PreliminaryResults2005 010410073654

Dialight plc 2005 Preliminary Results
13th March 2006
p r e l i m i n a r y r e s u l t s 2005
Highlights
Divested Solartron Businesses for gross proceeds of
£72.1m
Returned £46.5M to Shareholders (£90m since 2003)
Renamed and Refocussed company : Dialight plc
Appointed new Executive Management Team
Year end cash position £9.8m
Early 2006 acquisition of Lumidrives
p r e l i m i n a r y r e s u l t s 2005
Group profit and loss account
£m
Turnover
Continuing Operations
Discontinued operations
Operating Profit
Continuing operations
Discontinued operations
2005
2004
95.2
118.9
56.1
39.1
55.3
63.6
8.3
12.7
3.9
4.4
4.4
8.3
Interest
0.4
(0.2)
Profit before tax & exceptionals
8.7
12.5
Operating Margin *
8.7%
10.7%
Trading Margin **
9.2%
10.5%
*
before profit on disposal and interest
** before profit on disposal and after interest
p r e l i m i n a r y r e s u l t s 2005
Group profit and loss account continued
£m
2005
2004
8.7
12.5
(4.3)
Profit before tax and exceptionals
Tax
(2.7)
Profit on disposal of Solartron (net of tax)
22.0
-
Retained Profit
28.0
8.2
Dividends per share
EPS
Basic
Adjusted (for profit on disposal)
Continuing operations
6.4p
11.0p
92.2p
19.7p
10.1p
27.4p
27.4p
9.0p
14.0
3.0
2.5
2.5
Dividend Cover
Basic
Adjusted for profit on disposal
p r e l i m i n a r y r e s u l t s 2005
Movement in net debt
£m
2005
Free Cash Flow
1.5
Disposals
65.7
Tax paid on disposals
Issue of ordinary shares
Return to shareholders
Pension liabilities
B shares redeemed
Dividends
Transfer to restricted cash
Net Cash Inflow
2004
8.2
-
(5.2)
2.1
(46.5)
(7.4)
(0.1)
(3.3)
(4.0)
0.1
(0.2)
(3.1)
-
2.8
5.0
Opening Net Debt
6.8
2.0
Translation
0.2
(0.2)
Closing Net Cash
9.8
6.8
p r e l i m i n a r y r e s u l t s 2005
Dialight Plc
p r e l i m i n a r y r e s u l t s 2005
Highlights - Continuing Businesses
Strong increase in sales and profit in H2 over H1
Profit before tax £4.5m versus £4.3m in 2004
Operating Cash Flow £5.3m for Continuing Group
before Capex and Pension Payment
Strong year-end balance sheet
Increased order intake in 2006
p r e l i m i n a r y r e s u l t s 2005
Segments
Components- Traditional Indicator Business +
Electromagnetic Based Products
Signals/Illumination – High Brightness LED Business
comprising Traffic Lights, Rail Signals, Obstruction
Lights and Solid State Lighting
p r e l i m i n a r y r e s u l t s 2005
Components
Orders up 4% on year and 18% on H2
Sales down 2% on year
H2 Sales up 5% on H2/04
Contribution down on year
Electromagnetic Components responsible for
adverse swing in contribution year on year
p r e l i m i n a r y r e s u l t s 2005
Components
North American Distributor Point of Sales 5% growth
in 2005
Continued strong Preferred Vendor Status at OEMs
Awarded Wing Mirror Contract for major Japanese
