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Luceco - Margins head northwards to 11.5%

August 2024

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • LUCE
  • Price:
  • 160p
Ahead of reporting on 10 September, Luceco said H1 sales were +8% to £109m (+3.5% excluding acquisitions) but operating profit is up +15% to £12.5m. Despite the freight costs inflation that has emerged in recent months, increased volumes allowing for better fixed cost absorption as well a change of leadership and an improvement in focus at the factory in China have helped boost operating margin by 0.8% to 11.5%. Luceco’s net debt/EBITDA was 1.2x at 30 June  and brokers expect this to fall to 0.8x by December, providing scope for further M&A. Deutsche Bank sets a £2 share price target; buy. ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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