REG - Dialight PLC - FY26 Interim Results
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RNS Number : 9494G Dialight PLC 11 November 2025
11 November 2025
Dialight plc
Unaudited interim results for the six months ended 30 September 2025
Strong execution of Transformation Plan
Dialight plc (LSE: DIA.L), a global leader in sustainable LED lighting for
industrial applications,
announces its unaudited interim results for the six months ended 30 September
2025.
($m unless otherwise stated) Six months Six months Change ($m)
ended ended
30 September 30 September
2025 2024
(unaudited) (unaudited)
Group revenue 86.4 90.3 (3.9)
Underlying results(1)
Gross margin 35.3% 33.0% +230bps
EBITDA 9.6 5.2 +4.4
Operating profit 5.5 0.9 +4.6
Operating cash flow 13.9 6.3 +7.6
Statutory results
Operating profit/(loss) 5.9 (19.3) +25.2
Profit/(loss) before tax 4.5 (20.8) +25.3
Profit/(loss) after tax 2.7 (18.2) +20.9
Earnings/(loss) per share - diluted 6.8 cents (45.8) cents +52.6 cents
Net bank debt (10.2) (15.4) +5.2
1. The definitions of the adjustments made and the reconciliation to the reported
figures can be found in Note 16.
Performance highlights
● Group revenue down reflecting challenging market conditions for Lighting (down
9.4%) as capital projects were deferred, partially offset by Signals &
Components (up 10.2%).
● Margin improvement reflecting benefits from the Transformation Plan.
● Underlying operating profit up six-fold driven by higher gross margin and
lower overheads.
● Underlying operating cash flow doubled following increased profitability and
improved working capital management, particularly inventory, though more still
to do.
● Net bank debt reduced driven by positive profit and strong cash generation.
● New agreement reached in October 2025 to accelerate all remaining Sanmina
payments; $5.7m due to be paid by 31 December 2025 removing significant
contingent financial risk.
Commenting on these results, Steve Blair, Group Chief Executive Officer, said:
"The Group continues to operate against a backdrop of tariff uncertainty and
delayed sales orders caused by certain macroeconomic constraints.
Notwithstanding these market challenges, the Group has continued to make good
progress across a number of workstreams of the Transformation Plan. We've
reinvigorated our Signals & Components business following a strategic
review and should see growth here by investing in people and new products. Our
Operations function has delivered on a number of projects in the period,
driving up margins and significantly helping to reduce the Group's inventory
balance. There is more for us to do to make us the best that we should be.
"For the second half of our financial year, we will continue to expect to
deliver strong and tangible progress from the Transformation Plan which will
conclude at the end of March 2026. Our focus is on making accelerated progress
on our Sales transformation and generating growth in Lighting, despite the
continued headwind of difficult US market conditions. The Board remains
confident in achieving the recently upgraded expectations for the full
financial year(5)."
Interim results information
Interim results presentation
The interim 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 3525
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, the UK,
Mexico, Malaysia, Singapore, Australia, Germany and Dubai. To find out more
about Dialight, visit www.dialight.com.
Notes
1. Underlying EBITDA is defined as operating profit or loss stated before
non-underlying items, gains or losses on disposal of businesses, net finance
expense, taxation, depreciation (including right-of-use assets) and
amortisation of intangible assets.
2. Net bank debt is defined as total Group borrowings (excluding lease
liabilities recognised under IFRS 16 Leases ("IFRS 16") and the Sanmina
liability) less cash and cash equivalents.
3. The commentary in both the Chief Executive Officer's and Chief Financial
Officer's reviews uses alternative performance measures, which are described
as "underlying". Definitions of these measures can be found in Note 16. These
measures provide additional information for users on the underlying
performance of the business, enabling consistent period-on-period comparisons.
4. The Group's results for the year ending 31 March 2026 are due to be released
in late June 2026.
5. Investec expectation: underlying operating profit of $8.5m (6 October 2025).
Cautionary statement regarding forward-looking statements
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 other similar words. 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 Group has had an excellent first half of the financial year with
underlying operating profit of $5.5m already ahead of the $4.2m for the full
financial year last year. This performance has been achieved despite depressed
market conditions with tariff uncertainty and higher cost of other materials
needed to complete installations (caused by tariff increases) necessitating
customers to delay sales orders. Group revenue for the six months ended 30
September 2025 was $86.4m, down 4.3% from the prior period. A reduction of
9.4% was reported in the Lighting segment with business continuing to be
impacted by challenging market conditions as capital projects were deferred.
This was partly offset by increased revenues of 10.2% in Signals &
Components.
The Group's products manufactured in Mexico are currently tariff-free under
the USMCA free trade agreement and have been for almost all of the first half
of the year. This situation is under constant review and closely monitored. We
have developed a wide range of contingency plans should this position change.
Some of the Group's components are imported from outside the US and Mexico and
have been subject to tariffs. The overall impact of this has been less than 1%
of material cost and this has been offset by supplier price reductions.
SIGNALS & COMPONENTS
Despite the challenging market conditions the Group has made several strides
forward in the first half of the year. We have conducted a thorough strategic
review of our opto-electronics ("OE") product line. This has for a long time
been the "junior" product line that has been flat to marginally declining over
the last decade. The OE product line generates good gross margin above the
average Group return on sales. We have decided to reinvigorate and to invest
in this product line. This will include recruiting new salespeople, investing
in new product development and stock keeping unit ("SKU") reductions. We plan
to reduce lead times, have a more aggressive sales outlook, increase sales win
rates and partner with Asian contract equipment manufacturers. This should
stimulate growth in this product line which has a direct correlation to the
growth in data warehouses and artificial intelligence as our OE products are
on these servers and equipment.
LIGHTING SALES/SALES TRANSFORMATION
We have been focused on stabilising the business over the last 18 months
achieving considerable success in returning the business to profitability,
generating cash and reducing net bank debt. Over the last six months we have
begun to turn our attention to future growth across the business looking at
short-, medium- and long-term strategic opportunities. This will continue to
be our focus moving forward, despite the prevailing macroeconomic climate, as
the transformation of the operational side of the business transitions to
business as usual.
In the first half of the year, the Group opened new geographic markets
(Lighting sales in Nigeria and Angola for oil and gas) and launched several
new Lighting products. These have included self-developed products, for
instance lights for use in hydrogen production and storage environments, as
well as, for the first time, source and sell products. This latter Group
includes swivel pole lights, lower cost linear lights and high output
floodlights. These source and sell products are still expected to generate
returns in line with our three-year gross margin ambitions.
The Group's sales transformation is tracking slightly behind the business,
financial and operational transformation. That said, the Group has introduced
a tollgate order tracking and margin approval system on its Salesforce
customer relationship management system. There has also been a project to
optimise sales talent that has seen several under-performing sales staff
leave. We have also re-created a Global Engineering, Procurement and
Contracting ("EPC") team. We are seeking to return to the levels of sales that
the Group used to generate from specified projects that EPCs control. We have
also seen a good improvement in pricing discipline and an increased focus on
selling the higher margin products from a limited number of SKUs.
Finally, on sales transformation, sales commissions are now based on order
profitability not just the value of the order. This will pay a higher
commission to those individuals that beat the sales target and, more
importantly, beat the gross margin target.
OPERATIONAL TRANSFORMATION
Our Operations function has delivered on a number of projects in the period.
Sub-assembly SKU numbers have reduced by as much as 80% over the past year,
SKUs have reduced by around one third, costs reductions and purchase price
variances have not only offset tariff pressure but increased gross margin,
Ensenada has been rightsized and several new products have been introduced.
This Group has led (through cross functional teams) the product portfolio
optimisation, business simplification, inventory reduction (inventory has
reduced by 23% to $35.8m in the last six months), rightsizing the
manufacturing facilities and SKU reductions.
The Group's Traffic business, disposed of in the prior year but which the
Group had an assembly commitment through to the end of October 2025, has now
ceased production. Sales to the end of 30 September 2025 were $7.1m compared
to $6.3m in the comparative period. The Group's Traffic business has
historically been loss making and an onerous contract provision of $0.9m was
created in the last financial year. This has been released and a small exit
profit of $0.4m was made in the half year. A substantial amount of the
inventory associated with this business has been successfully sold (and
collected) with a reduction of over $2.8m in the half year.
