Luceco Share Discussion Threads

[investing2retire] 13/9/2022 11:44

looks like a nice breakout. i bought back in at 100p

[thorpematt] 12/9/2022 14:02

Regarding the presentation,

Yes I was really impressed, particularly by the FD and FWIW I posted my thoughts on the SHA thread following it.

I also bought in (before posting of course). Mostly I am avoiding buying at the moment, but I felt that given the change in narrative (from falling margin and growth to returns to margin and confidence on growth), it was likely IMO that the market would understand that this is far too cheap for such a good quality operation.

[our haven] 12/9/2022 08:51

Great rise again this morning.Hopefully it will hold and push on from here in the coming weeks.

[srichardson8] 07/9/2022 17:37

Yes, just now. There is also a (longer) results presentation on the website.

[johndoe23] 06/9/2022 20:54

Anyone watch the presentation on IMC?

[hamhamham1] 06/9/2022 11:25

Nice rise, jeez I'm a most at break even now, just a few pence to go :)
Happy holder here for 400p+ over next couple of years.

[brucie5] 06/9/2022 10:18

Wow. In the context of its 80% decline, this is nothing, of course; but it does remind that when the market turns, it may well be a several bagger.

But I do notice that the (interim) dividend is well down:
Interim dividend of 1.6 pence per share will be paid to shareholders on 21 October 2022. This compares to a 2.6p interim dividend in 2021.

Among other things, I liked this:

3. Pre-COVID comparator
Highlights

-- H1 2022 results in line with July Trading Update:
o Revenue of GBP106.4m

o Adjusted Operating Profit of GBP11.5m

-- Results reflect some normalisation following record 2021 results:
o Slowdown in DIY demand post-lockdown, as expected

o Significant but temporary headwind from distributor customer destocking

-- Results remain well ahead of pre-pandemic levels, underlining strategic progress made:
o Revenue +29% and Adjusted Operating profit +60% versus H1 2019

o Outperformed the market

-- Well positioned to perform in uncertain macroeconomic conditions:
o Market demand for our products is stronger than current results suggest, due to customer destocking

o Product cost inflation passed through, now reversing, and gross margin building

o Successful entry into rapidly growing EV charge point market, with exciting product pipeline

o Acquisition integration progressing well

o Low carbon footprint, which will become an increasingly important differentiator in our marketplace

o Healthy balance sheet: Covenant Net Debt leverage of 1.4x, in the middle of our target range of 1-2x

Outlook

-- FY 2022:
o Trading since the end of H1 in line with expectations

o Consumer/DIY activity expected to continue to slow

o Professional contractor activity to remain broadly stable

o Improving gross margin and increasing contribution from EV chargers

o We expect full year earnings in line with current market expectations

-- Emerging from the pandemic as a stronger business with significant long-term growth prospects
Commenting on the results, Chief Executive Officer, John Hornby said:

"Our trading performance relative to prior year comparatives reflects the very buoyant demand we experienced in 2021, boosted by COVID lockdowns and stocking up by our distributor customers. It also reflects slower demand in 2022 as DIY markets have normalised and as our customers have run their stocks down.

Whilst we were not able to match the record benchmark set last year, our results remain significantly ahead of pre-pandemic levels, underlining the strategic progress we have made over recent years.

The current headwind from customer destocking is likely to continue into early 2023 but is fundamentally temporary in nature. Our margins and cash generation are improving and our balance sheet is in good shape. I am encouraged by the progress and potential of our recently acquired businesses, particularly the access they have given us to the growing EV charging market.

We expect full year earnings for 2022 to be in line with current market expectations and I am confident that we are well positioned to continue to perform as we navigate a period of macroeconomic uncertainty."

[our haven] 06/9/2022 09:46

Archy147Looks like the market agrees with you that it has been taken far too down. 20 percent up as I write.

[archy147] 06/9/2022 08:22

On an adjusted basis the profits were £9m

Looks like the business is doing very well compared to pre-covid, Significantly higher revenue as well as improved margin and eps. Difficult to see why its trading atsuch a discount to pre-covid prices.

I think the bearish state of the market generally has taken this down way too far.

[bertiebingo] 06/9/2022 08:20

Gross margin 34% is roughly back to pre Covid levels. OpCF excluding working capital margin 14.4% is good, only beaten by H1'21. The OpCF margin inc WC is 5% (low) due to a big payables outflow obviously paying up for the slow moving products that have been stuck in the logistics system. DSI and inventory margin is still elevated vs historic.

[purplepelmets] 06/9/2022 07:48

Better than I was expecting, but the wafer thin margins are a concern. I can see us very easily slipping back into loss making. 100m income with a 4m profit is deffo a worry. Still will add here on any further weakness.

[johndoe23] 29/8/2022 20:07

Topvest, you have read mark minervinis stuff?!

[topvest] 29/8/2022 19:54

Agreed on this - best not to buy a stage 4 downtrend, but await a stage 2 uptrend start. I will be buying this when the chart indicates things are improving rather than deteriorating. I think its a fundamentally strong business so expect it to survive and do well long term.

[johndoe23] 29/8/2022 08:59

Fwiw, I wouldn't. Reckon more pain to come here and small caps in general

[archy147] 29/8/2022 08:51

Sigh obviously bought in too early here. Will average down if it goes into the 70s.

[dr biotech] 25/8/2022 14:15

Down 82% from its overrated peak. Assuming it can survive the recession it’s probably a bargain at these levels, the EV business should provide solid growth at decent margins whilst the lighting may take a little longer to recover.

[salpara111] 25/8/2022 13:05

Had this on my watchlist for a while....almost bought at £2! I guess the upcoming results will determine direction so I'll wait for them.

[loglorry1] 23/8/2022 20:56

Given the massive short interest in Kingfisher I'm not confident here.

Shares down a lot but I think it will be a bumpy ride to say the least.

[topvest] 16/8/2022 21:47

Yes, thanks - firmly on my watch list. I'm watching the chart closely, but not quite tempted yet.

[archy147] 16/8/2022 09:00

Interesting comments above on the value here, and the sector generally.

I've managed to pick some of these up at 99p this morning. Delighted to get in under £1! Now busy researching some of the other names listed above. Cheers guys.

[brucie5] 04/8/2022 08:56

Wisely spoken. To which I'd I'd add SYNT, SCS, to name just two from my folio...

[riverman77] 03/8/2022 14:23

I think there are any host of incrediblly cheap stocks in this sector that will make fantastic recovery plays when the time is right. Alongside LUCE, I'd also mention WIX and NXR. However, no need to rush in as think these will remain weak until we see clear signs that the UK economy is improving (and no sign of that any time soon I'm afraid). Ones to keep on the watchlist.

[owenski] 03/8/2022 14:06

As said Brucie, no need to rush here. :-)

[brucie5] 03/8/2022 13:25

Slipped under the £ threshold.