Headline: Luceco Optimistic for 2025, Reports Steady Growth in Q3
On Thursday, Luceco plc, a leading supplier of wiring accessories, EV chargers, LED lighting, and portable power products, reported a 3.0% year-on-year revenue increase for the third quarter ending September 30, 2024. The group also saw a 6.4% revenue rise since the beginning of the year. This growth occurred despite a slight decline of 3.6% in like-for-like revenue in Q3. However, a strong fourth-quarter order book is expected to support like-for-like revenue growth in the second half.
The residential divisions, which make up about two-thirds of the group's sales, experienced encouraging growth. This offset a decline in infrastructure revenue, which accounts for approximately 15% of sales and is subject to individual project timings. Notably, Luceco's Residential EV Charging business grew by 44% compared to the same quarter last year.
Luceco's acquisition of CMD, a leading workplace wiring accessories designer and manufacturer, for £30 million is expected to create significant operational synergies. The group completed two acquisitions during the year and is actively evaluating further mergers and acquisitions opportunities. This acquisition aligns with the group's efforts to expand its product range and market reach.
In terms of financial health, Luceco reported £67.4 million in Bank Net Debt at the end of Q3, with a leverage ratio of 1.8x, remaining within the target range. The group exercised an option for a £40 million accordion facility, bringing the total bank debt facility to £120 million. This strong balance sheet and cash flow are anticipated to support further growth investments and M&A activities.
Looking ahead, Luceco's profit expectations are aligned with full-year consensus, with the group anticipating like-for-like revenue growth in the second half and total revenue growth exceeding 10% for the year. The group is optimistic about 2025 due to signs of improvement in residential RMI (Repair, Maintenance, and Improvement) sentiment and the normalization of container shipping costs. Additionally, Luceco is preparing to launch a Home Energy Management System that integrates various residential energy solutions and EV Chargers for commercial premises.
CEO John Hornby expressed confidence in the group's diversified portfolio and channels, highlighting their contribution to strong commercial performance and maintaining full-year profit expectations. He pointed to the recent CMD acquisition and improving market sentiment as positive indicators for the group's growth trajectory into 2025 and beyond.