Light Science Technologies Holdings PLC (AIM:LST) shares were on the front foot as the firm’s latest trading update confirmed the momentum in its order book.
It has won two new contracts valued at around £0.45 million in its Passive Fire Protection division, amid growing demand as the government seeks to accelerate building safety compliance.
The projects involve remediation work at a Manchester hotel operated by a multinational chain and a Birmingham school building for a UK construction company, and the work is slated for completion in the second half of 2025.
“We are delighted by the improving momentum in the PFP division, seeing further conversion of the c.£24 million quoted pipeline,” chief executive Simon Deacon said.
"Despite broader market issues causing some contract delays, specifically the long timescales taken by the Building Safety Regulator to sign off fire safety in tall buildings, and the UK Government responding by making structural changes to the regulator itself, we are now seeing this bottleneck starting to unblock and are confident that pipeline conversion will rapidly grow."
Deacon added: "Encouragingly, we are already seeing initial follow-on activity with one customer.
"This is a legislation-backed opportunity and our solution is already proven, with a growing number of existing and new clients wanting to rectify non-compliant public and private buildings, spanning residential, commercial, and industrial sectors."
Light Science said both new contracts offer scope for further expansion, as each client owns large property portfolios requiring similar compliance work.
In London, Light Science shares traded up 4.26% changing hands at 3.18p.
SP Angel, in note, highlighted that the fire safety business has the capability to quickly and cost-effectively ramp up its capacity to meet this expected demand.
“We note the comment that with strong potential for follow-up contracts from existing clients, whilst also focusing on converting contracts for new customers, the board believes there is significant potential to drive near-term revenue and cash generation at the same time as increasing visibility for the Group (i.e. lowering its risk profile),”
The stockbroker added: “We would also expect the news of the recent durability test results for Injectaclad (50-year lifespan, c.3x the industry standard) to further increase awareness of the solution and the sales pipeline in due course.
Moreover, the broker highlighted that the firm’s pipeline is currently worth over £58 million, and, added that management expects to see an increased conversion rate going forward.