Luceco PLC (LON:LUCE) told investors its performance in the third quarter and current trading is ahead of expectations.
Revenue growth in the third quarter was marked at 7.5%, beating guidance for ‘low single-digit growth’.
"Ongoing improvement in gross margin, tight control of overheads and a relatively buoyant UK home improvement market combined to deliver record profits in the third quarter,” said John Hornby, Luceco chief executive in a trading update.
The lighting wholesale company noted better-than-expected demand from online and multi-channel customers. Specifically, it said that sales to UK pure-play online, hybrid and DIY customers were 25% higher than last year.
At the same time, it said that the UK professional channel continued to see a recovery and returned to ‘low single-digit growth’. Revenues from Europe accelerated rapidly boosted by demand previously deferred by lockdown in Q2.
Revenue growth in early Q4 is seen to be stronger than in Q3.
Luceco upgraded its guidance for the full year, with 2020 revenue now expected to be at least equal to the £172.1mln generated in 2019. It expects that all ground lost to the coronavirus (COVID-19) pandemic during the first half will be recovered in the second.
On the assumption that it will see no major COVID-19 related disruption to its distribution operations, Luceco now guides for full-year revenue of £172mln to £176mln, adjusted profit of £28mln to £30mln, operating margin of 16% to 17%.
Earnings per share is now expected between 13.5p and 15p.
Hornby said: “Although we start the final quarter with a degree of uncertainty from the impact of a second wave of COVID and recently reintroduced social distancing measures in our key markets, strong trading momentum and a healthy order book mean that we now expect significant additional progress to be made in full year adjusted operating profit and adjusted operating margin, as reflected in our latest guidance."