Prophotonix continues to progress

ProPhotonix, a high technology designer and manufacturer of LED illumination systems and laser diode modules, has reported another successful half year ending 30 June 2016.

Order bookings rose $8.8m from $7.7m in 2015 and revenue increased 20% to $8.1m with both businesses Lasers/Diodes and LED contributing to the growth. Gross profit increased 29.8% to $3.6m and the margin increased to 44.4% compared to 41.2% in 2015. Operating income increased by 600% to $0.7m compared to $0.1m in the last period and earnings before interest tax and amortisation (EBITDA) increased to $0.9m from $0.3m in 2015.

Chief executive Tim Losik said: "The first half results mark the sixth consecutive half-yearly positive EBITDA, fourth consecutive half-yearly positive operating income and the second consecutive half-yearly positive net income reported by the Company; clearly demonstrating the Company's continued financial progress.”

Net income came to $0.4m, up from a loss of $0.2m in the previous period. According to Losik, net income was negatively impacted by the decline in sterling versus the US dollar following the result of the EU referendum.

The majority of the group’s revenue was derived from its industrial sector at 84% followed by its Medical and Security and Defence sectors at 11% and 5% respectively.

In terms of regions majority was made in Europe at 48% followed closely by North America at 42% and the remaining 10% from the rest of world.

The group introduced three new products and booked a $1.1m order for the delivery of laser modules with one of its largest customers during the first half.

According to the chief executive, the company's balance sheet continues to strengthen. Principal on term debt of $553,000 was repaid and the net available credit from the company's loan facilities was $2m as of 30 June 30 2016.

The firm has also amended its credit facility with Barclays to increase the line to £1,500,000, to reduce certain fees and service charges and increase the borrowing rate to 85% while extending the minimum period of this amendment to 12 months.

In terms of strategy Losik said in the short term the firm’s focus is to eliminate costs, win new customers, and improve margins and in the long term continues to be one of strategic repositioning to include markets directed product portfolio.

The company is investing in additional engineering resources in order to fulfill this strategy. In addition, the firm is in the process of expanding its sales team to increase world-wide sales coverage.

The share price rose 30.67% to 3.92p at the close on Thursday.