In This Article:
Release Date: March 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Luceco PLC (FRA:2LC) reported a 16% increase in revenue on a like-for-like basis, significantly outperforming a market that was down by 2.5%.
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Operating profit improved by over 20%, reaching 29 million, with an increase in operating margin by 0.5 points.
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The company's residential EV charging business saw substantial growth, with sales up 100% in Q1 of the current year.
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Luceco PLC successfully integrated acquisitions made in 2024, contributing to revenue growth and providing scope for further M&A activities.
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Strong cash generation has enabled the company to complete five acquisitions in the last six years, with plans for continued M&A activity.
Negative Points
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The infrastructure-led outdoor LED business struggled in 2024, partly due to local authority funding issues.
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House building, which constitutes about 5% of total revenue, took a significant hit in 2024, impacting the company's performance.
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Sea freight challenges, particularly in the Red Sea, led to increased costs and affected inventory management.
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The US dollar posed a revenue headwind, impacting sales by over 2.5 million due to unfavorable exchange rates.
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The company's tax rate increased to just under 23% in 2024, reflecting a higher UK corporate tax rate and additional UK-based acquisitions.
Q & A Highlights
Q: Why do you think Luceco is winning in the energy transition market, and how will the rebranding to Sync Energy affect your strategy? A: We have a competitive cost base, manufacturing our products in our own Chinese factory, unlike many competitors. Our wide distribution network in the UK, particularly in the electrical wholesale channel, allows us to leverage customer relationships effectively. The rebranding to Sync Energy aligns with our expansion into batteries, complementing our EV offerings. (Unidentified_1)
Q: Can you provide more details on the international growth seen in 2024? A: Our Middle East and Mexican operations have shown strong growth, attributed to gaining traction with major customers and projects. The US market is also performing well, partly due to sourcing products from Vietnam, avoiding tariffs. Spain and Ireland have also contributed positively, with Ireland benefiting from a buoyant economy. (Unidentified_1 and Unidentified_2)
Q: What is Luceco's strategy for the new build sector, and how do you plan to expand your offerings? A: We aim to provide a comprehensive range of products, including circuit protection, lighting, wiring accessories, and EV chargers. We have central deals with house builders and are working on expanding our EV offerings. The focus is also on social housing, which presents new opportunities. (Unidentified_1)