantly
lower than the normalised tax rate as a result of the following major
adjustments:
· unrecognised losses in the European Lighting business resulting in $2.5m of
tax losses not being recognised in the period; and
· Mexican taxes of $1.1m.
Tax credit recognised directly in equity
12-month period ended 15-month period ended
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Employee benefits (1.0) (0.1)
Current tax
Current tax is calculated with reference to the profit or loss of the Company
and its subsidiaries in their respective countries of operation. Set out below
are details in respect of the significant jurisdictions where the Group
operates and the factors that influenced the current and deferred taxation in
those jurisdictions.
UK
The UK companies are subject to a corporate tax rate of 25.0% (2024: 23.8%).
Group
The majority of the Group's profits arise in the US where the corporation tax
rate is 23%, including 21% federal tax and 2% state tax (2024: 24%, including
21% federal tax and 3% state tax).
6. Earnings per share
Basic earnings per share
The calculation of basic earnings per share ('EPS') at 31 March 2025 was based
on a loss for the year of $13.6m (2024: loss of $32.5m) and the weighted
average number of ordinary shares outstanding during the year of 39,586,489
(2024: 35,603,515).
Weighted average number of ordinary shares
12-month period ended 31 March 2025 15-month period ended 31 March 2024
000s 000s
(audited) (audited)
Weighted average number of ordinary shares 39,586 35,604
12-month period ended 31 March 2025 15-month period ended 31 March 2024
(audited) (audited)
Basic (loss)/earnings per share (34.4) cents (91.1) cents
Diluted earnings per share
The calculation of diluted earnings per share at 31 March 2025 was based on a
loss for the year of $13.6m (2024: loss of $32.5m) and the weighted average
number of ordinary shares outstanding during the year of 39,586,489 (2024:
35,603,515).
Where a loss has been recognised the same number of shares are used in both
the basic and diluted loss per share calculation as there is no dilutive
effect when the Group is in a loss-making position. The number of shares that
would be used in the diluted EPS calculation is 40,646,358 (2024: 36,457,712).
Weighted average number of ordinary shares
12-month period ended 31 March 2025 15-month period ended 31 March 2024
000s 000s
(audited) (audited)
Weighted average number of ordinary shares 39,586 35,604
12-month period ended 31 March 2025 15-month period ended 31 March 2024
(audited) (audited)
Diluted (loss)/earnings per share (34.4) cents (91.1) cents
7. Property, plant and equipment
Land and buildings Plant, equipment and vehicles Total
$m $m $m
Net book value at 1 April 2024 1.2 11.5 12.7
Additions - 4.3 4.3
Depreciation expense (0.2) (3.0) (3.2)
Disposals - (0.3) (0.3)
Effects of foreign exchange movements - - -
Net book value at 31 March 2025 1.0 12.5 13.5
During the prior period a review of property, plant, and equipment was
performed where it was identified that certain assets relating to the
Malaysian facility are no longer in use following the planned vacation of the
existing Malaysian site. As a result, an impairment loss was recognised in the
prior period within non-underlying items (note 3) given it related to the
transformation plan.
8. Intangible assets
Patents, Goodwill Software Development Total
licenses, and $m licenses costs $m
trademarks $m $m
$m
Net book value at 1 April 2024 1.6 - 0.7 5.8 8.1
Additions 0.8 - 0.1 2.8 3.7
Amortisation charge (0.9) - (0.2) (1.5) (2.6)
Impairment charge (0.2) - - - (0.2)
Amortisation transfer 0.1 - (0.2) 0.1 -
Disposals - - - - -
Effects of foreign exchange movements - - - - -
Net book value at 31 March 2025 1.4 - 0.4 7.2 9.0
The amortisation charge for the period is included within administrative
expenses in the income statement. The carrying value of development costs not
yet available for use and, therefore, for which amortisation has not yet
commenced is $5.8m (2024: $3.1m). All development costs are allocated to the
Lighting CGU.
