The company blamed the downgraded guidance on delayed orders from some US customers in December to the tune of £3mln. Industrial sales grew by 50% to £23mln without these orders.
Dialight said underlying pre-tax profits would fall no lower than £14.5mln for the full-year, around £1mln less than in 2012.
It had warned in November that profits would be broadly in line with last year due to a poor performance from the Obstruction business.
The firm, which ended 2013 with £7mln in cash, also unveiled talks with Dutch technology giant Philips about joining its LED Luminaire Licensing Programme, which would give Dialight access to a “broad range of Philips’ Intellectual Property relating to Luminaires”.
“With the Industrial Lighting market remaining buoyant and Dialight continuing to hold its market leading positions, the board remains confident of delivering renewed profitable growth in 2014 and beyond,” the company said in a statement.
Brokers remained upbeat despite the downgrade, with Investec, N+1 Singer and Canaccord Genuity all keeping their buy ratings.
“Disappointing, but still expecting good growth,” was Investec’s reaction.
“Obviously the news is disappointing and we have cut our TP by 14% to 1,020p... We still regard Dialight as a ‘recovery stock’, albeit on lower earnings, and await evidence during 2014 that it is back on track. For now, perhaps, a Buy for the brave.”
The shares were down 23% to 650p at 11.30am, valuing the group at just over £200mln.