Manufacturing will start in Penang in the current quarter as Dialight expands in Asia and the Middle East, it said today in a statement. The Suffolk, England-based company raised its interim dividend to 4 pence from 3.3 pence, and said full-year earnings will be “at the higher end of current market expectations.”
Dialight is seeking to supply lights for new projects rather than replacing existing lighting, and will do “bigger projects but fewer of them,” Chief Executive Officer Roy Burton said in an interview. The maker of light emitting diode products said today that it won an order to provide fixtures for the large distribution center of an online retailer in Germany.
The U.K. company is targeting former Soviet republics for expansion because of their growing oil and gas industries, Burton said.
“It’s clear for us that that’s a marketplace that we would be missing out on if we did not expand,” the CEO said in the interview. “There is huge investment going on. We’ll hire salespeople to address those market places, moving into Russia and Kazakhstan and Uzbekistan. That’s probably a 2013 event.”
Dialight gained 5.2 percent to 1,049, the most since June 6, leading advancing stocks on the FTSE 350 Index, which declined 2.1 percent.
The company’s net cash of 8.1 million pounds ($12.6 billion) “supports a tactical acquisition program,” Andrew Shepherd-Barron, an analyst at Peel Hunt, said today in a note. He recommends buying the stock.
The company will consider acquisitions to help it reach new markets, Burton said. Dialight made purchases in Australia and Japan last year to gain “channel to market,” he said. “We will continue to look for those acquisitions.”
Finance Director Mark Fryer said Dialight’s cash assets and bank facilities mean it “shouldn’t have any issues” financing expansion.
Dialight’s revenue rose 18 percent to 61.1 million pounds in the first half, led by the signals and illumination business.
Dialight also said today it will create a sales team in Brazil to serve the oil and gas market, and continue to grow in Europe. The company intends to double its sales force this year after increasing employees in the U.S. and Mexico.
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