City round up: Luceco; Headlam
A Telford-based designer and manufacturer of LED lighting products has reported improving results despite facing challenges such as increased container shipping costs.
Luceco’s revenue for the first half of 2024 grew by 8% year-on-year to £109m and its adjusted operating profit is expected to be around £12.5m, marking a 15% year-on-year increase.
It follows Luceco’s acquisition of a cable supplier in a deal worth up to £12.4m. D-Line, based in Tyne & Wear was purchased with an initial cash consideration of £8.6m, with another £3.8m to be paid if the firm secures a “transformational” new business win and if certain working capital balances crystallise.
The board says it’s encouraged by the strong start to the year with performance expectations for the full year in line with market expectations.
Chief executive officer, John Hornby said: “Luceco performed strongly in the first half against a challenging market backdrop. The Group’s diverse portfolio and channels have ensured that we continue to deliver progress, with adjusted operating profit up around 15% in H1 2024.
“Our acquisition of D-Line, which was completed in February 2024, is expected to add circa £15m of sales this year and has integrated well into the Group. The balance sheet remains strong with debt levels towards the lower end of our target range, giving us the flexibility to pursue new organic and M&A opportunities in line with our indicated capital allocation policy.”
A Birmingham flooring company continues to experience a revenue decline and isn’t expecting conditions to settle for another year.
Headlam’s trading for the period matched its revised update on May 14th. Revenue declined by 11.8% year-on-year, with the UK down 11.3% and Continental Europe down 15.9%. The Group expects an underlying loss before tax of around £16m.
It blames results on a weak floor coverings market and reduced customer spending on home improvements.
In May, the Group announced plans to accelerate its strategy to simplify its customer offer and invest across all customer groups to maintain and grow its market presence.
The planning phase is progressing, with a detailed update expected in September alongside the half-year results.
The initiatives aim to simplify customer engagement, enhance service, improve operational efficiency, and deliver significant profit improvement and one-off cash benefits from property disposal and working capital reduction.
Chris Payne, chief executive, said: “While current market conditions remain challenging, we are pleased with the early progress we have made on accelerating our simplification and integration of the business together with the development of exciting improvements to our customer offer and service. We remain confident that our strategy, and the changes we are making, will strengthen Headlam over the medium term, ensuring that we are well placed to take the opportunity when the market recovers.”
