Materials supply and pension changes a concern for Dialight
Industrial LED lighting company Dialight updated the market on its trading for the year ending 31 December on Thursday, reporting that it had made “considerable progress” since the termination of its contract manufacturing partner arrangements.
The London-listed firm said that at the time of the termination, it had 50% of final assembly of lighting products in-house.
That had now increased to more than 90%, and was anticipated to be at 100% in the coming weeks.
Dialight said production at its own facility had been ramping up well, but had been hampered by the inability to obtain raw material supplies from its manufacturing partner on a timely basis.
The delays in raw material supplies adversely impacted November results, the board claimed.
Performance in December was “critical” to delivering the company’s year-end results, and would require a further planned ramp-up in production coupled with continuity of raw material supply.
Dialight also noted that on 26 October, the High Court reached a judgment in relation to Lloyds Banking Group's defined benefit pension schemes which concluded that schemes should equalise pension benefits for men and women as regards to guaranteed minimum pension benefits.
Should that outcome be upheld, Dialight said it was working with the trustees of its pension schemes, and its actuarial and legal advisers, to understand the extent to which the judgment would crystallise additional liabilities for its pension schemes.
It said its current guidance excluded any potential impact on the income statement related to the equalisation.
“The relocation of final assembly of our products to our own facilities is essentially complete,” said Dialight group chief executive Marty Rapp.
“As we ramp up our new facilities in Mexico and Malaysia early in 2019, we will begin to see the full impact of transition to a hybrid manufacturing model.
“We would have preferred to make these changes outside our peak selling season, but these are the right actions for the business and coupled with our expanded new product development actions will result in a stronger and faster-growing Dialight.”
Dialight said its full-year results for the year ending 31 December would be announced on 25 February next year.