9. Provisions
Warranty Sanmina litigation Lease-restoration Onerous contract Total
and claims $m $m $m $m
$m
At 1 April 2024 (audited) 2.2 - 0.6 - 2.8
Provisions made during the period 0.7 23.2 0.5 0.9 25.3
Provisions used during the period - (6.3) (0.5) - (6.8)
Provisions released during the year - (4.7) - - (4.7)
Reclassified to liabilities - (11.3) - - (11.3)
Other - (0.9) - - (0.9)
Effects of foreign exchange movement - - 0.1 - 0.1
Balance at 31 March 2025 (audited) 2.9 - 0.7 0.9 4.5
The warranty provision relates to sales made over the past nine years. The
warranty provision has been estimated based on historical warranty data with
similar products. The Group expects to settle the majority of the liability
over the next two to three years. The onerous contract provision is in
relation to the Leotek contract and is expected to be fully used in the next
year. The table below provides a breakdown of the provisions into their
short-term and long-term portions:
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Due within one year 2.4 1.2
Due within one and five years 0.7 1.3
Due after five years 1.4 0.3
4.5 2.8
10. Inventories
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Raw materials and consumables 20.0 18.8
Work in progress 10.7 13.4
Finished goods 15.7 16.7
46.4 48.9
Spare parts 0.2 0.2
46.6 49.1
Inventories to the value of $67.2m (15-months ended 31 March 2024: $90.8m)
were recognised as expenses in the period.
The inventory reserve at the balance sheet date was $5.9m, which represents
11.2% of gross inventory (2024: $6.6m representing 11.8% of gross inventory).
Additional reserves of $3.0m were booked in the period, being offset by
utilisation of $1.5m and released of $2.2m, resulting in a net decrease in the
reserve of $0.7m. As at 31 March 2025, management's best estimate of the
amount of inventory that will not be used within the next 12 months is c.
$8.5m (2024: $8.1m).
In 2022, the Group revised its basis for estimate to calculating the inventory
reserve to provide for raw and sub-assembly inventory that is over 24-months
old at the balance sheet date. The new basis for estimate reduces estimation
subjectivity, while allowing for the adverse impact from component shortages
that have led to high inventory levels and some components being held for
longer than expected. Two years is felt to be appropriate as the components
have a long shelf life and continue to be used in production.
The review of finished goods inventory was based on all inventory over 365
days old. Inventory on hand was compared to historical sales, current orders,
sales pipeline and whether the product had been recently launched. Management
judgement was then applied to determine whether there was a reasonable
probability that the inventory would be sold, with a provision being required
for any inventory that failed this assessment.
See note 13 for details of fixed and floating charges which includes the value
of inventory in material Group companies.
11. Dividends
No dividends were declared in the current or the prior year. After the balance
sheet date no dividends were proposed by the Directors and there are no income
tax consequences for the Company.
12. Cash and cash equivalents
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Cash and cash equivalents 7.9 11.5
13. Borrowings
The Group's bank facility comprise a revolving credit facility ('RCF') of
$28.8m from HSBC. A balance of $5.2m was repaid in August 2024 using the
proceeds received from the disposal of the Traffic business, after which the
facility was reduced by a corresponding amount from $34.0m to $28.8m. As at 31
March 2025, $25.7m was drawndown (2024: $27.9m).
The facility was extended on 5 June 2025 to 21 July 2027 on the same terms as
the original agreement. Aligned with the Group's robust commitment to
environmental, social, and governance principles, the RCF facility operates as
a sustainability-linked loan.
The Group's bank facility includes security for HSBC by way of fixed and
floating charges over all the material companies in the Group that generate
greater than 5% of the turnover, operating profit or net assets of the Group.
This was registered at Companies House on 21 July 2022.
The RCF facility is subject to quarterly covenants encompassing maximum
leverage and minimum interest cover. The covenants for the quarter ending 30
September 2023 were temporarily reset from a leverage ratio maximum target of
less than 3x to 4.5x, and an interest cover minimum target of a maximum 4.0x
to 2.5x. The covenants reverted to the original hurdles from the quarter
ending 31 December 2023 onwards.
Due to the historical weak trading performance of the Group, in the final
quarter of the financial period ending 31 March 2024 HSBC agreed to reduce the
interest rate covenant for the third-quarter of FY2025 (only) to 2.5x. The
covenant reverted to the original level of 4.0x from the quarter ending 31
March 2025 onwards.
In the 12-month period to 31 March 2025 the covenants have been complied with
and the outstanding borrowings of $25.7m have been classified as a non-current
liability as at 31 March 2025 in line with the facility expiring in July 2026.
