- LED lighting specialist Luceco has warned that weaker gross margins in the second half would reduce full year after profits from current forecasts of £16.7m to £13.2m.

The group's financial controller has resigned after failing to identify the gross margin weakness sooner due to an incorrect assessment of the value of the group's stock.

The group said system improvements were being put in place to make sure this issue did not recur.

It said the principal reasons for the gross margin weakness had been the strengthening of the Chinese RMB versus the US dollar, alongside the ongoing weakness in sterling and increased commodity costs.

The group said it would be able to mitigate some of these headwinds through internal efficiency savings and overhead reductions, with margins expected to recover to long term expectations in H2 2018 as a result of these actions.

The group said it also intended to increase its foreign exchange and commodity price hedging activities with particular focus on the Chinese RMB versus the US dollar.

Luceco said its revenue forecasts for 2017 and 2018 remained in line with market expectations.

It said: 'We continue to expand the group's product ranges and our geographic reach.

'Luceco's balance sheet remains strong and the board continues to assess opportunities to invest in the future growth of the business.'

At 9:11am: [LON:LUCE] Luceco Plc share price was -94p at 138.5p

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