During the half year, the Group successfully moved certain key lighting
products from Ensenada, Mexico to our new facility in Penang, Malaysia. This
move was conducted perfectly by the respective teams, and this reduces our
lead times and tariffs into the Asian market. The continued delivery of
efficiencies associated with the implementation of the Transformation Plan, as
well as the move of Asian lighting to Malaysia, SKU reduction, discontinuing
loss-making products, including lighting, has resulted in the Group conducting
two reductions in force ("RIF") in the first half year with one further in
October. The overall headcount reduction has been almost 100 direct, indirect
and salaried staff. The cost of redundancy of $1.2m has been treated as
non-underlying. The annual cost saving from these reductions is in excess of
$3m. Despite these rightsizing actions, the Group has maintained the
flexibility in the workforce to step up production as and when the Group
Lighting sales returns to growth.
The Group engineering function continued to work through the Covid pandemic.
The US Internal Revenue Service allowed an Employee Retention Credit ("ERC")
to compensate such companies that continued investing in people and growth.
The Group submitted two claims totalling $2.9m and these were both paid in the
first half of the financial year. These have been credited to other operating
income but are not included in underlying operating profit as this income is a
one off and there are no more claims to follow.
PROFIT PERFORMANCE
Underlying operating profit before interest and tax has increased six-fold to
$5.5m compared to the $0.9m in the prior period. The primary factors for the
increased underlying operating profit are increased gross margin and reduced
overheads.
Gross margin overall has increased to 35.3% from 33.0% in the comparable
period. This increase has added almost $2m to operating profit. The increase
has been driven by a reduction in sub-assembly SKUs, reduction in finished
goods SKUs, cost reduction, rightsizing direct labour, reduction in gross to
net sales adjustments, reduced sales commission, procurement savings and
freight optimisation.
The overall underlying Group overhead at $25.0m has reduced by $3.9m compared
to the comparative period. This has been achieved by reduced headcount, lower
legal fees and professional fees and better overall control of costs. All
businesses in the Group now have monthly cost centre cost report analyses with
appropriate delegated authority levels to improve overall control of costs.
WINNING HEARTS AND MINDS
We have a clear and coherent strategy. Our employees are invested in the
Transformation Plan to improve Dialight and make it a better place to work
with a more certain future. Through the first half year, we have had around a
dozen cross functional teams with representation from every department looking
to simplify and improve our business. It is testament to our staff and these
teams that the positive progress reported here has occurred. The result of
this work is reflected in the increased profit and cash generation. From this,
for the first time, in July we paid every employee not on an alternative bonus
scheme a small bonus as a statement of gratitude and thanks. The management
bonus also paid out for the first time in several years.
During the year we conducted a Group-wide employee survey. The results of this
showed that we are making good progress but also that there are plenty of
improvements still to come. These recommendations are now being worked on by
each department.
Lynn Brubaker, our Chair of the Remuneration Committee and Non-Executive
Director ("NED"), has continued a wide-ranging series of employee engagements
including at Ensenada, New Jersey and London acting as our Workforce
Engagement NED.
CASH FROM OPERATIONS
Overall cash generated by operations has increased to $16.3m in the first half
of the year (half year to 30 September 2024: $4.3m). This has been achieved
through underlying EBITDA for the six months of $9.6m, a $10.8m reduction in
inventories and a $5.2m reduction in trade and other receivables offset by an
outflow relating to trade and other payables of $9.9m (which includes catch-up
payments to our suppliers of $2.0m). Non-underlying cash costs in the six
months ended 30 September 2025 were $2.0m which comprises $0.8m for the
settlement of legal fees relating to Sanmina and $1.2m in respect of the
Transformation Plan whilst non-underlying ERCs of $2.9m were received in cash.
After adjusting for these net non-underlying cash items of $0.9m and deducting
lease payments (including interest) in the first half of $1.5m, underlying
operating cash flow was $13.9m.
We have had better control of our capital expenditure, with capitalised
development costs of $1.6m (six months ended 30 September 2024: $1.4m) with an
associated amortisation charge of $0.9m (six months ended 30 September 2024:
$0.9m) and capital projects (mainly replacement) of $0.9m (six months ended 30
September 2024: $3.4m).
OTHER
Two payments of $1.0m were paid to Sanmina in the half, leaving $6.0m
outstanding. On 9 October, we reached an agreement with Sanmina to pay $5.7m
(a reduction of $0.3m over what would otherwise have been paid) before the end
of December 2025 and in return the potential actions to recover $22m (which
are detailed and disclosed as a contingent liability in Note 17) will be
extinguished.
OUTLOOK
For the second half of our financial year, we continue to expect to deliver
strong and tangible progress from the Transformation Plan which will conclude
at the end of March 2026. Our focus is on making accelerated progress on our
Sales transformation and generating growth in Lighting, despite the continued
headwind of difficult US market conditions. The Board remains confident in
achieving the recently upgraded expectations for the full financial year.
Steve Blair
Group Chief Executive Officer
10 November 2025
CHIEF FINANCIAL OFFICER'S REVIEW
The Group's first half results are strong across a number of key financial
metrics. Despite demand trends and operating conditions in the Group's end
markets remaining soft which has caused Group revenue to decline, the first
half has seen the Group continue to successfully execute the Transformation
Plan. This has resulted in the Group delivering an operating profit of $5.9m
in the period which, coupled with a $10.8m reduction in inventory, has driven
the strong cash generation by operations of $16.3m. Net bank debt at the half
year is $10.2m, down from $17.8m at 31 March 2025. This strong financial
performance led the Group to upgrade market guidance on 6 October 2025.
As a Board and a management team, we are committed to growing revenues,
improving gross margins and reducing the operating cost base to bring into
line with the current level of activity. With our streamlined Operations and
Sales structure and continued focus on reducing the number of SKUs, we are
well-set on returning the Group to earning historic double-digit returns on
sales margin.
FINANCIAL REVIEW
FINANCIAL PERFORMANCE
Group revenue of $86.4m for the six months ended 30 September 2025 (six months
ended 30 September 2024: $90.3m) generated a gross profit of $30.5m (six
months ended 30 September 2024: $29.8m), giving a gross margin of 35.3% (six
months ended 30 September 2024: 33.0%). This increase of 230 basis points has
been driven by selling more profitable products and the continuation of
driving better financial discipline on pricing and costs.
In the first half, the Group received ERCs of $2.9m which has been recognised
as other operating income but which has been treated as non-underlying. In the
prior period, the Group recognised a one-off gain of $5.2m on the sale of the
Traffic business. Distribution costs of $13.3m (six months ended 30 September
2024: $14.7m) and administrative expenses of $14.2m (six months ended 30
September 2024: $39.6m) resulted in an operating profit of $5.9m (six months
ended 30 September 2024: loss of $19.3m). The operating profit for the current
period (operating loss for the prior period) was after $0.4m of net
non-underlying income (including the ERC credit of $2.9m) was recognised (six
months ended 30 September 2024: non-underlying costs of $25.4m) and, for the
prior period, the $5.2m gain on sale of the Traffic business.
Underlying performance
The Group's gross profit for the first half was $30.5m (six months ended 30
September 2024: $29.8m) and, excluding net non-underlying items, total
underlying overheads in the six months ended 30 September 2025 were $25.0m
(six months ended 30 September 2024: $28.9m). This resulted in an underlying
operating profit of $5.5m (six months ended 30 September 2024: $0.9m).
Lighting before central costs
The Lighting segment represents approximately 70% of the Group's revenue and
consists of two revenue streams: large capital expenditure projects and
ongoing maintenance, repair and operations ("MRO") spend.
