- LED lighting technology company Dialight expects underlying operating profit for the year ended 31 December to be in line with consensus market estimates.

The group says this is despited revenue growth being hit by weakness in the oil & gas sector and reduced levels of industrial capital expenditure, particularly in North America.

The company also issued an update on strategic progress.

It said: "In the Group's strategic review we outlined our plans to capture the market opportunity in LED lighting to deliver sustainable profit growth and strong cash generation. The initial focus is on rebuilding Dialight's operating model, to enable scalable and cost efficient production. We are making good progress as we look to outsource manufacturing, streamline our product portfolio and develop common production platforms intended to decrease the number of individual component parts held in inventory.

"As anticipated, this fundamental transition in our operating model has led to significant exceptional costs. In aggregate, we have incurred exceptional costs in the range of GBP10 million to GBP12 million during the year of which approximately GBP7 million were non-cash costs mainly as a result of inventory obsolescence and the write-off of previously capitalised development costs reflecting the progress we are making in outsourcing manufacturing, streamlining our product portfolio and developing common production platforms.

"There are likely to be further non-recurring costs in 2016, and we will provide further guidance on these and the benefit payback period at the final results."

The group will publish its audited final results for the year ended 31 December on 8 March. Group chief executive Michael Sutsko said: "As previously stated, 2015 was a challenging year for Dialight with the Group's financial performance impacted by operating inefficiencies as well as its exposure to the oil & gas sector. However, we have a clear strategy to improve our business, and have made the first steps to secure sustainable, profitable growth and release the shareholder value inherent in this business.

"There remains a lot to do but we expect to make good progress in 2016 as we build on our differentiated and market-leading position in LED lighting to establish scalable and efficient manufacturing operations, develop a more effective sales model, and diversify into new sectors and geographies. Whilst the macro environment remains challenging, the structural growth drivers in the LED lighting market remain strong and we are confident in the company's medium and long term outlook."

Story provided by