Dialight PLC (LON:DIA) shares started Tuesday lower as it cautioned that its expectations for the 2020 financial year have significantly reduced amid coronavirus (covid-19) turmoil.
The LED lighting firm told investors it continue to closely monitor and adapt to all developments, whilst focusing on customer demands and managing cash tightly.
It emphasised that its long term prospects remain “excellent” given the ongoing conversion to industrial LED lighting, and, over the longer term it continues to expect to grow profitably.
The company noted that Q1 orders were in line with expectations, until the latter part of March when there was some “softening”.
Smaller EMEA business was significantly impacted due to government restrictions across northern Europe, Dialight said, meanwhile, US project business had softened but MRO orders increased substantially.
Orders for components increased significantly, amid demand for medical equipment, and the company said it is working through supply chain challenges to deliver these critical components.
Dialight management has moved to reduce costs, curtailing all discretionary spend, and, the board and management are taking 20% pay cuts until the immediate crisis is over. Some employees have been furloughed and other salary reductions have taken place.
Spending on capital projects has been paused temporarily.
The company noted that on 20 April it has £16.2mln of net debt, and, in February it renewed its bank financing facility of £25mln until February 2023.
It is also in early-stage talks with its bank to arrange additional liquidity and covenant headroom, should it be required.
Dialight shares dropped around 10% to trade at 183.33p.