REG - Luceco PLC - Trading Update

LucecoAnnouncement

19/08/2020 07:00

RNS Number : 5083W
  
Luceco PLC
  
19 August 2020
  
 

19 August 2020
 
Luceco plc
 
Trading Update
 
Luceco plc ("the Group" or "Luceco"), the manufacturer and distributor of high quality and innovative wiring accessories, LED lighting and portable power products, is pleased to provide the following update on trading ahead of the scheduled announcement of our interim results on 8 September 2020.
 
Our first half results remain in line with guidance given in our pre-close update on 13 July 2020.  Since then, our performance has continued to improve and our expectations for full year 2020 Adjusted Operating Profit have increased from at least £18m to at least £23m.
 
The background to this is as follows:
 
·      We continue to out-perform the UK market as a result of our higher share of online / multi-channel capable customers and consumer/DIY markets, where demand has been robust.
 
·      As previously announced, activity levels improved steadily in Q2 2020 as lockdown conditions eased.  This trend has continued into the second half.  The business has good visibility of Q3 2020 trading and we now expect a return to low single digit like-for-like revenue growth in the quarter. 
 
·      The recent improvement has been driven by:
 
o  Continued recovery in demand from professional / wholesale channels, supplementing the earlier recovery in consumer / DIY markets.
 
o  Some channel restocking in response to a sustained improvement in end-user demand.
 
·      The recovery is particularly benefiting our higher margin, in-house manufactured product categories, resulting in increased production efficiency and an accelerated improvement in Group margins.  We therefore expect full year 2020 Adjusted Gross Margin of approximately 40.0% (FY 2019: 36.2%, H1 2020: 38.4%).
 
·      Whilst the outlook for Q3 is clearer, the prospects for Q4 remain inherently uncertain, dependent on:
 
o  the macroeconomic impact of government stimulus withdrawal on employment, consumer confidence and therefore demand; and
 
o  the ongoing risk of a disruptive second wave of coronavirus infection.
 
·      We are confident that a confirmed improvement in near-term demand, improved gross margin and tight control of overheads should deliver full year 2020 Adjusted Operating Profit of at least £23m provided there is no severely disruptive second wave of coronavirus infection in H2.  This would yield an Adjusted Operating Margin of at least 14.5%.  Significant additional progress is possible if the second half is unaffected by the macroeconomic uncertainty referred to above.
 
·      Furthermore, ongoing work across the Group's global operations to improve tax efficiency should mean that Adjusted Earnings Per Share will be at least 11.0p.
 
John Hornby, Chief Executive Officer, said:
 
"We are very encouraged by the rate at which demand has returned to our industry.  We are also pleased that our diverse channel access and product portfolio, combined with our resilient operating model, have contributed to this continued improvement in performance. 
 
The outlook for later in the year remains uncertain for all, but what we know confirms that 2020 should be a year of strong profit growth for the Group despite very challenging conditions - a product of a consistent strategy and the unwavering commitment of the entire Luceco team."
 
- 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, 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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