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January 19, 2012 7:24 pm
LPA, the electrical components maker, said that volatile demand in its core UK market would push it to seek more stable revenues elsewhere.
Speaking as the company reported results for the year to September 2011, Peter Pollock, chief executive, said that the company had won “very significant orders in Asia and Australasia”.
Nevertheless, two-thirds of sales still come from the UK and Mr Pollock admitted that expansion in Asia was not easy. “Our products are high end, and we’re not the cheapest,” he said. “In China and India [this] is not too great, as the lowest price rules.”
However, he said there were opportunities in countries such as Australia where a better quality product requiring less upkeep was more attractive than in countries where maintenance staff are plentiful.
LPA, which also makes LED lighting, moved back into the black in 2011 after delays in the programmes of some of its biggest customers pushed it into losses the previous year.
Sales were up 17.7 per cent to £17.3m, while pre-tax profits were £400,000, up from a loss of £458,000.
The company, which exports its products to nearly 50 countries, increased its full-year dividend to 90p, up from 40p in 2010.
Mr Pollock said that delays from five of its leading customers in the UK and elsewhere had been responsible for the loss in 2010.
“We lost £2.4m of activity…it conspired to cause us a great deal of grief,” he said on Thursday.
“2012 right now looks very exciting,” he said. “We’re quietly confident the current year will show more progress.”
The company recently launched LPA Transport +, a maintenance service to refurbish rolling stock in the UK, and Mr Pollock added that the UK remained a good base to compete for contracts with European rail companies.
Demand from Australia helped sales of more durable LED lighting to rise 47 per cent to £2.39m.
Diluted earnings per share were 2.92p, up from a loss per share of 3.35p last year.
Shares in LPA Group closed up more than 2 per cent at 46p.
Additional reporting by James Shotter
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