REG - Light Science Tech. - Trading Update

Light Science Technologies HoldingsAnnouncement

10/01/2024 07:00

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RNS Number : 1642Z  Light Science Tech. Holdings PLC  10 January 2024

 

Light Science Technologies Holdings plc

("LSTH", the "Company" or the "Group")

 

Trading Update

 

Light Science Technologies Holdings plc (AIM: LST), comprising three
divisions: controlled environment agriculture ("CEA"); contract electronics
manufacturing ("CEM") and passive fire protection ("PFP"), is pleased to
provide a trading update for the 12 months ended 30 November 2023 (the
"Period").

 

Financial Highlights (Unaudited, subject to confirmation through 2023 audit)

During the Period, the Group saw revenue increase by approximately 13% to
c.£9.25m (2022: £8.17m), driven by growth across each of the trading
divisions, as LSTH made solid organic and acquisitive progress.

 

Overhead cost reductions during the Period resulted in c.20% cost savings,
while gross margins grew by approximately 27% to c.22.5% (2022: 17.7%). As a
result, the Group expects to report an unaudited loss before tax of c.£1.3m
(2022 loss: £2.72m) - down approximately 50% year-on-year.

 

During the Period, LSTH focused on selected strategic expansion in order to
progress towards becoming an operationally self-funded group that is
positioned to take advantage of the clear opportunities across all of its
target sectors.

 

Operational Highlights

 

Contract Electronics Manufacturing

The Group's CEM division - UK Circuits and Electronics Solutions Limited ("UK
Circuits") - targeting a market worth £2.3 billion** in the UK, had its best
year on record during the Period, with sales rising by c.13%. The focus
during the Period was on increasing margins, which was successfully achieved.

 

Further investment in staff training and modern equipment has enabled
production lines to become more automated, whereby UK Circuits will be
positioned to handle larger volume projects and take advantage of wider market
trends and the move away from Far East manufacturing and increased demand for
products to be manufactured more locally in UK.

 

Controlled Environment Agriculture

The CEA division - Tomtech (UK) Limited ("Tomtech") and Light Science
Technologies Ltd ("LST") - which is targeting a market forecasted to be worth
nearly £30 billion by 2030*, grew acquisitively during the Period, with
completion of the Tomtech acquisition in September 2023.

 

The focus now is on integrating LST's and Tomtech's technology platforms and
taking advantage of commercial and operational synergies with a view to
increasing sales in the UK and major global markets, by setting
up distributor networks. This will be aided by the agreement with Arkif
Limited ("Arkif") to scope and implement global partnerships to sell the
Group's NurturGROW lights, SensorGROW sensors and Tomtech's software and
control systems.

 

Passive Fire Protection

The PFP division, which was established following the Group's acquisition of
Injecta Fire Barrier trade and assets in November 2023, provides the Group
with exposure to a growing market, potentially worth £50 billion*** in the
UK. The Group acquired assets with a proven track record in the passive fire
protection market with a strong pipeline of sales opportunities in place. A
formal agreement with Injectaclad Ltd was signed at completion to retrofit its
industry disrupting fire resistant graphite barrier system ("Injectaclad"). As
a high-margin and anticipated near-term cash-generative trade, it is expected
to strengthen the wider Group's balance sheet in 2024.

 

Looking ahead, the Group will explore further technology advances in this
sector along with the potential to coordinate its sensor technology across
the divisions.

 

Outlook

The core focus for the Group remains on growing revenue and margin,
controlling overhead costs and ultimately becoming operationally cash
self-funded. LSTH has a group of businesses that is targeting large growth
markets and offers near to medium and long-term opportunities.

 

The CEM division is seeing forward orders and stock levels return towards
pre-pandemic levels, as electronic components become more readily available
in the marketplace and accordingly customers reduce their purchase fulfilment
timescales and stockholdings. UK Circuits has a strong forward order book,
with visibility for H1, and continues to work with both existing and
perspective customers to build out H2 demand. Historically the CEM division
has been the predominant revenue generator for the Group, but expectations
are that the opportunities within the CEA and PFP divisions will rebalance
the position during the course of FY24.

 

The CEA division, having acquired Tomtech and progressed integration with LST,
is expecting to capitalise on the commercial and operational synergies with a
stronger portfolio of products and solutions and increasing sales through the
UK and via global distribution channels.

 

The PFP division received its first project orders, worth approximately
£600,000, just before the Period end, with work commencing shortly after.
With the cost-effective, regulatory compliant Injectaclad offering,
underpinned by the requirements of the Fire Safety Act 2021, it is well
positioned for anticipated further growth through conversion of its strong
pipeline of quoted work, currently valued at £8 million.

