Luceco PLC (LSE:LUCE) reported a 72% drop in interim pretax profit due to customer destocking and record results last year for the lighting and wiring company.
Interim pretax profit fell to £4.6mln from £16.6mln in 2021 as revenue dipped 1.7% to £106.4mln.
It said the results reflected some normalisation following record 2021 results with a slowdown in DIY demand post-lockdown, as expected, and a significant but temporary headwind from distributor customer destocking.
"Our trading performance relative to prior year comparatives reflects the very buoyant demand we experienced in 2021, boosted by COVID lockdowns and stocking up by our distributor customers,” said chief executive John Hornby. “It also reflects slower demand in 2022 as DIY markets have normalised and as our customers have run their stocks down.”
It said it expects consumer/DIY activity to continue to slow in the second half, although demand from professional contractors should remain broadly stable.
Despite the market slowdown, it expects to make more profit in the second half than the first, helped by an improving gross margin and an increasing contribution from electric vehicle (EV) chargers, plus some seasonality benefits.
“Trading since the half year end has been in line with our forecasts and we expect full-year earnings for 2022 to be in line with current market expectations,” it said.