Luceco (LUCE) 237.5p

Gain to date: 58.3%

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

Lighting-to-wiring accessories manufacturer Luceco (LUCE) has made its first acquisition since floating on the UK stock market nearly a year ago.

The £381m business has paid £9.75m in cash for Kingfisher Lighting, a UK supplier of exterior lighting products including road and street LED lighting systems and control, as well as a provider of installation and maintenance services.

Kingfisher works for UK wholesalers, contractors, specifiers and local authorities. It made £11.7m net revenue in the year to 31 March 2017 and £1.6m adjusted EBITDA (earnings before interest, tax, depreciation and amortisation).

The acquisition is expected to enhance Luceco’s earnings in the first full year of ownership. Stockbroker Numis reckons it will boost earnings per share (EPS) by 5%, hence why it has lifted 2018 forecasts by roughly this amount for pre-tax profit, EPS and dividend per share.

‘Combining these two businesses will permit the group to go to market with a complete offering. Kingfisher is based in Mansfield, Nottinghamshire and operates an outsourced model with product provided from third parties, primarily in China,’ says Numis analyst David Larkam.

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