Firm posted positive Q1 trading update following weak FY results & raise to shore up balance sheet
Electronic engineering firm Laird gave a modest trading update on Friday, telling the market that performance for the first quarter was in line with expectations. The update provides a solid start to 2017 following a pretty dire set of FY results last year.
Revenues grew 15% to £197m, up from £171m the same quarter last year, boosted significantly by currency tailwinds. On a constant currency basis, income rose a more modest 8%.
There was a mixed performance from Laird's three divisions, with Connected Vehicle Solutions providing the Lion's share of growth at 35% to £70m on a reported basis and 24% in constant currency. This was offset by less impressive growth in Performance Materials (10% reported, 4% constant currency) and no growth in the Wireless and Thermal Solutions division (-6% constant currency).
"This decline was mainly driven by a strong prior year comparator in our Wireless Automation and Controls business before its sharp decline during the second quarter of 2016."
At the end of February, Laird told investors that underlying operating profit had fallen to £61.9m from £80.7m in 2015, due to weaker sales and margin pressures in the Precision Metals business. It subsequently had to raise £185m to shore up its balance sheet.
CEO Tony Quinlan said he was encouraged by performance in Q1, and that while it was still early in the year - he was confident that the recent measures would improve performance in 2017:
"I am encouraged by our overall trading performance in the first quarter. We have seen continued strong revenue growth in Connected Vehicle Solutions, solid growth in Performance Materials, and the Wireless and Thermal Systems Division tracking in line with our expectations. We had strong shareholder support for our rights issue, the proceeds of which provide us with the balance sheet strength needed to continue our work in building a more robust and stable revenue and earnings performance."
Shares in Laird rose 6% on Friday.