Overseas sales continue to grow with consumer demand in the UK offsetting a subdued professional market, but abroad business is described as strong.
Luceco is also benefiting from lower costs of manufacturing and material and pricing changes brought in last year.
“The continuation of improved trading into the second quarter means that the board is now confident of delivering adjusted operating profit for 2019 materially ahead of current market expectations.”
Shares jumped 14% to 116p valuing the main market listed group at £163mln. The share price has more than trebled since the start of 2019.
In a note to clients, City broker Numis said Luceco's actions on the cost base - including the Chinese manufacturing plant, improved hedging on currencies, exiting loss making activities, power overheads - and improved, if still not buoyant, end markets ‘are leveraging through to the bottom line’.
After difficulties in 2018, ‘the strength of the recovery arguably demonstrates the quality of the underlying business’, the broker added, raising its target price for Luceco to 125p and repeating a 'buy' earing on the stock.
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