 

 

*Report - Smart Agriculture Market Size & Share report (2030)

**Report - Plimsoll Report (2021) and LSTH's AIM Admission Document - Top
197 participants within the CEM market had a combined turnover of £2.3
billion in 2020

***Estimators price cladding replacement at 10 times government budget
(theconstructionindex.co.uk)
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.theconstructionindex.co.uk_news_view_estimators-2Dprice-2Dcladding-2Dreplacement-2Dat-2D10-2Dtimes-2Dgovernment-2Dbudget&d=DwMGaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=k3ztxpiL9GaLwCCGU9fPymgPVcqvYBuqTjjYyTHwiDE&m=FkrfCU8L8JbNSpJy2iOqi_ufsIhPkBWqki20NIFJFw75Xk8uHWT1vpic2OJY0ioQ&s=PR1_EBbDTB9ZM08WpCO_9ThUQ0hELxP6lsaT57zpanA&e=)
 2021

 

 

For additional information please contact:

 

 Light Science Technologies Holdings plc                                     www.lightsciencetechnologiesholdings.com

                                                                           (http://www.lightsciencetechnologiesholdings.com/)

 Simon Deacon, Chief Executive Officer                                       via Walbrook PR

 Jim Snooks, Chief Financial Officer

 Andrew Hempsall, Chief Operating Officer

 Strand Hanson Limited (Nominated & Financial Adviser) Ritchie Balmer /      Tel: +44 (0) 20 7409 3494
 James Harris / Rob Patrick

 Oberon Capital (Broker)                                                     Tel: +44 (0) 203 179 5300

 Mike Seabrook / Nick Lovering

 Walbrook PR Ltd (Media & Investor Relations)                                Tel: +44 (0)20 7933 8780 or lst@walbrookpr.com (mailto:lst@walbrookpr.com)

 Nick Rome / Paul McManus

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018, as amended.

 

About Light Science Technologies Holdings
plc (www.lightsciencetechnologiesholdings.com
(http://www.lightsciencetechnologiesholdings.com/) )

 

Light Science Technologies Holdings plc, comprising three divisions:
controlled environment agriculture ("CEA"); contract electronics manufacturing
("CEM") and passive fire protection ("PFP"), encompasses design, manufacture
and installation of products and bespoke solutions across a varied spread of
industry sectors, including commercial horticulture, pest control, lighting,
audio, gas detection and fire protection.

 

The Group focuses on providing solutions to a number of global issues,
in food security, climate change, and fire protection and continues to
build a strong set of solutions in these key growing market sectors.

 

LSTH is the holding company to Light Science Technologies Ltd ("Light Science
Technologies") and Tomtech (UK) Limited ("Tomtech") within the CEA division;
UK Circuits and Electronics Solutions Limited ("UK Circuits") within the CEM
division and LSTH IFB Limited ("LSTH IFB") within the PFP division.

 

Controlled Environment Agriculture

The Group's bespoke solutions provide control systems, grow lights, sensor
technology, venting and irrigation systems to UK and global customers - with
key targets including indoor, vertical, glasshouses, polytunnels and medicinal
farming markets. Market drivers include food and water shortages in many parts
of the world; growing global population; UK and other government policy
encouraging sustainable and efficient growth methods; increased scrutiny of
the effect of food production on climate change and the continuing transition
away from processed foods. Key markets include the Americas, Australasia and
specific locations in the Middle East.

 

Its sensorGROW technology enables farmers to monitor key air zone growing
factors in real-time: carbon dioxide, air humidity, air pressure, air
temperature and light - and in development, the potential to monitor: soil
temperature, soil moisture and soil electroconductivity (EC). By
monitoring these key growing factors, farmers can save money through better
management of resources: water, nutrients, fertilisers and energy - while
increasing yields and producing healthier crops.
https://lightsciencetech.com/sensorgrow/
(https://lightsciencetech.com/sensorgrow/)

 

nurturGROW is a sustainable grow lighting product range, covering greenhouses,
vertical farming, polytunnels and medicinal plants. The Group's total
addressable market is experiencing strong compound annual growth and is
expected to be worth in excess of US$6.5 billion, globally, by 2026.
https://lightsciencetech.com/solutions/greenhouse/
(https://lightsciencetech.com/solutions/greenhouse/)

 

Through Tomtech the Group is a UK leader in control systems for commercial
greenhouses and polytunnels, helping growers optimise and automate their
cultivating environments, resulting in superior crop growth. Tomtech's product
range incorporates control systems and software, irrigation, lighting, sensors
and venting and can be used across multiple crops, improving yields and
profitability. https://www.tomtech.co.uk/ (https://www.tomtech.co.uk/)

 

Contract Electronics Manufacturing

UK Circuits is the Group's CEM focussed division, profit making with strong
revenues. The Group designs, procures, and manufactures high-quality CEM
products, specialising in Printed Circuit Boards, which are used in a range of
sectors including audio, automotive, electronics, gas detection, lighting,
pest control, telecommunications and, more recently, the CEA market.
https://www.ukcircuits.co.uk/ (https://www.ukcircuits.co.uk/)

 

Passive Fire Protection

LSTH IFB offers a functional, cost and time effective solution to remediate
public and private residential, commercial, and industrial buildings that fail
to comply with fire safety regulations; an issue for which the UK government
has already allocated £5.1 billion. LSTH IFB is the UK's first independent
approved installer of the industry disrupting Injectaclad fire resistant
graphite barrier system, retrospectively installed within building cavities to
reinstate fire resistant performance, containing the spread of fire and smoke,
in accordance with fire safety regulation requirements. This unique solution
offers a very attractive alternative to the more expensive, time-consuming and
disruptive method of removing external building facades and installing
traditional fire barrier systems.  https://injectafirebarrier.com/
(https://injectafirebarrier.com/)

 

LSTH IFB has a proven track record in the passive fire protection market and a
strong sales pipeline in place. It is targeting a UK market that is
potentially worth up to £50 billion.

 

 

 

 

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