Luceco Share Discussion Threads

[brucie5] 19/1/2023 08:24

Looks like train finally left station...

[topvest] 19/1/2023 08:12

I've entered today. Better late to the party than never. Only downside was the very good FD leaving, but at least they have worked through a temporary solution. Disappointed to have missed the bottom here. Very good company though. There appears to be some shareholder tension maybe with the Chairman's vehicle. Maybe he is the one that is anti buy backs.

[gymratt] 19/1/2023 08:05

Managed a 4k top-up at just under 115p !!

[ymaheru] 19/1/2023 07:59

Yes, I liked the following:
- debt reduced in H2 by around £32mn (I was looking for £14mn+)

- customer destocking played out similar to previous guidance and is nearing an end

- Chinese factory shutdowns have had little impact

- Input (materials/ shipping) costs are declining

Net debt is now very manageable and the outlook quite clear.

[archy147] 19/1/2023 07:56

Yep good TU very happy to be holding here too.

[dr biotech] 19/1/2023 07:37

Great to see the debt come down. Would have liked a separate update on the EV division - overall I’m happy enough to hold.

[adorling] 19/1/2023 07:34

I am impressed with this trading update and cash generation from the improved operating margin increasing from 34% to 37.5% - I am also a fan of technical chart Bowl formations and LUCE chart is looking perfect for a rise back to 500p if you can have the patience to see it out in the next year or two?

[masurenguy] 19/1/2023 07:17

Inspite of the expected hit to Q4 resulting from customer destocking, annual sales and profits will be at the upper end of expectations, margins have improved and net debt has more than halved due to very strong free cash flow.

2022 full year trading update

Profit at the upper end of guidance - record cash generation

Luceco plc provides an update on trading for the year ended 31 December 2022. It confirms that it expects to report Adjusted Operating Profit at the upper end of the previously guided range of GBP20-22m, with record cash generation.

Q4 2022 trading

The Group traded in line with expectations in Q4 2022. Revenue was 22% lower than in Q4 2021 and 10% higher than pre-COVID Q4 2019. As previously guided, destocking by Retail and Hybrid customers accelerated in Q4, accounting for nearly all of the Group's year-on-year reduction in revenue.

Underlying demand from the residential construction market in Q4 2022 was c.10% lower than last year in volume terms. Demand from the non-residential construction market remained buoyant and higher than last year, with higher energy prices driving increased interest in LED lighting retrofit projects.

Gross margin improved as expected, from 34% in the first half to c.37.5% in the second half, reflecting the full benefit of recent selling price increases.

The Group generated exceptionally strong free cash flow of c.GBP21m in Q4, adding to the GBP11m generated in Q3, driven by inventory optimisation and disciplined cash collection.

2022 full year results

The Group expects to report full year revenue of c.GBP206m and Adjusted Operating Profit at the upper end of the previously guided range of GBP20-22m. We expect to report pre-IFRS 16 net debt at 31 December 2022 of GBP24m (30 June 2022: GBP53.9m), equal to 0.8x Adjusted EBITDA (30 June 2022: 1.4x). This significant deleveraging was driven by record full year free cash flow of c.GBP30m.

Update on customer destocking

The Group's major customers reduced their inventory levels by GBP20m in 2022, as forecast. We continue to expect a further c.GBP5m reduction in 2023.

Update on cost inflation

Our estimate of the total impact of cost inflation emerging from the pandemic has reduced in recent months as key cost drivers such as sea container prices and currency rates have moved in our favour. At current prices, this would lead to a reduction in our annual cost base between 2022 and 2024 once existing inventory has been sold through and current hedging arrangements mature.

Impact of COVID in China

Most of our Chinese workforce have now experienced COVID and, we are pleased to report, recovered from it. There have been no cases of serious illness. We have seen minimal operational disruption at our own manufacturing site and across our supply base.

Notice of Results

The Group's final results for the year ended 31 December 2022 will be released on 21 March 2023.

Commenting on trading, John Hornby, Chief Executive Officer of Luceco said:"Whilst our overall result for 2022 was inevitably held back by customer destocking activity, I am pleased with the way we ended the year. Our increased share of the professional contractor market, which we have focused on building over recent years, has undoubtedly helped to mitigate the slowdown in consumer-led construction activity. I am also pleased with our improving gross margin and strong cash generation, which underline the strength of our business model. A healthy balance sheet enables us to plan with confidence. We remain appropriately cautious about near-term prospects until the unusually wide range of macroeconomic outcomes for 2023 begins to narrow. However, solid progress at the end of 2022 serves to underline that our robust business model and operational platform mean that we are well positioned to prosper as market conditions improve."

