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Plugs, wires and lighting specialist is on a roll after impressive first set of numbers
Thursday 06 Apr 2017 Author: Daniel Coatsworth

Luceco (LUCE) 215.54p

Gain to date: 43.7%

Original entry point: Buy at 150p, 20 October 2016


Better than expected full year results on 3 April have given another lift to shares in Luceco (LUCE). They are now nearly 45% ahead of the price at which we said to buy six months ago.

Luceco makes and sells wiring accessories, USB charging plugs and LED lighting. Post-tax profit increased by 67.2% in 2016 to £9.7m.

LUCECO - Comparison Line Chart (Rebased to first)

It has a policy to pay 20% of profit after tax as a dividend. It has declared a maiden dividend of 0.3p, a lower figure than you might expect when doing the maths. That represents the portion of profit after tax for the two and a half months it was a listed business (it floated in October 2016).

Unfavourable foreign exchange rates could mean retailers have to put up the prices of Luceco’s goods. It says this hasn’t happened yet because retailers have currency hedges in place – although it warns these hedges could soon run out. Retailers account for 40% of its sales.

Chief executive John Hornby says the biggest risk to Luceco would be a recession in the UK. For now, Hornby claims demand is strong from its core customer base of housebuilders, construction firms and retailers.

We remain positive, albeit keeping a close eye for any signs of trading weakness which could be a trigger to lock in profit. (DC)


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