Dialight banking on new leadership
Shareholders in LED lighting systems designer Dialight (DIA) are pinning their hopes on new leadership drawing a line under manufacturing execution problems.
The £195m company is at the cutting edge of LED technology, specialising in lighting solutions for hazardous and challenging industrial applications, such as mobile masts, power plants and oil rigs.
Struggles to meet output led to the decision last year to outsource manufacturing to Silicon Valley-based Sanmina. That move has been beset with problems, including product launch and production delays. This led to two profit warnings during 2017.
The problems cost former chief executive Michael Sutsko his job, but analysts believe his successor, Marty Rapp, has the engineering and manufacturing background to turn things around.
Rapp is a former executive at electronics designer Laird (LRD). He also held engineering positions at Monsanto, the Fortune 500 agriculture giant.
‘His main priority is to accelerate the recovery after the relationship with contract manufacturer Sanmina began so poorly,’ say analysts at Investec. They believe there could be 60% share price upside from the current 600p if he gets it right.
However, Berenberg believes there may have been large market share declines during months of upheaval.
In our view there is scope for recovery but evidence of better execution is needed. (SF)
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