Auto Manufacturer- will ship in 2006
Booked £1.5m+ orders for Meter Disconnects in
January/February 2006
2006 to date Order Input up over H2/05
p r e l i m i n a r y r e s u l t s 2005
Signals /Illumination
Orders up 4.6% on year
Orders in H2/05 up 10% on H2/04
Sales up 5.5% on year
Sales in H2/05 up13% on H2/04
Contribution up 7.3% on year
Obstruction showing good growth
Traffic flat in 2005
p r e l i m i n a r y r e s u l t s 2005
Financial Review 2005
p r e l i m i n a r y r e s u l t s 2005
Proforma 2005 group profit and loss account
£m
Turnover
Operating profit
Interest
Profit before tax
Taxation
Dividend – say 4.5 pence full year
EPS
Dividend Cover
56.1
5.0
0.4
5.4
(1.9)
3.5
1.4
11p
2.46x
p r e l i m i n a r y r e s u l t s 2005
Continuing operations
First and second half comparison
£m
H1
Sales
Operating Profit
Interest
Profit before tax
H2
% Movement
25.8
30.3
17.4
1.5
2.5
60.2
(0.1)
0.6
1.4
3.1
p r e l i m i n a r y r e s u l t s 2005
Continuing operations
First and second half comparison
£m
First Half
Second Half
% Movement
Sales Contribution
Sales Contribution
12.7
6.5
13.9
6.8
9.4%
4.3%
Signals/Illumination 13.7
4.7
15.9
5.2
16.0%
9.6%
11.2
29.8
12.0
12.8%
6.5%
Components
26.4
Sales Contribution
Note: Using $1.82 = £1 for first and second half
p r e l i m i n a r y r e s u l t s 2005
Taxation
2005
2004
Actual rate including disposal
37.8%
34.2%
Actual rate excluding disposal
31.5%
34.2%
Actual rate for continuing group
(excluding prior year credit)
37.0%
33.4%
2006 tax rate expected to be broadly similar
p r e l i m i n a r y r e s u l t s 2005
Dialight – continuing group cash flow
£m
2005
2004
Operating profit
3.9
4.4
Depreciation / amortisation
1.8
1.7
(0.4)
(0.1)
5.3
6.0
Capital expenditure
(1.1)
(0.7)
Tax
(1.6)
(1.5)
2.6
3.8
Movement in working capital
Cash from operations
Before one-off pension contributions
p r e l i m i n a r y r e s u l t s 2005
Dialight – group cash balance
£m
Total cash at 31 December 2005
Less: Cash held in “Creditor Account”
Less: Cash for acquiring Lumidrives
13.8
(4.0)
(2.5)
7.3
p r e l i m i n a r y r e s u l t s 2005
IFRS implemented as at 01 January 2005
One year’s comparative date
Overall impact limited to a few key areas:
Pensions
Development costs
Discontinued operations
Goodwill
Employee share options (future periods)
p r e l i m i n a r y r e s u l t s 2005
Impact on continuing group (IFRS V UK GAAP)
Profit and Loss
Net Assets
2005
£m
2004
£m
2005
£m
2004
£m
Capitalisation of development costs
0.3
0.4
1.0
0.7
Accounting for defined benefit schemes
0.1
0.6
(3.9)
(7.4)
(0.1)
(0.4)
0.9
2.7
0.2
0.2
0.7
0.6
Accounting for dividends
-
-
0.9
2.3
Accounting for shares
-
-
(2.2)
-
0.5
0.8
(2.6)
(1.1)
Deferred tax on development costs
and pension
Accounting for goodwill
p r e l i m i n a r y r e s u l t s 2005
Acquisition of Lumidrives Ltd.
