Dialight (LSE:DIA), the AIM-listed industrial LED lighting manufacturer, more than doubled underlying operating profit to $10.3m for the year ended 31 March, against $4.2m in the prior year, as margin gains and overhead cuts from its Transformation Plan more than offset a sharp revenue decline.
Group revenue fell 9.0% to $166.9m, with the Lighting segment down 11.5% as customers deferred capital projects amid tariff uncertainty; Signals and Components provided a partial offset, growing 13.7% on an underlying basis excluding Traffic.
Gross margin widened to 39.0% from 35.6%, adding over $5m to operating profit, while the overall underlying overhead base fell $6.3m to $54.8m through headcount reductions totalling almost 300 staff across the year.
Cash generation from operations surged to $35.4m from $12.4m, driven by underlying EBITDA of $19.8m and a $17.4m working capital reduction; inventory alone fell 36% to $30m.
Net bank debt dropped from $17.8m to $1.9m after the Group settled its long-running Sanmina liability for $7.7m in full and final resolution, and it subsequently signed a new £15m revolving credit facility with HSBC, with a further £10m accordion option.
"I expect these to translate into good profit growth and cash generation in the current financial year and beyond," said Chief Executive Steve Blair.
For the current financial year, the company expects to eliminate bank debt entirely and targets a return on sales of at least 15%, raised from the prior 11% to 13% range.
