Interim Results 18th September 2006
Financial Highlights
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Turnover increased by 16.2% to £30m (2005: £25.8m)
Strong increase in order intake over first half 2005
Operating profit increased by 53% to £2.3m (2005: £1.5m)
Basic EPS up by 63% to 5.2p (2005: 3.2p)
Group profit and loss account
£m
2006
2005
Movement
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Turnover
30.0
25.8
16.2%
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Contribution
12.7
11.0
15.9%
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Unallocated expenses
(10.4)
(9.5)
10.0%
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Operating profit
2.3
1.5
52.5%
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Profit before tax
2.6
1.4
83.8%
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Earnings per share
5.2p
3.2p
62.5%
Sales and Contribution (£m)
2006
First Half
Contribution
Sales
2005
First Half
Sales Contribution
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Components
15.8
7.6
12.4
6.4
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Signals/Illumination
14.2
5.1
13.4
4.6
30.0
12.7
25.8
11.0
* Note: Adjusted for £0.9m returned inventory sales increase 12.7%
% Movement
Sales
Contribution
27.1%
6.0%*
16.2%
18.8%
11.9%
15.9%
Contribution Margin
2006
First Half
2005
First Half
Components
47.9%
51.2%
Signals/Illumination
36.3%
34.4%
Unallocated Overheads
£m
2005 first half
9.5
Lumidrives acquisition
0.6
European traffic signal reorganisation
0.2
Corporate cost saving
(0.5)
Investment in people
0.5
Other
0.1
10.4
Significant Cashflow Items
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£2.5m acquisition of Lumidrives
£0.5m ongoing cash contribution to DB pension schemes
£0.3m funding of Employee Share Plan
Working capital absorption £2.1m
2005 final dividend payment of £0.9m
Summarised Cashflow
£m
Operating profit
2.3
Depreciation and amortisation
1.0
Working capital
(2.1)
Pension payment
(0.5)
Operating cashflow
0.7
Capital expenditure
(0.6)
Development spend
(0.5)
Taxation
(0.5)
Free cash flow
(0.9)
Movement in Cash
£m
Free cash flow
(0.9)
Dividends
(0.9)
Shares acquired
(0.3)
Acquisitions
(2.5)
Interest
Net cash outflow
0.3
(4.3)
Opening net cash
9.8
Translation
-
Closing net cash
5.5
Business Review
Components
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Orders up 30%
Sales up 27%
Contribution up 19%
Key Customers and Channels
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Dialight does business with almost all the professional
electronics companies in the world and is a key supplier to
Nokia, Ericsson, Lucent, Cisco, IBM, etc.
Dialight sells both direct (as to key OEMs/CEMs) and through
distributors such as Arrow, Farnell, InOne, Electrocomponents,
Future Electronics
Dialight sells to customers around the world 47% in North
America, 35% in Europe and 18 % in the Rest of the World
Components
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Key OEM Relationships intact
North American Distributor POS growing
Margins stable
Expansion of worldwide sales channels
General Electronics market continues to be strong
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Apr-04
May-04
Jun-04
Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
NORTH AMERICA DISTRIBUTOR POINT OF SALE
3,000
2,500
2,000
1,500
1,000
500
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Signals/Illumination Highlights
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Orders up 18%
Sales up 13% *
Contribution up 12%
Acquisition of Lumidrives
License agreement with Color Kinetics
New Obstruction Products
New Traffic Signals Standards
Good progress with OEM relationships in Europe
*adjusting for contract cancellation of £0.9m
Signals/Illumination Traffic
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Introduced first fully ITE compliant Traffic Light for US market
Transferred production of European Standard lights from
Germany to UK
Grew OEM relationships in Europe
Sales to over 30 customers in 19 countries in Europe
Commenced volume shipments to Siemens
Signals/Illumination Rail
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Flat sales in US
Product in evaluation in China
Product in evaluation in Russia
Discussions with a number of potential customers in Europe
Danish Rail awaiting Safety Review
Signals/Illumination Obstruction
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Introduced Hazardous Location Products
Introduced new low wattage Beacon
Introduced ICAO Standard Product for European market
Developing multi country variants for Europe and Asia
Developing product for new US Wind Tower specification
New FAA Specification will enable easier development of White
Obstruction product in Broadcast Market
New Beacon versus Old Beacon
D264 Gen III Beacon
45 Watts
12.5 Inches
30 lbs
42
Yes
Yes
D164 Gen II Beacon
Power
Height
Weight
# of LEDs
Full ICAO Compliance
Hazardous Location Rated
125 Watts
15 Inches
62 lbs
432
No
No
Signals/Illumination Solid State Lighting
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Lumidrives acquisition January 2006
Successful 1st Half
Exhibited at Light and Building in Frankfurt, Lightfair in Las
Vegas, Light Middle East in Dubai
Introduced Lumidrives products to Electronic Distributors –
Arrow, Future, Farnell, InOne, Electrocomponents
Concluded License Agreement with Color Kinetics
LINKLED – Product Improvements
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Improvements
IP67 rated – more applications
Pre-assembled – faster installation
Multichip RGB package – better colour mixing
More lensing options – more applications
Integrated heat-sink – easier installation
Lower system costs
HL series Product Improvement
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Die-cast heatsink – low cost, faster assembly
User selectable optics - less stock holding
Modular wiring options – faster installation
Colourdriver XP – Range Expansion
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More options to suit more markets
Advanced control options – power line control
First fully functioned driver for latest LED technology – drive
currents of up to 1000 mA
Additional colour channel for improved colour performance
Roll out of 2 Pat applied for technologies
Signals/Illumination Solid State Lighting
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First shipments of white hazardous location light for
petrochemical application
Developed white bridge light for fluorescent replacement
Specifying white light for commercial vehicle interiors
Intellectual Property
IP Strategy
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Continued development of IP portfolio in key business areas
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Synergistic licensing agreements to enable Dialight driven LED based solutions
Signals
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Yellow Traffic Signal Using White
LEDs
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LED-Based Signal Light (Use of
Tilted Reflector Cups)
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Method & Apparatus for Using LEDs
for Removing Moisture
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Intelligent Drive Circuit for LED Light
Engine
Obstruction
z Beacon Light with Reflector and Light
Emitting Diodes
z Beacon Light with Light-Transmitting
Element & LEDs
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Pipes in Controlling Temperature of a
LED Strobe Unit
z Method & Apparatus for Monitoring
Input Voltage & Total LED Vf {Strobe
Electronics}
Illumination
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LED Light for Use in Hazardous
Locations
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Optical Potting Material}
Summary
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Good performance in Components
Electronics market continues at H1 pace
European Traffic positioned for good growth on top of good H1
Steady underlying growth for Obstruction
New low wattage Beacon will fuel more adoption
HazlocLED Obstruction products starting to move into the field
Expansion of channels and geography continues
White Hazardous Location expected to show more adoption in H2
Lumidrives to build on good H1 growth both in Europe and US
Continued aggressive registration of IP