Industrial LED lighting technology group Dialight has continued to focus on addressing its operational issues since the start of 2018 but warned that as its actions were yet to yield significant results, its performance would be heavily weighted towards the second half of the trading year.
Issues arising from an incompatibility of Dialight's contract manufacturer's internal systems and the needs of its product portfolio led the group to transfer its more complex product lines back to its facility in Ensenada, Mexico, where it retained assembly capabilities, to help its overall production throughput.
During this period of transfer, Dialight will be holding higher inventory levels in order to support the business after the production of its complex product lines kicked off in February, a practice the group expected would be extended through to June in order to produce High Bays.
In its Tuesday morning trading update, the firm said, “As expected, these actions are yet to yield significant results in the fulfilment of outstanding orders, although we have made progress in service levels of our smaller product lines. We are confident of an overall significant improvement in our operations over the coming months. The board continues to expect the group's results for 2018 to be heavily weighted to H2 reflecting the successful resolution of the issues.”
“We have the right products and a market with good growth prospects; when the current operational issues are behind us we will maximise the opportunities for growth available to the group,” it concluded.
As of 1700 BST, shares had declined 1.53% to 516.00p.