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LUCE - Luceco News Story

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Sector
Industrials
Size
Mid Cap
Market Cap £471.1m
Enterprise Value £489.4m
Revenue £176.2m
Position in Universe 614th / 1820

Luceco PLC - FY 2020 Trading Update and Notice of Results

Thu 21st January, 2021 7:00am
RNS Number : 3808M
Luceco PLC
21 January 2021
 

21 January 2021

Luceco plc

 

Full Year 2020 Trading Update

 

Notice of Results

 

Luceco plc ('the Group' or 'Luceco'), the manufacturer and distributor of wiring accessories, LED lighting and portable power products, is pleased to provide the following trading update for the fourth quarter ('Q4 2020') and the year ended 31 December 2020 ('FY 2020').

 

The Group traded strongly in Q4 2020 and we expect to report record full year profits at the top end of the most recently guided range.

 

Construction activity was relatively unencumbered by lockdown measures in most of our markets.  Demand for our products remained high as consumers spent more of their time and money at home.  Our higher share of e-commerce and multi-channel capable customers provided a continued route to market when traditional distribution channels temporarily closed to combat COVID.  Demand in traditional channels recovered relatively quickly as lockdown controls eased as the year progressed.

 

As a result of the strong trading performance in the second half of the year, we have taken the decision to repay in full furlough support of £1.0m received from the UK Government.

 

Our manufacturing operations remain fully operational and COVID is currently not disrupting our sales channels or distribution operations.

 

Q4 2020 performance

 

·      Revenue growth of 23.0%, at the top end of previous expectations:

 

Exceptional recovery in the UK wholesale channel in H2 2020 following the reopening of customer branches

Continued strong demand from online and multi-channel customers and DIY markets, supported by new business wins

Production and sea freight capacity unable to fully meet exceptional demand

Carrying good momentum into FY 2021

 

·      Gross margin was higher than H1 2020 due to manufacturing efficiency gains and a greater proportion of higher margin professional sales; however, lower than forecast due to unexpectedly high raw material cost inflation.

 

·      Adjusted Operating Profit more than doubled from the comparative period last year driven by strong revenue growth and tight control of overheads.

 

FY 2020 performance

 

·      Revenue of approximately £176m (FY 2019: £172.1m):

 

Revenue growth of 2.3%

Ground lost to COVID in H1 2020 more than compensated by strong performance in H2 2020

Outperformed the UK market

 

·      Adjusted Operating Profit of approximately £30m (FY 2019: £18.0m), primarily driven by significant margin improvement:

 

Gross margin increased to approximately 40%, despite raw material cost pressures in H2 2020

Overheads diligently controlled, with many COVID-driven reductions in H1 2020 retained in H2 2020

Reflects full repayment of £1.0m of UK Government furlough support

Adjusted Operating Margin of approximately 17% (FY 2019: 10.5%)

 

·      Continued strong cash conversion, leverage reduction and reinstatement of dividend:

 

Adjusted Free Cash Flow of approximately £22m (FY 2019: £18.9m)

Closing net debt of £18.3m, equal to approximately 0.5x Adjusted LTM EBITDA (FY 2019: 1.1x)

Significant balance sheet capacity for future investment in growth

Dividends reinstated and payout range increased, as previously announced

 

Notice of Results

 

The Group's final results for the year ended 31 December 2020 will be released on Tuesday 23 March 2021. There will be a webcast of the results at 9:30am on 23 March 2021 for analysts and investors. Please email luceco@mhpc.com to register for the webcast.

 

John Hornby, Chief Executive Officer, said:

 

"I am very pleased to report that we ended the year as strongly as expected, with record full year profits against the backdrop of COVID.

 

We have started the new year with good momentum despite tighter social distancing measures. Increased home improvement spending is likely to continue and new business wins, superior channel access and product availability should sustain further market share gains.  Whilst we are now entering a more challenging inflationary environment, we aim to defend the significant margin gains we have made.  Unless future lockdown measures severely disrupt our sales channels or distribution operations, we are confident of further revenue and profit progression in 2021."

 

- ENDS-

 

For further information, please contact:

 

Luceco plc

Contact

John Hornby, Chief Executive Officer

020 3128 8572 (Via MHP Communications)

Matt Webb, Chief Financial Officer

020 3128 8572 (Via MHP Communications)



MHP Communications

Contact

Tim Rowntree

020 3128 8572

James Bavister

020 3128 8572

 

This announcement is released by Luceco plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR).  It is disclosed in accordance with the Group's obligations under Article 17 of MAR.  Upon the publication of this announcement, this information is considered to be in the public domain.

 

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Luceco plc by Matt Webb, Chief Financial Officer.

 

Business summary

 

Luceco is a manufacturer and distributor of high quality and innovative wiring accessories, LED lighting and portable power products for a global customer base.

 

The Group supplies trade distributors, retailers, wholesalers and project developers with a wide range of products which broadly fall into the following market recognised brands:

 

·      British General ("BG"): wiring accessories including switches and sockets, circuit protection and cable management products;

 

·      Luceco and Kingfisher Lighting: energy efficient LED lighting products and associated accessories;

 

·      Masterplug: cable reels, extension leads, surge protection, timers and adaptor products; and

 

·      Ross: television wall mounts, audio visual accessories and other items.

 

Luceco's long-established BG brand commands a loyal following amongst professional electrical contractors in both the UK and overseas.  It is synonymous with quality, safety, innovation and value for money.  The production of BG wiring accessories is the main focus of the Group's Chinese manufacturing facility, allowing it to control product quality, cost and availability.

 

The Luceco and Kingfisher LED lighting brands combine to present a comprehensive range of indoor and outdoor LED lighting solutions.  The range focuses largely on professionally installed products with an emphasis on performance and quality.  The Group is able to support these products by offering customers access to its in-house installation design team.

 

Masterplug is the market leading brand in the UK Portable Power category.  It is sold largely to consumers through retail distribution and online.  Its products are offered in a wide range of global electrical standards and they are sold in every territory in which the Group operates.

 

Forward-looking statements

 

This announcement contains forward-looking statements that are subject to risk factors associated with,

among other things, the economic and business circumstances occurring from time to time in the countries,

sectors and markets in which the Group operates.  It is believed that the expectations reflected in these

statements are reasonable, but they may be affected by a wide range of variables which could cause actual

results to differ materially from those currently anticipated.  No assurances can be given that the

forward-looking statements in this announcement will be realised.

 

The forward-looking statements reflect the knowledge and information available at the date of preparation of

this announcement and the Group has no obligation to update these forward-looking statements.  Nothing in this announcement should be construed as a profit forecast.

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