($m unless otherwise stated) Six months Six months Variance
ended ended
30 September 30 September
2025 2024
(unaudited) (unaudited)
Lighting
Revenue 60.4 66.7 (6.3)
Gross profit 22.3 24.2 (1.9)
Gross profit margin 36.9% 36.3% +60 bps
Underlying overheads (16.7) (19.2) +2.5
Underlying operating profit before central costs 5.6 5.0 +0.6
In the six months ended 30 September 2025, Lighting revenue is down by $6.3m
to $60.4m due to tariff uncertainty, the softer macroeconomic climate and the
impact of this on the Group's hazardous end-market sectors. Gross margins are
60 basis points up in the first half against the comparative period with
underlying overheads lower by $2.5m due to the benefits of the Transformation
Plan.
Signals & Components before central costs
Signals & Components is a high-volume business operating within highly
competitive markets. There are three main elements: traffic lights,
opto-electronics ("OE") components and vehicle lights.
($m unless otherwise stated) Six months Six months Variance
ended ended
30 September 30 September
2025 2024
(unaudited) (unaudited)
Signals & Components
Revenue 26.0 23.6 +2.4
Gross profit 8.2 5.6 +2.6
Gross profit margin 31.5% 23.7% +780 bps
Underlying overheads (3.6) (3.9) +0.3
Underlying operating profit before central costs 4.6 1.7 +2.9
Overall, Signals & Components revenue increased from $23.6m in the six
months ended 30 September 2024 to $26.0m in the first half of this year. Gross
margins have increased significantly in the period to 31.5%, driven by the
Group's renewed focus and investment in OE products. Traffic light contract
manufacturing to Leotek made a profit of $0.4m in the first half with this
activity ceasing in October 2025.
Central costs
Central overheads comprise costs not directly attributable to a segment and
primarily relate to head office costs and professional fees. Total underlying
unallocated costs decreased from $5.8m to $4.7m in the six months ended 30
September 2025 due to lower professional fees resulting from the
Transformation Plan.
NON-UNDERLYING COSTS
Six months Six months
ended ended
30 September 30 September
2025 2024
$m $m
(unaudited) (unaudited)
ERCs 2.9 -
Transformation Plan (1.3) (3.1)
Defined benefit pension scheme service costs (1.1) -
Sanmina litigation costs (0.1) (22.3)
Total 0.4 (25.4)
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.
As explained above, in the six months ended 30 September 2025, the Group
received ERCs which are one-off in nature and will not recur.
During the six months ended 30 September 2025, costs of $1.3m (six months
ended 30 September 2024: $3.1m) have been incurred relating to the
Transformation Plan. Implementation of the plan is expected to be complete by
31 March 2026 with the annualisation impact still benefitting the following
financial year. 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 both the current and prior period relate
to resetting and realigning the Group's cost base including severances,
consulting costs and related legal and professional fees.
As explained in more detail on page 12, the Group completed its buy-in
transaction of Plan B on 4 July 2024. In the current period, the Group has
incurred $1.1m of service costs representing legal and professional fees as
the trustees of the scheme and their advisors work on various completion
steps.
On 31 March 2025, the Group settled its long-standing litigation with Sanmina
for $12.0m to be paid by instalments. During the six months ended 30 September
2025, final legal expenses of $0.1m (six months ended 30 September 2024:
$22.3m) have been incurred relating to the case. The charge of $22.3m for the
six months ended 30 September 2024 represented the Group's best estimate of
the claim and associated legal costs at the time.
INVENTORY
Inventory of $35.8m decreased by $10.8m from $46.6m at 31 March 2025. The
Group is targeting further reductions in inventory in the year ending 31
March 2026.
30 September 31 March
2025 2025
$m $m
(unaudited) (unaudited)
Raw materials 15.3 20.0
Sub-assemblies 8.5 10.7
Finished goods 11.9 15.7
Spare parts 0.1 0.2
Total 35.8 46.6
The aged inventory provision has decreased to $5.3m at 30 September 2025
compared with $5.9m at 31 March 2025.
CASH AND BORROWINGS
At 30 September 2025, the Group had net bank debt of $10.2m, a decrease of
$7.6m from the 31 March 2025 balance of $17.8m. Net bank debt excludes IFRS 16
lease liabilities of $8.9m and the Sanmina liability of $5.6m, which are
excluded for covenant testing purposes. The roll forward of net bank debt was
as follows:
Six months ended
30 September 2025
$m $m
Opening balance at 1 April 2025 (audited) (17.8)
Underlying EBITDA 9.6
Share-based payments 0.3
Decrease in inventories 10.8
Decrease in trade and other receivables 5.2
Decrease in trade and other payables (excluding $0.6m non-underlying) (9.3)
Provisions and pensions (1.2)
Repayment of lease liabilities (including $0.3m interest) (1.5)
Underlying operating cash flow 13.9
Cash outflows and other movements:
Sanmina payments (2.0)
Non-underlying ERCs cash receipts (see Note 4) 2.9
Non-underlying cash costs (see Note 4) (2.0)
Capital expenditure (including additions to intangible assets) (2.9)
Interest and tax paid (excluding $0.3m interest on leases) (1.9)
Effect of foreign exchange rates (0.4)
Closing balance at 30 September 2025 (unaudited) (10.2)
Gross bank debt of $20.6m was offset by cash on hand of $10.4m. Refer to Note
12 of the condensed consolidated interim financial statements for further
details of bank borrowings. The Group's finance expense of $1.4m is analysed
in Note 5.
BANKING AND COVENANTS
The Group's bank facility comprises 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.
The RCF is subject to quarterly covenants encompassing maximum leverage and
minimum interest cover. The covenants require a leverage ratio maximum target
of less than 3x adjusted EBITDA and an interest cover minimum target of x4
adjusted EBITDA and were all met during the period.
GOING CONCERN
The Directors consider it remains appropriate to continue to adopt the going
concern basis in the preparation of these condensed consolidated interim
financial statements. Furthermore, the Group has assessed whether there are
any material uncertainties and has concluded, unlike in previous periods, that
there are not. Further details are provided in Note 1b of the condensed
consolidated interim financial statements on pages 25 to 27.
TAX
The tax charge of $1.8m for the six months ended 30 September 2025 (H1 FY25:
$2.6m) reflects the best estimate of the weighted average effective income tax
rate expected for the full financial year. Non-underlying items have been
taxed using the relevant tax rates where tax deductions are available.
PENSION SCHEMES
The Group has two defined benefit schemes that are closed to new entrants. The
aggregate surplus on an IAS 19 Employee Benefits ("IAS 19") basis on both
funds at 30 September 2025 is $0.2m (30 September 2024: $5.9m; 31 March 2025:
$2.2m). 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.
Plan A purchased a bulk annuity policy covering the majority of its
liabilities on 5 August 2025 with an insurer (a "buy-in"). The premium paid
was £1.8m with the calculated value of the scheme's liabilities also being
£1.8m, resulting in no "buy-in" gain or loss. The trustees of the scheme and
their advisors are presently working on various data cleanse steps which are
not expected to be completed until around June 2026. Until this work has been
completed, the trustees 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 has been viewed as an investment transaction, with the impact
recognised through other comprehensive income ("OCI").
Plan B completed its buy-in transaction on 4 July 2024. 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 the GMP
equalisation. These steps are not expected to be completed until around June
2026. In light of this, the buy-in was viewed as an investment transaction,
with the impact recognised through OCI in the year ended 31 March 2025. During
the current period, legal and professional fees have been incurred by the
scheme as part of the completion steps outlined above. Under IAS 19, these
service costs of $1.1m have been recorded in the condensed consolidated
statement of profit or loss but have been presented by the Directors as a
non-underlying item.
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 consolidated total equity as capital, which at
30 September 2025 equated to $49.4m (30 September 2024: $45.7m; 31 March 2025:
$47.3m). The Board is not declaring an interim dividend payment for the six
months ended 30 September 2025 (30 September 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.
EVENTS AFTER THE BALANCE SHEET DATE
On 9 October 2025, the Group agreed an accelerated payment plan with Sanmina
whereby a final payment of $5.7m will be made to Sanmina by 31 December 2025,
representing a $0.3m cash saving versus the $6.0m that would otherwise have
been paid over the six remaining quarters to 31 March 2027. Once the $5.7m is
paid, the Stipulation agreement between the parties shall be satisfied and
both parties will take steps to legally set aside the US and English court
judgments, meaning the potential financial liabilities will be fully
extinguished, as set out in Note 17 of the condensed consolidated interim
financial statements.
