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Last close As at 03/02/2023
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Light Science Technologies Holdings offers a range of products and services for improving productivity in controlled environment agriculture. It also offers an end-to-end, full-service contract electronic manufacturing capability (UK Circuits) based in the UK.
The postponement of some CEA projects means that group FY22 revenues will be c 13% below market expectations (consensus estimates were £9.4m), giving year-on-year growth of c 10.5% ie an implied £8.2m. In addition, gross margins at the group’s contract electronics manufacturing (CEM) division were under pressure during H222 because of significant price volatility in the global electronics component market. Management anticipates these will return to normal in FY23. Management consequently expects FY22 group loss before tax to be c £0.85m wider than market expectations (consensus estimates were a £2.0m loss).
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In December, Light Science Technologies Holdings (LSTH) noted that high input costs have resulted in strong interest in the group’s controlled environment agriculture (CEA) products because they help growers operate more efficiently. This demand has generated a sales pipeline for the group of quoted work worth more than £60m (as of December 2022), including forward orders and contracts of £18m (contingent on meeting certain milestones). However, high input costs have caused growers to defer capital investment decisions, resulting in longer sales cycles. This has adversely affected FY22 trading because some anticipated revenue streams for the CEA division are now more likely to materialise in FY23 rather than FY22. Based on this information, we are introducing estimates for FY22 and FY23.
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