TIDMLST
RNS Number : 1642Z
Light Science Tech. Holdings PLC
10 January 2024
Light Science Technologies Holdings plc
("LSTH", the "Company" or the "Group")
Trading Update
Light Science Technologies Holdings plc (AIM: LST) , comprising
three divisions: controlled environment agriculture ("CEA");
contract electronics manufacturing ("CEM") and passive fire
protection ("PFP"), is pleased to provide a trading update for the
12 months ended 30 November 2023 (the "Period").
Financial Highlights (Unaudited, subject to confirmation through
2023 audit)
During the Period, the Group saw revenue increase by
approximately 13% to c.GBP9.25m (2022: GBP8.17m), driven by growth
across each of the trading divisions, as LSTH made solid organic
and acquisitive progress.
Overhead cost reductions during the Period resulted in c.20%
cost savings, while gross margins grew by approximately 27% to
c.22.5% (2022: 17.7%). As a result, the Group expects to report an
unaudited loss before tax of c.GBP1.3m (2022 loss: GBP2.72m) - down
approximately 50% year-on-year.
During the Period, LSTH focused on selected strategic expansion
in order to progress towards becoming an operationally self-funded
group that is positioned to take advantage of the clear
opportunities across all of its target sectors.
Operational Highlights
Contract Electronics Manufacturing
The Group's CEM division - UK Circuits and Electronics Solutions
Limited ("UK Circuits") - targeting a market worth GBP2.3 billion**
in the UK, had its best year on record during the Period, with
sales rising by c.13%. The focus during the Period was on
increasing margins, which was successfully achieved.
Further investment in staff training and modern equipment has
enabled production lines to become more automated, whereby UK
Circuits will be positioned to handle larger volume projects and
take advantage of wider market trends and the move away from Far
East manufacturing and increased demand for products to be
manufactured more locally in UK.
Controlled Environment Agriculture
The CEA division - Tomtech (UK) Limited ("Tomtech") and Light
Science Technologies Ltd ("LST") - which is targeting a market
forecasted to be worth nearly GBP30 billion by 2030*, grew
acquisitively during the Period, with completion of the Tomtech
acquisition in September 2023.
The focus now is on integrating LST's and Tomtech's technology
platforms and taking advantage of commercial and operational
synergies with a view to increasing sales in the UK and major
global markets, by setting up distributor networks. This will be
aided by the agreement with Arkif Limited ("Arkif") to scope and
implement global partnerships to sell the Group's NurturGROW
lights, SensorGROW sensors and Tomtech's software and control
systems.
Passive Fire Protection
The PFP division, which was established following the Group's
acquisition of Injecta Fire Barrier trade and assets in November
2023, provides the Group with exposure to a growing market,
potentially worth GBP50 billion*** in the UK. The Group acquired
assets with a proven track record in the passive fire protection
market with a strong pipeline of sales opportunities in place. A
formal agreement with Injectaclad Ltd was signed at completion to
retrofit its industry disrupting fire resistant graphite barrier
system ("Injectaclad"). As a high-margin and anticipated near-term
cash-generative trade, it is expected to strengthen the wider
Group's balance sheet in 2024.
Looking ahead, the Group will explore further technology
advances in this sector along with the potential to coordinate its
sensor technology across the divisions.
Outlook
The core focus for the Group remains on growing revenue and
margin, controlling overhead costs and ultimately becoming
operationally cash self-funded. LSTH has a group of businesses that
is targeting large growth markets and offers near to medium and
long-term opportunities.
The CEM division is seeing forward orders and stock levels
return towards pre-pandemic levels, as electronic components become
more readily available in the marketplace and accordingly customers
reduce their purchase fulfilment timescales and stockholdings. UK
Circuits has a strong forward order book, with visibility for H1,
and continues to work with both existing and perspective customers
to build out H2 demand. Historically the CEM division has been the
predominant revenue generator for the Group, but expectations are
that the opportunities within the CEA and PFP divisions will
rebalance the position during the course of FY24.
The CEA division, having acquired Tomtech and progressed
integration with LST, is expecting to capitalise on the commercial
and operational synergies with a stronger portfolio of products and
solutions and increasing sales through the UK and via global
distribution channels.
The PFP division received its first project orders, worth
approximately GBP600,000, just before the Period end, with work
commencing shortly after. With the cost-effective, regulatory
compliant Injectaclad offering, underpinned by the requirements of
the Fire Safety Act 2021, i t is well positioned for anticipated
further growth through conversion of its strong pipeline of quoted
work, currently valued at GBP8 million.