Mark Fryer
Group Chief Financial Officer
10 November 2025
PRINCIPAL AND EMERGING RISKS AND UNCERTAINTIES
The Board has conducted a robust assessment of the Group'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. The principal risks and
uncertainties affecting the business activities of the Group for the six
months ended 30 September 2025 remain substantially unchanged as those
disclosed in the March 2025 Annual Report and Accounts.
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 bank 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.
This risk will be removed when the Group pays the $5.7m in December as agreed
on 9 October 2025.
● 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.
Statement regarding shareholder consultation Following the 2025 Annual General
Meeting
At the Company's Annual General Meeting ("AGM") held on 1 September 2025, all
resolutions were duly passed. However, Resolution 11 (political donations) and
Resolution 12 (authority to allot shares) received 73.41% and 73.86% support
respectively, below the 80% threshold set by the UK Corporate Governance Code
(the "Code") for enhanced shareholder engagement.
In accordance with the Code, the Company has consulted with shareholders who
voted against these resolutions to understand their views. Feedback indicated
that opposition was primarily driven by institutional voting policies rather
than concerns regarding the Board or Company performance.
Resolution 11 is a routine request to ensure compliance with sections 366 and
367 of the Companies Act 2006 ("CA 2006"). The Political Parties, Elections
and Referendums Act 2000 defines political donations in a way that is open to
a broad range of interpretation and therefore the Company will routinely seek
authority to make political donations, (even though the Company nor any of its
subsidiaries has any intention of making any political donations or incurring
any political expenditure), so as to avoid inadvertently breaching the terms
of the CA 2006.
Resolution 12 aligns with the latest Investment Association guidelines. While
the Board has no current intention to use these authorities, it believes
retaining this flexibility is in the best interests of the Company and its
shareholders.
The Board remains committed to ongoing shareholder engagement and will provide
a further update in the Company's 2026 Annual Report. The Board thanks
shareholders for their continued support and constructive feedback.
Neil Johnson
Group Chair
10 November 2025
DIRECTORS' RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
a) the condensed set of interim financial statements has been prepared in
accordance with UK-adopted IAS 34 Interim Financial Reporting ("IAS 34");
b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events and their impact during
the first six months and description of principal risks and uncertainties for
the remaining six months of the year); and
c) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
The full list of current Directors can be found on the Company's website at
www.dialight.com.
On behalf of the Board,
Steve Blair Mark Fryer
Group Chief Executive Officer Group Chief Financial Officer
10 November 2025 10 November 2025
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the six months ended 30 September 2025
Six months ended Six months ended Year
30 September 2025 30 September 2024 ended
(unaudited) (unaudited) 31 March
2025
(audited)
Note $m $m $m
Revenue 2 86.4 90.3 183.5
Cost of sales (55.9) (60.5) (117.0)
Gross profit 30.5 29.8 66.5
Other operating income 2.9 - -
Distribution costs (13.3) (14.7) (29.0)
Administrative expenses (14.2) (39.6) (52.8)
Impairment losses of financial assets - - (2.1)
Gain on disposal of business - 5.2 5.8
Operating profit/(loss) 2 5.9 (19.3) (11.6)
Underlying EBITDA(1) before impairment losses of financial assets 9.6 5.2 15.0
Impairment losses of financial assets - - (2.1)
Underlying EBITDA(1) 9.6 5.2 12.9
Depreciation and amortisation (4.1) (4.3) (8.7)
Underlying operating profit 5.5 0.9 4.2
Non-underlying items 4 0.4 (25.4) (21.6)
Gain on disposal of business - 5.2 5.8
Operating profit/(loss) 5.9 (19.3) (11.6)
Net finance expense 5 (1.4) (1.5) (2.5)
Profit/(loss) before tax 4.5 (20.8) (14.1)
Taxation 6 (1.8) 2.6 0.5
Profit/(loss) for the period 2.7 (18.2) (13.6)
Profit/(loss) for the period attributable to:
Equity owners of the Company 2.8 (18.2) (13.8)
Non-controlling interests (0.1) - 0.2
Profit/(loss) for the period 2.7 (18.2) (13.6)
Earnings/(loss) per share
Basic (cents) 7 7.0 (45.8) (34.7)
Diluted (cents) 7 6.8 (45.8) (34.7)
1. Underlying EBITDA is defined as operating profit or loss stated before
non-underlying items, gains or losses on disposal of businesses, net finance
expense, taxation, depreciation (including right-of-use assets) and
amortisation of intangible assets. See Note 16 for further details.
All results arise from continuing operations.
The accompanying Notes on pages 25 to 42 form an integral part of these
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2025
Six months ended Six months ended Year
30 September 2025 30 September 2024 ended
(unaudited) (unaudited) 31 March
2025
(audited)
Note $m $m $m
Profit/(loss) for the period 2.7 (18.2) (13.6)
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit and loss
Exchange differences on translation of foreign operations 0.2 (0.1) (0.1)
0.2 (0.1) (0.1)
Items that will not be reclassified subsequently to profit and loss
Remeasurement of defined benefit pension liability 13 (1.4) - (4.0)
Tax on remeasurement of defined benefit pension liability 0.3 - 1.0
(1.1) - (3.0)
Other comprehensive loss for the period, net of tax (0.9) (0.1) (3.1)
Total comprehensive income/(loss) for the period 1.8 (18.3) (16.7)
Attributable to:
Equity owners of the Company 1.9 (18.3) (16.9)
Non-controlling interests (0.1) - 0.2
Total comprehensive income/(loss) for the period 1.8 (18.3) (16.7)
The accompanying Notes on pages 25 to 42 form an integral part of these
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 September 2025
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
Note $m $m $m
Assets
Property, plant and equipment 12.9 14.3 13.5
Right-of-use assets 7.9 9.6 9.0
Intangible assets 9 9.6 8.4 9.0
Deferred tax assets 7.8 8.3 8.5
Employee benefits 0.2 5.9 2.2
Other receivables 0.5 0.7 0.5
Total non-current assets 38.9 47.2 42.7
Inventories 10 35.8 47.1 46.6
Trade and other receivables 29.2 30.9 34.3
Current tax assets 0.8 0.5 0.4
Cash and cash equivalents 10.4 7.4 7.9
Total current assets 76.2 85.9 89.2
Total assets 115.1 133.1 131.9
Liabilities
Trade and other payables (30.1) (31.0) (40.1)
Provisions 11 (1.6) (21.7) (2.4)
Current tax liabilities (0.6) (0.7) (0.5)
Lease liabilities (2.5) (2.5) (2.5)
Total current liabilities (34.8) (55.9) (45.5)
Trade and other payables (1.8) - (3.8)
Provisions 11 (2.1) (0.7) (2.1)
Borrowings 12 (20.6) (22.8) (25.7)
Lease liabilities (6.4) (8.0) (7.5)
Total non-current liabilities (30.9) (31.5) (39.1)
Total liabilities (65.7) (87.4) (84.6)
Net assets 49.4 45.7 47.3
Equity
Issued share capital 1.2 1.2 1.2
Share premium 13.0 13.0 13.0
Merger reserve 1.0 1.0 1.0
Other reserves 15.6 15.6 15.4
Retained earnings 18.3 14.7 16.3
Equity attributable to equity owners of the Company 49.1 45.5 46.9
Non-controlling interests 0.3 0.2 0.4
Total equity 49.4 45.7 47.3
The accompanying Notes on pages 25 to 42 form an integral part of these
condensed consolidated interim financial statements.
