Light Science Technologies reports solid first-half progress

4th Jul 2024 15:18

(Sharecast News) - Light Science Technologies updated the market on its trading for the six months ended 31 May on Thursday, highlighting substantial financial and operational progress across its three divisions - controlled environment agriculture (CEA), contract electronics manufacturing (CEM), and passive fire protection (PFP).

The AIM-traded company reported expected revenue of around £5.2m for the period, a 19.3% increase year-on-year from £4.4m in the first half of 2023.

Group gross margins were anticipated to rise significantly to around 26.5%, up from 20.9% in the first half of 2023 and 23.4% for the full 2023 year.

Light Science Technologies also expected to be EBITDA positive for the period, compared to a £494,000 EBITDA loss in the first six months of 2023, with net losses more than halved to approximately £334,000 from £809,000.

The company's financial position was strengthened by increased gross profit and rigorous overhead cost control.

In May, the group enhanced its debt facilities with Close Brothers, securing an additional £850,000 facility to bolster financial resilience.

The CEM division secured key contracts, including a new client in the sports entertainment sector, valued initially at £130,000.

Expected sales for the period totalled around £4.5m, with a committed order book valued at about £3.6m.

In the CEA division, the exclusive distribution agreement with AgriLogiq in South Africa had expanded its global reach.

The division also received a £188,000 grant from the Department for Environment, Food and Rural Affairs (Defra).

Expected sales for the period were about £375,000, with a committed order book valued at around £160,000.

SensorGrow's outdoor trials in partnership with Dyson Farming were positioning the company in the open agriculture sensor market, projected to be worth over $3.84bn by 2028.

The PFP division, established after acquiring Injecta Fire Barrier's trade and assets in November last year, generated revenues of £300,000 for the period.

Light Science said the division had secured orders exceeding £1.35m, and had a committed order book of around £935,000, positioning it strongly within a growth market.

The group's total quoted sales pipeline amounted to over £47m, with a committed order book of nearly £5m.

Recent board restructuring and the appointment of new managerial roles were expected to drive further growth and operational expertise.

Light Science Technologies remained optimistic about its prospects, with the CEA division poised for long-term growth, the CEM division benefiting from trends favouring local manufacturing, and the PFP division targeting the growing UK fire safety retrofit market, estimated to be valued at up to £50bn.

"LSTH entered the period with a strong platform for growth and a realigned cost base having successfully navigated considerable global pressures," said chief executive officer Simon Deacon.

"I am delighted to say that from that base we have seen significant progress - with strong revenue growth and a healthy committed order book, which is expected to increase in the coming months, currently worth nearly £5m, underpinning our goal of becoming an operationally self-funded, cash backed, group.

"As such, we are delighted to see a further reduction in losses, with the company expected to report a positive EBITDA during the period, for the first time in its history."

Deacon said the addition of Dr Graham Cooley and Richard Mills to the board had given it an "enormous pool of experience" from which to draw, and had already had an impact on both the sales pipeline and corporate activity.

"In conjunction, we've seen improving performances across our divisions - PFP is now adding meaningful revenues, CEM has expanded into new markets, and CEA is strengthening through international partnerships and Tomtech revenues, more of which will also be recognised in the second half.

"We aim to continue this trend and build on the strong start we've seen to the second half of our financial year.

"The board expects to see continued momentum in PFP and CEM, and further international expansion of the CEA division."

At 1426 BST, shares in Light Science Technologies Holdings were down 4.84% at 2.71p.

Reporting by Josh White for Sharecast.com.