Completed on 11 January 2006 for £3m
£2.45m in cash
£0.55m in Dialight shares (223,578 shares)
2005 draft results show sales of £3.2m with a double
digit return
Consistent growth in sales from 2002 to 2005
Net assets of approximately £0.5m at acquisition –
fair value review to be completed
p r e l i m i n a r y r e s u l t s 2005
Dialight Plc
p r e l i m i n a r y r e s u l t s 2005
Growth Objectives
Dialight has set double digit growth plans
Some of its markets are mature
Important to focus on growth segments for investment
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth-Traffic
North America $80m annually
50% Adopted
Dialight 35%+ share
Competition Gelcore and Leotek plus numerous small Asian companies
Share protected by dealer Channel and strong spec. position
Europe
<5% Adopted
10 million Signals to be converted
Potential €60m market annually if only 8% of lights are replaced each
year
Futurit market leader with 65% share followed by Dialight with 20%
Sales through OEMs- new agreement with Siemens Germany
New standards driving adoption in Germany and Netherlands
Asia
Low infrastructure, high new build, energy shortage
No strong market established yet
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth- Rail
Completed NYCT Contract in 2005
Europe little adoption
Contract for Danish rail will ship early 2006
Working with SBB(CH), Railpro(NL), SNCB(B),
AZD(CZ), Jerbaverket(N), Col(IT)
In qualification for Russian Rail Authority
Market just starting to open up
Over 2 million signals to replace worldwide
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth-Obstruction
Market Potential over $300m Worldwide
USA has 79,000 lighted towers using 311,000 Sidelights and
38,000 Red Beacons for a potential of $120 million
Assume Europe and Asia to be similar size to give a further
$120 million
Wind Energy will install 30,000 units over the next 5 years giving
a market of $120 million assuming 2 beacons per tower
Hazardous Location Market estimated to be $50 million
Bridges, cranes and tall buildings estimated to be $10 million
White applications not included in these estimates
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth-Obstruction
Compelling Value Proposition
Key supplier to FAA
6,000 Beacons sold so far –more than130,000 left to change
38,000 sidelights sold so far- almost 600,000 left to change
Agreements with the two leading OEMs in North America
Major Customers in Europe NTL, Centertel and Polkomtel
(Poland), VT Merlin
Distribution set up throughout Europe
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth-White Lighting White LEDs currently only
viable for niche applications
due to cost and efficiency
Currently areas of high
reliability, safety and durability
are viable
Examples are:
Hazardous location lights
for explosive environments
Bridge and Tunnel Lights
Road Sign Illumination
More niches are enabled as
LEDs become more efficient
and more cost effective.
p r e l i m i n a r y r e s u l t s 2005
Hazloc Applications in White
Mines
Petrochem
Pharmaceutical
Chemical
Long life and “inherent
safety” allow use in
hazardous locations where
lights qualified to UL Class 1
Div 2 are required
Dialight has qualified product
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth - Coloured Lighting
Available market worldwide in
hundreds of millions of dollars.
Technology opens up
applications
Colour Mixing for Architectural,
Entertainment and Theatrical
Markets
LEDs can be dynamically
controlled
LEDs do not need to be
maintained
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth-Coloured Lighting
Acquisition of Lumidrives in January 2006
Strong position in Architectural/Entertainment Market in Europe
Revenues in 2005 more than £3m
30%+ Growth in 2005
OEM sales of complete fixtures
Range of Lighting Modules
Optics
Drivers
Light Engines
p r e l i m i n a r y r e s u l t s 2005
Architectural Lighting Products
p r e l i m i n a r y r e s u l t s 2005
White Lighting Products
p r e l i m i n a r y r e s u l t s 2005
The Light – Leeds, UK
p r e l i m i n a r y r e s u l t s 2005
Lacoste Retail Outlets – Nationwide UK
p r e l i m i n a r y r e s u l t s 2005
Modules
Developing the essential components
Enabling OEM’s in new markets
Invigorating existing applications
Faster routes to market
p r e l i m i n a r y r e s u l t s 2005
Modules – Light Engines
p r e l i m i n a r y r e s u l t s 2005
Modules - Drivers
p r e l i m i n a r y r e s u l t s 2005
Modules - Optics
p r e l i m i n a r y r e s u l t s 2005
Drivers for Growth-Coloured Lighting
Expect continued growth from Lumidrives
Take Dialight Spectramix® Products to Europe
Take Lumidrives Lighting Modules and Fixtures to
USA and Asia
Expand European Sales Network using Dialight
channels
p r e l i m i n a r y r e s u l t s 2005
Prospects for 2006
European Traffic positioned to grow
Obstruction continued growth with new products and
more adoption
White Light- hazardous location launched
Coloured Light- exploitation of Lumidrives acquisition
on a worldwide basis
Promising signs in Components Segment
p r e l i m i n a r y r e s u l t s 2005
DIALIGHT
Uniquely Positioned to Exploit
the Lighting Revolution
p r e l i m i n a r y r e s u l t s 2005