Registered number: 02486024
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2025
Issued Share premium Merger Other reserves Retained Total Non-controlling interests Total
share capital reserve earnings equity
Translation Capital redemption Own shares
reserve reserve
$m $m $m $m $m $m $m $m $m $m
At 1 April 2025 (audited) 1.2 13.0 1.0 12.5 4.3 (1.4) 16.3 46.9 0.4 47.3
Profit/(loss) for the period - - - - - - 2.8 2.8 (0.1) 2.7
Other comprehensive income/(loss):
Exchange differences on translation of foreign operations - - - 0.2 - - - 0.2 - 0.2
Remeasurement of defined benefit pension liability, net of taxes - - - - - - (1.1) (1.1) - (1.1)
Total other comprehensive income/(loss) - - - 0.2 - - (1.1) (0.9) - (0.9)
Total comprehensive income/(loss) for the period - - - 0.2 - - 1.7 1.9 (0.1) 1.8
Transactions with owners:
Share-based payments - - - - - - 0.3 0.3 - 0.3
Total transactions with owners - - - - - - 0.3 0.3 - 0.3
At 30 September 2025 (unaudited) 1.2 13.0 1.0 12.7 4.3 (1.4) 18.3 49.1 0.3 49.4
The accompanying Notes on pages 25 to 42 form an integral part of these
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2024
Issued Share premium Merger Other reserves Retained Total Non-controlling interests Total
share capital reserve earnings equity
Translation Capital redemption Own shares
reserve reserve
$m $m $m $m $m $m $m $m $m $m
At 1 April 2024 (audited) 1.2 13.0 1.0 12.6 4.3 (1.2) 32.8 63.7 0.2 63.9
Loss for the period - - - - - - (18.2) (18.2) - (18.2)
Other comprehensive loss:
Exchange differences on translation of foreign operations - - - (0.1) - - - (0.1) - (0.1)
Total other comprehensive loss - - - (0.1) - - - (0.1) - (0.1)
Total comprehensive loss for the period - - - (0.1) - - (18.2) (18.3) - (18.3)
Transactions with owners:
Share-based payments - - - - - - 0.1 0.1 - 0.1
Total transactions with owners - - - - - - 0.1 0.1 - 0.1
At 30 September 2024 (unaudited) 1.2 13.0 1.0 12.5 4.3 (1.2) 14.7 45.5 0.2 45.7
The accompanying Notes on pages 25 to 42 form an integral part of these
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2025
Issued share capital Share premium Merger Other reserves Retained Total Non-controlling interests Total
reserve earnings equity
Translation Capital redemption Own shares
reserve reserve
$m $m $m $m $m $m $m $m $m $m
At 1 April 2024 (audited) 1.2 13.0 1.0 12.6 4.3 (1.2) 32.8 63.7 0.2 63.9
Loss for the period - - - - - - (13.8) (13.8) 0.2 (13.6)
Other comprehensive loss:
Exchange differences on translation of foreign operations - - - (0.1) - - - (0.1) - (0.1)
Remeasurement of defined benefit pension liability, net of taxes - - - - - - (3.0) (3.0) - (3.0)
Total other comprehensive loss - - - (0.1) - - (3.0) (3.1) - (3.1)
Total comprehensive (loss)/income for the period - - - (0.1) - - (16.8) (16.9) 0.2 (16.7)
Transactions with owners:
Issue of share capital - - - - - - - - - -
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
At 31 March 2025 (audited) 1.2 13.0 1.0 12.5 4.3 (1.4) 16.3 46.9 0.4 47.3
The accompanying Notes on pages 25 to 42 form an integral part of these
condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 September 2025
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
Note $m $m $m
Operating activities
Profit/(loss) for the period 2.7 (18.2) (13.6)
Adjustments for:
Net finance expense 5 1.4 1.5 2.5
Taxation expense/(credit) 6 1.8 (2.6) (0.5)
Sanmina expense 4 - 22.3 11.3
Gain on disposal of business - (5.2) (5.8)
Share-based payments 0.3 0.1 0.3
Defined benefit pension scheme service costs 1.1 - 0.2
Depreciation of property, plant and equipment 1.4 1.4 3.2
Loss on disposal - - 0.3
Depreciation of right-of-use assets 1.3 1.3 2.5
Amortisation of intangible assets 9 1.4 1.6 2.6
Impairment losses on financial assets - - 2.1
Impairment losses on property, plant and equipment - 0.4 -
Impairment losses on intangible assets - - 0.2
Operating cash flow before movements in working capital 11.4 2.6 5.3
Decrease in inventories 10.8 2.0 2.6
Decrease in trade and other receivables 5.2 1.5 1.9
(Decrease)/increase in trade and other payables (9.9) (0.9) 2.2
(Decrease)/increase in provisions (0.8) (0.4) 1.1
Pension contributions in excess of charge taken through statement of profit or (0.4) (0.5) (0.7)
loss
Cash generated by operations 16.3 4.3 12.4
Income taxes paid (0.9) (0.7) (1.7)
Interest paid(1) (1.3) (1.5) (2.8)
Net cash generated from operating activities 14.1 2.1 7.9
Investing activities
Proceeds on disposal of business - 5.2 5.2
Purchase of property, plant and equipment (0.9) (3.4) (4.3)
Additions to intangible assets 9 (2.0) (1.8) (3.7)
Net cash used in investing activities (2.9) - (2.8)
Financing activities
Drawdown of bank facility 12 - - 3.0
Repayment of bank facility 12 (5.0) (5.2) (5.2)
Repayment of Sanmina liability (2.0) - (4.0)
Re-purchase of own shares - - (0.2)
Repayment of lease liabilities(2) (1.2) (1.2) (2.3)
Net cash used in financing activities (8.2) (6.4) (8.7)
3.0 (4.3) (3.6)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period 7.9 11.5 11.5
Effect of foreign exchange rates (0.5) 0.2 -
Cash and cash equivalents at end of period 10.4 7.4 7.9
The Group has classified:
1. cash payments for the interest portion of lease payments as operating
activities consistent with the presentation of interest payments chosen by the
Group; and
2. cash payments for the principal portion of lease payments as financing
activities.
The accompanying Notes on pages 25 to 42 form an integral part of these
condensed consolidated interim financial statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the six months ended 30 September 2025 (unaudited)
1. Basis of preparation and principal accounting policies
Dialight plc (the "Company") and its subsidiaries (together referred to as the
"Group") provides sustainable, energy efficient and intelligent LED lighting
technologies driving towards a net zero economy. Its primary market is North
America, with smaller operations in Europe, the Middle East and Africa
("EMEA") and the rest of the world.
The Company is listed on the London Stock Exchange and is incorporated and
domiciled in England and Wales under registration number 2486024. Its
registered office is at 60 Petty France, London, England, SW1H 9EU.
These condensed consolidated interim financial statements were approved by the
Board of Directors for issue on 10 November 2025 and have not been audited nor
reviewed.
(a) Statement of compliance
These condensed consolidated interim financial statements for the six months
ended 30 September 2025 have been prepared in accordance with the Disclosure
and Transparency Rules of the Financial Conduct Authority and with IAS 34.
These condensed consolidated interim financial statements should be read in
conjunction with the consolidated financial statements for the year ended 31
March 2025, which have been prepared in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006.
These condensed consolidated interim financial statements do not comprise
statutory accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 March 2025 were approved by the
Board of Directors on 23 June 2025 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified and
did not contain a statement under Section 498 of the Companies Act 2006. The
report drew attention by way of emphasis to a material uncertainty related to
going concern.
(b) Basis of preparation
Going concern
The Group's bank facility comprises an RCF of $28.8m from HSBC. The facility
was extended to 21 July 2027 on the same terms as the original agreement on 5
June 2025.
Net bank debt has decreased to $10.2m at 30 September 2025 (30 September 2024:
$15.4m; 31 March 2025: $17.8m) comprising borrowings of $20.6m (30 September
2024: $22.8m; 31 March 2025: $25.7m) with cash and cash equivalents of $10.4m
(30 September 2024: $7.4m; 31 March 2025: $7.9m).
The covenants are tested quarterly and are as follows:
Ratio Calculation Covenant
Leverage ratio Net bank debt/Adjusted EBITDA <3.0x
Interest cover Adjusted EBITDA/Net interest expense >4.0x
Further details of net bank debt are included in Note 12.
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 16-month period from the date of authorisation of these condensed
consolidated interim financial statements to 31 March 2027, 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 is on the risk to
the going concern basis of preparation to these condensed consolidated interim
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.
