LPA Group PLC (LON:LPA) shares dropped in early trading Thursday after it upped its interim dividend in its half-year results but warned that the medium term going forward “maybe more challenging”.
The AIM-listed LED light manufacturer reported a pre-tax profit for the half-year of £987,000, up from £976,000 for the same period last year, while revenues climbed to £13.9mln from £10.8mln.
The group also upped its interim dividend to 1.1p per share, up from 1.05p last year.
Decline in order book
Despite the positive results, LPA’s chairman Michael Rush said the medium term “maybe more challenging” as order entry in its Electro-Mechanical and its LED Lighting had not kept pace with sales, resulting in a decline in its order book.
He added that changes regarding government procurement policy has impacted supply chains for new and refurbished trains, to which the company often supplies power sockets and LED lighting, in addition to increased competition from Asian markets.
However, the firm said it had been selected for £1.8mln of new LED Lighting and power socket export contracts for trains being imported to the UK, for delivery commencing in the next financial year, as well as investing £1mln in an attempt to reduce manufacturing costs.
LPA shares were down 8.7% at 146.5p.