Light maker Dialight tumbles after it warns profits are dimming

 
Courtney Goldsmith
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Dialight makes industrial LED lighting technology . (Source: Getty)

Industrial LED maker Dialight has warned profits will be lower than previously expected due to "short-term" production issues.

In a trading update for the third quarter, Dialight said it had hit challenges with the transfer of manufacturing to its outsourcing partner, Sanmina.

It now expects underlying earnings before interest and tax for the full year to be in the range of £13.5m to £15.5m, which analysts at N+1 Singer said was around 21 per cent below the consensus.

Shares in the company lost their shine, tumbling 15.23 per cent to 690.84p.

Read more: Shares in this FTSE 250 firm are down 30 per cent after a profit warning

Trevor Griffiths, an analyst at N+1 Singer, said there was a "significant loss of visibility for the short term".

"We expect to reduce our estimates accordingly. This should be relatively temporary, but there are clearly issues in the transfer of manufacturing to Sanmina," Griffiths said.

Dialight added it expects to end the current financial year with a strong net cash position, and the board was considering reinstating dividend payments.

Michael Sutsko, chief executive, said:

The board has ambitious plans for the group, both in terms of the significant transition of our capabilities and for future growth.

Our outsourced manufacturing challenges are disappointing but are being addressed over the coming months.

Our significant new product launches and the benefits they offer our customers as they migrate to LED lighting continue to give us considerable optimism for the future growth of Dialight.

Read more: The number of companies warning on profits has jumped

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