Base case
The base case is derived from the Board-approved latest "3+9" forecast for the
year ended 31 March 2026 (being three months of actuals and nine months of
forecast), which assumes that the margin will improve over the going concern
period through various Group initiatives. Management have adjusted the 3+9 net
bank debt at 30 September 2025 (with a related reduction to forecast interest
costs) to reflect the actual position of $10.2m which is significantly better
than forecast and have also adjusted for the accelerated Sanmina payment of
$5.7m in December 2025. 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 ended 31 March 2026 mainly due to the
disposal of Traffic and Rail in October 2025 (end of the manufacturing
services agreement).
● Reduction in Lighting net revenue in the year ended 31 March 2026 due to the
current macroeconomic climate and the uncertainty surrounding global tariffs.
● Net revenue for the year ended 31 March 2027 is forecast to increase by 1.9%
compared to the year ended 31 March 2026. 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 1.1% in the year to 31 March 2026 and
a further 3.8% in the year ended 31 March 2027, respectively.
● Operating costs are expected to be 31.7% of revenue in the year ended 31 March
2026 and 32.2% for the year ended 31 March 2027.
● Accelerated payment of $5.7m to Sanmina payable in December 2025 (see below
for further details).
Plausible downside case
The key assumptions in this case are:
● Year to 31 March 2026: reduction of 3+9 revenue of 15.0% in the second half of
the year across Lighting, Obstruction, OE and Vehicle.
● Year to 31 March 2027: no growth in core revenue and a 100% 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 years ended 31 March 2026 and 2027.
Reverse stress test (break-even assessment)
The key assumptions in this case are:
● Year to 31 March 2026: reduction of 3+9 revenue of 20.5% in the second half of
the year across Lighting, Obstruction, OE and Vehicle.
● Year to 31 March 2027: no growth in core revenue and a 100% 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 years ended 31 March 2026 and 2027.
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 was paid in March 2025 with a further $2.0m being paid in the
six months ended 30 September 2025. As set out in Note 18, on 9 October 2025,
the Group agreed an accelerated payment plan with Sanmina whereby a final
payment of $5.7m will be made to Sanmina in December 2025, representing a
$0.3m cash saving versus the $6.0m that would otherwise have been paid to 31
March 2027. This accelerated payment plan has been modelled in all scenarios
and removes the risk of the Stipulation being triggered which is explained in
further detail in Note 17. The Directors are confident the accelerated payment
will be funded out of operating cash flow, with sufficient headroom to meet
business needs.
In the base case and plausible downside scenarios, the Group is not forecast
to breach any covenants in the going concern period. The Directors have
considered the circumstances which would be needed to breach at least one
covenant - a reverse stress test. This indicates that a 20.5% fall in revenue
from H2 FY26 without any controllable mitigating actions being taken (apart
from the removal of a bonus provision) would trigger a breach of the interest
cover covenant in Q1 FY27. The likelihood of this circumstance is considered
remote as management could take substantial mitigating actions, such as taking
various cost-cutting measures. Therefore, the Directors consider it remains
appropriate to continue to adopt the going concern basis in the preparation of
these condensed consolidated interim financial statements. Furthermore, the
Group has assessed whether there are any material uncertainties and has
concluded, unlike in previous periods, that there are not.
Taxation
The tax charge/credit reflects the best estimate of the weighted average
effective income tax rate expected for the full financial year.
Uncertain tax positions
The Group operates in certain jurisdictions that are unstable or have changing
political conditions, giving rise to occasional uncertainty over the tax
treatment of items of income and expense. In addition, from time-to-time
certain tax positions taken by the Group are challenged by the relevant tax
authorities, which carry a financial risk as to the final outcome. The
Directors have considered the potential impact arising from these
uncertainties and risks on the Group's tax assets and liabilities, both
recognised and unrecognised, and believe that they are not material to these
condensed consolidated interim financial statements.
(c) Use of judgements, estimates and assumptions
The preparation of these condensed consolidated interim 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 1b for further
details.
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 a 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 $9.3m (30 September 2024: $7.8m; 31 March 2025: $8.6m) 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.
Deferred tax assets
The Group must determine the extent to which deferred tax assets can be
recognised. 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. At 30
September 2025, the Group has recognised a net deferred tax asset of $7.8m (30
September 2024: $8.3m; 31 March 2025: $8.5m).
The Group considers it highly probable 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.
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 condensed consolidated
interim 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 4 for further
information.
Estimates
Inventory provision
The total value of the inventory provision for all categories of inventory
over which judgement has been exercised was $5.3m (30 September 2024: $7.7m;
31 March 2025: $5.9m;) and this represents 12.9% (30 September 2024: 14.0%; 31
March 2025: 11.2%) of the gross inventory value.
Inventory provision: 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 value of the inventory provision for raw materials and sub-assemblies at
30 September 2025 was $3.3m (30 September 2024: $6.7m; 31 March 2025: $4.4m).
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 for these
categories would be $4.0m (an increase of $0.7m). Alternatively, if all raw
material and sub-assembly inventory over 36 months old at the balance sheet
date was only to be provided for, the inventory provision for these categories
would be $1.6m (a decrease of $1.7m).
Inventory provision: 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 provision: disposal of Traffic business
Following the disposal of the Traffic business to Leotek Electronics USA LLC
("Leotek"), 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
at 30 September 2025 (30 September 2024: $nil; 31 March 2025: $0.8m).
Inventory is being utilised or sold to Leotek and at the balance sheet date
future inventory utilisation/sales are inherently an estimate.
Pension plans
The key actuarial assumptions used to value the pension plan liabilities could
have a significant impact on the valuation of the liabilities. 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.
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: 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: 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 & 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.
Six months ended 30 September 2025 (unaudited) Lighting Signals & Components Central & Unallocated Total
Note $m $m $m $m
Revenue 60.4 26.0 - 86.4
Gross profit 22.3 8.2 - 30.5
Underlying overheads (16.0) (2.8) (6.2) (25.0)
Underlying operating profit/(loss) 6.3 5.4 (6.2) 5.5
Non-underlying items 4 (0.2) - 0.6 0.4
Operating profit/(loss) 6.1 5.4 (5.6) 5.9
Net finance expense 5 - - (1.4) (1.4)
Profit/(loss) before tax 6.1 5.4 (7.0) 4.5
Taxation 6 - - (1.8) (1.8)
Profit/(loss) after tax 6.1 5.4 (8.8) 2.7
Six months ended 30 September 2024 (unaudited) Lighting Signals & Components Central & Unallocated Total
Note $m $m $m $m
Revenue 66.7 23.6 - 90.3
Gross profit 24.2 5.6 - 29.8
Underlying overheads (19.2) (3.9) (5.8) (28.9)
Underlying operating profit/(loss) 5.0 1.7 (5.8) 0.9
Non-underlying items 4 (23.1) - (2.3) (25.4)
Gain on disposal of business - 5.2 - 5.2
Operating (loss)/profit (18.1) 6.9 (8.1) (19.3)
Finance expense 5 - - (1.5) (1.5)
(Loss)/profit before tax (18.1) 6.9 (9.6) (20.8)
Taxation 6 - - 2.6 2.6
(Loss)/profit after tax (18.1) 6.9 (7.0) (18.2)
Year ended 31 March 2025 Lighting Signals & Components Central & Unallocated Total
(audited)
Note $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 operating profit/(loss) 12.9 3.3 (12.0) 4.2
Non-underlying items 4 (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)
Net finance expense 5 - - (2.5) (2.5)
(Loss)/profit before tax (5.7) 10.0 (18.4) (14.1)
Taxation 6 - - 0.5 0.5
(Loss)/profit after tax (5.7) 10.0 (17.9) (13.6)
Other segmental data
Six months ended 30 September 2025 (unaudited) Lighting Signal & Components Central & Unallocated Total
$m $m $m $m
Cost of inventories recognised as expense (19.8) (10.9) - (30.7)
Total personnel expenses (16.8) (4.5) (1.4) (22.7)
Depreciation of property, plant and equipment (1.0) (0.4) - (1.4)
Depreciation of right-of-use assets (0.9) (0.4) - (1.3)
Amortisation of intangible assets (1.4) - - (1.4)
Six months ended 30 September 2024 (unaudited) Lighting Signal & Components Central & Unallocated Total
$m $m $m $m
Cost of inventories recognised as expense (23.7) (10.1) - (33.8)
Total personnel expenses (17.8) (5.5) (1.6) (24.9)
Depreciation of property, plant and equipment (1.0) (0.4) - (1.4)
Depreciation of right-of-use assets (1.0) (0.3) - (1.3)
Amortisation of intangible assets (1.6) - - (1.6)
Impairment of property, plant and equipment (0.4) - - (0.4)
Year ended 31 March 2025 Lighting Signal & Components Central & Unallocated Total
(audited) $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 intangible assets (0.1) (0.1) - (0.2)
Geographical segments
Lighting and Signals & Components segments are managed on a worldwide
basis but operate in three principal geographic areas: North America, EMEA and
the 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.