*Report - Smart Agriculture Market Size & Share report
(2030)
**Report - Plimsoll Report (2021) and LSTH's AIM Admission
Document - Top 197 participants within the CEM market had a
combined turnover of GBP2.3 billion in 2020
*** Estimators price cladding replacement at 10 times government
budget (theconstructionindex.co.uk) 2021
For additional information please contact:
Light Science Technologies Holdings www.lightsciencetechnologiesholdings.com
plc
Simon Deacon, Chief Executive Officer via Walbrook PR
Jim Snooks, Chief Financial Officer
Andrew Hempsall, Chief Operating
Officer
Strand Hanson Limited (Nominated Tel: +44 (0) 20 7409 3494
& Financial Adviser) Ritchie Balmer
/ James Harris / Rob Patrick
Oberon Capital (Broker) Tel: +44 (0) 203 179 5300
Mike Seabrook / Nick Lovering
Walbrook PR Ltd (Media & Investor Tel: +44 (0)20 7933 8780 or
Relations) lst@walbrookpr.com
Nick Rome / Paul McManus
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as
it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
About Light Science Technologies Holdings plc (
www.lightsciencetechnologiesholdings.com )
Light Science Technologies Holdings plc, comprising three
divisions: controlled environment agriculture ("CEA"); contract
electronics manufacturing ("CEM") and passive fire protection
("PFP"), encompasses design, manufacture and installation of
products and bespoke solutions across a varied spread of industry
sectors, including commercial horticulture, pest control, lighting,
audio, gas detection and fire protection.
The Group focuses on providing solutions to a number of global
issues, in food security, climate change, and fire protection and
continues to build a strong set of solutions in these key growing
market sectors.
LSTH is the holding company to Light Science Technologies Ltd
("Light Science Technologies") and Tomtech (UK) Limited ("Tomtech")
within the CEA division; UK Circuits and Electronics Solutions
Limited ("UK Circuits") within the CEM division and LSTH IFB
Limited ("LSTH IFB") within the PFP division.
Controlled Environment Agriculture
The Group's bespoke solutions provide control systems, grow
lights, sensor technology, venting and irrigation systems to UK and
global customers - with key targets including indoor, vertical,
glasshouses, polytunnels and medicinal farming markets. Market
drivers include food and water shortages in many parts of the
world; growing global population; UK and other government policy
encouraging sustainable and efficient growth methods; increased
scrutiny of the effect of food production on climate change and the
continuing transition away from processed foods. Key markets
include the Americas, Australasia and specific locations in the
Middle East.
Its sensorGROW technology enables farmers to monitor key air
zone growing factors in real-time : carbon dioxide, air humidity,
air pressure, air temperature and light - and in development, the
potential to monitor: soil temperature, soil moisture and soil
electroconductivity (EC). By monitoring these key growing factors,
farmers can save money through better management of resources:
water, nutrients, fertilisers and energy - while increasing yields
and producing healthier crops.
https://lightsciencetech.com/sensorgrow/
nurturGROW is a sustainable grow lighting product range,
covering greenhouses, vertical farming, polytunnels and medicinal
plants. The Group's total addressable market is experiencing strong
compound annual growth and is expected to be worth in excess of
US$6.5 billion, globally, by 2026.
https://lightsciencetech.com/solutions/greenhouse/
Through Tomtech the Group is a UK leader in control systems for
commercial greenhouses and polytunnels, helping growers optimise
and automate their cultivating environments, resulting in superior
crop growth. Tomtech's product range incorporates control systems
and software, irrigation, lighting, sensors and venting and can be
used across multiple crops, improving yields and profitability.
https://www.tomtech.co.uk/
Contract Electronics Manufacturing
UK Circuits is the Group's CEM focussed division, profit making
with strong revenues. The Group designs, procures, and manufactures
high-quality CEM products, specialising in Printed Circuit Boards,
which are used in a range of sectors including audio, automotive,
electronics, gas detection, lighting, pest control,
telecommunications and, more recently, the CEA market.
https://www.ukcircuits.co.uk/
Passive Fire Protection
LSTH IFB offers a functional, cost and time effective solution
to remediate public and private residential, commercial, and
industrial buildings that fail to comply with fire safety
regulations; an issue for which the UK government has already
allocated GBP5.1 billion. LSTH IFB is the UK's first independent
approved installer of the industry disrupting Injectaclad fire
resistant graphite barrier system, retrospectively installed within
building cavities to reinstate fire resistant performance,
containing the spread of fire and smoke, in accordance with fire
safety regulation requirements. This unique solution offers a very
attractive alternative to the more expensive, time-consuming and
disruptive method of removing external building facades and
installing traditional fire barrier systems.
https://injectafirebarrier.com/
LSTH IFB has a proven track record in the passive fire
protection market and a strong sales pipeline in place. It is
targeting a UK market that is potentially worth up to GBP50
billion.
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