Luceco (LUCE) H1 2024 earnings summary

Executive summary

• Revenue increased 8.4% year-over-year to £109.6m, with 3.6% organic growth and strong contributions from the D-Line acquisition.

• Adjusted operating profit rose 16.7% to £12.6m, with margin up 0.8ppts to 11.5%.

• EPS grew over 12% to 5.7p, and the interim dividend was raised by 6.3% to 1.7p.

• Residential RMI sector sales increased nearly 10%, offsetting infrastructure market declines.

• D-Line acquisition in February 2024 is integrating well, contributing to results and expected to add £15m in 2024 sales.

Financial highlights

• Gross margin reached 41% due to lower raw material costs, improved efficiency, and cost reductions.

• Adjusted profit before tax up 19.1% to £11.2m; adjusted profit after tax up 14.3% to £8.8m.

• Adjusted free cash flow improved to an outflow of £1.7m from £8.0m outflow in H1 2023.

• Net debt at £39.4m, with a net debt/EBITDA ratio of 1.1x, well within facilities.

• Overhead costs rose to £32.3m, mainly due to D-Line acquisition and wage inflation.

Outlook and guidance

• Full-year performance expected to be in line with market expectations; consensus for adjusted operating profit is £26.1m.

• Easing UK interest rates may boost sector confidence for 2025 and beyond.

• Strong growth expected in Residential EV Charging and imminent launches in commercial EV chargers and home energy management.

• Continued focus on M&A and organic investment as market recovers.