[forrest1987] 19/1/2023 07:05

Very good results imho

[albanyvillas] 17/1/2023 08:32

they had the agm last week and didnt say anything but if they make another 13m cash in the next period we be in clover

[johndoe23] 16/1/2023 21:57

Yes, this is true.

[mrbeaky] 16/1/2023 21:12

I think that normally applies but for LUCE now all depends on Thursdays trading update

[johndoe23] 16/1/2023 20:40

Always wait after a stock is tipped. Usually goes back down to where it was before the tip. Market makers aren't silly

[brucie5] 16/1/2023 13:02

Yes, I think your observations mirror my own. So generally not in a hurry to receive the newsletter, as far better to let prices settle. But I have to disagree about Stocko - over last couple of years it's become my real eyes and ears on the markets, and the written commentary by PS among others, is fascinating and highly educative, to me at least!
With LUCE my sense it that this will do very well, though it's all on a scale of probability, hence the risk/reward. And also likely to revive in lockstep with KETL, subject to common sourcing issues in China. I hold both.

[dr biotech] 16/1/2023 12:56

I always enjoyed it and in a way you are better off not getting it for a couple of days as often the tips are marked up instantly. I felt last year it has lost its way a bit - tipping Boohoo I felt was awful and so it proved to be (its last few additions to GP3 haven't performed). They did get it right with Crestchic and a couple of others that I also didn't follow. I did think about having a guild for subscribers only to discuss their tips, not sure how many would be interested.

I do occasionally read stocko - Paul scott has an interesting perspective on some but of course isn't infallible. I don't subscribe there though.

I am in here but under water even after averaging down somewhat. Not a big position.

[brucie5] 16/1/2023 11:28

Dr Biotech16 Jan '23 - 11:06 - 2155 of 2155
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Surprised you don't just look at the online version. Having said that they picked a few dogs last year. Joules being the worst at -100%.
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Yes. This is one I've always enjoyed reading in print, like listening to vinyl album. But given the unreliability of the post I've just request online access. LUCE was a featured recommendation last year, if I remember rightly; but of more interest to me was the coverage on Stocko, when it came out out top of potential baggers. I dare say you've read it yourself.
Against that was their last (effective) profit warning, covered by Paul Scott.

[dr biotech] 16/1/2023 11:06

Surprised you don't just look at the online version. Having said that they picked a few dogs last year. Joules being the worst at -100%.

[johndoe23] 16/1/2023 11:05

Yes, looking interesting here

[brucie5] 16/1/2023 10:59

value hound16 Jan '23 - 10:55 - 2152 of 2152
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It was tipped in SCSW apparently
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Ah- that would be it, then. My copy seems to have got held up in the post.

[value hound] 16/1/2023 10:55

It was tipped in SCSW apparently

[brucie5] 16/1/2023 10:49

ALBANYVILLAS16 Jan '23 - 10:46 - 2150 of 2150
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Breakout
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Yes indeed. On the weighted MAs this is an absolute peach of a chart. Pending, of course, the next update and fundamentals aside - caution- the good ship LUCE appears to have dropped anchor, left harbour and set sail for the big wide open.

[ymaheru] 13/1/2023 19:00

I basically agree that it’d be nicer to see that debt go down. H2 is stronger, so I’d suspect debt’s declined £11 million or so due to net profits, and as srichardson8 points out inventories were high (due to supply chain issues). As those issues ease, LUCE can turn inventories into cash, so we might see a few £million more debt paid off than just profit.

Also, if they’re buying back shares now, they must feel the shares are cheap- perhaps management are expecting (or have seen) a solid H2. Even if it wasn’t great, it is true that LUCE shares are far cheaper than they were, so I’m indifferent here about buybacks.

[srichardson8] 13/1/2023 18:28

It would be quite wrong for Luceco to be buying back shares unless there has been a dramatic improvement in their balance sheet since June on stronger trading. Even then I judge it wildly mistaken. At June end they had high inventory levels, high receivable levels, high debt levels and were showing only a miserly cash balance at June end. If any substantial creditor were unable to pay I dread to think of the impact. They have slashed the dividend. The stock is still way above tangible book value. I don't know who is advising them or driving this idea but this proposal is just stupid. I am really surprised and disapponnted.

[simonsmithiv] 13/1/2023 10:32

Yes, why the need to behave like you're in the playground or on the terraces? Sore winner it seems.