StockMarketWire.com - Lighting products provider Dialight swung to a loss on a sharp uptick in costs after the company ditched its outsource manufacturer and brought production in house.

For the year ended 31 December 2019, the company reported a pre-tax loss of £12.5m compared with a profit of £7.4m on-year as revenue fell to £151m from £170m.

'Our 2019 financial results were disappointing due in large part to the significant costs (£10.2m) associated with exiting from our outsource manufacturer,' the company said. 'We incurred additional costs for machining and painting while our own facility in Tijuana, Mexico ramped up which have been classified as non-recurring.'

Looking ahead, the company said most of its end markets were likely to remain challenging short-term, exacerbated by the possible impacts of the COVID-19 virus. But in 2020, we 'continue to target a materially improved trading performance, with a strong focus on sales and new product development, and again with an second half weighting and we expect a significant reduction in our year-end net debt,' the company said.

'We expect gross margin recovery in 2020 and we are targeting exiting the year at 40% Lighting gross margins. Our target inventory levels for year-end 2020 are £38-£40m, which includes finished goods inventory in the US of £4.0m,' it added.


At 9:20am: [LON:DIA] Dialight PLC share price was -35p at 181p



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