Romsey-based PhotonStar made an operating loss of £645,000 on revenues of £2 million in the year to March 2010, although the loss has declined since then. Some of the company’s growth, which has been predominantly organic, came from the acquisition of Architectural Lighting & Controls, a supplier of conventional products, in May of 2009. PhotonStar’s product range includes ‘smart’ LED products, with sensors and controls that enable them to be more energy efficient.
Enfis is also loss making and has struggled in the past couple of years because of its small size. It focuses on niche markets including film, TV and ultra-violet lighting. There will be opportunities to combine the two companies’ technologies.
Enfis chief executive Ceri Jones will become finance director and James Mackenzie of PhotonStar will become chief executive in the enlarged group.
Enfis is raising £1.6 million net from a placing at 10p a share, which is the same as the share price before the deal was announced. At the placing price, the enlarged group would be worth £8.6 million.
New house broker FinnCap predicted that Enfis would generate revenues of £1 million in 2011, but the combined business is forecast to make revenues of £5.6 million next year. Although that will not be enough to move the business into profit, it is expected to make a profit of £1.4 million on revenues of £10 million in 2012. That would be two years earlier than Enfis was originally expected to reach profitability.
There will be a cash outflow of £1 million next year if the forecast is met, but a similar amount of cash will be made back in 2012 if plans work out.
Philips has been a consolidator in the LED lighting sector, which is likely to generate more acquisitions activity in the future.
12-month high/low: 37.5p/7.5p
Market cap: £1.7m
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