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2025 2024 2025
$m $m $m
(unaudited) (unaudited) (audited)
Geographical market:
North America 72.6 76.3 155.3
EMEA 5.5 5.0 10.7
Rest of the world 8.3 9.0 17.5
Total 86.4 90.3 183.5
3. Other operating income
In May and September 2025, the Group received two ERCs totalling $2.9m in
respect of claims filed in 2023. An ERC is a US refundable tax credit for
certain eligible businesses that had employees and were affected during the
Covid-19 pandemic. Accordingly, in the six months ended 30 September 2025 the
Group has recorded $2.9m as other operating income in the condensed
consolidated statement of profit or loss. As set out in Note 4 below, given
the size and one-off nature of this item it has been treated as
non-underlying.
4. Non-underlying items
The Group incurs cost and earns income that is non-recurring in nature or
that, in the Directors' judgement, needs to be separately disclosed for users
of the condensed consolidated interim 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 represents the components
of non-underlying items recognised in the condensed consolidated statement of
profit or loss. All costs are recognised within administrative expenses unless
otherwise stated.
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2025 2024 2025(2)
$m $m $m
(unaudited) (unaudited) (audited)
ERCs(1) 2.9 - -
Transformation Plan (1.3) (3.1) (4.1)
Defined benefit pension scheme service costs (1.1) - -
Sanmina litigation costs (0.1) (22.3) (17.8)
Other non-underlying costs - - (0.6)
Business disposal income - - 0.9
Total non-underlying items 0.4 (25.4) (21.6)
1. ERCs have been recorded within other operating income for the six months ended
30 September 2025.
2. For the year ended 31 March 2025, a credit of $1.2m was recognised within cost
of sales (see Note 16) and a $22.8m charge was recognised within
administrative expenses.
ERCs
As explained in Note 3, in the six months ended 30 September 2025, the Group
received ERCs which are one-off in nature as no more claims will follow.
Transformation Plan
During the six months ended 30 September 2025, costs of $1.3m (six months
ended 30 September 2024: $3.1m; year ended 31 March 2025: $4.1m) have been
incurred relating to the Transformation Plan. Implementation of the 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 both the current
and prior periods relate to resetting and realigning the Group's cost base
including severances, consulting costs and related legal and professional
fees.
Defined benefit pension scheme service costs
During the current period, legal and professional fees have been incurred by
the Main Scheme (Plan B) as part of the completion steps of the buy-out
process (see Note 13 for further details). Under IAS 19, these service costs
of $1.1m have been treated as non-underlying costs in the condensed
consolidated statement of profit or loss.
Sanmina litigation costs
On 31 March 2025, the Group settled its long-standing litigation with Sanmina
for $12.0m to be paid by instalments. During the six months ended 30 September
2025, final legal expenses of $0.1m have been incurred relating to case. The
charge of $22.3m for the six months ended 30 September 2024 represented the
Group's best estimate of the claim and associated legal costs at the time. The
charge of $17.8m for the year ended 31 March 2025 comprises a $11.3m
discounted expense for the settlement together with $5.6m of legal expenses
and $0.9m of other irrecoverable amounts.
Cashflow related to non-underlying items
The ERCs of $2.9m were received in cash in the six months ended 30 September
2025. Offsetting this, the Group has paid $2.0m in relation to non-underlying
costs in the six months ended 30 September 2025 (six months ended 30 September
2024: $3.5m; year ended 31 March 2025: $10.2m) including the settlement of
legal costs relating to Sanmina and severances which were unpaid at 31 March
2025. Therefore, net non-underlying cash received in the current period is
$0.9m which excludes the quarterly Sanmina payments totalling $2.0m.
5. Net finance expense
Six months ended Six months ended Year
30 September 30 September ended
2025 2024 31 March
$m $m 2025
(unaudited) (unaudited) $m
(audited)
Net interest income on defined benefit pension asset - - 0.3
Interest expense on borrowings (0.8) (1.1) (2.2)
Facility arrangement fee expense - (0.1) -
Interest expense on lease liabilities (0.3) (0.3) (0.6)
Unwinding of Sanmina settlement (0.3) - -
Net finance expense (1.4) (1.5) (2.5)
6. Taxation
The taxation charge of $1.8m for the six months ended 30 September 2025 (six
months ended 30 September 2024: credit of $2.6m; year ended 31 March 2025:
credit of $0.5m) reflects the best estimate of the weighted average annual
income tax rate expected for the full financial year. Non-underlying items
have been taxed using the relevant tax rates where deductions are available.
7. Earnings per share
Basic earnings per share
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
Profit/(loss) for the period attributable to equity owners ($m) 2.8 (18.2) (13.8)
Weighted average number of shares (000s) 39,942 39,828 39,786
Basic earnings/(loss) per share (cents) 7.0 (45.8) (34.7)
Basic earnings per share is calculated by dividing the profit or loss for the
period attributable to equity owners by the weighted average number of
ordinary shares in issue during the period. The calculation of the weighted
average number of ordinary shares excludes the shares held by the Employee
Benefit Trust ("EBT") which are treated as cancelled. There have been no
transactions involving ordinary shares or potential ordinary shares between
the reporting date and the date of authorisation of these condensed
consolidated interim financial statements.
Diluted earnings per share
Diluted earnings per share is calculated after adjusting the weighted average
number of ordinary shares in issue during the period to assume conversion of
all potentially dilutive shares. The calculation of the weighted average
number of ordinary shares excludes the shares held by the EBT.
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. This was the case for the
six months ended 30 September 2024 and the year ended 31 March 2025. The
number of shares that would have been used in the diluted earnings per share
calculation was 40,819,783 for the six months ended 30 September 2024 and
40,845,498 for the year ended 31 March 2025.
Six months Six months ended Year
ended 30 September ended
30 September 2024 31 March
2025 (unaudited) 2025
(unaudited) (audited)
Profit/(loss) for the period attributable to equity owners ($m) 2.8 (18.2) (13.8)
Weighted average number of shares for basic earnings per share (000s) 39,942 39,828 39,786
Effect of dilution:
Employee share awards 1,258 - -
Weighted average number of shares for diluted earnings per share (000s) 41,200 39,828 39,786
Diluted earnings/(loss) per share (cents) 6.8 (45.8) (34.7)
8. Dividends
There were no dividends declared or paid in the six months ended 30 September
2025 (six months ended 30 September 2024: $nil; year ended 31 March 2025:
$nil).
9. Intangible assets
Concessions, patents, Software Development Total
licences and licences costs $m
trademarks $m $m
$m
Net book value:
At 1 April 2025 (audited) 1.4 0.4 7.2 9.0
Additions 0.3 0.1 1.6 2.0
Amortisation charge for period (0.3) (0.2) (0.9) (1.4)
At 30 September 2025 (unaudited) 1.4 0.3 7.9 9.6
10. Inventories
30 September 30 September 31 March
2025 2024 2025
$m $m $m
(unaudited) (unaudited) (audited)
Raw materials and consumables 15.3 19.5 20.0
Work in progress 8.5 10.4 10.7
Finished goods 11.9 17.0 15.7
Spare parts 0.1 0.2 0.2
Total 35.8 47.1 46.6
In the six months ended 30 September 2025 inventories to the value of $30.7m
(six months ended 30 September 2024: $33.8m; year ended 31 March 2025: $67.2m)
were recognised as an expense.
