Agri-tech firm begins recovery from £2.7m shortfall

A Derbyshire agri-tech firm which ended its 2022 financial year over £2.7m in the red says a series of operational improvements implemented in the wake of the shortfall are already beginning to produce positive results.

In a trading update on Thursday (29 June), Light Science Technologies said it was expecting to post revenues of around £4.4m for the first six months of 2023 – an improvement of 22% on the comparable period last year.

Improving market conditions and reduced supply chain constraints within the Hilton firm’s contract electronic manufacturing (CEM) division have played a big part in the turnaround, as has a 20% reduction in overheads. Supply chain issues, coupled with inflationary pressures, were largely responsible for Light Science’s poor performance last year – a return that resulted in its share price slumping to an all-time low in June 2022.

The firm said its gross margins had grown by 20.9% in the last six months, and said bosses had begun evaluating “cash flow generative” acquisition opportunities.

“As previously flagged, there is still material uncertainty over the level and timing of revenue in the CEA [controlled environment agriculture] division”, the company told the London Stock Exchange.

“Therefore, the group’s broader strategy remains on creating partnerships globally within this division, enabling it to develop a portfolio of clients to include markets that have been less impacted by the energy crisis. The CEM division continues to benefit from its relationship with long standing blue-chip customers, providing good levels of visibility.”

The board currently anticipates meeting full year expectations as the group benefits from further cost savings during H2 FY2023 at the same time as continuing to develop and convert opportunities”, the statement adds.

Light Science’s pipeline of quoted work currently stands at over £45m.