Interest is based on the Secured Overnight Financing Rate ('SOFR')/Sterling
Overnight Index Average ('SONIA'), depending on the tranche of debt, plus a
margin which varies dependent on the Group's leverage ratio and a
sustainability margin adjustment. There are three sustainability key
performance indicators ('KPIs'), being: reduction in absolute gross tonnes
CO2e per £1m of revenue; the percentage of employees who take up a day of
paid time to participate in charity days; and reduction in absolute kilolitres
of water usage per £1m of revenue. Margin increases by 0.015% if only one KPI
is achieved, by 0.03% if no KPI is met and decreases by 0.015% if two KPIs
achieved and by 0.03% if all three KPIs are met.
14. Share capital
31 March 2025 31 March 2025 31 March 2024 31 March 2024
Number $m Number $m
(audited) (audited) (audited) (audited)
Authorised:
Ordinary shares of 1.89p each 40,202,936 1.2 39,828,141 1.2
Authorised: as previously stated
Adjustment* - - 199,140 -
Authorised: restated 40,202,936 1.2 40,027,281 1.2
Issued and fully paid:
At beginning of the period 40,027,281 1.2 32,946,371 1.0
Issued during the period 175,655 - 6,881,770 0.2
At end of period: as previously stated 40,202,936 1.2 39,828,141 1.2
Issued during the period: adjustment* - - 199,140 -
At end of the period: restated 40,202,936 1.2 40,027,281 1.2
On 24 March 2025 a total of 175,655 new ordinary shares of 1.89 pence each in
the capital of the Company were issued.
* On 28 March 2024 a total of 199,140 new ordinary shares of 1.89 pence each
in the capital of the Company were issued. This issue of shares had been
inadvertently omitted from the 2024 annual financial statements.
On 5 April 2023 a total of 246,513 new ordinary shares of 1.89 pence each in
the capital of the Company were issued.
On 31 October 2023 a total of 6,635,257 new ordinary shares of 1.89 pence each
in the capital of the Company were allotted to raise gross proceeds of
approximately $12.9m.
15. Share premium
31 March 2025 31 March 2024
$m $m
(audited) (audited)
At the beginning of the period 13.0 1.2
Issued during the period - 12.7
Share issues costs - (0.9)
At the end of the period 13.0 13.0
16. Principal exchange rates
12-month period ended 31 March 2025 15-month period ended 31 March 2024
31 March 2025 At balance 31 March 2024 At balance
Average rate sheet date Average rate sheet date
Pound sterling 0.7840 0.7733 0.8010 0.7925
Euro 0.9318 0.9273 0.9240 0.9264
Canadian dollar 1.3911 1.4293 1.3491 1.3540
Mexican peso 19.1539 20.2480 17.5790 16.5558
17. Related party transactions
The ultimate Parent Company of the Group is Dialight plc. Transactions between
the Company and its subsidiaries have been eliminated on consolidation.
Transactions with key management personnel
The main Board Directors are considered to be the Group's key management
personnel. Key management personnel compensation comprised the following:
12-month period 15-month period
ended ended
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Short-term employee benefits 1.4 2.3
Termination benefits 0.2 -
Share-based payments 0.3 1.5
1.9 3.8
Directors of the Company and their immediate relatives control less than 1% of
the Company.
Other related party transactions
During the period and the prior period, the Company paid for a lease agreement
for the previous CEO, Fariyal Khanbabi, which was cohabited with her son and
his partner. The lease ended in May 2024.
18. Reconciliation to non-GAAP performance measures
Certain financial information set out in the consolidated year end financial
statements and annual report is not defined under International Financial
Reporting Standards ('IFRS'). These key Alternative Performance Measures
('APMs') represent additional measures in assessing performance and for
reporting both internally and to shareholders and other external users. The
Group believes that the presentation of these APMs provides useful
supplemental information which, when viewed in conjunction with IFRS financial
information, provides readers with a more meaningful understanding of the
underlying financial and operating performance of the Group. None of these
APMs should be considered as an alternative to financial measures drawn up in
accordance with IFRS.