The inventory provision at 30 September 2025 was $5.3m (30 September 2024:
$7.7m; 31 March 2025: $5.9m), which represents 12.9% of gross inventory (30
September 2024: 14.0%; 31 March 2025: 11.2%). The provision decreased from 31
March 2025 by $0.6m due to the utilisation of the provision of $1.2m and
foreign exchange of $0.2m offset by additions of $0.8m driven by an increase
in ageing of stock on hand. See Note 12 for details of fixed and floating
charges which includes the value of inventory in material Group companies.
11. Provisions
Warranty and claims Lease dilapidations Onerous Total
$m $m contract $m
$m
Balance at 1 April 2025 (2.9) (0.7) (0.9) (4.5)
Provisions made during the period (0.2) - - (0.2)
Provisions utilised during the period 0.1 - 0.9 1.0
Balance at 30 September 2025 (3.0) (0.7) - (3.7)
Of which:
Current (1.6) - - (1.6)
Non-current (1.4) (0.7) - (2.1)
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 related to
the Leotek contract as part of the sale of the Traffic business.
12. Borrowings
The Group's bank facility comprises an 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. At 30 September 2025, $20.6m was
drawn (30 September 2024: $22.8m; 31 March 2025: $25.7m) following repayments
of $5.0m during the six months ended 30 September 2025.
The facility was extended on 5 June 2025 to 21 July 2027 on the same terms as
the original agreement.
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2025 2024 2025
$m $m $m
(unaudited) (unaudited) (audited)
Opening borrowings (25.7) (27.9) (27.9)
RCF drawdown (USD) - - (3.0)
RCF repayment (USD) 5.0 5.2 5.2
Foreign exchange movements 0.1 (0.1) -
Closing borrowings (20.6) (22.8) (25.7)
Interest is based on the Secured Overnight Financing Rate or Sterling
Overnight Index Average, depending on the tranche of debt.
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 is subject to quarterly covenants encompassing maximum leverage and
minimum interest cover. In the six months ended 30 September 2025 the
covenants have been complied with and the outstanding borrowings of $20.6m
have been classified as a non-current liability at 30 September 2025 in line
with the facility expiring in July 2027.
The banking covenants are as follows:
Ratio Calculation Covenant
Leverage ratio Net bank debt/Adjusted EBITDA <3.0x
Interest cover Adjusted EBITDA/Net interest expense >4.0x
13. Employee benefits
The Group makes contributions to two closed defined benefit plans (referred to
below as Plan A and Plan B) to provide benefits for employees and former
employees upon retirement. The plans expose the Group to actuarial risks, such
as longevity risk, interest rate risk and investment risk. Both plans are
administered by discrete funds (the "Funds") that are legally separate from
the Group and managed by trustees that are independent individuals. The
trustees of the plans are required by law to act in the best interests of the
plan participants and are responsible for setting certain policies (e.g.
investment) of the Funds. 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 aggregate surplus on an IAS 19 basis on both funds at 30 September 2025 is
$0.2m (30 September 2024: $5.9m; 31 March 2025: $2.2m). In the current period,
the Group incurred service costs of $1.1m which have been treated as
non-underlying costs, an actuarial loss of $1.4m which has been recognised
through OCI and other movements of $0.5m.
Executive Scheme (Plan A)
Plan A purchased a bulk annuity policy covering the majority of its
liabilities on 5 August 2025 with an insurer (a "buy-in"). The premium paid
was £1.8m with the calculated value of the scheme's liabilities also being
£1.8m, resulting no "buy-in" gain or loss. The trustees of the scheme and
their advisors are presently working on various data cleanse steps which are
not expected to be completed until around June 2026. Until this work has been
completed, the trustees 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 OCI.
Main Scheme (Plan B)
Plan B completed its buy-in transaction on 4 July 2024. 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 the GMP
equalisation. These steps are not expected to be completed until around June
2026. In light of this, the buy-in was viewed as an investment transaction,
with the impact recognised through OCI in the year ended 31 March 2025.
During the current period, legal and professional fees have been incurred by
the scheme as part of the completion steps outlined above. Under IAS 19, these
service costs of $1.1m have been recorded in the condensed consolidated
statement of profit or loss but have been presented by the Directors as a
non-underlying item (see Note 4).
14. Principal exchange rates
The following significant exchange rates (versus the US dollar) applied during
the period:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
Average for the period:
Australian dollar 1.5446 1.5066 1.5336
Canadian dollar 1.3802 1.3666 1.3911
Euro 0.8686 0.9201 0.9318
Malaysian ringgit 4.2645 4.6024 4.5053
Mexican peso 19.0656 18.0464 19.1539
Pound sterling 0.7453 0.7815 0.7840
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
At balance sheet date:
Australian dollar 1.5267 1.4572 1.5857
Canadian dollar 1.3940 1.3449 1.4293
Euro 0.8546 0.8952 0.9273
Malaysian ringgit 4.2194 4.1274 4.4297
Mexican peso 18.3512 19.4581 20.2480
Pound sterling 0.7464 0.7479 0.7733
15. 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.
Other than as set out above, there have been no other changes in the nature of
related party transactions from those described in the March 2025 Annual
Report and Accounts that could have a material effect on the financial
position or performance of the Group in the six months ended 30 September
2025.
16. Reconciliation to non-GAAP performance measures
Certain financial information set out in these condensed consolidated interim
financial statements is not defined under IFRS. These 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.
Non-GAAP performance measures
Note Six months Six months Year
ended ended ended
30 September 2025 30 September 2024 31 March
$m $m 2025
(unaudited) (unaudited) $m
(audited)
Gross profit 30.5 29.8 66.5
Non-underlying items 4 - - (1.2)
Underlying gross profit 30.5 29.8 65.3
Operating profit/(loss) 5.9 (19.3) (11.6)
Non-underlying items 4 (0.4) 25.4 21.6
Gain on disposal of business - (5.2) (5.8)
Depreciation of property, plant and equipment 1.4 1.4 3.2
Loss on disposal of property, plant and equipment - - 0.3
Depreciation of right-of-use assets 1.3 1.3 2.5
Amortisation of intangible assets 9 1.4 1.6 2.6
Impairment of intangible assets - - 0.1
Underlying EBITDA 9.6 5.2 12.9
Operating profit/(loss) 5.9 (19.3) (11.6)
Non-underlying items 4 (0.4) 25.4 21.6
Gain on disposal of business - (5.2) (5.8)
Underlying operating profit 5.5 0.9 4.2
Cash generated by operations 16.3 4.3 12.4
Cash impact of non-underlying items 4 (0.9) 3.5 10.2
Lease payments (including interest paid) (1.5) (1.5) (2.9)
Underlying operating cash flow 13.9 6.3 19.7
As explained in Note 4, 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.
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 and
cash equivalents. At 30 September 2025, the Group's net bank debt of $10.2m
(30 September 2024: $15.4m; 31 March 2025: $17.8m;) consisted of borrowings of
$20.6m (30 September 2024: $22.8m; 31 March 2025: $25.7m) less cash and cash
equivalents of $10.4m (30 September 2024: $7.4m; 31 March 2025: $7.9m).
17. Contingencies
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. During the six months ended 30 September 2025,
the Group paid $2.0m to Sanmina representing two quarterly payments of $1.0m
each. The amount of any outstanding deferred instalments would automatically
increase 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 a 45-day cure 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. Refer to Note 18 below for details of how
the Group has addressed this risk since 30 September 2025.
18. Events after the balance sheet date
On 9 October 2025, the Group agreed an accelerated payment plan with Sanmina
whereby a final payment of $5.7m will be made to Sanmina by 31 December 2025,
representing a $0.3m cash saving versus the $6.0m that would otherwise have
been paid over the six remaining quarters to 31 March 2027. Once the $5.7m is
paid, the Stipulation agreement between the parties shall be satisfied and
both parties will take steps to legally set aside the US and English court
judgments, meaning the potential financial liabilities (as set out in Note 17
above) would be fully extinguished.
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