15-month comparatives
12-month period ended 15-month period ended
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Revenue: 3-month period from January 2023 to March 2023 - 43.9
Revenue: 12-month period from April to March 183.5 182.1
Revenue 183.5 226.0
Gross profit: 3-month period from January 2023 to March 2023 - 12.7
Gross profit: 12-month period from April to March 66.5 54.4
Gross profit 66.5 67.1
Underlying gross profit: 3-month period from January 2023 to March 2023 - 12.7
Underlying gross profit: 12-month period from April to March 65.3 57.4
Underlying gross profit 65.3 70.1
Loss from operating activities: 3-month period from January 2023 to March 2023 - (2.8)
Loss from operating activities: 12-month period from April to March (11.6) (27.4)
Loss from operating activities (11.6) (30.2)
Underlying profit/(loss) from operating activities: 3-month period from - (2.7)
January 2023 to March 2023
Underlying (loss)/profit from operating activities: 12-month period from April 4.2 (1.9)
to March
Underlying (loss)/profit from operating activities 4.2 (4.6)
Non-underlying items: 3-month period from January 2023 to March 2023 - (0.1)
Non-underlying items: 12-month period from April to March (21.6) (25.5)
Non-underlying items (21.6) (25.6)
Other non-GAAP performance measures
12-month period ended 15-month period ended
31 March 2025 31 March 2024
$m $m
(audited) (audited)
Gross profit 66.5 67.1
Non-underlying items (see note 3) (1.2) 3.0
Underlying gross profit 65.3 70.1
Loss from operating activities (11.6) (30.2)
Non-underlying items (see note 3) 21.6 25.6
Gain on disposal of business (5.8) -
Underlying profit/(loss) from operating activities 4.2 (4.6)
Loss from operating activities (11.6) (30.2)
Non-underlying items (see note 3) 21.6 25.6
Gain on disposal of business (5.8) -
Depreciation of property, plant and equipment (note 7) 3.2 4.3
Loss on disposal of property, plant and equipment (note 7) 0.3 -
Amortisation of intangible assets (note 8) 2.6 7.7
Impairment of intangible assets (note 8), not included in non-underlying items 0.1 -
Share-based payments 0.3 1.5
Underlying EBITDA 10.7 8.9
Loss from operating activities (11.6) (30.2)
Non-underlying items (see note 3) 21.6 25.6
Gain on disposal of business (5.8) -
Depreciation of property, plant and equipment (note 7) 3.2 4.3
Loss on disposal of property, plant and equipment (note 7) 0.3 -
Amortisation of intangible assets (note 8) 2.6 7.7
Impairment of intangible assets (note 8), not included in non-underlying items 0.1 -
Impairment losses of financial assets 2.1 -
Share based payments 0.3 1.5
Net movement on working capital (Inventories, trade and other receivables, 6.7 10.0
trade and other payables) as per Consolidated statement of cash flows
Underlying operating cash flow 19.5 18.9
As explained in note 3, the Group incurs costs and earns income that is not
considered to be reflective of the underlying performance of the business. In
the assessment of performance of the business units of the Group, management
examines underlying performance, which removes the impact of non-underlying
costs and income.
Underlying profit from operating activities and underlying EBIT referred to in
the earlier sections of the annual report are the same measures. Underlying
operating cash flow and adjusted operating cash flow referred to in the
earlier sections of the annual report are the same measure.
Net bank debt
Net bank debt is defined as total Group borrowings (excluding lease
liabilities recognised under IFRS 16 and the Sanmina liability) less cash. Net
bank debt of $17.8m at the period end (2024: $16.4m) consisted of borrowings
of $25.7m (2024: $27.9m) less cash of $7.9m (2024: $11.5m).
19. Contingencies
Sanmina litigation
On 31 March 2025, the Group settled its long-standing litigation with Sanmina
for $12.0m to be paid by instalments. This required payment of $4.0m on 31
March 2025 and eight quarterly payments of $1.0m per quarter with the final
payment due on 27 March 2027. The amount of any outstanding deferred
instalments will be automatically increased from $1.0m to $1.5m if Dialight's
market capitalisation exceeds £100m for 30 consecutive days, subject to the
total cumulative instalment payments not exceeding $8.0m. If these quarterly
instalments are not paid on time, or within with a forty-five cure per period,
Sanmina has filed with the UK court a Stipulation ('Stipulation') for Entry of
Judgement of $22.0m less the cumulative value of payments already made. There
are in addition various triggers, which the Directors believe to be highly
unlikely to be triggered, that can activate the Stipulation.
20. Post balance sheet events
The Group's multi-currency revolving credit facility of $28.8m with HSBC was
extended on 5 June 2025 to 21 July 2027 on the same terms as the original
revolving credit facility agreement.
In May 2025, the Group received an Employee Retention Credit ('ERC') of $1.4m.
An ERC is a US refundable tax credit for certain eligible businesses that had
employees and were affected during the COVID-19 pandemic. This government
grant income has not been included in this annual report and accounts since as
at the balance sheet date it was not known that the credit was reasonably
certain to be received. The claim was filed in 2023.
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